(6) Government Grant

We have a grant (the “Grant”) with the U.S. Department of Energy (“DOE”) under the American Recovery and Reinvestment Act for reimbursements up to a maximum of $32.4 million. The Grant provides funds to facilitate the manufacture and deployment of electric drive vehicles, batteries and electric drive vehicle components in the United States. Pursuant to the terms of the Agreement, the DOE will reimburse us for 50 percent of qualifying costs for the purchase of facilities, tooling and manufacturing equipment, and for engineering related to product qualification and testing of our electric propulsion systems. The period of the Grant is through January 12, 2015. We recognize government grant reimbursements when it is probable that the Company will comply with the conditions attached to the grant arrangement and the grant money will be received.

The Grant is also subject to our compliance with certain reporting requirements. The American Recovery and Reinvestment Act imposes minimum construction wages and labor standards for projects funded by the Grant.

If we dispose of assets acquired using Grant funding, we may be required to reimburse the DOE upon such sale date if the fair value of the asset on the date of disposition exceeds $5,000. The amount of any such reimbursement shall be equal to 50 percent of the fair value of the asset on the date of disposition.

While UQM has exclusive patent ownership rights for any technology developed with Grant funds, we are required to grant the DOE a non-exclusive, non-transferable, paid-up license to use such technology.

During the second quarter of the current fiscal year, we changed our cumulative estimate of reimbursable rates under the Grant which resulted in an increase in our reimbursement of costs recorded for the nine month period ended December 31, 2013 of $958,000. At December 31, 2013, we had received reimbursements from the DOE under the Grant totaling $24.0 million and had funds receivable under the Grant of $0.2 million.

The application of grant funds to the recorded value of eligible capital asset purchases under the Grant as of December 31, 2013 and March 31, 2013 are as follows:


	December 31, 2013
	Purchase Cost		Grant Funding		Recorded Value
Land	$	896,388	$	448,194	$	448,194
Building		9,906,736		4,953,368		4,953,368
Machinery and Equipment		8,410,016		4,205,008		4,205,008
	$	19,213,140	$	9,606,570	$	9,606,570


	March 31, 2013
	Purchase Cost		Grant Funding		Recorded Value
Land	$	896,388	$	448,194	$	448,194
Building		9,906,736		4,953,368		4,953,368
Machinery and Equipment		7,581,408		3,790,704		3,790,704
	$	18,384,532	$	9,192,266	$	9,192,266