continuing as the surviving corporation and a wholly owned subsidiary of Danfoss, and the other transactions contemplated thereby (the "Merger" and, such proposal, the "Merger Proposal");

•

a proposal to approve, on an advisory (non-binding) basis, specified compensation that may become payable to our named executive officers in connection with the Merger (the "Advisory Compensation Proposal"); and



•

a proposal to approve the adjournment or about September 5, 2018, we began mailingpostponement of the Special Meeting, if necessary or appropriate, for, among other reasons, the solicitation of additional proxies in the event that there are not sufficient votes at the time of the special meeting to shareholdersadopt and approve the Merger Agreement (the "Adjournment Proposal").

Who Can Vote at the Special Meeting (Page 14)

        Only holders of record either a Notice of Internet Availability of Proxy Materials (“Notice”) or the proxy statement, proxy card, and Annual Report on Form 10-K.

Why am I receiving these proxy materials?

You have received these proxy materials because you own shares of UQM Technologies, Inc. common stock, and our Boardas of Directors (the “Board”) is soliciting your proxy to vote your shares at the Annual Meeting. This proxy statement describes proposals on which we would like you to vote at our Annual Meeting. It also gives you information on these proposals so that you can make an informed decision.

The expense of this solicitation is being borne by the Company.  Further solicitation of proxies may be made by telephone or oral communication by regular employees of the Company, who will not be additionally compensated for this work or by Alliance Advisors, a proxy solicitation firm, which is being paid $4,500 base fee plus out-of-pocket expenses for its services.

When you vote by using the Internet, by telephone or (if you received your proxy card by mail) by signing and returning the proxy card, you appoint David I. Rosenthal and Joseph R. Mitchell as your representatives at the Annual Meeting. They will vote your shares at the Annual Meeting as you have instructed them or, if an issue that is not on the proxy card comes up for vote, in accordance with their best judgment. This way, your shares will be voted whether or not you attend the Annual Meeting. Even if you plan to attend the Annual Meeting, we encourage you to vote in advance by using the Internet, by telephone or (if you received your proxy card by mail) by signing and returning your proxy card.

Why did I receive a Notice of Internet Availability of Proxy Materials in the mail instead of a printed set of proxy materials?

Pursuant to rules adopted by the Securities and Exchange Commission (the “SEC”), we are permitted to furnish our proxy materials over the Internet to our shareholders by delivering a Notice in the mail. We are sending the Notice to most shareholders. If you received a Notice by mail, you will not receive a printed copy of the proxy materials in the mail. Instead, the Notice instructs you on how to access and review the proxy statement and Annual Report on Form 10-K over the Internet.  The Notice also instructs you on how you may submit your proxy over the Internet.  If you received a Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting these materials contained in the Notice.

Shareholders who receive a printed set of proxy materials will not receive the Notice, but may still access our proxy materials and submit their proxies over the Internet at www.envisionreports.com/UQM.

•

attending the Special Meeting and voting in person; or



•

delivering to the Company's Secretary a written notice of revocation to UQM Technologies, Inc., 4120 Specialty Place, Longmont, Colorado 80504.

The Merger (Page 16)

        Under the Merger Agreement, Merger Sub will be merged with and into the Company, with the Company surviving such Merger as a wholly owned subsidiary of Danfoss.

        Under the terms of the Merger Agreement, at the effective time of the Merger (the "Effective Time"), each issued and outstanding share of common stock of the Company (each, a "Company Share"), other than Company Shares owned by Danfoss, Merger Sub, or any wholly owned subsidiary of the Company, or held in the Company's treasury (and excluding shares with respect to which dissenters' rights are exercised), will be cancelled and converted into the right to receive separate copies$1.71 per share in cash (the "Merger Consideration").

        Each option to purchase Company Shares that is outstanding as of the proxy materialsEffective Time (whether vested or unvested) will be cancelled in exchange for the right to receive the excess of the Merger Consideration (aggregated for the Company Shares underlying such option) over the exercise price of such option, less applicable withholding taxes.

        Restricted stock that is not vested immediately prior to the Effective Time will be automatically fully vested and free of any restrictions immediately prior to the Effective Time, and will be treated as Company Shares for all purposes of the Merger Agreement, including the right to receive the Merger Consideration, subject to applicable withholding taxes.

        Warrants that are outstanding at the Effective Time will be cancelled and the holders thereof will be issued replacement warrants exercisable for an amount in cash equal to the aggregate number of Company Shares underlying such warrants multiplied by the excess, if any, of the Merger Consideration over the per share exercise price of the applicable warrant.

        UQM and Danfoss are working together to complete the Merger as quickly as possible after the Special Meeting. UQM anticipates that the Merger will be completed during UQM's second fiscal quarter of 2019, ending June 30, 2019

The Recommendation of UQM's Board and UQM's Reasons for the Merger (Page 22)

        UQM's board of directors (the "Board"), by unanimous vote, has determined that it is advisable and in the future,best interests of UQM and our shareholders to consummate the Merger and the other transactions contemplated by the Merger Agreement, and unanimously recommends that the shareholders of the Company voteFOR the proposal to adopt and approve the Merger Agreement. For the factors considered by the Board in reaching its decision to approve and declare advisable the Merger Proposal, see the section entitled "The Merger (Proposal 1)—The Recommendation of UQM's Board and UQM's Reasons for the Merger."

Opinion of the Company's Financial Advisor, Duff & Phelps (Page 25 andAnnex C)

        Pursuant to an engagement letter, dated December 28, 2018, the Company retained Duff & Phelps, LLC ("Duff & Phelps") to provide an opinion as to the fairness, from a financial point of view, to the shareholders of the Company of the Merger Consideration to be received by such holders in the proposed Merger. At the meeting of the Board on January 18, 2019, Duff & Phelps reviewed with the Board its financial analysis of the Merger Consideration, responded to questions from the Board, and then delivered its opinion to the Board that, as of January 18, 2019 and based upon and subject to the assumptions, qualifications and limiting conditions contained in its written opinion, and discussed with

the Board, the Merger Consideration to be received by the shareholders of the Company in the Merger was fair from a financial point of view to such holders..

The full text of the Opinion is attached as Annex C to this Proxy Statement and is incorporated herein by reference. The full text of the Opinion sets forth a description of the assumptions made, procedures followed, matters considered and qualifications and limitations in rendering the Opinion. The Company encourages you to read the Opinion carefully and in its entirety.

Conditions to Closing the Merger (Page 50)

        Mutual Conditions:    The obligations of each party to effect the Merger are subject to satisfaction or waiver, on or prior to the Closing Date, of the following conditions:

•

The Merger Agreement and Merger shall have received approval from the holders of two-thirds of the outstanding Company Shares;



•

All required filings must have been made and all regulatory approvals shall have been received under applicable antitrust laws;



•

No governmental entity having jurisdiction over any party to the Merger Agreement shall have enacted, issued, promulgated enforced or entered any laws or regulations that make it illegal or otherwise prohibit consummation of the Merger;



•

The Committee on Foreign Investments in the United States ("CFIUS") shall have approved the Merger; and



•

All other governmental consents and approvals necessary to consummate the Merger shall have been obtained.

        Conditions to Obligations of Danfoss and Merger Sub.    The obligations of Danfoss and Merger Sub to effect the Merger are subject to satisfaction or waiver by Danfoss and Merger Sub on or prior to the Effective Date of the following conditions:

•

Representations and warranties of UQM specified in the Merger Agreement shall be true and correct in all respects when made and immediately prior to the Effective Time;



•

The Company shall have performed in all material respects all obligations, and complied in all material respects with the agreements and covenants, in the Merger Agreement required to be performed by or complied with by it at or prior to the Effective Time; and



•

Since the date of the Merger Agreement, there shall not have been any Company Material Adverse Effect (as defined in the Merger Agreement) or any shareholder whoevent, change, or effect that would, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

        Conditions to Obligation of the Company to Close.    The obligation of the Company to effect the Merger is receiving multiple copiesalso subject to the satisfaction or waiver by the Company on or prior to the Effective Time of the following conditions:

•

Representations and would likewarranties of Danfoss and Merger Sub specified in the Merger Agreement shall be true and correct in all respects when made and immediately prior to receive only one per household,the Effective Time; and



•

Danfoss and Merger Sub shall have performed in all material respects all obligations, and complied in all material respects with the agreements and covenants, of the Merger Agreement required to be performed by or complied with by them at or prior to the Effective Time.

Financing Conditions (Page 35)

        The Merger is not conditioned upon the receipt of financing by Danfoss or Merger Sub.

Interests of the Company's Directors and Executive Officers in the Transaction (Page 35)

        General.    In considering the recommendation of our Board with respect to the Merger Proposal and the Advisory Compensation Proposal, you should contactbe aware that some of our directors and executive officers have interests in the shareholder’s bank, broker,Merger that may differ from, or be in addition to, the interests of shareholders generally, including for the following reasons, among others: potential employment of our executive officers following the Merger; the accelerated vesting and/or cash-out of Company equity awards held by them; and our directors' and officers' rights under the Merger Agreement to ongoing indemnification and insurance coverage.

Takeover Proposal (Page 47)

        Under the Merger Agreement, the Company has agreed that it will, and will cause its subsidiaries to, immediately cease and cause to be terminated, and shall not authorize or knowingly permit any of its or their representatives to continue, any and all existing activities, discussions, or negotiations, if any, with any third party (other than Danfoss, Merger Sub and their respective representatives) with respect to any Takeover Proposal and will use reasonable best efforts to cause any such third party in possession of non-public information in respect of the Company or any of its subsidiaries that was furnished by or on behalf of the Company and its subsidiaries to return or destroy all such information.

        The Company will not, and will cause each of its subsidiaries not to, and shall not authorize its and their representatives, to, directly or indirectly:

•

solicit, initiate, or knowingly take any action to facilitate or encourage the submission of any Takeover Proposal (as defined below) or the making of any proposal that could reasonable by expected to lead to a Takeover Proposal;



•

other than clarifying the terms of the Takeover Proposal or to disclose the existence of the terms of the Merger Agreement, conduct or engage in any discussions or negotiations with, disclose any non-public information relating to the Company or any of its subsidiaries to, afford access to the business, properties, assets, books, or records of the Company or any of its subsidiaries to, or knowingly assist, participate in, facilitate, or encourage any effort by, any third party that is seeking to make, or has made, any Takeover Proposal;



•

amend or grant any waiver or release under any standstill or similar agreement with respect to any class of equity securities of the Company or any of its subsidiaries; or



•

enter into any agreement in principle, letter of intent, term sheet, acquisition agreement, merger agreement, option agreement, joint venture agreement, partnership agreement, or other nominee record holder, orcontract relating to any Takeover Proposal.

        Notwithstanding the shareholder may contact the Company at the above address and phone number. 

        The diversityCompany has agreed to promptly (and in no event more than 24 hours) following the Company's receipt of our directors’ skills allows each director an opportunityany Takeover Proposal, any inquiry that could reasonably be expected to lead to a Takeover Proposal, or any request for non-public information relating to the Company or for access to the business, properties, assets, books, or records of the Company or any of its subsidiaries by any third party, provide specific leadership in his respective areasDanfoss with written notice of expertise. such Takeover Proposal or request, which notice must include a written summary of the material terms and conditions thereof (including the identity of the person making such Takeover Proposal or inquiry).

Board Leadership Structure

We have        In addition, the Company will keep Danfoss fully informed, on a Board leadership structure wherebycurrent basis, of the positionsstatus and material terms of Chairmanany such Takeover Proposal, indication or request, including any material amendments or proposed amendments as to price and other material terms thereof. The Company must also provide Danfoss with not less than 48 hours' prior notice of any meeting of the Board at which any Takeover Proposal is expected to be considered.

        At any time prior to the approval of the Merger Agreement and Chief Executive Officer are separate. We believe this structure providesthe Merger by the holders of Company Shares, the Board may change its recommendation and withdraw, amend, modify or materially qualify its recommendation in a manner adverse to Danfoss ("Company Adverse Recommendation Change") or enter into an agreement with independent leadership and oversight of management and allowsa third party for the Chief Executive Officer to concentrate on the Company’s business operations.

Our Board is comprised of five directors, four of whom are independent directors.  All of our independent directors are highly accomplished and experienced business leaders in their respective fields, who have demonstrated leadership in significant enterprises and are familiar with board processes.  For additional information about the backgrounds and qualifications of our directors, see “Election of Directors” in this proxy statement. 

We believe the current Board leadership structure facilitates effective communication, oversight and governanceacquisition of the Company consistent withacquisition of 15% or more of the bestvoting interests of the Company’s shareholders and other stakeholders. 

Regulatory Approvals (Page 41)

        The consummation of the Merger Agreement and the Merger are conditioned upon receipt of the approval of the U.S. Committee on Foreign Investment in the United States ("CFIUS").

Material U.S. Federal Income Tax Consequences of the Merger (Page 39)

        If you are a U.S. Holder (as defined below in "The Merger (Proposal 1) Material U.S. Federal Income Tax Consequences of the Merger"), the receipt of cash in exchange for Company Shares pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. A U.S. Holder of Company Shares who receives cash in the Merger generally will recognize gain or loss in an amount equal to the difference, if any, between (a) the amount of cash received and (b) such U.S. Holder's adjusted tax basis in the Company Shares exchanged therefor. Such gain or loss generally will constitute capital gain or loss and will constitute long-term capital gain or loss if the U.S. Holder's holding period for the Company Shares is more than one year as of the closing date of the Merger.

        You should consult your own tax advisors regarding the particular tax consequences to you of the exchange of Company Shares for cash pursuant to the Merger in light of your particular circumstances (including the application and effect of any federal, state, local, or foreign tax laws).

Dissenters' Rights of Appraisal (Page 57)

        For holders of Company Shares that are issued and outstanding immediately prior to the Effective Time who did not vote in favor of the Merger and who properly demand the fair value of such shares and otherwise comply in all respects with the provisions of Article 113 of the CBCA (the "Dissenting Shareholders"), their Company Shares shall not be converted into the right to receive the Merger Consideration, but instead such holder shall be entitled to payment of the fair value of such shares in accordance with the provisions of Article 113 of the CBCA. At the Effective Time, such Dissenting Shareholder's Company Shares shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and such holder shall cease to have any rights with respect thereto, except the rights provided for pursuant to the provisions of Article 113 of the CBCA and the Merger Agreement.

Voting and Support Agreement (Page 53)

        In connection with the execution and delivery of the Merger Agreement, GDG Green Dolphin, LLC, which holds approximately 7.4% of the issued and outstanding shares of the Company and each director and executive officer of the Company, in their respective capacities as shareholders of Company, have each entered into new employment agreementsa Voting and Support Agreement with Danfoss and Merger Sub (each, a "Voting Agreement"), pursuant to which such shareholders have agreed, among other things, to vote their respective Company Shares (and any shares of Company common stock they may later acquire), in favor of the approval of the Merger and the adoption of the Merger Agreement and any related matters, against any Takeover Proposal and against any other action involving the Company that is intended, or would reasonably be expected to interfere with or adversely affect the consummation of the Merger or the transactions contemplated by the Merger Agreement.

        In addition, in the Voting Agreements each shareholder agreed to certain affirmative and negative covenants, including: to not demand appraisal of any of their Company Shares (or shares of Company common stock they may later acquire) or exercise a right to dissent from the transactions contemplated by the Merger Agreement; to refrain from sales or other transactions involving their respective Company Shares (or shares of Company common stock they may later acquire); and to not solicit, initiate, encourage or facilitate the submission by any person(s) to the Company of any Takeover Proposal or any inquiries or proposals that would reasonably be expected to lead to any Takeover Proposal.

        Thus description of the Voting Agreements is qualified in its entirety by reference to the form of the Voting Agreement, which was provided as Exhibit 10.1 to the Company's Form 8-K filed or furnished with the SEC on January 22, 2019.

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND MERGER

Q:

Why am I receiving this Proxy Statement?

A:

A:    You have received this Proxy Statement and the attached proxy materials because you own shares of UQM common stock and the Board is soliciting your proxy to vote your shares at the Special Meeting in connection with the Merger Agreement, the advisory (non-binding) vote on specified compensation that may become payable to our named executive officers in July 2015, it agreedconnection with the Merger and the adjournment and postponement of the Special Meeting, if necessary. This Proxy Statement describes issues on which we would like you to provide retention bonusesvote at our Special Meeting. It also gives you information on these issues so that you can make an informed decision.

Q:

On what items am I voting?

A:

You will be voting on the following three proposals:

•

A proposal to itsadopt and approve the Merger Agreement, by and among the Company, Danfoss, and Merger Sub, pursuant to which Merger Sub will be merged with and into the Company, with the Company surviving the merger as a wholly owned subsidiary of Danfoss (the "Merger" or the "Transaction" and, such proposal, the "Merger Proposal").

•

A proposal to approve, on an advisory (non-binding) basis, specified compensation that may become payable to our named executive officers in connection with the Merger (the "Advisory Compensation Proposal"); and

•

A proposal to incent themapprove the adjournment or postponement of the Special Meeting, if necessary or appropriate, for, among other reasons, the solicitation of additional proxies in the event that there are not sufficient votes at the time of the special meeting to remain employeesadopt and approve the Merger Agreement (the "Adjournment Proposal").

Q:

What is the proposed merger transaction?

A:

The proposed transaction is the acquisition of UQM by Danfoss through the consummation of the Merger, pursuant to the Merger Agreement. Once the Merger Agreement has been adopted and approved by the Company's shareholders and the other closing conditions under the Merger Agreement have been satisfied or waived, Merger Sub will merge with and into the Company. The Company will be the surviving corporation in the Merger and will become a wholly owned subsidiary of Danfoss.

The Merger Agreement is attached as Annex A to this Proxy Statement.

Q:

What are the primary terms of the Merger Agreement with the Buyer?

A:

Under the terms of the Merger Agreement, at the Effective Time, each issued and outstanding Company Share, other than shares owned by Danfoss, Merger Sub, or any wholly owned subsidiary of the Company, while it explored strategic alternatives.  Ifor held in the executive remained an employeeCompany's treasury, will be cancelled and converted into the right to receive the Merger Consideration, unless such holders of Company Shares elect to seek to exercise and perfect dissenters' rights under the Colorado Business Corporation Act (the "CBCA").

Each option to purchase Company Shares that is outstanding as of the Effective Time (whether vested or unvested) will be cancelled in exchange for the right to receive the excess of the Merger Consideration over the exercise price of such option, less applicable taxes required to be withheld. Restricted stock that is not vested immediately prior to the Effective Time will be automatically fully vested and free of any restrictions immediately prior to the Effective Time, and will be treated as Company continuously through June 30, 2017, he wouldShares for all purposes of the Merger Agreement, including the right to receive the Merger Consideration, subject to applicable withholdings.

Warrants that are outstanding at the Effective Time will be paid acancelled and the holders thereof will be issued replacement warrants exercisable for an amount in cash bonus after that date inequal to the amount specified in his respective employment agreement.  The retention bonuses were paid to its named executive officers, Mr. Mitchell, Mr. Rosenthal, and Mr. Schaffer, in July 2017 in the amounts of $100,000, $100,000, and $75,000, respectively.

Long-Term Incentive Compensation.  The Compensation Committee annually considers the award of long-term incentive compensation to compensate executive officers for their efforts in positioning the Company for long-term growth. The Compensation Committee considers aaggregate number of qualitative factors in settingCompany Shares underlying such warrants multiplied by the long-term incentive compensation for each executive officer, including the specific goals listed above as well as each executive officer’s contribution to a variety of  other Company-wide goals such as new customer and market development activities, supply chain optimization and improvement, technology base enhancements, new product development and launch activities, enhanced investor relations and implementation of certain extraordinary transactions, among other things. 

Long-term incentive compensation may be paid in the form of Company common stock or in the form of a grant of stock options orexcess, if any, combination of stock and stock options.  The Committee believes that equity-based compensation awards aid in the retention of the executive and serve to alignMerger Consideration over the interests of the executive with those of the Company’s other shareholders. Equity-based compensation awards have a future service requirement (vesting period) of three years.

Qualitative criteria are generally used to establish goals and objectives that the Board believes add value to the Company and enhance its prospects for long-term growth and success.  The Compensation Committee has established target levels for long-term incentive compensation for each executive officer based on the level of responsibility for each executive position and the peer group of companies. The target long-term incentive compensation level (as a percentage of each officer’s base salary) for each of the Company’s executive officers is as follows:

Name of Executive Officer		Target Long-Term Incentive Compensation
Joseph R. Mitchell		100	%
David I. Rosenthal		65	%
Adrian P. Schaffer		55	%

The Compensation Committee reviewed performance for the year ended December 31, 2017 in April 2018 and determined to award long-term incentive compensation to the executive officers at 100% of the target level.  The fair value of long-term incentive compensation awards granted to executive officers in April 2018 for their performance, as a percentage of their base salary, were as follows:

Name of Executive Officer		Actual Long-Term Incentive Compensation Percentage Awarded		Options Granted # of Shares		Stock Granted # of Shares
Joseph R. Mitchell		100%		294,737		56,000
David I. Rosenthal		65%		142,143		27,007
Adrian P. Schaffer		55%		115,243		21,896

Employment Agreements

Each of our executive officers has an employment agreement with the Company, as described below.  The agreements provide for compensation in the form of annual base salary, which cannot be decreased during the term of the agreement

quarter ending June 30, 2019. In order to complete the Merger, we must obtain the required shareholder approval, and the approval of CFIUS and a number of other closing conditions under the Merger Agreement must be satisfied or waived. See "The Merger Agreement—Conditions to Completion of the Merger".

Q:

What happens if the Merger is not complete?

A:

If the Merger Agreement is not adopted by the shareholders, or if the Merger is not completed for any other reason, our shareholders will not receive any payment for their Company Shares in connection with the Merger. Instead, UQM will remain a public company and the Company Shares will continue to be listed or quoted on NYSE American Stock Exchange. In addition, under specified circumstances, we may be required to pay Danfoss a termination fee of $3.5 million. See "The Merger Agreement—Termination of the Merger Agreement".

Q:

What will happen if shareholders do not approve the Advisory Compensation Proposal in connection with the Merger?

A:

The approval of the Advisory Compensation Proposal is not a condition to the completion of the Merger. The vote on this proposal is an advisory vote and will not be binding on the dateCompany or Danfoss. Further, the underlying plans and arrangements are contractual in nature and not, by their terms, subject to shareholder approval. Therefore, regardless of grant.  

	Outstanding Equity Awards at December 31, 2017
			Option awards																		Stock awards
			Number					Number
			of securities					of securities													Number				Market value
			underlying					underlying													of shares				of shares
			unexercised					unexercised				Option					Option				of stock				of stock
			options					options				exercise					expiration				that have				that have
	Name		exercisable					unexercisable				price					date				not vested				not vested (5)
			(#)					(#)				($)									(#)				($)
	Joseph R.		-					153,000			(1)	0.87					7/11/2027
	Mitchell		66,619					133,237			(2)	0.68					7/11/2026				27,662			(4)	38,450
			45,205					22,603			(3)	0.66					9/23/2025
			27,278					-				1.71					8/18/2024
			24,193					-				0.89					7/11/2022
	David I.		-					74,800			(1)	0.87					7/11/2027
	Rosenthal		32,572					65,145			(2)	0.68					7/11/2026				13,525			(4)	18,799
			57,224					28,612			(3)	0.66					9/23/2025
			40,651					-				1.71					8/18/2024
			14,000					-				0.69					4/30/2018
	Adrian P.		-					51,100			(1)	0.87					7/11/2027
	Schaffer		22,249					44,497			(2)	0.68					7/11/2026				9,238			(4)	12,841
			39,087					19,543			(3)	0.66					9/23/2025
			27,677					-				1.71					8/18/2024
			71,854					-				0.89					7/11/2022
(1)	These unexercisable options were granted on July 12, 2017. One-third of the options will vest over each of the next three years starting on July 12, 2018.
(2)	These unexercisable options were granted on July 12, 2016.  One-third of the options have vested, and an additional one-third of the options are scheduled to vest on each of July 12, 2018 and July 12, 2019.
(3)	These unexercisable options were granted on September 24, 2015. Two-thirds of the options have vested, the remaining one-third of the options are scheduled to vest on September 24, 2018.
(4)	The restricted shares were granted on July 12, 2016. One-third of the shares have vested, and an additional one-third of the shares are scheduled to vest on each of July 12, 2018 and July 12, 2019.
(5)	The market value has been determined based on the closing price of Company common stock on December 29, 2017 of $1.39 per share.

other nominee to vote your Company Shares, the above-described options for revoking your voting instructions do not apply, and instead you must follow the instructions received from your broker, bank, trust or other nominee to revoke your voting instructions or submit new voting instructions.

Q:

What happens if I sell my Company Shares before completion of the Merger?

A:

If you transfer all of your Company Shares (or rights to acquire such Company Shares), you will have transferred your right to receive the Merger Consideration in the Merger and lost your right to pursue appraisal of your shares under the CBCA. To receive the Merger Consideration (or, if you properly demand appraisal, to remain entitled to appraisal rights with respect to your Company Shares), you must hold your Company Shares through completion of the Merger.

The Record Date for shareholders entitled to vote at the Special Meeting is earlier than the Special Meeting date and the closing of the Merger. If you transfer your Company Shares after the Record Date but before the Special Meeting, you will have transferred your right to receive the Merger Consideration in the Merger but, unless special arrangements are made, retained the right to vote at the special meeting

Q:

Should I send in my stock certificates now?

A:

No. At or about the date of completion of the Merger, if you hold certificated shares, you will receive a letter of transmittal with instructions informing you how to send in your stock certificates to the funding agent to receive the Merger Consideration.Do not send any stock certificates with your proxy.

If your shares of UQM common stock are held in "street name" by your broker, you will receive instructions from your broker as to how to surrender your shares and receive the Merger Consideration for those shares following the completion of the Merger.

Q:

Who can help answer my other questions?

A:

If you have additional questions about the Merger, or require assistance in submitting your proxy or voting your shares or need additional copies of the proxy statement or the enclosed proxy card, please contact our proxy solicitor, Okapi Partners, at:

1212 Avenue of the Americas, 24^th Floor
New York, NY 10036
855-305-0857

If a broker, bank, trust or other nominee holds your shares, you should also call your broker, bank, trust or other nominee for additional information.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

        This Proxy Statement contains statements that constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), including statements about our beliefs or current expectations of the future financial prospects, operations and corporate governance procedures of the Company following the closing of the Transaction as well as our current beliefs of the future prospects of the Company if the Transaction does not occur, whether as a result of a failure of our shareholders to approve the Transaction or otherwise. We intend the forward-looking statements throughout this Proxy Statement to be covered by the safe harbor provisions for forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual outcomes to differ materially from our expectations. UQM undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Proxy Statement. In addition to other factors and matters contained or incorporated in this document, UQM advises that the following factors could cause actual results to differ materially from those discussed in the forward-looking statements:

•

the financial performance of each of UQM and Danfoss through the completion of the Merger, including in particular UQM's cash flows and cash balances;



•

stock market volatility;



•

the timing of, and regulatory and other conditions associated with, the completion of the merger, including approval by CFIUS and by UQM shareholders;



•

competitive pressures and continued consolidation in the markets in which UQM operates;



•

the potential loss of key UQM employees, customers or suppliers;



•

general economic conditions affecting the international market in which UQM operates, including international trade disputes and tariffs;



•

UQM's extended history of losses and current financial limitations;



•

risks related to UQM's intellectual property and litigation and claims in which UQM or its principals may become involved; and



•

other factors that are described from time to time in UQM's periodic filings with the U.S. Securities and Exchange Commission

Current Named Executive OfficersTHE PARTIES TO THE MERGER

        UQM is a developer and manufacturer of power-dense, high-efficiency electric motors, generators, power electronic controllers and fuel cell compressors for the commercial truck, bus, automotive, marine, and industrial markets. A major emphasis for UQM is developing propulsion systems for electric, hybrid electric, plug-in hybrid electric and fuel cell electric vehicles. UQM is IATF 16949 and ISO 14001 certified. UQM's executive offices are located at 4120 Specialty Place, Longmont, CO 80504 and its telephone number is: 303-682-4900.

        Danfoss is a wholly owned subsidiary of Denmark-based Danfoss A/S, a multi-industry technology provider divided into four business segments: Danfoss Power Solutions, Danfoss Cooling, Danfoss Drives, and Danfoss Heating. Danfoss Power Solutions is a leading player in hydraulic systems and components for powering off-highway machinery. Danfoss Cooling is a market leader in the air-conditioning and refrigeration industry. Danfoss Drives' key expertise lies in low-voltage AC drives, power modules, and stacks for a number of industries. Danfoss Heating is a leading producer of residential heating, commercial heating, and district energy products. Danfoss's executive offices are located at Nordborgvej 81, DK-6430 Nordborg, Denmark and its telephone number is: +4574882557.

        Danfoss-2019 Merger Sub, Inc. is a Delaware corporation and a wholly owned subsidiary of Danfoss. Merger Sub was formed solely for the purpose of facilitating Danfoss' acquisition of UQM. Merger Sub's executive offices are located at Nordborgvej 81, DK-6430 Nordborg, Denmark and its telephone number is +4574882557.

SPECIAL MEETING OF THE COMPANY'S SHAREHOLDERS

Time, Place and Purpose of the Special Meeting

        The special meeting will be held at 10:00 a.m., local time, on April 23, 2019, at the offices of UQM, at 4120 Specialty Place, Longmont, Colorado 80504. The purpose of the special meeting is to consider and vote on the proposal to adopt and approve the Merger Agreement and the Merger (the "Merger Proposal") and the adjournment or postponement of the Special Meeting, if necessary (the "Adjournment Proposal").

        In addition, in accordance with Section 14A of the Exchange Act, we are providing holders of Company Shares with the opportunity to cast an advisory (non-binding) vote on specified compensation that may be payable to our named executive officers in connection with the Merger, the value of which is disclosed in the table in the section of the proxy statement entitled "The Merger (Proposal 1) Interests of Certain Persons in the Merger" (the "Advisory Compensation Proposal"). The vote on the Advisory Compensation Proposal is separate from the vote to adopt the Merger Proposal and the Adjournment Proposal. Accordingly, a holder of Company Shares may vote to approve the adoption of the Merger Proposal and vote not to approve the Advisory Compensation Proposal and vice versa. Approval of this Advisory Compensation Proposal is not a condition to the completion of the Merger. Because the Advisory Compensation Proposal vote is advisory in nature only, it will not be binding on either the Company or Danfoss. Accordingly, because we are contractually obligated to pay the specified compensation, such compensation will be payable, subject only to the conditions applicable to such payment, if the Merger is completed and regardless of the outcome of the advisory vote.

The Board, by unanimous vote, has determined that it is advisable and in the best interests of UQM and our shareholders to consummate the Merger and the other transactions contemplated by the Merger Agreement, and unanimously recommends that shareholders voteFOR the Merger Proposal,FOR the Advisory Compensation Proposal andFOR the Adjournment Proposal.

Who Can Vote at the Special Meeting

        Only holders of record of UQM common stock, as of the close of business on March 4, 2019, which is the record date for the special meeting, are entitled to receive notice of and to vote at the special meeting. If you own Company Shares that are registered in the name of someone else, such as a broker, you need to direct that person to vote those shares or obtain an authorization from them and vote the shares yourself at the special meeting. On the record date, there were 56,197,188 shares of common stock outstanding. Each Company Share is entitled to one vote at the Special Meeting.

Quorum; Vote Required

        The presence, in person or by proxy, of the holders of one-third of the outstanding shares of our common stock entitled to vote will constitute a quorum. If a quorum is present, we can hold the Special Meeting and the conduct business discussed herein.

        Approval of the Merger Proposal requires the affirmative vote of the holders of not less two-thirds of the outstanding shares of our common stock. We will likely adjourn the Special Meeting until a later date if we do not have a sufficient number of shares present to approve the Merger Proposal. Approval of the Advisory Compensation Proposal and the Adjournment Proposal requires the affirmative vote of holders of a majority of the shares represented at the meeting and entitled to vote on the matter. A

failure to vote your shares, an abstention or a broker non-vote will have the same effect as a vote "AGAINST" on the outcome of the Merger Proposal. A failure to vote your shares, an abstention or a broker non-vote will have no effect on the Advisory Compensation Proposal and the Adjournment Proposal.

Solicitation of Proxies

        UQM will pay all of the costs of this proxy solicitation. In addition to soliciting proxies by mail, directors, officers and employees of UQM may solicit proxies personally and by telephone, e-mail or otherwise. None of these individuals will receive additional or special compensation for soliciting proxies. Upon request, UQM will reimburse brokers, banks and other nominees for their expenses in sending proxy materials to their customers who are beneficial owners and obtaining their voting instructions.

        UQM has engaged Okapi Partners to assist in the solicitation of proxies for the special meeting and will pay Okapi Partners a fee of approximately $100,000 plus reimbursement of actual out-of-pocket expenses.

Householding

        We, along with some banks, brokers and other nominee record holders, may be participating in the practice of "Householding" proxy statements. This means that only one copy of the proxy may have been sent to multiple shareholders sharing a household. The Company will promptly deliver a separate copy of this document to any shareholder upon written or oral request to the Secretary of the Company, UQM Technologies, Inc., 4120 Specialty Place, Longmont, Colorado 80504, telephone: (303) 682-4900.

Revocation or Proxies

        Any holder of Company Shares giving a proxy pursuant to this solicitation has the power to revoke and change it any time before it is voted at the Special Meeting. If you are a shareholder of record, you may revoke your proxy at any time before the vote is taken at the Special Meeting by:

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submitting a new proxy with a later date, but using the telephone or internet proxy submission procedures described in this proxy statement, or by completing, signing, dating, and returning a new proxy card by mail to the Company;



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attending the Special Meeting and voting in person; or



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delivering to the Company's Secretary a written notice of revocation to UQM Technologies, Inc., 4120 Specialty Place, Longmont, Colorado 80504.

        Attending the Special Meeting without taking one of the actions described above will not in itself revoke your proxy. Please note that if you want to revoke your proxy by mailing a new proxy card to the Company or be sending a written notice of revocation to the Company, you should ensure that you send your new proxy card or written notice of revocation in sufficient time for it to be received by the Company before the Special Meeting.

        If you hold your Company Shares in "street name" through a bank, broker, trust, or other nominee, you will need to follow the instructions provided to you by your bank, broker, trust, or other nominee in order to revoke your voting instructions or submit new voting instructions.

THE MERGER (PROPOSAL 1)

        The discussion of the merger in this Proxy Statement is qualified by reference to the Merger Agreement, which is attached to this Proxy Statement as Annex A. You should read the Merger Agreement carefully.

Background of the Transaction

Overview

        The proposed Merger with Danfoss is the culmination of a several-year long evolution of the Company and the industry in which it operates and a resulting realization by the Company and its Board that in order to survive and thrive it needs to engage in a fundamental transaction with a strategic partner.

        Beginning in 2011, the Company adopted a plan to locate a strategic partner that would support the Company in its efforts to expand internationally, and particularly in the market for electric vehicles and controllers in China. The Chinese market for electric vehicle propulsion systems is the largest and the electric vehicle motor and controller market is highly competitive. The Board anticipated that the sector would experience increased consolidation, and that UQM's limited financial position would prevent it from efficiently accessing such international markets without a strategic partner that would provide sufficient scale to compete effectively with the Company's larger competitors. Thus, the Company initiated its strategy to locate a strategic partner, particularly a partner that could provide financial support and access while allowing UQM to develop and sell its products into the international markets including the Chinese market. Selection criteria for the strategic partner was that it must be able to provide needed capital, access to the market, and the sales and development infrastructure necessary to develop and sell the Company's products in international markets, including China.

        In order to execute this strategy, on September 25, 2013 the Board formed a Special Committee of independent directors of the Board (the "Special Committee") to negotiate and analyze any significant transactions with a strategic partner. The Special Committee was reauthorized through a Special Committee Charter approved on June 2, 2016, and subsequently reaffirmed on October 16, 2018.

On July 1,16, 2014, the Company engaged the investment banking firm BDA Advisors to contact potential strategic investors and/or partners in the United States as well as overseas about an investment in, or manufacturing partnership with, the Company. The Special Committee and management chose BDA Advisors for its experience and connections in East Asia as well as its familiarity with the Company and its operations and strategy.

        In 2015, the Company directed BDA Advisors to engage in a broad canvassing of the entire market with a focus on Chinese and East Asian markets to seek potential investors/partners, which led to increased interest and activity with potential investors and partners in late 2015 and early 2016.

        In its preliminary screening effort, BDA Advisors prepared a list and had preliminary contact with over 100 public and private companies globally who they believed would be interested in a strategic investment in, or other arrangement with, the Company. The Company reviewed and finalized the list with BDA Advisors, including adding other companies the Company wished to approach, resulting in a list of 85 potential strategic investors and/or partners who the Company and BDA Advisors believed could be a good fit for the Company and its strategic plans. Through the remainder of 2015 and into 2016, BDA Advisors contacted a total of approximately 50 target companies at the direction of the Company. Of the target companies that were approached, the most serious interest was shown by Asian companies, mainly from China. Subsequently, UQM executives visited a number of the potential partner companies in China and several of them paid reciprocal visits to the UQM facilities in Colorado in what would be considered the pre-due diligence phase.

Hybrid Kinetic Purchase and Sale Agreement in 2016

        On June 28, 2016, the Company entered into a Stock Issuance and Purchase Agreement (the "HKG Purchase Agreement") with American Compass, Inc. ("American Compass"), a California corporation and wholly owned subsidiary of Hybrid Kinetic Group Limited, a publicly traded Bermuda company listed on the Hong Kong Stock Exchange ("Hybrid Kinetic"), pursuant to which American Compass would purchase 66.5 million newly issued shares of the Company's common stock for an aggregate purchase price of $47,880,000. The newly issued shares would have resulted in American Compass owning approximately 51% of the Company's shares of common stock. The Board approved the HKG Purchase Agreement and transactions contemplated thereby.

        The amount to be paid by Hybrid Kinetic through American Compass represented approximately a 6.4% premium to the volume-weighted average trading price of the Company's common stock for the 90-day period ending on June 27, 2016.

        As part of the HKG Purchase Agreement, Hybrid Kinetic sought to amend the Company's articles of incorporation and bylaws in ways to reduce minority shareholder voting rights. The proposal to acquire a majority interest of the Company's outstanding common stock was approved by the Company's shareholders, but the HKG Purchase Agreement was rejected by the Company's shareholders due to its requirement to amend the Company's article of incorporation and bylaws to reduce minority shareholder voting rights. As a result, the transaction was ultimately terminated.

CNHTC/Sinotruk Purchase and Sale Agreement in 2017

        Following the termination of the HKG Purchase Agreement, in January 2017, the Board conducted a review of its strategic investment strategy. The Board determined that the reasons supporting the decision to seek a strategic partner that could assist the Company in expanding into international markets, including China, remained. In early 2017, the Company approached National Heavy Duty Truck Group Co. Ltd. ("CNHTC") and its wholly owned subsidiary, Sinotruk (BVI) Limited ("Sinotruk"), to discuss opportunities for investment in the Company and to develop and sell electric motors and controller products for sale into the China market. The discussions included discussion of a potential Chinese development and manufacturing joint venture and potential minority investment in the Company.

        Sinotruk proposed a two stage investment in the Company, pursuant to which Sinotruk would acquire newly issued shares of our common stock in two stages, and UQM and CNHTC would plan to create a joint venture to manufacture and sell electric propulsion systems for commercial vehicles and other vehicles in China. The proposed Sinotruk transaction, if approved by the Company's shareholders and CFIUS, would have resulted in Sinotruk owning a total of 34% of the Company's outstanding shares at a purchase price of $0.95 per share, which represented a 15% premium over the 30-day closing price average for the period ending on the last trading date before signing.

        On August 25, 2017, the Company entered into a Stock Purchase Agreement with Sinotruk (the "Sinotruk Purchase Agreement"). The first stage investment closed on September 25, 2017, resulting in Sinotruk acquiring 5,347,300 shares of the Company's common stock, representing 9.9% of the total outstanding shares as of the date of the Sinotruk Purchase Agreement, for aggregate consideration of approximately $5.1 million. In the second stage, Sinotruk was to acquire such number of additional shares (the "Second Stage Shares") resulting in Sinotruk owning a total of 34% of the Company's then-outstanding common stock on a fully diluted basis (the "Second Stage Transaction"). The purchase price for the Second Stage Shares was identical to the price at which the shares were sold in the First Stage Transaction—$0.95 per share. If completed, the total transaction would have brought approximately $28.3 million in cash to UQM.

        On May 9, 2018, the Company announced that the closing of the Second Stage Transaction would not occur because CFIUS determined that it would not approve the Second Stage Investment. As a result, in January 2019, we formally notified Sinotruk of the termination of the Sinotruk Purchase Agreement.

Proposed Danfoss Merger Agreement and Plan of Merger:

        After CFIUS denied the joint application by the Company and CNHTC to complete the Second Stage Investment and corresponding purchase of the Company shares, it was clear to the Company that it would need additional funding and/or a strategic investment partner to support the Company's business plan and development cycle. Because of CFIUS' general concerns regarding risks of misappropriation of UQM's intellectual property and trade secrets by Chinese-based investors, the Company concluded Chinese investors would no longer be a viable option. Accordingly, the Company turned its focus to North American, European and Indian based companies.

        In parallel to the Company's attempt to seek a strategic partner, the Company also noted the significant consolidation taking place in the electric propulsion sector. In 2016, BorgWarner acquired Remy International, a manufacturer of traction motors and other motor products, and a competitor of the Company. In July 2017, BorgWarner announced that it would also acquire Sevcon, a manufacturer of inverters. In June 2018, Dana, Inc. announced it would purchase a majority interest in TM4, Inc., one of the Company's largest competitors. In addition, several other acquisitions and alliances were announced globally in this segment along with other major companies announcing significant investments into electric propulsion technology. In each case, the combined competitor companies could demonstrate significantly increased scale in their purchasing power, manufacturing capacity and global reach, each of which is critical to effectively competing in the electric propulsion industry.

        At a Board meeting held on June 20, 2018, the Board reviewed the status of the Company's sales and its international expansion strategy. David Rosenthal, the Company's Chief Financial Officer ("Rosenthal"), reported that because the Company could no longer rely on CNHTC's second tranche investment, management was considering several alternative funding sources. Joseph Mitchell, the Company's President and Chief Executive Officer ("Mitchell"), also presented to the Board the status of consolidation in the industry and the Company's sales in China. Mitchell noted that Sinotruk's projected sales were lower than those initially projected. The Board concluded that the Company's immediate need for additional funds and the rapidly accelerating consolidation and increased global competition in the sector would require the Company to accelerate its search for a strategic investor.

        At the Board meeting held on October 16, 2018, the Board reaffirmed the mandate of the existing Special Committee and tasked it with the oversight of the strategic alternatives review process, with Chairman of the Board, Don Vanlandingham, and independent directors Joe Sellinger and Stephen Roy as members of the committee. The other members of the Board were invited to participate in committee meetings and did participate from time to time.

        During the period beginning with the engagement of BDA Advisors in 2015 until CFIUS' rejection of the CNHTC transaction in March 2018, the Company directly contacted or was contacted by at least 200 companies located worldwide to discuss possible strategic investments or strategic development and sales joint ventures. Following CFIUS' determination not to approve the CNHTC second tranche transaction, the Company contacted several additional companies globally to explore potential strategic investments. The types and locations of the companies that were contacted varied, including major companies in India, North America, Europe and Asia and including strategic partnering options from direct investment, joint ventures to convertible debt options. These companies included current customers, potential customers and suppliers of the Company along with others that had an interest in expanding their capabilities in this space. Most of the companies ultimately declined to engage beyond the initial high level discussion stages, although two potential investors did enter into confidentiality

agreements and initiated due diligence, including technical and financial diligence and several visits to the UQM headquarters. They subsequently declined to make a meaningful investment offer.

        In August 2018 Danfoss contacted the Company directly to discuss collaboration opportunities. The parties executed a confidentiality agreement on August 28, 2018 to allow Danfoss to conduct initial due diligence.

        On September, 6, 2018, Nis Jessen, Vice President Business Development Electrification of Danfoss ("Jessen") and Kimmo Rauma, Vice President at Danfoss Power Solutions ("Rauma"), met via Skype with Ian Stonington, Business Development & Marketing at the Company ("Stonington") to arrange a meeting during the EV Tech Show in Novi, Michigan.

        On September 12, 2018 Jessen and Rauma met with Adrian Schaffer, Senior Vice President of Sales and Business Development for UQM ("Schaffer"), Stonington and Joe Meylor, Senior Program Manager at UQM ("Meylor") in Novi, Michigan and engaged in a general discussion about potential relationship between UQM and Danfoss.

        On September 27, 2018, Jessen, Rauma, Thorsten Boger, Director Business Development Electrification at Danfoss ("Boger"), Daniel Pfeifer, M&A and Integration Controller for Danfoss ("Pfeifer") and Troels Petersen, Senior Vice President Danfoss M&A ("Petersen") met with Mitchell and Schaffer at Danfoss' offices in Hamburg, Germany. At that meeting, the Danfoss team presented to the UQM team about Danfoss and its capabilities and UQM made a similar presentation to Danfoss. The parties engaged in a high-level discussion about a potential investment by Danfoss in UQM. No specific terms of such investments were discussed at the meeting.

        On October 8-9, 2018, Jessen, Rauma and Petersen from Danfoss met with Mitchell, Schaffer, Josh Ley, UQM Vice President of Technology ("Ley"), Rosenthal, and Jim Spellman, Senior Manufacturing Engineering Manager at UQM ("Spellman"), in addition to several other engineering managers from UQM at UQM's offices in Longmont Colorado. The UQM team provided a detailed presentation regarding UQM's engineering, manufacturing and financial status. The parties then discussed Danfoss' interest in investing in UQM and specifically its initial interest in acquiring a majority interest in UQM.

        On October 16, 2018, Mitchell provided a report to the Board at a meeting during which he summarized the status of the discussions with Danfoss and other potential strategic investors. The Board members agreed that the parties should continue initial discussions and engage in due diligence.

        Subsequently, UQM started providing Danfoss with more detailed due diligence information and the parties engaged in a full due diligence exercise.

        On October 29, 2018, Jessen and Petersen from Danfoss met by Skype with Mitchell to discuss a potential transaction.

        On October 30, 2018, Mitchell provided the UQM Board a detailed update on the Danfoss discussions, pre-due diligence visit status and next planned steps with Danfoss. The Board agreed that the potential benefits of a strategic transaction with Danfoss were positive and authorized continuing the discussions.

        On November 5, 2018, Jessen and Petersen from Danfoss met by Skype with Mitchell to discuss a potential transaction.

        On November 12, 2018, Jessen and Petersen from Danfoss met by Skype with Mitchell to discuss a potential transaction.

        On November 16, 2018, Petersen sent Mitchell a draft non-binding letter of intent pursuant to which Danfoss offered to acquire between 51% and 100% of the Company's outstanding capital stock

and to negotiate in good faith the potential transaction along with a 15 business day exclusivity period for Danfoss to conduct its formal due diligence.

        On November 19, 2018 the UQM Board met to consider the proposed letter of intent. After discussion, the Board authorized Mitchell to work with the legal advisors to negotiate a final letter of intent consistent with U.S. standards and customs, and assuming a letter of intent could be finalized the Board approved UQM management to complete formal due diligence with Danfoss and approved the 15-day exclusivity period to conduct due diligence.

        On November 20, 2018, Mitchell sent Petersen a revised letter of intent that included proposed changes by UQM.

        On November 20, 2018, Mitchell, Peterson and their legal representatives discussed the terms of the exclusivity period and reviewed the due diligence schedule. Based on the call, the parties agreed to revised terms of the letter of intent. On November 21, 2018, Mitchell sent Petersen the revised letter of intent that included changes discussed between the parties on the call the day before. Also on November 21, 2018, the parties executed a non-binding letter of intent in which Danfoss offered to acquire between 51% and 100% of the Company's outstanding capital stock and to negotiate in good faith the potential transaction along with a 15 business day exclusivity period for Danfoss to conduct its formal due diligence. This non-binding letter of intent was approved by the board of directors of each company and executed on the same date.

        On November 26, Mitchell, Petersen, and representatives of UQM and Danfoss met to discuss a detailed due diligence process and schedule.

        On November 29 2018, Mitchell provided an update to the UQM Special Committee regarding the status of the discussions and the strategies for continuing the dialogue with Danfoss. The Special Committee asked questions regarding the diligence timing and potential Danfoss agreement.

        Between December 5 through December 7, 2018, representatives of the Danfoss technical and commercial divisions traveled to Colorado to visit the UQM headquarters and to conduct technical and commercial due diligence. Representatives of Danfoss included Jessen, Tero Jarvelainen, Director of Research and Development, Christopher Prowell, an intellectual property consultant, Thorsten Boger, Director of Business Development, and Daniel Pfeifer, Danfoss' Mergers and Acquisitions and Integration Controller. Representatives of UQM at the meetings included Mitchell, Rosenthal and Ley, with other members of UQM's executive, technical, operations, finance and business development teams available as needed. The group conducted a detailed review of all aspects of UQM's technology, finances, customer base, and business plan.

        On December 13, 2018, the Company received from Danfoss a non-binding indication of interest which included a proposal to acquire 100% of the shares of the Company at a purchase price of between $1.50-1.60 per share of Company common stock.

        On December 17, 2018, the Special Committee of the Board met to evaluate the Danfoss indication of interest. The Special Committee reviewed Danfoss' proposed pricing and transaction structure and concluded that it was generally reasonable and reflected a price generally consistent with the Company's budget for 2020 and material assumptions regarding long term growth and revenue, although it appeared to understate potential intangible assets of the Company such as its experienced personnel and the value of its intellectual property. The Special Committee asked its legal advisor questions regarding the structure and timing of the proposed Merger, and the fiduciary duties of the Board. Following discussion, the Special Committee recommended that the full Board approve further negotiations with Danfoss of the proposed merger, and provide a counter offer to the price offered by Danfoss. Based on the Company's intangible value and consideration of future revenues not captured in the Danfoss analysis, the Special Committee concluded that price should be higher than the range of $1.50 to $1.60 per share put forth in the Danfoss indication of interest

        On December 18, 2018, the Board held a meeting to review the Company's 2019 budget and evaluate the Special Committee's recommendation. Management, including Rosenthal, presented the 2019 budget, which demonstrated a forecasted annual cash burn rate of $1.1 million for 2019. Rosenthal explained that the Company held less than $3 million in cash and cash equivalents and that the Company's credit facility with Bank of the West, in the amount of approximately $4.6 million was due and payable on March 15, 2019, accentuating the need for external financing. Following discussion, the Board authorized Mr. Vanlandingham and Mr. Mitchell to continue negotiations of the merger, but to propose an increase in the price offered by Danfoss of up to $2.18 per share.

        On December 19, 2018, Mitchell and Petersen had a phone conversation during which Mitchell advised that the UQM Board would endorse a transaction for the sale of 100% of UQM's common stock at a price of $2.18 per share.

        On December 21, 2018, Petersen and Mitchell held further discussions to resolve the Merger Consideration. Petersen indicated the counter offer from UQM exceeded the Danfoss valuation calculations and could not be accepted but that Danfoss remained very interested in working with UQM to further the discussions. The parties agreed to meet in New York in January 2019 to attempt to reach a final resolution of the price.

        On January 7-8, 2019, principals of the Company, including Vanlandingham, Mitchell, and Rosenthal, met with representatives of Danfoss, including Petersen, Jessen, and Anders Stahlschmidt, Danfoss' General Counsel, to continue discussions and negotiate key provisions of the proposed Merger Agreement, together with the parties' legal advisors and Danfoss' financial advisor, Greenhill. During that meeting and after considering various valuation-related points of input, the parties, tentatively agreed to a price per share of $1.71, subject to review and approval by the parties' respective boards of directors.

        On January 18, 2019, the Board, including all of the members of the Special Committee, held a telephonic meeting to consider and vote on the Merger Agreement. At this meeting Duff & Phelps reviewed with the Board its financial analysis of the Merger Consideration, responded to questions from the Board, and then delivered its opinion to the Board that, as of January 18, 2019 and based upon and subject to the assumptions, qualifications and limiting conditions contained in its written opinion, and discussed with the Board, the Merger Consideration to be received by the shareholders of the Company in the Merger was fair from a financial point of view to such holders. The Board asked questions regarding the Company's financial position and alternative financing alternatives. Rosenthal advised the Board that the Company's cash position was tight but could be managed to closing with careful management. He also advised that the Bank of the West had agreed to extend the maturity date of its credit facility by six months, through September 2019, which was the outside timeline for the proposed Merger. Based in part on the advice of its financial and legal advisors, the Board agreed and adopted the Merger Agreement, subject to obtaining all necessary shareholder consents and the execution of shareholder voting and support agreements. Following the Board meeting, the consent and support agreements were transmitted to its largest North American shareholder and to each of the directors and executive officers of the Company. The major North American shareholder and the directors and officers of the Company signed the consent and support agreements between January 19-20, 2019. The Agreement was executed by the parties on January 21, 2019 and the Company announced the execution of the Merger Agreement on January 21, 2019. The Company conducted a shareholder call to answer questions the following morning before the market opened.

The Recommendation of UQM's Board and UQM's Reasons for the Merger

UQM's Board, by unanimous vote, has determined that it is advisable and in the best interests of UQM and our stockholders to consummate the Merger and the other transactions contemplated by the Merger Agreement, and unanimously recommends that the shareholders of the Company vote FOR the proposal to adopt and approve the Merger Agreement. When you consider the Board's recommendation, you should be aware that UQM's directors may have interests in the merger that may be different from, or in addition to, your interests. These interests are described in "—Interests of the Company's Directors and Executive Officers in the Merger."

Factors considered by the Board.

        In making these determinations, the Board and the Special Committee considered various factors, including the following:

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Merger Consideration.  The Board concluded that the merger consideration of $1.71 per share of common stock to UQM's common stockholders represented a very favorable valuation for UQM.



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This per share Merger Consideration represents a premium of approximately 52.5% to the closing price of UQM's common stock of $1.13 on January 18, 2019, the last trading day prior to the public announcement of the execution of the Merger Agreement. This per share price also equates to approximately nine times UQM's last twelve months' ("LTM") reported revenue, and the valuation incorporated a detailed analysis and inclusion of our future business plan to arrive at the approximately $100 million aggregate purchase price.



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Data provided by both Danfoss and UQM showed Electric Vehicle Transaction comparable transactions have been completed at approximately 3.25x LTM reported revenue, demonstrating that the transaction considers UQM's future revenue stream and potential future growth.



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Relative to the implied value of the Sinotruk transaction in the fall of 2017, which implied a value per share of UQM common stock of $0.95, the Merger will provide UQM shareholders with a per share price in cash that represents an 80.0% premium to the potential Sinotruk transaction.



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This premium is being realized in the context of an equity valuation and debt capital markets environment that has experienced material volatility in the last 12 months.



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The per share Merger Consideration also represents a 137.5% premium relative to the Hybrid Kinetic offer of $0.72 per share, which ultimately was not approved by UQM's shareholders due to demands to amend UQM's articles of incorporation and bylaws to reduce minority shareholder rights.



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Following negotiation between representatives of Danfoss and UQM, the Board concluded that Consideration of $1.71 per share of common stock was the highest price that Danfoss would pay.



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The Board noted that the recently announced transactions involving its peers were premiums that were generally below that which the Company and its shareholders would receive pursuant to the Merger Agreement.



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The Board took under consideration the fact that this will be an all cash transaction, which provides greater certainty of value and liquidity to our stockholders than a transaction involving an exchange of equity.

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Risks of Remaining Independent.  The Board considered UQM's financial condition, results of operations, and business and earnings prospects if it were to remain independent in light of various factors, including UQM's current and anticipated near-term operating results and the highly competitive dynamics of the electric propulsion systems sector. Such factors include:



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The Board believes that as the market for electric vehicles matures, competition for electric motors and controllers will rapidly increase. Several large multinational organizations, including ABB, Bosch, Borg Warner, ZF, Siemens, BAE, DANA and several Chinese companies, have recently entered the market or announced plans to continue to invest and further expand into our market.



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Multiple competitors have recently announced plans to invest millions of dollars into technology to support further development of their product and market share. The Company has noted the resulting increased competition and pricing pressure.



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In addition, the Board considered that the market has recently experiencing rapidly accelerating consolidation, resulting in competitors with much larger scale and international access and resultant increasing pricing pressure as global competition intensifies.



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The multi-national companies UQM is now competing against have purchasing power, scalability and global infrastructure from their other business lines that is being leveraged in the electrification business that UQM cannot match.



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Many of UQM's existing and prospective customers generally expect their suppliers to have equal or greater presence in terms of global revenues, operational capacity, and support. The Board considered that UQM has competed to bid on several potential contracts where UQM was competitive both technically and commercially, but the prospective customer rejected the bid solely on the basis of the Company's insufficient size and scale and lack of infrastructure to provide support globally. Some potential customers have openly questioned UQM's "staying power" in the global market, given its limited capital and financial resources.



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Management has advised that being awarded significant new orders would require a much larger scale both in purchasing power and the operating capacity required to meet customer manufacturing requirements.



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The Board noted that expanding the Company's operations into new target countries requires the Company to overcome challenging regulatory and commercial risks and hurdles that are disproportionately difficult for a smaller company to overcome or mitigate, including geopolitical risks and risks of increased international disputes and tariffs.



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The Board considered that the fundamental issues caused by the Company's lack of sufficient scale and financial resources places the Company at a significant disadvantage, which is even more pronounced in emerging markets, where the majority of the Company's targeted sales are expected to be targeted.



•

Relative to a minority, non-control investment, the Merger provides UQM shareholders with an immediate cash premium in lieu of UQM equity that is subject to business and market risk in an increasingly competitive industry.

Thus, after considering these several factors, the Board believes that remaining independent would not provide the scale and financial resources necessary to enable the Company to effectively compete in the highly competitive global electric motor market. The Board believes that pursuing the Merger will allow the Company to maximize shareholder value while strengthening the Company's position to effectively compete in the market.

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Relative Value of a Merger Transaction.  In lieu of a sale of the Company, the Board considered investments with other partners, and other financing alternatives. The Board concluded, based on CFIUS' denial of the Company's potential investments from Sinotruk and negative view of investments involving Chinese partners, that future strategic investments from China would be very challenging. In addition, after discussions with management and advisors, the Board concluded that the merger with Danfoss was preferable to a financing transaction because (i) another debt offering or sale of assets would likely involve onerous terms and unfavorable pricing, if such debt or asset sale could be obtained at all, (ii) another equity offering would be highly dilutive to existing stockholders, if such an offering could be completed at all and, in any event, (iii) such a debt or equity transaction would not address the Company's fundamental issue, i.e., having the scale and financial resources required to compete successfully in the global electric vehicle propulsion systems sector.



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Extensive Prior Process and Sinotruk Transaction.  The Board reviewed the extensive process that UQM and its advisors had conducted during the two years prior to the signing of the Merger Agreement, which, with the advice of BDA partners, involved contacts with numerous parties that the Board believed would potentially have an interest in acquiring UQM. Such inquiries had resulted in a small number of potential investors, and in each case the share price offered by such investors was at a nominal premium to the then-current UQM share price. The most recent process in 2017 had resulted in the proposed strategic investment transaction with Sinotruk, which was at a share price equal to 15% over the share price at the execution date of such agreement. The Board considered that the Sinotruk agreement resulted in no competing bids and was ultimately rejected by CFIUS due to concerns about the Chinese partner. In addition, the Board considered that the consideration reflected in the Merger Agreement was the highest value that had been offered to the Company during its extensive search for a strategic partner, and that there was no assurance that a more favorable opportunity to sell the Company would arise later.



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Likelihood of Closing.  The Board considered the relatively limited nature of the closing conditions included in the Merger Agreement, including the absence of any financing-related closing condition and the likelihood that the merger will be approved by requisite regulatory authorities, including CFIUS, and UQM's stockholders. The Board noted that Denmark-based Danfoss would likely be more favorably viewed by CFIUS. The Board also considered Danfoss' substantial financial resources and ability to consummate the transaction without a financing contingency.



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Terms of the Merger Agreement.  The Board considered the terms of the Merger Agreement, including the parties' representations, warranties and covenants, the conditions to their obligations to complete the merger and their ability to terminate the agreement. The Board noted that the termination or "break-up" fee provisions of the Merger Agreement could have the effect of discouraging competing third party proposals, but that the $3.5 million termination fee, which represented an approximately 3.5% of the equity and assumed debt value of the proposed transaction, is customary for transactions of similar size and type. The Board also noted that the Merger Agreement permits UQM and the Board to respond to a competing proposal that the Board determines is a superior proposal, subject to certain restrictions imposed by the Merger Agreement and the requirement that UQM pay Danfoss the termination fee in the event that UQM terminates the Merger Agreement to accept a superior proposal.

Adverse Factors:

        The Board also identified and considered a number of countervailing factors and risks to UQM and our stockholders relating to the merger and the Merger Agreement, including the following:

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Potential Inability to Complete the Merger.  The Board considered the possibility that the Merger may not be completed and the potential adverse consequences to UQM if it is not completed. Such impacts may include adverse reputational position of the Company and its management, and the potential loss of customers, employees, and suppliers.



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No Participation in Post-Closing Growth.  The Board considered the fact that, because UQM's stockholders will be receiving a fixed amount of cash for their stock, they will not be compensated for any increase in value of UQM or Danfoss either during the pre-closing period or following the closing. This impact would be most significantly felt by those long term shareholders who had held shares that were previously purchased above the proposed merger share price.



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Interim Operating Covenants.  The Board considered the limitations imposed in the Merger Agreement on the conduct of UQM's business during the pre-closing period, its ability to solicit and respond to competing proposals, and the ability of the Board to change or withdraw its recommendation of the merger.



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Termination Fee.  The Board took into account the $3.5 million termination fee payable to Danfoss if the Merger Agreement is terminated under certain circumstances within UQM's control, and the potential impact that such termination fee may have in deterring other potential strategic investors from making competing proposals that could be more advantageous to UQM's stockholders. The Board determined that the $3.5 million termination fee is within market expectations.



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Taxability.  The Board considered that the Merger will be a taxable transaction to UQM's stockholders.



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Interests of UQM's Directors and Executive Officers.  The Board considered the potential conflicts of interest of UQM's directors and executive officers, as described in the section entitled "—Interests of the Company's Directors and Executive Officers in the Merger."

        The foregoing discussion of the information and factors considered by the Company's management team, the Board, and the Special Committee is not intended to be exhaustive, but includes the material factors considered by them. The Board based its favorable recommendation to the Company's shareholders on the totality of the information presented. Portions of this explanation of the reasons for the Transaction and other information presented in this section are forward-looking in nature and, therefore, should be read in light of the section entitled "Cautionary Statement Regarding Forward-Looking Statements."

Opinion of the Company's Financial Advisor, Duff & Phelps

        On December 26, 2018, the Company engaged Duff & Phelps to serve as an independent financial advisor to the Board (solely in their capacity as members of the Board) to provide an opinion as to the fairness, from a financial point of view, to the shareholders of the Company of the Merger Consideration to be received by such holders in the Merger (without giving effect to any impact of the Merger on any particular shareholder other than in its capacity as a shareholder).

        On January 18, 2019, representatives of Duff & Phelps reviewed with the Board its financial analysis of the Merger Consideration, responded to questions from the Board, and then delivered its opinion (the "Opinion") to the Board that, as of January 18, 2019 and based upon and subject to the assumptions, qualifications and limiting conditions contained in the Opinion, and discussed with the

Board, the Merger Consideration to be received by the shareholders of the Company in the Merger was fair from a financial point of view to such holders.

The full text of the Opinion is attached as Annex C to this Proxy Statement and is incorporated herein by reference. The full text of the Opinion sets forth a description of the assumptions made, procedures followed, matters considered and qualifications and limitations in rendering the Opinion. The Company encourages you to read the Opinion carefully and in its entirety.

        In connection with the Opinion, Duff & Phelps made such reviews, analyses and inquiries as it deemed necessary and appropriate under the circumstances. Duff & Phelps also took into account its assessment of general economic, market and financial conditions, as well as its experience in securities and business valuation, in general, and with respect to similar transactions, in particular. Duff & Phelps' procedures, investigations, and financial analyses with respect to the preparation of the Opinion included, but were not limited to, the items summarized below:

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Reviewed the following documents:



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The Company's annual reports and audited financial statements on Form 10-K filed with the SEC for the years ended December 31, 2016 and December 31, 2017 and the Company's unaudited interim financial statements for the period ended September 30, 2018 included in the Company's Form 10-Q filed with the SEC;



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Unaudited interim financial statements for the Company for the year-to-date period ended November 30, 2018;



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Other internal documents relating to the history, current operations, and probable future outlook of the Company, including financial projections for the Company, provided to Duff & Phelps by the Company's management (the "Management Projections");



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Documents related to the Merger, including the Indication of Interest, dated as of December 13, 2018, and a draft, dated as of January 16, 2019, of the Merger Agreement;



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A letter dated January 18, 2019 from the Company's management, which made certain representations as to historical financial statements, the Management Projections and the underlying assumptions;



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Discussed the information referred to above and the background and other elements of the Merger with the Company's management;



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Reviewed the historical trading price and trading volume of the Company Shares and the publicly-traded securities of certain other companies that Duff & Phelps deemed relevant;



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Performed certain valuation and comparative analyses using generally accepted valuation and analytical techniques including a discounted cash flow analysis, an analysis of selected public companies that Duff & Phelps deemed relevant and an analysis of selected transactions that Duff & Phelps deemed relevant; and



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Conducted such other analyses and considered such other factors as Duff & Phelps deemed appropriate with respect to the Company or otherwise.

        In performing its analyses and rendering the Opinion with respect to the Merger, Duff & Phelps, with the Company's consent:

•

Relied upon the accuracy, completeness, and fair presentation of all information, data, advice, opinions and representations obtained from public sources or provided to it from private sources, including the Company's management, and did not independently verify such information;

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Relied upon the fact that the Board and the Company have been advised by counsel as to all legal matters with respect to the Merger, including whether all procedures required by law to be taken in connection with the Merger have been duly, validly and timely taken;



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Assumed that any estimates, evaluations, forecasts and projections furnished to Duff & Phelps, including the Management Projections, were reasonably prepared and based upon the best currently available information and good faith judgment of the person furnishing the same, and Duff & Phelps expressed no opinion with respect to such projections or the underlying assumptions;



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Assumed that information supplied and representations made by the Company's management were substantially accurate regarding the Company and the Merger;



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Assumed that the representations and warranties made in the Merger Agreement were substantially accurate;



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Assumed that the final versions of all documents reviewed by Duff & Phelps in draft form conformed in all material respects to the drafts reviewed;



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Assumed that there has been no material change in the assets, liabilities, financial condition, results of operations, business, or prospects of the Company since the date of the most recent financial statements and other information made available to Duff & Phelps and that there was no information or facts that would make the information reviewed by Duff & Phelps incomplete or misleading;



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Assumed that all of the conditions required to implement the Merger will be satisfied and that the Merger will be completed in accordance with the Merger Agreement without any amendments thereto or any waivers of any terms or conditions thereof; and



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Assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the Merger will be obtained without any adverse effect on the Company or the contemplated benefits expected to be derived in the Merger.

        To the extent that any of the foregoing assumptions or any of the facts on which the Opinion was based prove to be untrue in any material respect, the Opinion cannot and should not be relied upon. Furthermore, in Duff & Phelps' analysis and in connection with the preparation of the Opinion, Duff & Phelps made numerous assumptions with respect to industry performance, general business, market and economic conditions and other matters, many of which are beyond the control of any party involved in the Merger.

        Duff & Phelps delivered the Opinion to the Board on January 18, 2019. The Opinion was necessarily based upon market, economic, financial and other conditions as they existed and could be evaluated as of such date, and Duff & Phelps disclaimed any undertaking or obligation to advise any person of any change in any fact or matter affecting the Opinion which may come or be brought to the attention of Duff & Phelps after January 18, 2019.

        Duff & Phelps did not evaluate the Company's solvency or conduct an independent appraisal or physical inspection of any specific assets or liabilities (contingent or otherwise). Duff & Phelps was not requested to, and did not, (i) initiate any discussions with, or solicit any indications of interest from, third parties with respect to the Merger, the assets, businesses or operations of the Company, or any alternatives to the Merger, (ii) negotiate the terms of the Merger, and therefore, Duff & Phelps assumed that such terms were the most beneficial terms, from the Company's perspective, that could, under the circumstances, be negotiated among the parties to the Merger Agreement and the Merger, or (iii) advise the Board or any other party with respect to alternatives to the Merger.

        Duff & Phelps did not express any opinion as to the market price or value of the Company Shares (or anything else) after the announcement or the consummation of the Merger. The Opinion should not be construed as a valuation opinion, credit rating, solvency opinion, analysis of the Company's credit worthiness, tax advice or accounting advice. Duff & Phelps did not make, and assumed no responsibility to make, any representation, or render any opinion, as to any legal matter.

        In rendering the Opinion, Duff & Phelps did not express any opinion with respect to the amount or nature of any compensation to any of the Company's officers, directors, or employees, or any class of such persons, relative to the Merger Consideration to be received by the public shareholders of the Company in the Merger, or with respect to the fairness of any such compensation.

        Duff & Phelps provided the Opinion for the use and benefit of the Board in connection with its consideration of the Merger and noted it was not intended to, and did not, confer any rights or remedies upon any other person, and was not intended to be used, and may not be used, by any other person or for any other purpose, without Duff & Phelps' express consent. The Opinion (i) did not address the merits of the underlying business decision to enter into the Merger versus any alternative strategy or transaction; (ii) did not address any transaction related to the Merger; (iii) was not a recommendation as to how the Board or any shareholder should vote or act with respect to any matters relating to the Merger, or whether to proceed with the Merger or any related transaction, and (iv) did not indicate that the Merger Consideration received is the best possibly attainable under any circumstances. Instead, the Opinion states whether the Merger Consideration to be received in the Merger is within a range suggested by certain financial analyses. The decision as to whether to proceed with the Merger or any related transaction may depend on an assessment of factors unrelated to the financial analyses on which the Opinion is based. Duff & Phelps did not review or advise the Board with respect to any alternative transaction.

Summary of Financial Analyses Performed by Duff & Phelps

        Set forth below is a summary of the material analyses performed by Duff & Phelps in connection with the delivery of the Opinion to the Board. This summary is qualified in its entirety by reference to the full text of the Opinion, attached hereto as Annex B. While this summary describes the analyses and factors that Duff & Phelps deemed material in its presentation to the Board, it is not a comprehensive description of all analyses and factors considered by Duff & Phelps. The preparation of a fairness opinion is a complex process that involves various determinations as to appropriate and relevant methods of financial analyses and the application of these methods to the particular circumstances. Therefore, neither the Opinion nor Duff & Phelps' underlying analysis is susceptible to partial analysis or summary description. In arriving at its Opinion, Duff & Phelps did not attribute any particular weight to any analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, Duff & Phelps' analyses must be considered as a whole and selecting portions of its analyses and individual factors considered by it in rendering the Opinion, without considering all analyses and factors, could create a misleading or incomplete view of the evaluation process underlying the Opinion. The conclusion reached by Duff & Phelps was based on all analyses and factors taken as a whole, and also on the application of Duff & Phelps' own experience and judgment.

        The financial analyses summarized below include information presented in tabular format. In order for Duff & Phelps' financial analyses to be fully understood, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses undertaken by Duff and Phelps. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Duff & Phelps' financial analyses.

Valuation Analyses

        As part of its analyses, Duff & Phelps performed an enterprise valuation analysis of the Company using generally accepted valuation methodologies. Duff & Phelps considered a selected public companies analysis and a selected merger and acquisition transactions analysis but did not rely on them due primarily to the Company's historically negative profitability and the expected high growth nature of the Company's business. Therefore, the discounted cash flow analysis was used as the primary valuation methodology.

Discounted Cash Flow Analysis

        Duff & Phelps performed a discounted cash flow analysis of the projected unlevered free cash flows of the Company for the fiscal years ending December 31, 2019 through December 31, 2028. Duff & Phelps defined "free cash flow" as cash that is available to distribute to all security holders of the Company or to reinvest in the Company's businesses. The discounted cash flow analysis was used to determine the net present value of projected unlevered free cash flows utilizing an appropriate cost of capital for the discount rate, which reflects the relative risk associated with these cash flows as well as the rates of return that investors could expect to realize on alternative investment opportunities with similar risk profiles to the Company.

        Duff & Phelps calculated the Company's projected unlevered free cash flows by taking its projected earnings before interest and taxes, subtracting taxes, adding back depreciation, and subtracting capital expenditures and the investment in net working capital. Duff & Phelps calculated the terminal value in 2028 using a perpetuity growth formula by capitalizing the normalized fiscal year ending 2028 free cash flow using a 3.0% terminal growth rate.

        For purposes of its discounted cash flow analysis, Duff & Phelps utilized and relied upon the Management Projections, which provided a financial forecast for the fiscal years ending December 31, 2019 through December 31, 2028. The Management Projections assumed that the Company would have access to the capital required to execute its business plan; however, UQM Management indicated to Duff & Phelps that the Company on a stand-alone basis did not presently have access to such capital.

        Duff & Phelps used a multi-stage discounted cash flow analysis that used three discount rates that were matched to the risk of the cash flows and terminal value to which they were applied. The three stages and corresponding discount rates are described below:

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High-growth stage: Based on the Management Projections, the Company's near-term growth is primarily attributable to the following: (i) growing demand from customers in China and India, as the market for electric vehicles in these regions is driven by strong government pressures to deal with the staggering pollution in the countries' major cities; and (ii) the Company's recent strategic alliance with a manufacturer of commercial truck equipment and collaboration with a manufacturer of battery electric powertrains. These favorable industry dynamics and early-stage interests lead to the potential for the Company to generate significant free cash flow growth; however, a high level of risk would be associated with these cash flows due to obstacles in navigating through these countries' regulatory hurdles and from lack of expected volume fruition after prototype test deliveries. Based on these factors, Duff & Phelps in its professional judgment selected a discount rate range of 30.0% to 35.0%, representing a mid-stage venture capital return, for the Company's projected high-growth stage through fiscal 2023;



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Stable-growth stage : Based on the Management Projections, the Company's growth rate is expected to gradually moderate from the fiscal year ending 2024 to the fiscal year ending 2028 as the Company establishes a track record and market share. Accordingly, the riskiness of the free cash flows during this stage is expected to decline, and as such, Duff & Phelps in its professional judgment selected a discount rate range of 20.0% to 25.0%, which represents a

late-stage venture capital return, for the stable-growth stage from the fiscal year ending 2024 to the fiscal year ending 2028; and

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Normalized-growth stage: Based on the Management Projections, the terminal period cash flows represent a normalized level of expected operations going forward into perpetuity. The terminal value for the Company was estimated utilizing a discount rate range commensurate with the Company's weighted average cost of capital, which was calculated utilizing the Capital Asset Pricing Model, in the terminal period of 13.0%.

        Based on these assumptions, the discounted cash flow analysis indicated an estimated enterprise value for the Company of approximately $75.6 million to approximately $102.0 million.

        Based on the estimated enterprise value range for the Company summarized above, Duff & Phelps also calculated implied multiples of enterprise value of the Company to the Company's:

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estimated revenue for fiscal year 2018 (referred to as "2018E Revenue");



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estimated revenue for fiscal year 2019 (referred to as "2019E Revenue");



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projected revenue for fiscal year 2020 (referred to as "2020P Revenue");



•

projected revenue for fiscal year 2021 (referred to as "2021P Revenue");



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earnings before interest, taxes, depreciation, amortization, public company expenses and previously granted option expenses ("Adjusted EBITDA") for the fiscal year 2020 (referred to as "2020P Adjusted EBITDA"); and



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projected Adjusted EBITDA for fiscal year 2021 (referred to as "2021P Adjusted EBITDA").

        This analysis indicated the following:

Selected Public Companies Analysis

        Duff & Phelps compared certain financial performance metrics of the Company to corresponding data and ratios from seven publicly traded companies in the electric vehicle component manufacturing industry and five publicly traded companies in the automotive parts and equipment supplier industry (collectively, the "selected public companies"). The selected public companies reviewed were:

Electric Vehicle Component Manufacturers

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Ballard Power Systems Inc.;



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CBAK Energy Technology, Inc.;



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Kandi Technologies Group, Inc.;



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Power Solutions International, Inc.;

•

Westport Fuel Systems Inc.;



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Workhorse Group Inc.; and



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Zhuhai Enpower Electric Co., Ltd.

Automotive Suppliers

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Allison Transmission Holdings, Inc.;



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BorgWarner Inc.;



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Cummins Inc.;



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Delphi Technologies PLC; and



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Meritor, Inc.

        Although none of these selected public companies is directly comparable to the Company, Duff & Phelps reviewed these companies based on their relative similarity, primarily in terms of business model and primary customer end markets, to the Company. For purposes of its analysis, Duff & Phelps used certain publicly available historical financial data and consensus equity analyst estimates for the selected public companies.

        The table below summarizes certain observed trading multiples and historical and projected financial performance of the selected public companies as of January 17, 2019. The revenue and EBITDA estimates for 2019 and projected 2020 and 2021 in the table below for the selected public companies were derived based on information for the 12-month periods ending closest to the Company's 2019, 2020, and 2021 fiscal years for which information was available. Duff & Phelps

determined, in its professional judgement, that certain metrics could not be calculated (which is referred to as NA) or were not meaningful (which is referred to as NM).