UQM TECHNOLOGIES INC

The following is a maturity analysis of the payments discounted at our bank borrowing rate of 6.48% of the operating lease liabilities, inclusive of the quarterly service fees, as of March 31, 2019, assuming the ¥/$ exchange rate as of the same date:

During the quarter ended March 31, 2019, seven legal complaints, including five putative class actions, were filed by purported stockholders of UQM challenging the Merger and/or the Company’s disclosures in the proxy statements filed with the SEC related to the Merger.  These lawsuits are generally described in Item 1 of Part II of this Quarterly Report on Form 10-Q.  UQM believes that the claims asserted in each of these lawsuits are without merit.  However, to avoid the risk of litigation delaying or adversely affecting the Merger, UQM made certain supplemental disclosures regarding the Merger and the circumstances surrounding the negotiation of the Merger Agreement in a Current Report on Form 8-K filed with the SEC on April 25, 2019.  In connection therewith all of the plaintiffs agreed to voluntarily dismiss all claims asserted in their Lawsuits within five days of the closing of the Merger.  Certain plaintiffs already have voluntarily dismissed their lawsuits and the remaining plaintiffs have agreed to voluntarily dismiss their Lawsuits within five days of the closing of the Merger.  The dismissals are subject to the plaintiffs requests for fees, which fees are not estimable at this time.  Therefore, no provision has been made in the financial statements for the ultimate resolution of the Lawsuits.  Management believes that the final resolution of the Lawsuits will not have a material adverse effect on the Company’s financial position.

On April 23, 2019, we held a Special Shareholders Meeting to consider, among other things, the proposed Merger.  At that meeting, our shareholders voted to approve the Merger.    Assuming we obtain approval from the Committee on Foreign Investment in the United States (“CFIUS”), we expect to close the Merger transaction, which we anticipate will happen in the quarter ended June 30, 2019 or soon thereafter.

During the quarter ended March 31, 2019, seven legal complaints, including five putative class actions, were filed by purported stockholders of UQM challenging the Merger and/or the Company’s disclosures in the proxy statements filed with the SEC related to the Merger.  The following five cases were filed in the United States District Court for the District of Colorado: (i) Carter v. UQM Technologies, Inc., et al., No. 19-cv-502; (ii) Lopez v. UQM Technologies, Inc., et al., No. 19-cv-543; (iii) ETS Logistics Inc. v. UQM Technologies, Inc., et al., No. 19-cv-602; (iv) Poston v. UQM Technologies, Inc., et al., No. 19-cv-648; and (v) Arukala v. UQM Technologies, Inc., et al., No. 19-cv-650.  One case was filed in Colorado state court: Franchi v. Vanlandingham, et al., No. 19-cv-30217 (Weld County, CO.).  One case was filed in the United States District Court for the Southern District of New York: Gunderson v. UQM Technologies, Inc., et al., No. 19-cv-2219 (S.D.N.Y.) (collectively, such state and federal actions are referred to herein as the “Lawsuits”).  The six federal lawsuits asserted claims under Section 14(a) and Section 20(a) of the Exchange Act, and Rule 14a-9 promulgated thereunder, based on an alleged failure to disclose certain information in the  preliminary proxy statement filed by the Company on February 11, 2019 and the definitive proxy statement filed by the Company on March 7, 2019.  The state lawsuit (Franchi) alleged, among other things, that the Company’s Board of Directors failed to disclose certain information in the preliminary proxy statement filed by the Company on February 11, 2019 constituted a breach of fiduciary duty.  Carter and Franchi also included other breach of fiduciary duty claims against the Company’s directors in connection with the Merger.  

All of the Lawsuits sought or seek: (i) injunctive relief to prevent the parties from proceeding with, consummating, or closing the Merger unless certain omitted information was disclosed in the proxy statement; (ii) an accounting for alleged damages sustained by the plaintiffs; and (iii) unspecified costs and attorneys’ and experts’ fees.

UQM continues to believe that the claims asserted in the Lawsuits are and were without merit, and further believes that no supplemental disclosure was required under applicable law.  However, UQM determined that, to avoid the risk of litigation delaying or adversely affecting the Merger, UQM would make certain supplemental disclosures, in a Current Report on Form 8-K that was filed by the Company with the SEC on April 25, 2019. In connection with the filing of that Current Report on Form 8-K, all of the plaintiffs agreed to voluntarily dismiss all claims asserted in their Lawsuits within five days of the closing of the Merger.  Plaintiffs in Lopez,  Franchi, and ETS Logistics have already voluntarily dismissed their Lawsuits.