UQM Technologies Reports First Quarter Operating Results

Press Release 07-08

UQM Technologies, Inc.
7501 Miller Drive
Frederick, CO 80530

Contact:
John Baldiserra
BPC Financial Marketing
(800) 368-1217
or
Donald A. French, Treasurer
(303) 278-2002

UQM Technologies Reports First Quarter Operating Results

FREDERICK, COLORADO, JULY 27, 2006… UQM TECHNOLOGIES, INC. (AMEX: UQM), a developer of alternative energy technologies, announced today operating results for the quarter ended June 30, 2006. Continuing operations for the first quarter resulted in a loss of $785,684 or $0.03 per common share on total revenue of $1,301,332 versus a loss from continuing operations of $720,374 or $0.03 per common share on total revenue of $1,153,205 for the first quarter last year. Net loss for the quarter was $787,796 or $0.03 per common share versus a net loss of $730,805 or $0.03 per common share for the comparable quarter last year.

“During the quarter we received several significant production orders. In early March, we launched production of a vehicle motor auxiliary product and subsequently received two additional orders, which raised the total to 30,000 units, substantially all of which are scheduled for delivery this fiscal year. We also received an order from Denver’s Regional Transportation District for UQM® generators and electronic controllers to retrofit ten hybrid electric shuttle buses and a $1.9 million production contract for an electronic auxiliary product for hybrid vehicles with deliveries beginning this fall. Shortly after quarter end we received a $750,000 U.S. Air Force contract to develop wheel motors for aircraft ground support equipment. Production revenue of our Power Products segment for the first quarter was $421,700, a large portion of which was from the launch of the vehicle motor auxiliary product, exceeding our revenue guidance of $300,000 for this product for the quarter”, said William G. Rankin, UQM Technologies’ President and Chief Executive Officer.

“Total revenue for the quarter rose 13 percent versus the comparable quarter last year driven by sharply higher levels of contract services revenue which nearly doubled to $824,354 for the first quarter from $467,588 for the same quarter last year. Loss from continuing operations rose $65,310 to $785,684 for the quarter versus the comparable quarter last year and included approximately $161,000 of additional expense associated with the implementation of new accounting rules requiring the expensing of the cost of stock options,” said Donald A. French, UQM Technologies’ Treasurer and Chief Financial Officer.

The Company will host a conference call today at 4:30 p.m. Eastern Daylight Time to discuss operating results for the quarter ended June 30, 2006. To attend the conference call, please dial 1-866-321-6651 approximately ten minutes before the conference is scheduled to begin. International callers should dial 1-416-642-5212. For anyone who is unable to participate in the conference, a recording will be available for 48 hours beginning at 6:30 p.m. Eastern Daylight Time today. To access the playback call 1-866-244-4494 and give replay code 214253. International callers should dial 1-416-915-1028.

UQM Technologies, Inc. is a developer and manufacturer of power dense, high efficiency electric motors, generators and power electronic controllers for the automotive, aerospace, medical, military and industrial markets. A major emphasis of the Company is developing products for the alternative energy technologies sector including propulsion systems for electric, hybrid electric and fuel cell electric vehicles, under-the-hood power accessories and other vehicle auxiliaries and distributed power generation applications. The Company's headquarters, engineering and product development center, and motor manufacturing operation are located in Frederick, Colorado. For more information on the Company, please visit its worldwide website at www.uqm.com.

Consolidated Balance Sheets (unaudited)
	Assets					June 30, 2006		March 31, 2006
	Current assets:
		Cash and cash equivalents					$ 3,900,444	4,076,806
		Short-term investments					5,851,537	6,009,394
		Accounts receivable					834,874	512,409
		Costs and estimated earnings in excess of billings on
			uncompleted contracts				486,090	450,044
		Inventories					655,453	467,485
		Prepaid expenses and other current assets					317,717	118,439
					Total current assets		12,046,115	11,634,577

	Property and equipment, at cost:
		Land					181,580	181,580
		Building					2,303,919	2,297,467
		Machinery and equipment					3,043,758	2,808,324
							5,529,257	5,287,371
		Less accumulated depreciation					(2,756,511)	(2,683,295)
					Net property and equipment		2,772,746	2,604,076

	Patent and trademark costs, net of accumulated
		amortization of $570,215 and $545,468					531,406	552,382
	Other assets						5,053	5,053

				Total assets			$ 15,355,320	14,796,088

Liabilities and Stockholders’ Equity					June 30, 2006		March 31, 2006
Current liabilities:
	Accounts payable					$ 571,498	534,428
	Other current liabilities					260,996	309,097
	Current portion of long-term debt					93,669	92,013
	Short-term deferred compensation under executive employment agreements					127,636	-
	Liabilities and commitments of discontinued operations					42,677	62,004
	Billings in excess of costs and estimated earnings on
		uncompleted contracts				363,012	221,626
				Total current liabilities		1,459,488	1,219,168

Long-term debt, less current portion						597,729	621,685
Long-term deferred compensation under executive employment agreements						132,488	210,861
						730,217	832,546

				Total liabilities		2,189,705	2,051,714

Commitments and contingencies

Stockholders’ equity:
	Common stock, $.01 par value, 50,000,000
			shares authorized; 25,130,551 and 24,776,042 shares
			issued and outstanding			251,306	247,760
	Additional paid-in capital					70,498,952	69,293,461
	Accumulated deficit					(57,584,643)	(56,796,847)
				Total stockholders’ equity		13,165,615	12,744,374

				Total liabilities and stockholders’ equity		$ 15,355,320	14,796,088

Consolidated Statements of Operations (unaudited)
								Quarter Ended June 30,
								2006				2005
	Revenue:
			Contract services						$	824,354			467,588
			Product sales						476,978				685,617
									1,301,332				1,153,205

	Operating costs and expenses:
			Costs of contract services						655,125				662,556
			Costs of product sales						524,076				603,686
			Research and development						95,151				30,320
			Production engineering						248,372				166,690
			Selling, general and administrative						672,517				448,445
			Impairment of long-lived assets						-				1,455
									2,195,241				1,913,152

					Loss from continuing operations before other
						income (expense)			(893,909)				(759,947)

	Other income (expense):
			Interest income						120,652				56,165
			Interest expense						(12,427)				(16,592)
									108,225				39,573

					Loss from continuing operations				(785,684)				(720,374)

	Discontinued operations:
			Loss from operations of discontinued electronic
				products segment					(2,112)				(10,431)

					Net loss				$	(787,796)			(730,805)

					Net loss per common share - basic and diluted:
							Continuing operations		$		(.03)		(.03)
							Discontinued operations		-				-
									$		(.03)		(.03)

	Weighted average number of shares of common
		stock outstanding - basic and diluted							25,026,218				23,193,205

The following table summarizes significant financial statement information for continuing operations of each of the reportable segments as of and for the quarter ended June 30, 2006:
				Power
		Technology		Products	Total
	Revenue	$	879,632	421,700	1,301,332
	Interest income	119,089		1,563	120,652
	Interest expense	-		(12,427)	(12,427)
	Depreciation and amortization	(67,129)		(30,835)	(97,964)
	Segment loss from continuing operations	(606,047)		(179,637)	(785,684)
	Assets of continuing operations	12,503,459		2,851,861	15,355,320
	Expenditures for long-lived segment assets	$	(85,233)	(160,425)	(245,658)

The following table summarizes significant financial statement information for continuing operations of each of the reportable segments as of and for the quarter ended June 30, 2005:
				Power
		Technology		Products	Total
	Revenue	$	725,144	428,061	1,153,205
	Interest income	53,756		2,409	56,165
	Interest expense	-		(16,592)	(16,592)
	Depreciation and amortization	(60,274)		(28,508)	(88,782)
	Segment earnings (loss) from continuing operations	(748,588)		28,214	(720,374)
	Assets of continuing operations	13,208,642		2,877,825	16,086,467
	Expenditures for long-lived segment assets	$	(16,978)	(26,319)	(43,297)

This Release contains statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. These statements appear in a number of places in this Release and include statements regarding our plans, beliefs or current expectations, including those plans, beliefs and expectations of our officers and directors with respect to, among other things the development of markets for our products and the adequacy of our cash balances and liquidity to meet future operating needs. Important Risk Factors that could cause actual results to differ from those contained in the forward-looking statements are contained in our Form 10-Q filed today which is available through our website at www.uqm.com or at www.sec.gov

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Last Update: 07/27/06