UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549
                                    
                               FORM 10-K
                                    
           [ ]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                   OF THE SECURITIES EXCHANGE ACT OF 1934
                                     
           [X]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 
                15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
                    For the Transition Period from 
                  November 1, 1996, to March 31, 1997
                                    
                     Commission file number 1-10869
                                    
                          UNIQUE MOBILITY, INC.                
         (Exact name of registrant as specified in its charter)
                                    
                   Colorado                     84-0579156    
           (State or other jurisdiction of   (I.R.S. Employer
           incorporation or organization)     Identification No.)
                                    
              425 Corporate Circle, Golden, Colorado  80401    
         (Address of principal executive offices)    (Zip Code)
                                    
  Registrant's telephone number, including area code:  (303) 278-2002
                                    
     Securities registered pursuant to Section 12(b) of the Act:  
                      Common stock, $.01 par value
                                    
              Name of each exchange on which registered:  
                        American Stock Exchange
                         Boston Stock Exchange 
                         Pacific Stock Exchange
                         Chicago Stock Exchange
                                    
      Securities registered pursuant to Section 12(g) of the Act:
                      Common stock, $.01 par value

Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days. Yes  X     No     .

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 
of Regulation S-K is not contained herein, and will not be contained, to the 
best of registrant's knowledge, in definitive proxy or information statements 
incorporated by reference in Part III of this Form 10-K or any amendment to 
this Form 10-K.   X  

The aggregate market value of the voting stock held by nonaffiliates of the 
registrant (11,700,585 shares) computed by reference to the closing price of 
such stock on the American Stock Exchange, as of June 25, 1997:

                              $81,904,095

The number of shares outstanding (including shares held by affiliates) of each 
of the registrant's classes of common stock, as of June 25, 1997:

                        13,355,435 shares of the
                       registrant's common stock,
                            $.01 par value.
                                    
                  DOCUMENTS INCORPORATED BY REFERENCE
     In Part III certain information is incorporated by reference 
         from the Company's definitive Proxy Statement for the
             August 19, 1997 Annual Meeting of Shareholders
<PAGE>

ITEM 1.     BUSINESS

General

Unique Mobility, Inc. ("Unique" or the "Company") was organized in 1967 and
presently develops and manufactures high efficiency permanent magnet (PM) motors
and controls for automotive, industrial and aerospace applications. Since 1990,
the Company's focus has been to apply its products to several types of electric
(EV) and hybrid electric vehicle (HEV) propulsion systems. The Company's 
objective is to leverage its technology base and name recognition to serve a 
number of high potential niche markets in the near-term, and automotive mass 
markets in the longer-term. The Company's common stock trades on the American, 
Boston, Pacific and Chicago Stock Exchanges under the symbol "UQM".   

Historically, the Company's revenue has been derived from contract research and
development services. These sponsored research and development activities have
supplemented internally funded product development programs and have added
significantly to the Company's technology base. Now, the Company, its affiliates
and its licensees hope to begin commercial production of products that the 
Company hopes will generate a more consistent and greater revenue stream than 
that of prior years. The Company's future commercial products are expected 
to include:

     Bicycle Motors: Proprietary PM motors, controllers and chargers for
     application in electrically powered bicycles.

     Wheelchair Motors: Proprietary PM wheelchair motors that are compact and 
     energy efficient for application in motorized wheelchair products.  

     Scooter Motors: Advanced hub-mounted PM traction motors and controls for
     motor scooter applications. These matched systems deliver high performance
     over a wide power range with programmable control and regenerative braking.
     They will be manufactured in Taiwan  by the Company's licensee for Kwang 
     Yang Motor Co., Ltd. (KYMCO), one of the world's largest producers of motor
     scooters.
     
     Golf Cart Motors:  Higher power (5-10 kW) variations of the scooter motor 
     and controller designed  to reach existing markets for small electric
     vehicles such as golf carts, light industrial vehicles and lawn care 
     products.
     
     EV and HEV Motors: Power ranges from 30-100 kW.  Typical is the UQM 
     PowerPhase  System, developed for on-road EV and HEV applications and is
     currently offered for sale on a prototype low volume basis.  The system
     includes a 53 kW PM motor, matching controller and single stage transaxle
     with differential gearing and parking lock. Larger versions (63-100 kW) are
     currently offered or under development for bus and truck applications.

Management believes that the innovative designs, carefully selected materials 
and advanced manufacturing processes used in UQM  products provide a number of
benefits. These benefits include high power density (packageability), high
efficiency over a wide range of operation, and simplified construction that is
capable of achieving cost benefits at higher production levels. High power 
density and efficiency are critical attributes in any application where space 
is at a premium and the energy supply is limited.

Unique's relationships with major original equipment manufacturers (OEMs) and 
other industry leaders has enabled the Company to obtain partial funding for 
product development while still retaining substantially all rights to its 
intellectual property. In some cases, these funding sources are, or are 
expected to become, manufacturing partners, customers or licensees of the 
developed products. Such is the case with KYMCO, co-funder and licensee of the 
Company's electric scooter power system, who is also the Company's partner in a
Taiwan based joint venture company.
<PAGE>
The Company intends to continue to advance its technology base and to develop 
new products that have a high potential for commercialization. Key among these 
are the development of 75 and 100 kW traction drive systems for trucks and 
buses; an advanced  high speed motor for flywheels, spindle drives and vacuum
pumps; electric and hybrid electric passenger car conversion projects for 
customers in Korea and Taiwan; and the application of the Company's electric 
scooter power system to small vehicles for customers in Asia and Europe. In  
addition, the UQM  powered Ethos 3 EV electric car is being demonstrated to 
potential licensees in collaboration with the Pininfarina Group of Turin, 
Italy (Pininfarina).

Unique believes that its technology, its developed products, its cadre of 
strategic partners and its key management and technical personnel have
positioned the Company to potentially capitalize on existing niche markets an
global mass markets, should they develop, for energy-efficient clean vehicles 
and related products.

Recent Developments

During fiscal 1997, the Company continued to strengthen its strategic 
relationships with Invacare Corporation (Invacare), KYMCO and Pininfarina.  The
Company also formed a new strategic relationship with EV Global Motors, a new 
company formed by former Chrysler Chairman, Lee A. Iacocca, to market light 
electric vehicles.

Invacare Relationship: The design for manufacture of the Invacare wheelchair 
motor has been completed and prototypes have been delivered to Invacare for in-
chair testing.  Invacare is a leading U.S. based manufacturer and marketer of 
home medical equipment with products that include a complete line of 
wheelchairs, patient aids, seating and positioning products, home institutional
beds, and respiratory assistance products.  Mr. J. B. Richey, Invacare's top 
technical executive, is a member of the Company's board of directors.  The 
Company is currently negotiating with Invacare (1) to manufacture wheelchair 
motors pursuant to a long-term supply agreement and (2) to grant Invacare an 
exclusive worldwide royalty bearing license to make, use and sell other of the 
Company's motors for application in medical products.  There can be no 
assurance, however, that such negotiations will be successful.

Taiwan Joint Venture: During fiscal 1997, Taiwan UQM Electric Co., Ltd. (Taiwan
UQM), a Taiwan corporation owned jointly by the Company, KYMCO and Turn-Luckily
Technology (TLT), completed construction of a factory for the manufacture of
products under license from the Company.  Taiwan UQM is currently installing 
semi-automated manufacturing equipment and is planning to launch the production 
of conventional starter motors and generators in August 1997 pursuant to a 
supply agreement with KYMCO.  Taiwan UQM plans to launch production of electric
power systems for KYMCO scooters in 1999 and eventually will produce a full 
line of UQM products for other Asian automotive and industrial customers.

The Pininfarina Ethos 3 EV: The Company has continued to demonstrate the Ethos 3
EV electric car to automotive OEMs and other interested parties with its partner
Pininfarina.  During fiscal 1997, product presentations and demonstrations were
conducted in Italy for Audi, BMW, Fiat, Mercedes-Micro Compact Car, Rover and
Saab.  Upon its return to the U.S., the vehicle was showcased at the Denver
"Summit of the Eight."  Other demonstrations are planned in Denver and in Italy
throughout the remainder of calendar 1997. It is the objective of these
demonstrations to secure one or more funded programs leading to the development
of a global family of "clean" vehicles that can be industrialized and
distributed by third party automotive clients for sale to the general public
in several models in many markets worldwide.
<PAGE>
EV Global Motors: In June 1997, the Company entered into a strategic partnership
with EV Global Motors Company (EVG), a new entity recently formed by former
Chrysler Chairman Lee Iacocca to develop and market light electric 
transportation systems such as bicycles, scooters and electric cars.  EVG 
purchased 1,151,925 shares of the Company's stock in a private transaction from
Alcan Aluminum Limited and purchased warrants from other sources for an 
additional 350,000 shares. Separately, the Company and EVG entered into a Stock
Purchase Agreement whereby the Company has agreed to purchase 400,000 shares of
EVG's common stock in exchange for 200,000 newly-issued shares of the Company's 
common stock.  Upon completion of the latter transaction, EVG's beneficial 
ownership will represent approximately 12.2 percent of the Company's 
outstanding shares, making EVG the Company's largest shareholder.  Concurrently,
it is contemplated that Mr. Iacocca will join the Company's board of directors 
and Mr. Ray A. Geddes, the Company's chairman and Chief Executive Officer, will
join the board of EVG.

Also in June 1997, the Company, EVG, KYMCO, TLT and Taiwan UQM entered into a
memorandum of understanding for the formation of an international strategic
alliance to develop and market KYMCO electric scooters in North and South
America.

Products/Technology

The Company has an aggressive strategy to commercialize its technologies and
develop products to provide for future growth. Initial product offerings are 
being directed primarily toward near term markets for low voltage small vehicle
traction applications and will be followed by an expansion into the markets, 
should they develop, for larger, high voltage vehicle propulsion systems. Small
vehicle applications include wheelchairs, bicycles, motor scooters, small 
industrial vehicles, golf carts and lawn care products that generally require 
power levels from 1 kW to 10 kW at voltages from 12 Vdc to 48 Vdc. Large vehicle
applications include electric and hybrid electric passenger cars, commercial 
trucks and urban transit buses that generally require power levels from 20 kW 
to 250 kW at voltages from 96 Vdc to 400 Vdc. 
 
The Company's current product offerings typically utilize a number of 
proprietary technologies, several of which are patented, including high pole-
count PM motor design with six step commutation and phase advanced control. 
The high pole-count, together with a relatively large air-gap diameter, create
a higher torque, lower speed motor than that of more conventional architectures.
Higher torque at lower speed allows for a lower gear ratio, fewer mechanical 
losses and higher efficiency at light "cruising" loads. These designs have 
excellent heat rejection capability, high copper utilization (i.e. tight end 
turns), and a "hollow" profile that provides room to package other components 
inside the motor. Six step commutation enables the use of low cost rotor 
positioning sensing mechanisms and reduces switching losses to improve inverter
efficiency. Phase advanced control is a technique for manipulating current to 
allow the motor to run faster and thus deliver more power without the cost of 
having to increase the current supply.

Currently developed products include:

Wheelchair Motor:  A proprietary PM motor has been developed for the Invacare
powered wheelchair product line.  The Motor is compact and energy efficient.  
While it was developed specifically for powered wheelchair applications, 
management believes that scaled-up versions of the motor can serve several other
markets for electrically powered vehicles.  The Company is currently 
negotiating with Invacare to manufacture motors for its wheelchairs; however,
there can be no assurance that such negotiations will be successful.
<PAGE>


               Picture of Wheelchair and Motor          
                                 
     Fig. 1  Invacare  Storm' Wheelchair and PM Wheelchair Motor  
                                 
                                 
Scooter Motor and Controller:  A 3.6 kW hub-mounted PM motor and full authority
48 Vdc controller with integrated charger and dc-dc converter has been developed
for the KYMCO electric scooter product line. This system is air-cooled, compact
and efficient over a wide operating range. It delivers torque at a wide range 
of speeds and provides regenerative braking down to zero rpm. While the scooter
motor system was developed for KYMCO's exclusive use in most Asian markets, the
Company has reserved commercial rights in Japan and India and in all markets 
outside Asia. 

                Picture of Prototype Electric Scooter

  FIG. 2  KYMCO  Prototype Electric Scooter and Traction System


Golf Cart Motor and Controller:  A higher power (5-10 kW) variation of the KYMCO
scooter motor and controller is being developed to reach existing markets for 
small electric vehicles such as golf carts, light industrial vehicles and lawn 
care products. The golf cart motor is longer in dimension than the scooter 
motor, but has the same diameter stator core and can be built from the same 
tooling.  Its features of merit are similar to those of the scooter motor, but 
at power levels up to 10 kW. Management believes this product can be marketed 
as an aftermarket replacement motor as well as original equipment, and for this
reason universal motor mounts have been designed for easy "drop-in" 
installation. 

<PAGE>

                       Picture of Golf Cart Motor

                    Fig. 3  Golf Cart Motor


PowerPhase  System:  A high power, modular traction drive system for on-road
electric and hybrid electric vehicle applications. The PowerPhase  system was
initially developed for the Ethos 3 EV demonstrator vehicle, but has application
as a power system for all types of  passenger cars and light trucks. The system
includes a matched set of components composed of a 53 kW liquid cooled PM motor,
a 180-400 Vdc microprocessor based programmable controller with phase advance
control, and a single stage transaxle with differential and a mechanical parking
lock. The transaxle connects the output shaft of the motor to the road wheels in
a variety of front or rear wheel drive configurations. A 63 kW motor and 
controller of the same frame size is offered with in-line gear reduction for 
bus and heavy truck applications.


                    Picture of Unique PowerPhase System

                    Fig. 4   53 kW PowerPhase System


Ethos 3 EV Demonstrator

In partnership with Pininfarina, the Company has developed the system 
architecture for the Ethos 3 EV electric car. The Ethos 3 EV is a four-door, 
four-passenger hatchback sedan, styled as a wedge-like aerodynamic cube. It has
a rectangular base, short in length, but wide and tall to provide a roomy 
interior. The split tailgate simplifies the loading of cargo from above, 
particularly when the car is parked bumper to bumper along the curb. The 
McPherson-type front suspension has telescoping arms and coil springs, while 
the rear suspension has interconnected trailing arms. Electric power steering 
is by rack and pinion and the braking system incorporates full regenerative 
braking supplemented by discs on the front and drums on the rear. 

<PAGE>
           Picture of Ethos e EV Demonstrator and Space Frame Structure

          Fig. 5   Ethos 3 EV Demonstrator and Space Frame Structure


The Ethos 3EV is built on an extruded aluminum space frame that forms a sturdy 
cage to give a high level of occupant protection. Impact beams are incorporated
in the doors. The front seats are fitted with pre-tensioned seat belts and a 
driver's side air bag. Instruments and controls include a speedometer, a battery
state-of-charge gauge, shift lever, an engine-on light, and a main power 
disconnect switch. Integrated into the dash panel is an efficient heating, 
cooling and ventilating system specially developed for the Ethos 3 EV by 
Calsonic International, one of the world's largest suppliers of automotive 
climate control systems.

At the heart of the Ethos 3 EV is the front mounted UQM  PowerPhase  traction 
drive system that provides 53 kW maximum power and 150 Nm of continuous torque.
The motor drives through a 6.8 to 1 single stage transaxle with a mechanical 
differential and parking brake. Electric current is supplied to the motor by a
400 Vdc, 300 Amp inverter using IGBT power switching modules with digital 
microprocessor control.  Proprietary software provides for smooth, quick 
acceleration with phase advance control for extended power and full 
regenerative braking for extended range. 

The UQM  PowerPhase  system is matched to a high-performance energy storage 
system that uses 26 Ovonic nickel metal-hydride (NiMH) batteries. NiMH 
batteries are characterized by high power, long cycle life, no memory effect, 
few maintenance problems and they are totally recyclable. GM Ovonic, a joint 
venture between General Motors and Ovonic Battery Company is the manufacturing 
agent.  In the Ethos 3 EV, the batteries are housed in three compartments, two 
under the front seats and one under the rear cargo area. They have a specific 
energy of 70 Wh/kg, a specific power of 220 W/kg and are connected in series to
provide 312 Vdc with 85 Amp hours of capacity.  This system permits the Ethos 3
EV to travel more than twice as far per charge as would lead-acid batteries of 
the same size and weight, or approximately 150 miles at 45 mph. 

Marketing/Markets

The Company's marketing strategy is to build on its technology base to become a
leading supplier of advanced vehicle power systems for energy efficient,
environmentally clean surface transportation throughout the world. In the near
term, the Company's focus is being directed toward existing markets for low-
voltage systems used in small vehicles such as wheelchairs, bicycles, electric 
scooters, golf carts, light industrial vehicles and lawn care equipment. This
effort will be followed by initiatives to reach the market for larger, high-
voltage systems required for on-road passenger cars, trucks and buses, should 
such a market develop.
<PAGE>
Near Term Markets

Wheelchair Motors:  The Company hopes to manufacture wheelchair motors for
Invacare. Each powered wheelchair requires two motors. Invacare is the country's
largest manufacturer of home health care and mobility products. It holds the No.
1 position  in powered wheelchairs with approximately 60 percent of the market 
and is No. 2 in Europe.  The Company is currently negotiating with Invacare to
manufacture motors for its wheelchairs; however, there can be no assurance that
such negotiations will be successful.

Scooter Motors and Controllers:  The Company's electric scooter power system is
expected to be manufactured by Taiwan UQM for KYMCO and possibly for other
scooter manufacturers in markets where KYMCO does not have exclusive rights
(i.e., Japan, India and all markets outside Asia). KYMCO is Taiwan's largest
producer of two-wheeled vehicles with approximately one third of the market.
Timing for the production launch of the KYMCO electric scooter has not as yet
been released, but the launch is scheduled to occur no later than 1999 to meet
a government mandate requiring, by the year 2000, that two percent of all
scooters sold in Taiwan be electric.  There can be no assurance that the
government mandates will not be modified or rescinded.

The Taiwan Ministry of Transportation and Communication reports that 1994 
domestic sales of gasoline powered two-wheeled vehicles totaled 1,192,503 units
with approximately 500,000 additional units being produced for export, 
primarily to the People's Republic of China. This would indicate a Taiwanese 
market of  23,850 electric scooters by the year 2000, assuming a flat sales 
rate from now until then.  Other potential markets for electric scooters and/or
power system components include China, India and Indonesia, all of which have 
larger usage of two-wheeled vehicles than Taiwan.

Golf Cart Motors and Controllers:  Motors used to power golf carts are also used
for other commercial vehicle applications.  To better understand the potential,
the Company commissioned Markowitz & McNaughton, Inc., a Reston, Virginia, 
consulting firm, to define and quantify the U.S. market for golf cart motors 
and controllers.

The golf cart market is defined as vehicles sold to golf courses, golf 
communities and resorts for the transport of one or more persons around a golf 
course or residential community. Also included are golf carts operating as 
utility vehicles for on-site and in-plant materials transport and security 
patrol vehicles. The domestic market for golf carts is approximately 190,000 
units annually, with 65,000 being electric. Environmental concerns are expected
to increase the percentage of electric models in future years. 

Neighborhood electric vehicles (NEVs) are an outgrowth of electric golf carts. 
They are used for personal transportation, primarily to carry two or four 
persons around closed residential subdivisions, resorts, and town centers. 
Current market size is estimated at 15,000 units annually, with most being some
type of modified golf cart. Growth of this segment is expected to come from the
retired residential community market that is being served by a combination of 
new NEV manufacturers and the golf cart industry.
<PAGE>
Industrial personnel and cargo carriers also represent a market for golf cart
motors.  These vehicles are used for towing, materials handling and people
transport in plants, industrial parks, warehouses and other close proximity
manufacturing and industrial settings. Generally, they are electrically driven 
by brushed dc motors that often require expensive brush replacement maintenance
during the life of the vehicle. Market size of this segment is estimated at 
6,000 units annually.

Lawn tractors, riding mowers and turf equipment are used for residential or
commercial grounds keeping. They are almost exclusively gasoline powered and
current vehicle designs are not oriented toward electric motor use. However, the
demand for electric equipment could escalate with environmental regulation and
advances in battery technology. Electric versions would require at least two
motors, one or more for the cutting blade and one for propulsion. Current U.S.
market size is estimated at 135,000 riding mowers and 1,000,000 riding tractors,
not including farm equipment.

At present, the Company does not have distribution channels in place to reach
the described markets for golf cart motors and controllers. It is the Company's
goal, however, to establish distribution channels either directly or by a joint
venture or licensing arrangement with a major original equipment manufacturer
during calendar 1997, although, there can be no assurance that it will be
successful.

Emerging Growth Markets

In a world that produces over 50 million cars, trucks and buses every year, the
Company believes that the potential for electric and hybrid electric vehicle 
power systems is substantial, especially in those markets that place a premium 
on fuel efficiency and good air quality. The Company's long term goal has been,
and is, to become a leading provider to this emerging segment of the automotive
industry. However, the electric vehicle market has been slow to develop and the
hybrid electric vehicle market could take even longer. Early product offerings 
are costly, advanced batteries are not yet in mass production and battery 
charging infrastructure is virtually non-existent. 

Recently, a joint study by the Electric Vehicle Association of the Americas 
(EVAA) and the Electric Transportation Coalition (ETC) attempted to project a 
timetable for the emergence of a sustainable market for electric vehicles. The 
conclusions drawn from this study reveal an anticipated three-phase growth
pattern:

       Phase I:  Entry of electric vehicles into limited early markets, 
       primarily fleets; time frame 1996-1998 with production of low thousand
       of units over        the period.

       Phase II:  Expansion to additional markets with improved technology
       (batteries); time frame 1999-2002 with production of tens of thousands of
       units over the period.

       Phase III:  Broad based market launch of commercially competitive 
       electric vehicles; time frame 2003-2006 with production of 50,000 units 
       or more.

Several market drivers such as advanced battery development, government 
incentives and the degree to which the market accepts early product offerings 
could speed up or slow down this timetable, making accurate forecasting 
extremely difficult. The Company believes that its technology, as evidenced by 
the Ethos 3 EV and the UQM  PowerPhase  system, has positioned it well to 
capitalize on this potential, should such a market develop.
<PAGE>
Environmental Initiatives and Legislation

The major driving force behind the commercialization of electric and hybrid
electric vehicles in the United States is the demand for clean urban air. The
federal government has responded with the Clean Air Act, the Energy Policy Act 
and other initiatives directed toward reducing vehicular emissions. Some state
governments, California, Massachusetts and New York in particular, have done
likewise. California, for example,  mandated that beginning in 1998, at least 
two percent of all cars and light trucks offered for sale by major automakers 
must be zero emission vehicles (ZEVs). The requirement was to increase to five 
percent in 2001 and to ten percent in 2003. Massachusetts and New York adopted 
similar regulations.

During 1996, California canceled the mandates for ZEVs until 2003 when all
automakers that sell more than 3,000 vehicles in California will be required to
meet the ten percent ZEV requirement. Massachusetts has announced its intention 
to follow California, but New York has not. In lieu of the earlier mandates, the
California Air Resources Board (CARB) opted for a market-based approach whereby 
the major automakers agreed to install limited ZEV manufacturing capacity prior 
to 2003, and CARB would grant credit for early ZEV sales toward the 2003 
mandate. As of December 31, 1996, six manufacturers --- GM, Ford, Chrysler, 
Toyota, Nissan and Honda --- have announced plans to market limited numbers of
ZEVs beginning in the first quarter of 1997.

Also during 1996, the U.S. Department of Energy modified its rules governing how
certain state government and utility/fuel provider fleets covered by the Energy
Policy Act of 1992 must comply with the Act's requirements for the use of
alternative fuels. Under the modified rules, covered fleets must make 
increasingly higher purchases of alternatively fueled light duty vehicles 
(which may include electric) over the 1997-2001 period. A fleet is covered by
the Act if the fleet has 50 or more light-duty vehicles (under 8,500 GVW). 
The current fleet acquisition formula is as follows:

               Model            Utility/Fuel     State Government
               Year            Provider Fleets        Fleets      

               1997                   30%               10%
               1998                   50%               15%
               1999                   70%               25%
               2000                   90%               50%
               2001                   90%               75%
                                         
The Company views the relaxation of the California ZEV mandates as a positive 
step in the development of the EV industry. While the ZEV mandates were 
instrumental in jump starting the development of several new technologies, they
have the potential to force manufacturers to offer poorly performing products 
at prohibitive costs that may not be accepted in the marketplace. Management 
believes such a result would create an artificial market and would seriously 
damage the ultimate acceptance of electric vehicles.   There can be no assurance
that the state and federal mandates will not be further modified or rescinded.
<PAGE>
License Agreements

The Company and Alcan Aluminium Limited (Alcan) have entered into an agreement
(Assignment Agreement) wherein Alcan assigned to the Company all of its rights,
title and interest in all technology previously developed by the Company for or
on behalf of Alcan.  The Assignment Agreement further provides that the Company
shall pay to Alcan royalties on revenue derived from the manufacture and sale 
of products or processes embodying PM technology, subject to an offset in the 
amount of one-half of the Company's patent application and maintenance fees 
related to the PM technology.

In May 1996, the Company entered into a License and Technical Assistance 
Agreement with Taiwan UQM, a joint venture company in which the Company has a 
39 percent equity interest.  Pursuant to the agreement, Taiwan UQM was granted 
an exclusive license in Taiwan to make, use and sell the Company's electric 
motors and controls an exclusive license in the People's Republic of China with
respect to the propulsion system developed for KYMCO and a nonexclusive license
throughout the rest of Asia (except India and Japan) for the Company's electric
motors and controls.  The license is royalty bearing except for propulsion 
systems manufactured by Taiwan UQM for KYMCO.

In November 1996, KYMCO entered into a supply agreement with Taiwan UQM relating
to the purchase from Taiwan UQM of propulsion systems developed by the Company.
With the execution of the supply agreement, the grant of license contained in 
the Company's Product Development and License Agreement with KYMCO became 
effective. Pursuant thereto, KYMCO has a worldwide, royalty-free license, 
exclusive in Asia except for Japan and India, to sell scooters with propulsion
systems manufactured by Taiwan UQM using the Company's technology.  

Competition

The automotive, industrial and commercial markets into which the Company hopes 
to introduce and market its products are all highly competitive and 
characterized by rapid changes due to technological improvements. The automotive
industry, in particular, is currently being driven by legislation and other 
initiatives to develop low-emission, fuel efficient vehicle propulsion systems.
The Company is aware of efforts by many companies, including large automotive 
OEMs, to develop electric and hybrid electric vehicles. The Company believes 
that its principal competitors in the automotive supply sector include Auxilec,
Delco Power Electronics, Fuji Electric, Hitachi, Matsushita and Siemans. 
Principal competitors in the industrial and commercial sectors include Advanced
DC, Emerson Electric, General Electric and the Reliance Division of Rockwell 
International. The Company is aware of other companies, both large and small, 
that have entered or may enter the market and expects competition to intensify 
as demand increases for high efficiency PM motors.

Although the Company is not as well capitalized as many of its competitors, its
strategy is to compete with larger companies on the basis of technical skills,
proprietary know-how and its affiliation with large and well-financed strategic
partners. 

Patents and Trademarks

The Company filed a motor patent application with the U.S. Patent office in
December 1985, and similar applications are being prosecuted in many other
countries throughout the world.  As a result of the original U.S. Application,
U.S. Patent No. 5,004,944 was issued on April 2, 1991 containing one independent
claim and three dependent claims.  A Continuing Application of the 1985 
application was filed in October 1990 to pursue subject matter that was not 
allowed in the original U.S. Patent.  As a result, U.S. Patent 5,311,092 issued
on May 10, 1994 with four independent claims and one dependent claim.  Of the 
foreign applications, a patent has been published covering thirteen European 
member countries of the European Patent Office (EPO), and an opposition thereto
has been resolved.  In addition, corresponding patents have issued in Australia,
Brazil, Canada, India, Israel, South Korea, Mexico, New Zealand, South Africa 
and Taiwan.  Seven other foreign applications remain pending, three of which
have been indicated to be allowable.
<PAGE>
In August 1989, the Company filed a separate application with the U.S. Patent
office to cover certain proprietary aspects of its electronic control circuitry.
Additional claims were added by means of a Continuation in Part (CIP) filed in 
May 1990.  In April 1992, the Company was issued U.S. Patent No. 5,107,151 as a 
result of the CIP Application.  In August 1990, an International Patent 
Application corresponding to the U.S. Application and the Continuation in Part 
was filed under the provisions of the Patent Cooperation Treaty (PCT) which 
includes the EPO, Japan and South Korea, among others.  National applications 
were also filed in eight additional countries including India, Taiwan and 
Israel;  patents have been granted in Mexico, Taiwan, India and Israel.  
Applications remain pending in Japan and Korea but the EPO Application has been
withdrawn. 

In March 1990, a Continuing Application was filed to claim the method of
constructing the motor as disclosed in U.S. Patent No. 5,004,944.  The 
Continuing Application resulted in U.S. Patent 5,319,844 issued June 14, 1994.
In March 1991 the Company filed an International Patent Application 
corresponding to the U.S. Application; as a result a patent has been granted in
Australia and there are seven applications pending in foreign countries and one
pending application in the European Patent Office (EPO) which designates the 
European group of countries.

In September 1992, the Company filed a separate application with the U.S. Patent
Office titled "Stator and Method of Constructing Same for High Power Density
Electric Motors and Generators" which has resulted in issuance of U.S. Patent
5,382,859 in January, 1995.  This patent embodies the Company's most recent
enhancement to its motor technology which utilizes a segmented iron powder 
stator ring developed specifically for brushless permanent magnet stator cores. 
A Divisional U.S. Patent Application has been filed to pursue a second invention
disclosed in the original application; that divisional application has resulted 
in U.S. Patent 5,592,731 issued January 14, 1997.  Patent Applications in 
Canada,Europe, Japan and Korea are pending as a result of a counterpart PCT 
International Patent Application.

In July 1994 the Company filed an application in the U.S. Patent office titled
"Brushless DC motor using Phase Timing Advance" which embodies a low cost 
method of controlling the drive current to a motor to achieve operating 
characteristics ideal for vehicle traction drives.  This application has been 
allowed and the company is awaiting issuance of the patent.  In June 1995 a 
counterpart PCT International Patent Application was filed and various foreign
country patent applications are now being filed.

During 1994 the Company acquired the assets of Everton Developments of 
Birmingham, England including all rights under PCT Application WO 92/22121 
published December 10, 1992.  Patent applications filed thereunder are still 
pending in four countries.  The United States application has been allowed and 
the company is awaiting issuance of the patent.  Corresponding patents have 
been granted in Australia and in Europe where the patent is  effective as to 
France, Germany, Italy, Switzerland, Liechtenstein and United Kingdom.  
The Company elected to write-off the costs associated with this patent during 
the five months ended March 31, 1997, due to the uncertainty of applying the 
underlying technology to commercial markets in the near term.  See also 
"Management Discussion and Analysis of Financial Condition and Result of 
Operations" below. 

The Company owns the trademark "UM," which is registered with the United States
Patent and Trademark Office and is subject to renewal in October 2000. This
trademark is available for use in connection with the products and publications
of Unique.  The Company owns three U.S. Trademark Registrations for "UNIQ"
(International Class 7 for power Transducers, and Class 12 for Utility Land
Vehicles and Class 16 for Publications).  The Class 12 trademark is subject to
renewal in June 2006; the Class 7 trademark is subject to renewal in August 
2006; and the Class 16 trademark is subject to renewal in February 2007.
<PAGE>
The Company currently holds a patent issued by the United States Patent Office,
in August 1980, which covers certain mechanical features of the ElecTrek 
automobile, principally its composite unibody structure and battery trays.  
This patent expires in August 1997.  The Company no longer produces or market
its ElecTrek automobile.

The Company has also initiated registration of the letters UQM and a stylized
version thereof as its new trademark in the U.S. and 26 countries throughout 
the world.  Two U.S. Trademark Registrations and 22 out of 26 of the foreign 
countries have granted registrations or indicated them to be allowable.  These
trademarks are directed to the same trademark classes as for the marks "UM" and
"UNIQ".  UQM is the American Stock Exchange code identification for the Company.
The foreign trademark registrations and applications include major markets 
where the Company is doing business or establishing business contacts. 

The Company has recently begun using "POWERPHASE" as a trademark to identify its
modular brushless permanent magnet electric motor traction drives for electric
and hybrid electric vehicles.  An application for trademark registration in the
United States was filed in September 1996 and is still pending.  Corresponding
applications for trademark registration have been filed in 11 countries and the
European community.

In November 1994, the Company and Alcan completed an assignment agreement which
provided, among other things, that for so long as Alcan beneficially owns at
least five percent of the Company's common stock, it shall be obligated to pay
one-half of the patent application and maintenance fees (including reasonable
attorney's fees related thereto) associated with the Company's PM technology
in an amount not to exceed the aggregate amount of royalty revenue derived from
the PM technology.

The Company's future success depends, in part, on the diligent prosecution of
its issued and pending motor and electronic patents, as well as the filing and
prosecution of patents on future technological advances, if any.  There can be
no assurance that the Company will possess the financial resources necessary to
prosecute and maintain existing applications or to pursue additional patents.
If the Company is not able to prosecute and maintain its existing patent
applications, they will lapse.  There can be no assurance that the Company's
patents will not be circumvented, invalidated or infringed, or that the Company
will possess the financial resources to enforce its existing patents and patent
applications in the event of an infringement.  Further, new technology may be
developed by third parties or may already exist unknown to the Company causing
the Company's proprietary technology to be obsolete.
 
The Company also intends to rely on the unpatented proprietary know-how it has
developed and now utilizes in its products.  There can be no assurance that 
others will not independently develop, acquire or obtain access to the Company's
technology.  Although the Company protects its proprietary rights by executing
confidentiality agreements with its management, employees and others with access
to the Company's technology, these measures may not be adequate to protect the
Company from disclosure or misappropriation of its proprietary information.

Manufacturing

To date, the Company has manufactured all of its products at its facility in
Golden, Colorado.  The Company anticipates investing in manufacturing equipment
to further develop the manufacturing capacity at this facility at such time as
the Company secures a commitment for the volume purchase of its products.  The 
Golden facility has current available capacity of approximately 15,000 square 
feet which can be dedicated to manufacturing operations without significant 
alteration.  Although the Company has no prior experience in delivering large 
volumes of its products,  it is currently in the process of establishing the 
capacity to meet such high volume production requirements and has retained
talented personnel with experience in motor manufacturing to assist in the 
launch of such operations.  The Company believes additional manufacturing space
and equipment is readily available. 
<PAGE>
Backlog

At May 31, 1997, the Company had unperformed service contracts from customers 
which will provide payments to the Company upon completion aggregating 
approximately $2,875,000.  All such contracts are subject to amendment, 
modification or cancellation.

In addition, the Company had an order backlog for motors and electronic controls
at May 31, 1997, with an aggregate sales value of approximately $158,000.

Customers and Suppliers

A significant portion of the Company's revenue for the five months ended 
March 31, 1997, was derived from General Motors Corporation, Kia Motors, and 
Pan Asia Technology, Co., Ltd.  Contract services revenue of $452,478 or 65 
percent of total contract services revenue was derived from these customers.

Principal raw materials purchased by the Company include iron, steel, copper 
wire, neodymium boron iron alloy, fiberglass and epoxy resins.  All of the above
items are available from several suppliers and the Company generally relies on 
more than one for each item.  Principal purchased products include power 
electronic switching devices and magnet material which are available from 
several suppliers.

US Government Contracts

For the five months ended March 31, 1997, $78,532 or 11 percent of the Company's
contract service revenue was derived from contracts with agencies of the U.S.
Government and from subcontracts with U.S. Government prime contractors.

Some of the Company's business with the U.S. Government was performed on a cost
plus fixed fee basis.  These contracts provide for reimbursement of costs, to 
the extent allocable and allowable under applicable regulations, and payment of
a fee. Certain other contracts with the U.S. Government provide for the 
reimbursement of costs on a 50 percent cost sharing basis based on not-to-exceed
billing rates negotiated between the Company and the U.S. Government.  Other 
U.S. Government business is performed under firm fixed price contracts.  On 
"cost-share" and "firm fixed price" contracts, the Company can incur an actual 
loss in the performance thereof if incurred costs exceed the contract amount.  
All U.S. Government contracts with the Company are subject to modification or 
cancellation at the convenience of the Government.

Employee and Labor Relations

As of March 31,1997, the Company had 32 full-time employees.  The Company has
entered into employment contracts with its three executive officers which expire
in December 1999.  None of the Company's employees are covered by a collective
bargaining agreement.  The Company's management believes that its relationship 
with its employees has been generally satisfactory.

In addition to its full-time staff, the Company from time to time engages the
services of outside consultants and contract labor to meet peak workload or
specialized program requirements.  The Company does not anticipate any 
difficulty in locating additional qualified professional engineers, technicians
and production workers, if so required, to meet expanded research and 
development or manufacturing operations.
<PAGE>
ITEM 2.     PROPERTIES

Facilities

The Company leases a 40,000 square foot office/laboratory/warehouse building in
Golden, Colorado, from a limited liability company of which the Company and an
investor are equal owners.  The Company has entered into a ten-year lease of the
building at $21,667 per month with an option for an additional five years at the
then market rate.  The Company is required to pay all taxes, maintenance and
insurance.  The Company currently subleases 12,500 square feet of this facility
for $7,031 per month plus an allocable share of taxes, maintenance and 
insurance costs.  The Company believes its existing facilities are adequate to 
meet its operational needs for the foreseeable future.

The Company also owns the basic tools and equipment, including computer hardware
and software, necessary for the conduct of its production, research and 
development and vehicle prototyping activities.


ITEM 3.     LEGAL PROCEEDINGS

There is no material litigation with respect to which the Company is a party.


ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted for vote by security holders of the Company 
during the five months ended March 31, 1997.


ITEM 5.     MARKET PRICE OF COMMON STOCK

The Company's common stock trades on the American, Boston, Pacific and Chicago
Stock Exchanges.  The high and low closing prices, by fiscal quarter, as 
reported by the American Stock Exchange for the last three years, the quarter 
ended January 31, 1997, and the five months ended March 31, 1997, are as 
follows:

1997                                          High      Low
Two Months Ended March 31, 1997. . . . .  .  $4.50     $3.18
Quarter Ended January 31, 1997. . . . . .  . $4.88     $3.18 

1996                                                
Fourth Quarter. . . . . . . . . . . . . . . .$5.19     $3.81
Third Quarter . . . . . . . . . . . . . . . .$5.00     $3.50
Second Quarter. . . . . . . . . . . . . . . .$5.13     $4.19
First Quarter . . . . . . . . . . . . . . . .$4.50     $3.31

1995
Fourth Quarter . . . . . . . . . . . . . . . $5.38     $3.63
Third Quarter. . . . . . . . . . . . . . . . $5.56     $3.83
Second Quarter . . . . . . . . . . . . . . . $5.63     $3.75
First Quarter. . . . . . . . . . . . . . . . $5.75     $4.75

1994
Fourth Quarter . . . . . . . . . . . . . . . $7.00     $4.88
Third Quarter. . . . . . . . . . . . . . . . $6.88     $4.88
Second Quarter . . . . . . . . . . . . . . . $7.88     $5.75
First Quarter. . . . . . . . . . . . . . . . $8.63     $7.00
<PAGE>

On June 25, 1997 the closing price of the Company's common stock, as reported on
the American Stock Exchange, was $7.00 per share and there were 891 holders of
record of the common stock.

The Company has not paid any cash dividends on its common stock since inception 
and intends for the foreseeable future to retain any earnings to finance the 
growth of its business.  Future dividend policy will be determined by the Board
of Directors of the Company based upon consideration of the Company's earnings,
capital needs and other factors then relevant.


ITEM 6.          SELECTED FINANCIAL DATA


                      Unique Mobility, Inc.
               Consolidated Selected Financial Data
<TABLE>
<CAPTION>                          
               Five Months
                  Ended
                 March 31,
                  1997(1)      1996       1995         1994         1993          1992                  
<S>            <C>         <C>         <C>          <C>          <C>         <C>          
Contract
Services 
Revenue      $   700,132    1,436,484    4,031,951    1,643,203    1,461,568     2,306,070

Product 
Sales        $   152,016      611,213      701,700      708,917      695,300      468,508

Operating
Loss         $(1,120,900)  (2,744,      (1,134,338)  (3,367,873)  (2,446,574)  (2,240,170)

Net Loss     $(1,201,085)  (2,904,743)  (1,330,433)  (3,395,356)  (2,473,804)  (2,217,207)

Net Loss
Per Common
Share        $   (.12)        (.26)         (.13)        (.35)        (.28)       (.33)

Total 
Assets       $12,370,699    8,712,649    7,626,178    5,903,551    7,791,826    4,700,507 

Long-term
Obligations  $   726,218      744,389      807,003      886,996      921,758    2,161,376

Cash Divi-
dend Declared
Per Common
Share        $    -0-           -0-          -0-          -0-          -0-         -0-
</TABLE>

(1)  Prior to March 31, 1997, the Company's fiscal year ended on October 31. 
     Effective March 31, 1997, the Company changed its fiscal year to end on 
     March 31.  The following table sets forth unaudited consolidated selected 
     financial data for the unaudited five months ended March 31, 1996:

     Contract Services Revenue                  $   331,761
     Product Sales                              $   216,325
     Operating Loss                             $(1,313,705)
     Net Loss                                   $(1,367,261)
     Net Loss per Common Share                  $   (0.13)  
     Total Assets                               $ 7,799,981
     Long-Term Obligations                      $   774,248
     Cash Divident declared per Common Share    $         0  
      
<PAGE>

ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
            RESULTS OF OPERATIONS

This Report contains forward-looking statements that involve risks and
uncertainties.  The Company's actual results could differ materially from those
discussed in this Report.  Factors that could cause or contribute to such
differences include, but are not limited to, those discussed in this report and
any documents incorporated herein by reference, as well as, in the Company's
Registration Statement on Form S-3 (file no. 23843).  These forward-looking
statements represent the Company's judgment as of the date of this Report.  The
Company disclaims, however, any intent or obligation to update these forward-
looking statements.

The Company has changed its fiscal year end from October 31 to March 31.  This
change results in a five month transition period for financial reporting 
purposes commencing on November 1, 1996, and ending on March 31, 1997. This 
report covers the Company's financial condition at March 31, 1997 and 
October 31, 1996 and results of operations, changes in stockholders' equity and
changes in cash flows for the five months ended March 31, 1997, and the fiscal 
years ended October 31, 1996, 1995 and 1994, respectively.

Financial Condition

The Company's financial condition strengthened during five months ended 
March 31, 1997, due to the sale of 1,289,288 shares of common stock pursuant to
offerings under Regulation S and Regulation D of the Exchange Act of 1934.  
Cash proceeds to the Company from the offering, net of offering costs, amounted
to $4,146,820. Primarily as a result thereof, cash and cash equivalents rose to
$5,713,557 at March 31, 1997 compared to $3,230,246 at fiscal 1996 year end and
shareholders' equity rose to $8,574,799 at March 31, 1997, from $5,592,876 at 
October 31, 1996. Working capital (the excess of current assets over current 
liabilities) increased to $4,174,184 at March 31, 1997 from $2,469,197 at 
October 31, 1996.

Accounts receivable declined to $389,314 at March 31, 1997 from $569,562 at 
October 31, 1996, reflecting collection of certain overdue trade receivables. 
Accordingly, the accounts receivable balance at March 31, 1997, represented 
approximately 69 days revenue compared to 102 days revenue at fiscal 1996 year 
end.

Costs and estimated earnings on uncompleted contracts increased $12,402 to 
$191,885 at March 31, 1997 from the fiscal 1996 year end level of $179,483. The
increase was due to increased levels of contract services in process.  
Estimated earnings on contracts in process decreased to $490,407 at 
March 31, 1997 on total contracts in process of $3,649,111 compared to 
estimated earnings on contracts in process of $596,765 on total contracts in 
process of $1,678,117 at October 31, 1996.  The decrease is attributable to 
two contracts, representing 9 percent of total contracts in process at 
March 31, 1997, which have cost overruns of approximately $119,000 in the 
aggregate and a greater proportion of material costs in contracts in process at
March 31, 1997.

Raw materials and work in process inventories rose to $283,155 and $69,460,
respectively, at March 31, 1997 compared to $273,527 and $55,996, respectively,
at October 31, 1996.  The increase is attributable to increased demand for the
Company's PowerPhase  drive system.  Finished products inventories declined 
$5,846 to $72,776 at March 31, 1996 due to increased product sales and product 
utilization in contract services contracts during the five months ended 
March 31, 1997.
<PAGE>
The Company invested $118,608 for the acquisition of property and equipment 
during the five months ended March 31, 1997, compared to $22,279 for the 
comparable five month period ended March 31, 1996.  The increase in capital 
expenditures is primarily attributable to improvements to the Company's Golden, 
Colorado, facility by Unique Building Partners.  The Company expended $47,865 
on the prosecution of its trademark and patent applications during the five 
months ended March 31, 1997.

Investment in Taiwan joint venture rose to $2,677,730 at March 31, 1997, from
$1,366,540 at October 31, 1996, reflecting the recording of future capital call
obligations to Taiwan UQM.  The capital call obligation to Taiwan UQM was 
funded in April 1997 from the proceeds of the Company's sale of common stock
completed in March, 1997.  See also "Liquidity and Capital Resources" below.

Patent and trademark costs, net of accumulated amortization, was $502,297 at 
March 31, 1997 a decrease of $17,669 from October 31, 1996. The decrease 
represents the net effect of the write-off of a patent acquired from Everton 
Developments Limited in fiscal 1995.  The write-off of the patent costs 
reflects the Company's assessment that the revenue realizable from the 
technology encompassed under the patent over the near term would be 
insufficient to support the carrying cost of the associated technology asset.

Accounts payable rose to $169,403 at March 31, 1997 from $121,790 at October 31,
1996, due to increased levels of purchased components and materials for projects
in process in the normal course of operation.

Other current liabilities increased to $459,223 at March 31, 1997, from 
$400,574 at October 31, 1996.  The increase was primarily attributable to an
overpayment by a participant in the Company's March 1997 common stock offering.

Billings in excess of costs and estimated earnings on uncompleted contracts rose
to $659,807 at March 31, 1997 from $25,685 at October 31, 1996 primarily due to
a substantial prepayment by an overseas customer on a development program.

Long-term debt declined $18,171 during the five months ended March 31, 1997,
due to scheduled principal payments on the mortgage debt associated with the
Company's facility.

Common stock and additional paid-in capital increased to $130,430 and 
$27,094,170 at March 31, 1997, respectively, compared to $117,514 and 
$23,021,339 at October 31, 1996.  The increases were due to the sale of common 
stock to institutional investors and an individual investor in the amount of 
$4,146,820; sales of common stock to employees and consultant's through the 
company's benefit plans of $45,000; and the issuance of common stock for 
services of $3,949.

Results of Operations

Five months ended March 31, 1997

Operations for the five months ended March 31, 1997, resulted in a net loss of
$1,201,085 or $0.12 per share compared to a net loss of $1,367,261 or $0.13 per
share for the comparable five month period last year.

Revenue derived from contract services was $700,132 for the five months ended
March 31, 1997 versus $331,761 for the comparable period last year.  The 
increase is attributable to increased levels of sponsored development 
activities.

Product sales during the five months ended March 31, 1997, declined to $152,016
compared to $216,325 for the comparable five month period last year due 
principally to price reductions and lower unit volumes of high voltage products
and decreased sales to the solar race car market.
<PAGE>
Gross profit margins for the five months ended March 31, 1997, increased to 
15.6 percent compared to a negative margin of 2.3 percent for the comparable
five month period last year.  Gross profit on contract services was 15.2 percent
for the five months ended March 31, 1997, compared to a negative margin of 3.3 
percent for the comparable period last year.  Gross profit on product sales for
the five months ended March 31, 1997, was 17.3 percent compared to a negative 
margin of .7 percent for the comparable period last year.  The increase in 
contract services margins for the five months ended March 31, 1997, is 
attributable to increased absorption of overhead costs.  The increase in 
margins on product sales is attributable to lower overhead allocations and 
improvement in purchased material costs.

Research and development expenditures for the five months ended March 31, 1997,
decreased $120,785 to $489,442 for the five months ended March 31, 1997 from the
amount expended during the comparable period last year of $610,227.  The 
decrease is attributable to lower levels of internally-funded production and 
facilitization engineering activities associated with the launch of volume 
manufacturing operations at the Company's Golden, Colorado facility and lower 
levels of "cost sharing" type contracts during the five months ended 
March 31, 1997.

General and administrative expense for the five months ended March 31, 1997, 
rose $65,204 over the amount expended during the comparable period last year to
$600,446.  The increase during the five months ended March 31, 1997, was due 
primarily to the impairment of patent costs which were written off during the 
period of approximately $55,000 and commission costs on the production design 
phase of the KYMCO development program of approximately $30,000 which were 
 recorded during the five months ended March 31, 1997.

Depreciation and amortization expense was $159,473 during the five months ended
March 31, 1997, compared to $153,106 for the five month period ended 
March 31, 1996.  The increase is due to depreciation of additional property and
equipment and the amortization of patent and trademark costs in an expanded 
number of countries.

Interest income increased to $54,802 during the five months ended March 31, 
1997, compared to $46,214 for the comparable period last year. The increase is
attributable to higher levels of invested cash and improved yields on short-term
investment instruments.

Interest expense decreased to $84,704 during the five months ended March 31, 
1997, compared to $91,780 for the comparable period last year due primarily to 
a lower interest rate achieved through refinancing of the mortgage loan on the 
Company's facility.

Equity in loss of Taiwan joint venture rose to $24,121 for the five months ended
March 31, 1997 compared to $16,682 for the comparable period last year.  The
increase is due to expanded staffing and operations at Taiwan UQM preparatory
to the launch of manufacturing operations.

Effect of Recently Issued Accounting Standards

The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 128, Earnings Per Share ("SFAS 128") which will be
effective for interim and annual periods ending after December 15, 1997, and 
changes the computation and disclosure requirements for earnings per share.  
Had earnings per share been reported under the provisions of SFAS 128 for the 
five months ended March 31, 1997, basic earnings per share would have been
$0.12 per share.  The effect of the adoption of SFAS 128 is not expected to 
have a material effect on the earnings per share disclosures.
<PAGE>
Fiscal years ended October 31, 1996, 1995 and 1994

Operations for the year ended October 31, 1996, resulted in a net loss of 
$2,904,743 or $0.26 per share.  This compares to a net loss of $1,330,433 or 
$0.13 for the year ended October 31,1995, and a net loss of $3,395,356 or $0.3
per share of the year ended October 31, 1994.
   
Revenue derived from contract services in fiscal 1996 declined 64 percent or
$2,595,467 from the fiscal 1995 level, and 13 percent or $206,719 from the 
fiscal 1994 level. The decrease in revenue from fiscal 1995 was attributable
principally to a reduced level of work performed for Ford Motor Company and the
U.S. Department of Energy which accounted for $1,526,445 or 59 percent of the 
decrease in revenue. The decrease in revenue from fiscal 1994 was also 
primarily attributable to a reduced level of work performed under the product 
development agreement with KYMCO which accounted for $167,252 or 81 percent of
the decrease in revenue.
    
Product sales during fiscal 1996 declined 13 percent from the fiscal 1995 leve
and 14 percent from the fiscal 1994 level.  The decrease is attributable to 
price reductions on the Company's high voltage prototype products anddecreased
sales to the solar racing market.
   
Gross profit margins for fiscal 1996 declined to 20.9 percent compared to 31.7
percent for fiscal 1995 and were 6.6 percent higher than the fiscal 1994 margin
of 14.3 percent.  The fiscal 1996 decline is attributable to price reductions 
in the Company's high voltage product line and decreased absorption of overhead
costs on sponsored development contracts.  Gross profit on contract services 
was 25.4 percent for fiscal 1996 compared to 34.2 percent in fiscal 1995 and 
12.3 percent in fiscal 1994.  Gross profit on product sales was 9.9 percent for
fiscal 1996 compared to 17.5 percent in fiscal 1995 and 18.7 percent in fiscal
1994.
    
Research and development expenditures in fiscal 1996 rose $335,843 over the 
fiscal 1995 level and declined $459,671 from the amount expended during fiscal 
1994.  The fiscal 1996 increase is attributable primarily to production and 
facilitization engineering activities associated with the planned launch of 
volume manufacturing operations for Invacare which accounted for approximately 
$745,000 or 48 percent of internally-funded research and development 
expenditures.  The decrease from fiscal 1994 expenditures is attributable to a
decline in "cost sharing" development contracts which amounted to approximately
$420,000 in fiscal 1996 compared to $695,000 for fiscal 1994.
    
General and administrative expense for fiscal 1996 rose $185,417 over the fiscal
1995 level and declined $173,705 from the amount expended in fiscal 1994.  The
fiscal 1996 increase was primarily attributable to higher levels of professional
services costs ($20,369), commission expenses associated with the sublease of a
portion of the Company's facility ($53,483), and an adverse arbitration award
($41,945). The decrease from the fiscal 1994 expenditure level was primarily
attributable to lower levels of legal expenses ($56,952) and reduced staffing of
administrative functions ($62,535). During the second quarter of fiscal 1996 an
arbitrator awarded compensation and legal fees to a consultant of the Company 
for work the consultant asserted was performed at the Company's request on its
contract with Ford Motor Company and the U.S. Department of Energy.  The 
Company was unable to secure reimbursement of the consultant's costs under the 
Ford/DOE contract and therefore recorded such costs as general and 
administrative expense including the legal costs of the arbitration proceeding.
The foregoing award represented a complete settlement of all claims by the 
consultant against the Company.
     
Depreciation and amortization expense increased to $375,590 during fiscal 1996.
The increase reflects depreciation of a commercial vehicle owned and leased by 
the Company's leasing subsidiary and the amortization of intellectual property
in an expanded number of countries.  UQM Leasing, Inc. provides leases on the
Company's products to qualified customers to facilitate the purchase of such 
products.  To date, its operations have been limited to providing lease 
financing on a prototype vehicle with annual lease payments of $48,000 per 
year.  The operations of UQM Leasing, Inc. are immaterial to the Company's 
overall operations and as a result the Company has elected to omit the more 
expansive disclosures of leasing operations required by generally accepted 
accounting principles.
    
Royalty expense declined to $9,497 in fiscal 1996 reflecting lower levels of
royalty bearing content in the sale of products and services.

Interest income increased to $113,582 in fiscal 1996 compared to $50,890 and 
$98,228 for fiscal 1995 and 1994, respectively.  The increases were primarily 
attributable to higher levels of invested cash during fiscal 1996.
<PAGE>
Interest expense rose to $202,798 during fiscal 1996 due to increased loan value
underlying leases issued by UQM Leasing, Inc. and interest accruals under the 
waiver and option agreement with KYMCO.  See also "Liquidity and Capital 
Resources" below.

Equity in loss of Taiwan joint venture rose to $45,164 in fiscal 1996 compared 
to $11,952 and $3,888 for fiscal 1995 and 1994, respectively.  The increases 
were due to expanded staffing and operations at Taiwan UQM preparatory to the 
launch of manufacturing operations.
   
Other income rose to $43,643 in fiscal 1996 primarily as a result of a gain on
the sale of real estate held for investment ($38,124) and foreign currency 
exchange gains ($5,700).

Liquidity and Capital Resources

The Company's cash balances and liquidity during the five months ended March 31,
1997, were adequate to meet its operating needs. Net cash used by operating
activities was $104,769 for the five month period ended March 31, 1997 compared
to net cash used by operations for the comparable period last year of 
$1,371,427.  The decrease is primarily attributable to a reduction in trade 
accounts receivable and prepayments by customers for contract services 
reflected as an increase in billings in excess of costs and estimated earnings
on uncompleted contracts.  Cash requirements during the period were funded 
primarily through the sale of common stock.

In January 1996, Invacare purchased 129,032 shares of common stock at a price of
$3.88 per share.  Net proceeds to the Company were $500,000, all of which were
applied to fund the development of a wheelchair motor for Invacare.  Contingent
upon achieving development milestones, Invacare further agreed to purchase 
additional shares at the then market price, the proceeds of which would be used,
in part, to fund the Company's anticipated capital investment in motor 
anufacturing tools and equipment.  The Company is currently negotiating with 
Invacare to manufacture motors for its wheelchairs.  During the course of these
negotiations, Invacare has informed the Company that they would prefer to 
invest directly in the assets required to launch production, such as tooling 
and dedicated manufacturing equipment in lieu of the second investment 
envisioned in the original stock purchase agreement.  Accordingly, the Company
does not anticipate any further sales of its equity securities to Invacare.  
There can be no assurance that negotiations will lead to the completion of a 
definitive supply agreement.

During the five months ended March 31, 1997, the Company completed the 
placement of 1,289,288 shares of its common stock to various institutional 
investors and an individual investor in offerings under Regulation S and 
Regulation D of the Securities and Exchange Act.  The common stock was sold at 
$3.50 per share which was the average closing price of the common stock on the 
American Stock Exchange for the ten days prior to the offering pricing date.  
Net proceeds to the Company, after deducting offering costs of $365,688, was 
$4,146,820.  The Company also completed two offerings of its common stock to 
overseas individual and institutional investors under Regulation S in fiscal 
1996.  Pursuant to these offerings, the Company placed 1,057,708 shares of 
common stock and received cash proceeds, net of offering expenses, of 
$3,909,379.  

In fiscal 1994, the Company, KYMCO and TLT entered into a joint venture 
agreement which provided for the formation, capitalization and operation of 
Taiwan UQM, a company organized under the laws of the Republic of China.  The 
Company purchased 39 percent of the initial stock of Taiwan UQM for 
NT$1,170,000 (US$45,082 on the transaction date).  Pursuant to the joint
venture agreement, the venture partners are obligated to meet future capital 
calls as the Board of Directors of Taiwan UQM, by unanimous vote, determines.
During fiscal 1995, the company was unable to fund its capital call obligations.
In June 1995, the Company, KYMCO and TLT entered into a waiver and option 
agreement pursuant to which KYMCO agreed to purchase those shares of Taiwan UQM
underlying the Company's capital call obligations.  The purchase price of such
shares was NT$37,830,000 (U.S.$1,403,493 at October 31, 1995).  The Company was
granted the option to repurchase the shares for the original capital call 
amount plus 10 percent interest and associated transfer taxes.  In 
November 1996, the Company exercised its option and subsequently repurchased 
the shares from KYMCO, thus maintaining the Company's ownership position at 39 
percent of the then outstanding shares of Taiwan UQM.  The repurchase price 
plus interest and taxes totaled NT$44,175,505 (US$1,612,539 on the 
transaction date).

In November 1996, the Board of Directors of Taiwan UQM announced an additional
capital call to provide cash to fund facility construction and the launch of
electric component production.  The Company's capital call obligation pursuant
thereto is NT$37,050,000 (US$1,348,300 as of December 1, 1996), plus interest 
at the rate of 10 percent per annum on the outstanding amount from 
December 1, 1996, through the due date.  The obligation was due and payable in 
two equal installments on March 1, 1997 and June 1, 1997.  In April, the 
Company elected to fund the entire capital call obligation in one payment and 
remitted approximately $1,384,000 including accrued interest of approximaterly 
$40,000 in complete satisfaction of its capital call obligation.  The Company 
believes that Taiwan UQM is adequately capitalized to meet its operating cash 
requirements over the next twelve months. Accordingly, the Company does not 
anticipate any additional capital calls by Taiwan UQM in fiscal 1998.

Over the next several months, the Company expects to invest substantially 
greater amounts of capital to launch manufacturing operations for Invacare, 
should Invacare elect to purchase motors from the Company.  Anticipated capita
 expenditures for working capital, production machinery, equipment, computer 
hardware and software are expected to exceed $1.5 million.  The Company is 
negotiating to sell motors to Invacare, a leading wheelchair manufacturer.  
There can be no assurance that a final agreement will be reached.  The Company 
expects to fund this investment requirement through a combination of existing 
cash resources and short-term bank lines-of-credit.  Although the Company has, 
to-date, not entered into formal arrangements for such bank lines-of-credit, 
Management believes bank lines-of-credit are readily available to the Company 
on terms acceptable to the Company.  There can, however, be no assurance that 
the Company will launch volume manufacturing operations for Invacare or others.
The Company believes it has cash resources, in addition to those required to 
launch volume manufacturing operations, sufficient to fund non-manufacturing 
operations through at least March 31, 1998.
<PAGE>
  
ITEM 8.    Financial Statements


                  Independent Auditors' Report
                                
The Board of Directors
Unique Mobility, Inc.:

We have audited the accompanying consolidated balance sheets of Unique Mobility,
Inc. and subsidiaries as of March 31, 1997 and October 31, 1996, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
the five months ended March 31, 1997 and each of the years in the three-year
period ended October 31, 1996.  These consolidated financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.  We did not audit the
financial statements of Taiwan UQM Electric Co., Ltd., (a 39% percent owned
investee company).  The Company's investment in Taiwan UQM Electric Co., Ltd. at
March 31, 1997 was $2,677,730, and its equity in the losses of Taiwan UQM
Electric Co., Ltd were $(24,121) for the five months ended March 31, 1997.  The
financial statements of Taiwan UQM Electric Co., Ltd. were audited by other
auditors whose report has been furnished to us, and our opinion, insofar as it
relates to the amounts included for Taiwan UQM Electric Co., Ltd. for the five
months ended March 31, 1997 is based solely on the report of the other auditors.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits and the report
of the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of the other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Unique Mobility, Inc. and
subsidiaries as of March 31, 1997 and October 31, 1996, and the results of their
operations and their cash flows for the five months ended March 31, 1997 and 
each of the years in the three-year period ended October 31, 1996, in conformity
with generally accepted accounting principles.



                                   KPMG Peat Marwick LLP
Denver, Colorado
June 26, 1997
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Consolidated Balance Sheets



                                                March 31,       October 31,
Assets                                            1997             1996    

Current Assets                             
   Cash and cash equivalents                 $  5,713,557       3,230,246     
   Accounts receivable (note 12)                  389,314         569,562
   Costs and estimated earnings in excess
     of billings on uncompleted contracts
     (note 2)                                     191,885         179,483
   Inventories (note 3)                           425,391         408,145
   Prepaid expenses                               115,260          37,848
   Other current assets                            17,675          28,177

           Total current assets                 6,853,082       4,453,461

Property and equipment, at cost:
   Land (notes 4 and 7)                           335,500         335,500
   Building (notes 4 and 7)                     1,438,090       1,364,500
   Molds                                          102,113         102,113
   Transportation equipment                       258,675         258,675
   Machinery and equipment                      1,963,146       1,918,128
                                                4,097,524       3,978,916
   Less accumulated depreciation               (1,764,288)     (1,613,786)

           Net property and equipment           2,333,236       2,365,130

Investment in Taiwan joint venture (note 5)     2,677,730       1,366,540

Patent and trademark costs, net of 
  accumulated amortization of $45,551 
  and $40,030 (note 11)                           502,297         519,966

Other assets                                        4,354           7,552

                                             $ 12,370,699       8,712,649

                                                               (Continued)
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Consolidated Balance Sheets, Continued



                                                March 31,        October 31,
Liabilities and Stockholders' Equity               1997              1996    

Current liabilities:
   Accounts payable                         $    169,403           121,790
   Note payable to Taiwan joint venture
     (note 5)                                  1,345,285         1,375,121
   Other current liabilities (note 6)            459,223           400,574
   Current portion of long-term
     debt (note 7)                                45,180            61,094
   Billings in excess of costs and 
     estimated earnings on uncompleted 
     contracts (note 2)                          659,807            25,685

          Total current liabilities            2,678,898         1,984,264

Long-term debt, less current portion 
  (note 7)                                       726,218           744,389

           Total liabilities                   3,405,116         2,728,653

Minority interest in consolidated
  subsidiary (note 4)                            390,784           391,120

Stockholders' equity (notes 9 and 10)
   Common stock, $.01 par value, 50,000,000
     shares authorized; 13,042,964 and
     11,751,365 shares issued                    130,430           117,514
   Additional paid-in capital                 27,094,170        23,021,339 
   Accumulated deficit                       (18,532,364)      (17,331,279)
   Notes receivable from officers                (83,646)          (65,816)
   Cumulative translation adjustment             (33,791)          (21,030)  
   Treasury stock, at cost                          -             (127,852)

           Total stockholders' equity          8,574,799         5,592,876

Commitments (notes 5 and 14)

                                            $ 12,370,699         8,712,649


See accompanying notes to consolidated financial statements.   
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Consolidated Statements of Operations
<TABLE>
<caption
 
                                          Five Months
                                             Ended
                                            March 31,            Year Ended October 31,         
                                              1997          1996          1995          1994    
<S>
Revenue:                                    <C>           <C>         <C>            <C>        
   Contract services (note 12)           $    700,132      1,436,484    4,031,951     1,643,203
   Product sales                              152,016        611,213      701,700       708,917
                                              852,148      2,047,697    4,733,651     2,352,120 

Operating costs and expenses:
   Costs of contract services                 593,891      1,070,224    2,653,771     1,440,374
   Costs of product sales                     125,719        550,519      579,015       576,540
   Research and development                   489,442      1,628,646    1,292,803     2,088,317
   General and administrative                 600,446      1,157,827      972,410     1,331,532
   Depreciation and amortization              159,473        375,590      346,567       271,772
   Royalty (note 11)                            4,077          9,497       23,423        11,458 
                                            1,973,048      4,792,303    5,867,989     5,719,993

           Operating loss                  (1,120,900)    (2,744,606)  (1,134,338)   (3,367,873)

Other income (expense):
   Interest income                             54,802        113,582       50,890        98,228
   Interest expense                           (84,704)      (202,798)    (177,051)      (73,813)
   Equity in loss of Taiwan joint
     venture (note 5)                         (24,121)       (45,164)     (11,952)       (3,888)
   Minority interest share of earnings
     of consolidated subsidiary               (27,725)       (69,400)     (64,627)      (69,517)
   Other                                        1,563         43,643        6,645        21,507
                                              (80,185)      (160,137)    (196,095)      (27,483)

           Net loss                      $ (1,201,085)    (2,904,743)   1,330,433)   (3,395,356)
 
           Net loss per common share        
             (note 1n)                       $ (.12)          (.26)       (.13)          (.35)

Weighted average number of shares 
  of common stock outstanding              12,043,481     11,021,742  10,090,778      9,763,391
</TABLE>                   

See accompanying notes to consolidated financial statements.

<PAGE>
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Consolidated Statements of Stockholders' Equity
<TABLE>
<CAPTION>

                                           Number of                                                Notes
                                            common             Additional  Cumulative    Accumu-  receivable              Total
                                            shares    Common    paid-in    translation    lated    due from  Treasury  stockholders'
                                            issued     stock    capital    adjustment    deficit   officers   stock      equity
<S>                                      <C>         <C>      <C>         <C>         <C>         <C>       <C>       <C>         
Balances at October 31, 1993              9,461,385  $ 94,614  15,557,205      -      (9,700,747)  (31,944)  (41,823)  5,877,305

Issuance of common stock upon exercise
  of Alcan preemptive right (note 9)        111,395     1,114     199,397      -           -          -         -        200,511
Issuance of common stock upon exercise
  of underwriter warrants                    20,000       200      46,400      -           -          -         -         46,600
Issuance of common stock upon exercise
  of employee options                       325,133     3,251     936,996      -           -       (18,727)  (53,649)    867,871
Issuance of common stock for directors'
  compensation                                6,000        60      42,490      -           -          -         -         42,550
Issuance of common stock under
  employee stock purchase plan                1,632        16       8,507      -           -          -         -          8,523
Net loss                                       -         -           -                (3,395,356)     -         -     (3,395,356)

Balances at October 31, 1994              9,925,545    99,255  16,790,995      -     (13,096,103)  (50,671)  (95,472)  3,648,004

Issuance of common stock in private
  offerings, net of offering costs
  of $141,446 (note 9)                      581,111     5,812   1,944,742      -           -          -         -      1,950,554
Issuance of common stock upon exercise
  of employee options                        64,786       648      99,628      -           -        (1,750)  (22,130)     76,396
Issuance of common stock under
  employee stock purchase plan                  511         5       2,521      -           -          -         -          2,526
Issuance of warrants for service (note 10)     -         -         50,000      -           -          -         -         50,000
Net loss                                       -         -           -         -      (1,330,433)     -         -     (1,330,433)

Balances at October 31, 1995             10,571,953   105,720  18,887,886      -     (14,426,536)  (52,421) (117,602)  4,397,047

Issuance of common stock in private
  offerings, net of offering costs
  of $247,309 (note 9)                    1,057,708    10,577   3,898,802      -           -          -         -      3,909,379
Issuance of common stock upon
  exercise of employee options              100,542     1,005     153,205      -           -       (13,395)  (10,250)    130,565
Issuance of common stock under
  employee stock purchase plan                6,668        67      20,200      -           -          -         -         20,267
Issuance of common stock for 
  services                                   14,494       145      61,246      -           -          -         -         61,391
Cumulative translation adjustment              -         -           -      (21,030)       -          -         -        (21,030)
Net loss                                       -         -           -         -      (2,904,743)     -         -     (2,904,743)

Balances at October 31, 1996             11,751,365   117,514  23,021,339   (21,030) (17,331,279)  (65,816) (127,852)  5,592,876

Issuance of common stock in private
  offerings, net of offering costs
  of $365,688 (note 9)                    1,289,288    12,893   4,133,927      -           -          -         -      4,146,820
Issuance of common stock upon
  exercise of employee options               40,105       401      62,429      -           -       (17,830)     -         45,000
Issuance of common stock for 
  services                                    1,547        15       3,934      -           -          -         -          3,949
Cumulative translation adjustment              -         -           -      (12,761)       -          -         -        (12,761)
Retirement of treasury stock                (39,341)     (393)   (127,459)                                   127,852         -
Net Loss                                       -         -           -         -      (1,201,085)     -         -     (1,201,085)

Balances at March 31, 1997               13,042,964  $130,430  27,094,170   (33,791) (18,532,364)  (83,646)     -      8,574,799
</TABLE>

See accompanying notes to consolidated financial statements.
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>

                                                     Five Months
                                                        Ended
                                                       March 31,               Year Ended October 31,             
                                                         1997           1996          1995             1994    
<S>                                                 <C>             <C>            <C>             <C>       
Cash flows provided by (used by) operating 
  activities: 
   Net loss                                        $ (1,201,085)     (2,904,743)    (1,330,433)     (3,395,356)
   Adjustments to reconcile net loss to
     net cash used by operating activities:              
        Depreciation and amortization                   159,473         375,590        346,567         271,772
        Minority interest share of earnings of
          consolidated subsidiary                        27,725          69,400         64,627          69,517
        Noncash compensation expense for
          common stock and warrants issued 
          for services                                    3,949          61,391         50,000          42,550
        Equity in loss of Taiwan joint venture           24,121          45,164         11,952           3,888
        Gain on sale of property and equipment             -            (45,676)        (3,534)           -
        Write-off of patent costs                        55,529            -              -               -
        Other                                             1,210         (20,092)          (466)         35,919
        Change in operating assets and liabilities:
           Accounts receivable and costs and
             estimated earnings in excess of
             billings on uncompleted contracts          167,846        (148,782)       161,223          28,995
           Inventories                                  (17,246)         (3,444)        70,450          52,215
           Prepaid expenses and other current       
             assets                                     (66,910)        (12,846)        27,105          28,660
           Accounts payable and other current
             liabilities                                106,497         (25,681)      (200,703)        276,212
           Billings in excess of costs and 
             estimated earnings on uncompleted
             contracts                                  634,122          25,685       (137,247)         74,060   
                          
                 Net cash used by operating 
                    activities                         (104,769)     (2,584,034)      (940,459)     (2,511,568) 

Cash provided by (used by)investing activities:
   Acquisition of property and equipment               (118,608)       (182,011)      (440,079)       (413,907)
   Increase in patent and trademark costs               (47,865)        (92,390)       (64,766)       (131,652)
   Investment in Taiwan joint venture                (1,375,121)           -              -            (45,082)
   Proceeds from sale of certificates of deposit           
     and other investments                                 -            319,107        117,127            -
   Proceeds from sale of property and equipment            -             63,361            -              -   
    
                Net cash provided by (used by) 
                  investing activities             $ (1,541,594)        108,067       (387,718)       (590,641)  
         
</TABLE>
   
                                                                           
      (Continued)
<PAGE>
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Consolidated Statements of Cash Flows, Continued

<TABLE>
<CAPTION>
                                                      Five Months
                                                        Ended
                                                       March 31,               Year Ended October 31,          
                                                         1997             1996          1995            1994    
<S>                                                 <C>              <C>            <C>             <C>
Cash flows provided by financing activities:
   Proceeds from borrowings                        $        -               -          212,337            -
   Repayment of debt                                     (34,085)        (83,045)     (250,905)        (36,077)
   Proceeds from sale of common stock, net             4,146,820       3,909,379     1,950,554            -
   Issuance of common stock upon exercise
     of employee options                                  45,000         130,565        76,396         867,871
   Issuance of common stock under employee     
     stock purchase plan                                    -             20,267         2,526           8,523
   Issuance of common stock upon exercise of
     underwriter warrants                                   -               -             -             46,600
   Issuance of common stock upon exercise of
     Alcan preemptive right                                 -               -             -            200,511
   Distributions paid to holders of minority 
      interest                                           (28,061)        (67,345)      (67,347)        (60,613)

               Net cash provided by financing
                 activities                            4,129,674       3,909,821     1,923,561       1,026,815

               Increase (decrease) in cash and
                 cash equivalents                      2,483,311       1,433,854       595,384      (2,075,394)

Cash and cash equivalents at beginning of period       3,230,246       1,796,392     1,201,008       3,276,402

Cash and cash equivalents at end of period           $ 5,713,557       3,230,246     1,796,392       1,201,008

Interest paid in cash during the period              $   276,591          82,494        89,133          72,638
</TABLE>

Non-cash investing and financing transactions:

   In December 1996, the Company financed an additional investment in the 
   Taiwan joint venture through the issuance of a note payable in the amount 
   of $1,345,285 (see note 5).

   In accordance with the provisions of the Company's stock option plans, the
   Company accepts as payment of the exercise price, mature shares of the 
   Company's common stock held by the option holder for a period of six months 
   prior to the date of the option exercise.  For the five months ended 
   March 31, 1997, there were no such transactions.  For the years ended 
   October 31, 1996, 1995 and 1994, the Company issued 13,666, 32,130 and 
   24,364 shares of common stock for options exercised for an aggregate exercise
   price of $10,250, $22,130 and $53,649, respectively, for which the Company 
   received 2,000, 5,365 and 6,813 shares of common stock as payment for the 
   exercise price.  The shares received were recorded at cost as treasury stock
   and were subsequently retired.  In accordance with the provisions of the 
   Company's stock option plans, the Company may, and has, accepted promissory 
   notes from officers of the Company in satisfaction of the exercise price of
   options exercised.  These notes receivable are recorded as a reduction
   of shareholders' equity in the consolidated financial statements.  For the 
   five months ended March 31, 1997, the Company issued 20,105 shares of common
   stock for an aggregate exercise price of $17,830 for which the Company 
   received promissory notes for the same amount.  For the years ended 
   October 31, 1996, 1995 and 1994, the Company issued 13,395, 2,900 and 48,352
   shares of common stock for an aggregate exercise price of $13,395, $1,750
   and $18,727, respectively, for which the Company received promissory notes 
   for the same amount.

   See accompanying notes to consolidated financial statements.
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements



(1) Summary of Significant Accounting Policies

     (a)  General Business

      Unique Mobility, Inc. and subsidiaries (the "Company") is engaged in the
      research, development and commercialization of electric and hybrid
      electric vehicles, propulsion systems for such vehicles, as well as
      other non-automotive applications of its technologies.  The Company's
      revenue is derived primarily from contract research and development
      services and sales of products developed from such technology.

      The Company's operations are based in the United States with a
      significant investment in a joint venture in Taiwan.

      (b)  Principles of Consolidation

      The consolidated financial statements include the accounts of Unique
      Mobility, Inc. and those of all majority-owned or controlled
      subsidiaries.  All significant intercompany accounts and transactions
      have been eliminated in consolidation.

      The minority interests as of March 31, 1997, and October 31, 1996,
      consisted of the other stockholders' ownership interests in a subsidiary
      of the Company.  See Note 4.

     (c)  Cash and Cash Equivalents

      The Company considers cash on hand and investments with original
      maturities of three months or less to be cash equivalents.  

     (d)  Inventories

      Inventories are stated at the lower of cost or market.  Cost is
      determined by the first-in, first-out method.

      (e)  Property and Equipment

      Property and equipment is stated at cost.  Depreciation is computed
      using the straight-line method over the estimated useful lives of the
      assets which range from three to five years, except for the building
      which is depreciated over 31 years.  Maintenance and repairs are charged
      to expense as incurred.

      (f)  Investment in Taiwan Joint Venture

      The Company's investment in a joint venture located in Taiwan is
      accounted for under the equity method of accounting.  Under this method,
      the investment, originally recorded at cost, is adjusted to recognize
      the Company's share of the net earnings or losses of the joint venture. 
      Income or loss recognition is limited to the extent of the Company's
      investment in, advances to and guarantees of the joint venture. 
      Commencing with the five months ended March 31, 1997, due to timing
      considerations, the financial position and results of operations
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued



      for the Taiwan joint venture are included in the Company's consolidated
      financial statements on a three-month time lag.  Accordingly, the
      consolidated statements of operations, stockholders' equity and cash
      flows include activity of the Taiwan joint venture for the two months
      ended December 31, 1996, and the twelve months ended October 31, 1996,
      1995 and 1994.  Similarly, the accompanying consolidated balance sheets
      and related footnote disclosures as of March 31, 1997, and October 31,
      1996, include the financial position of the Taiwan joint venture as of
      December 31, 1996, and October 31, 1996, respectively.  The cumulative
      foreign currency translation adjustments with respect to the Taiwan joint
      venture were calculated using the average rates in effect during the
      respective two and twelve month periods ended December 31, 1996, and
      October 31, 1996, 1995 and 1994, respectively and the spot rates in
      effect at the respective December 31, 1996, and October 31, 1996,
      balance sheet dates.

      (g)  Patent and Trademark Costs

      Patent and trademark costs consist primarily of legal expenses, and
      represent those costs incurred by the Company for the filing of patent
      and trademark applications and the maintenance of patents issued. 
      Amortization of patent and trademark costs is computed using the
      straight-line method over the estimated useful life of the asset,
      typically 17 years for patents, and 40 years for trademarks.

      (h)  Long-Lived Assets

      In March 1995, the Financial Accounting Standards Board issued Statement
      of Financial Accounting Standards No. 121, Accounting for the Impairment
      of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of ("SFAS
      121").  SFAS 121 requires that long-lived assets and certain
      identifiable intangibles to be held and used by an entity be reviewed
      for impairment whenever events or changes in circumstances indicate that
      the carrying amount of an asset may not be recoverable.  The Company
      adopted SFAS 121 in 1996 and the adoption of SFAS 121 did not have an
      effect on the Company's financial statements.

      (i)  Contract Services Revenue and Cost Recognition

      Revenue relating to long-term fixed price contracts is recognized using
      the percentage of completion method.  Under the percentage-of-completion
      method, contract revenues and related costs are recognized based on the
      percentage that costs incurred to date bear to total estimated costs.

      Changes in job performance, estimated profitability and final contract
      settlements may result in revisions to cost and revenue, and are
      recognized in the period in which the revisions are determined.

      Contract costs include all direct materials, subcontract and labor
      costs.  General and administrative costs and other indirect costs are 
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued



      charged to expense as incurred.  At the time a loss on a contract
      becomes known, the entire amount of the estimated ultimate loss is
      accrued.

      The aggregate of costs incurred and estimated earnings recognized on
      uncompleted contracts in excess of related billings is shown as a
      current asset, and billings on uncompleted contracts in excess of costs
      incurred and estimated earnings is shown as a current liability.  

      Revenue relating to cost-plus type contracts is recognized as costs are
      incurred.  Revenue relating to "milestone billing" contracts is
      recognized upon completion of the various stages (milestones) of the
      project, based upon the contractual amounts.


      (j)  Income Taxes

      The Company accounts for income taxes in accordance with Statement of
      Financial Accounting Standards No. 109, Accounting for Income Taxes. 
      Under the asset and liability method of Statement 109, deferred tax
      assets and liabilities are recognized for the future tax consequences
      attributable to differences between the financial statement carrying
      amounts of existing assets and liabilities and their respective tax
      bases.  Deferred tax assets and liabilities are measured using enacted
      tax rates expected to apply to taxable income in the years in which
      those temporary differences are expected to be recovered or settled. 
      Under Statement 109, the effect on deferred tax assets and liabilities
      of a change in tax rates is recognized in income in the period that
      includes the enactment date.

      (k)  Research and Development

      Costs of researching and developing new technology or significantly
      altering existing technology are charged to operations as incurred.

     (l)   Equity Instruments Issued for Non-Employee Services

      The Company periodically issues common stock to non-employees for
      services rendered.  The cost of these services is recorded based
      upon the fair market value of the Company's  common stock on the date
      of issuance.

      (m)  Foreign Currency Translation

      The net assets of the foreign investment of the Company is translated
      at the appropriate period-end exchange rates.  Income and expense
      accounts are translated at average monthly exchange rates.  Net exchange
      gains or losses resulting from such translation are excluded from
      results of operations and accumulated as a separate component of
      stockholders' equity.  Gains and losses from foreign currency
      transactions are included in other income (expense).
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued



      (n)  Loss Per Common Share

      Loss per common share is based on the weighted average number of shares
      of common stock outstanding during each year.  Common stock equivalents
      were not included in the computations because their effect was anti-
      dilutive.  The fair value of the pre-emptive rights arising from the
      issuance of employee stock options during the five months ended March
      31, 1997, has been treated in a manner similar to a preferred stock
      dividend in the calculation of net loss per common share.  The estimated
      aggregate fair value of these rights was $201,000.

      (o)  Use of Estimates

      The preparation of financial statements in conformity with generally
      accepted accounting principles requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities
      and disclosure of contingent assets and liabilities at the date of the
      financial statements and the reported amounts of revenues and expenses
      during the reporting period.  Actual results could differ from those
      estimates.

      (p)  Reclassifications

      Certain prior year amounts have been reclassified to conform to the
      current period presentation.
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued


   
(2)  Revenue in Excess of Billings and Billings in Excess of Revenue

     At March 31, 1997, the estimated period to complete contracts in process
     ranged from 1 to 15 months, and the Company expects to collect
     substantially all related accounts receivable and costs and estimated
     earnings in excess of billings on uncompleted contracts as of March 31,
     1997, within one year.

     The following summarizes contracts in process at March 31, 1997, and
     October 31, 1996:                                                      

                                                 March 31,       October 31,
                                                   1997              1996      
      Costs incurred on uncompleted          
         contracts                            $ 3,158,704        1,081,352
      Estimated earnings                          490,407          596,765
                                                3,649,111        1,678,117

       Less billings to date                   (4,117,033)      (1,524,319)

                                              $  (467,922)         153,798

       Included in the accompanying balance
         sheets as follows:
           Costs and estimated earnings
             in excess of billings on  
             uncompleted contracts             $  191,885          179,483
           Billings in excess of costs and
             estimated earnings on 
             uncompleted contracts               (659,807)         (25,685)

                                               $ (467,922)         153,798 

(3)   Inventories

      Inventories at March 31, 1997, and
        October 31, 1996 consists of:
                                                 March 31,      October 31, 
                                                   1997             1996    
 
            Raw materials                      $  283,155          273,527
            Work in process                        69,460           55,996
            Finished products                      72,776           78,622

                                               $  425,391          408,145

(4)   Limited Liability Company

   In September 1992, the Company and a private investor formed a Colorado
   limited liability company to acquire, own and maintain a 40,000 square-foot 
   facility in Golden, Colorado, and the surrounding land. This facility serves
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued


   
   as the Company's corporate headquarters.  Ownership in this limited
   liability company is divided equally between the Company and the private
   investor.  However, the Company is deemed to have a controlling interest in
   the limited liability company by virtue of the operating agreement which
   authorizes the Company to make all decisions with respect to the business
   of the limited liability company, subject only to certain protective rights
   of the private investor, and by virtue of the lease agreement with the
   limited liability company covering the entire facility.  The limited
   liability company is, therefore, accounted for as a consolidated subsidiary. 
   Minority interest in consolidated subsidiary represents the private
   investor's allocable portion of the equity of the consolidated subsidiary.

(5)   Investment in Taiwan Joint Venture

   On January 29, 1994, the Company, Kwang Yang Motor Co. Ltd. ("KYMCO"), and
   Turn Luckily Technology Co. Ltd. ("TLT"), entered into a joint venture
   agreement (the "Joint Venture Agreement") providing for the formation,
   funding, and operation of Taiwan UQM Electric Company, Ltd., a company
   organized under the laws of the Republic of China ("Taiwan UQM").  Taiwan
   UQM was incorporated in April 1995.

   In 1994, the Company purchased 39% of the initial equity capital of Taiwan
   UQM for $45,082, and agreed to invest 39% of any additional capital calls. 
   Pursuant to the Joint Venture Agreement, the venturers are required to
   invest additional funds in Taiwan UQM, as the board of directors of Taiwan
   UQM by unanimous vote determines to be required.

   During 1995, the Company was unable to make payments for additional capital 
   call obligations under the Joint Venture Agreement.  The Company, KYMCO and
   TLT entered into a Waiver and Option Agreement (the "Option Agreement") on
   June 12, 1995, whereby KYMCO agreed to first purchase those shares of Taiwan
   UQM underlying the Company's additional capital call obligations in the
   amount of $1,403,493.  Under the Option Agreement, the Company had the
   option to repurchase these shares from KYMCO for the additional capital call
   amount, plus interest at 10% per annum. The purchase by KYMCO of the shares
   related to the Company's additional capital call obligations was accounted
   for as a financing arrangement.  Accordingly, for financial reporting
   purposes, at October 31, 1995, the Company recorded $1,403,493 as an
   addition to its investment in the joint venture and as a note payable to the
   joint venture participant.  The note payable remained outstanding at October
   31, 1996, with the decrease in its recorded value to $1,375,121 due to
   exchange rate fluctuations.

   The Company exercised its option prior to the November 30, 1996, expiration
   date of the option and tendered cash to repay the principal amount due to
   the joint venture participant.  The related interest and taxes due under the
   Option Agreement were also paid in conjunction with the payment of the
   principal amount. 

   In December 1996, Taiwan UQM made an additional capital call which was
   payable in two equal installments due March 1, 1997, and June 1, 1997, with
   interest accruing at 10% per annum.  The Company's 39% share of the December
   1996 capital  call was  $1,345,285.   Although 50%  of the  Company's 
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued




   obligation was payable March 1, 1997, it was not paid until April 17, 1997,
   at which time the entire obligation plus accrued interest was paid. 
   Therefore, the note payable remained outstanding at March 31, 1997.
              
   Summarized unaudited financial information for Taiwan UQM is as follows:   

                                                  December 31,    October 31,
        Financial Position                            1996           1996   
       
        Current assets                           $   889,881        330,826
        Noncurrent assets-land and            
          construction in process                  4,542,142      3,196,300 
  
               Total assets                        5,432,023      3,527,126 
  
        Current liabilities                          607,453         19,816
        Noncurrent liabilities                          -             3,361
        Stockholders' equity                       4,824,570      3,503,949
 
               Total liabilities and equity      $ 5,432,023      3,527,126

                                                         
                                                  Two Months
                                                     Ended        Year Ended
                                                  December 31,    October 31,
        Results of Operations                         1996            1996    

        Revenue                                  $    10,123           -    
        Expenses                                      56,403        128,214 

        Net loss                                 $   (46,280)      (128,214)


                                        
(6) Other Current Liabilities

    Other current liabilities at March 31, 1997, and October 31, 1996, consists
    of:  
                                                     March 31,      October 31,
                                                      1997             1996 
   
       Accrued interest                            $  39,218        214,002
       Accrued legal and accounting fees              37,171         45,237
       Accrued payroll, consulting, 
         personal property taxes and real 
         estate taxes                                 67,207         52,585
       Refund of overpayment                         250,005           -
       Other                                          65,622         88,750

                                                   $ 459,223        400,574
<PAGE>                                                                        
 
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued




(7) Long-term Debt

    Long-term debt at March 31, 1997, and October 31, 1996, consists of:
                                               
                                                     March 31,     October 31,
                                                       1997            1996     
       Note payable to bank, payable in 
          monthly installments with interest at
          9.1%; matures October 2007; secured 
          interest at a by land and building
          with a net book value of 
          $1,575,420                                 $ 771,398        789,793

      Note payable to bank, payable in 
          monthly installments with 
          interest at 12%; repaid 
          in March 1997                                   -            15,690

               Total long-term debt                    771,398        805,483

        Less current portion                            45,180         61,094
 
               Long-term debt, less current
                 portion                             $ 726,218        744,389

   The annual aggregate maturities of long-term debt for each of the next five
   fiscal years and thereafter are as follows:

                   1998                         $  45,180
                   1999                            49,528
                   2000                            54,597
                   2001                            59,523
                   2002                            65,255
                   Thereafter                     497,315

                                                $ 771,398 
   
(8)   Income Taxes             

   Income tax expense (benefit) attributable to income (loss) from continuing
   operations differed from the amounts computed by applying the U.S. federal
   income tax rate of 34% as a result of the following:
<PAGE>
                                
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued




                                  March 31,       Year Ended October 31,   
                                    1997       1996       1995        1994

   Computed "expected" tax 
       benefit                  $ (408,369)  (987,613)  (452,347) (1,154,421)
   Increase (decrease) in
       taxes resulting from:
          Increase in 
            valuation
            allowance for 
            net deferred  
            tax assets             407,443    985,132    450,383   1,142,656
          Other, net                   926      2,481      1,964      11,765

     Income tax benefit         $     -           -          -           -  

    The tax effects of temporary differences that give rise to significant
    portions of the net deferred tax asset are presented below:

                                        March 31,        October 31,
                                           1997              1996              
  
       Deferred tax assets:
          Research & development
             credit carryforwards    $     61,188            61,188        
           Net operating loss 
             carryforwards              5,728,676         5,321,233     

                 Total deferred
                   tax assets           5,789,864         5,382,421    

        Less valuation allowance        5,789,864         5,382,421    

                 Deferred tax assets,
                   net of valuation
                   allowance         $       -               -              

    As of March 31, 1997, the Company had net operating loss carryforwards 
   (NOL) of approximately $18.3 million for US income tax purposes which expire
   in varying amounts through 2012.  Approximately $1.4 million of the net
    operating loss carryforwards are attributable to stock options, the benefit
    of which will be credited to additional paid-in capital if realized. 
    However, due to the provisions of Section 382 of the Internal Revenue Code,
    the utilization of a portion of these NOLs is limited.  At October 21, 1991,
    the Company experienced an ownership change for purposes of Section 382
    subjecting approximately $2.8 million in NOLs to an annual usage limitation
    of approximately $0.9 million.  The amount of this annual limitation is 
    sufficient to allow for the utilization of the entire amount of these NOLs
    prior to expiration should sufficient taxable income be generated.

    Future ownership changes under Section 382 could occur that would result in
    an additional Section 382 limitation which would further restrict the use of
    NOLs.  In addition, the Section 382 limitation could be reduced to zero if 
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued



    the Company fails to satisfy the continuity of business enterprise
    requirement for the two-year period following an ownership change.

(9) Stockholders' Equity

    Alcan

    Alcan Aluminum Limited (Alcan) and certain affiliates of Advent 
    International Corporation (Advent) and Techno-Venture U.S.A., Inc. 
    (Techno), significant stockholders, have preemptive rights to acquire 
    16.7%, 13.1% and 2.1%, respectively, of the Company's shares of common 
    stock offered in any offering for so long as they hold any shares of the 
    Company's common stock.  In June 1997, Advent and Techno sold their holding
    in the Company to various investors and the preemptive rights granted to 
    Advent and Techno were terminated.

    Additionally, Alcan has the right of first refusal to purchase any private
    placement equity securities to be issued or sold to third parties if such
    issuance would cause such parties to become the beneficial owner of more 
    than 5% of any class of the Company's equity securities.  Separately, the
    Company's Chairman, who holds or has the right to acquire 982,438 shares of
    the Company's common stock, has granted Alcan a right of first refusal to
    purchase any shares to be sold or transferred by the Chairman in any public
    or private sale.

    Private Placement

    During fiscal 1995, the Company completed three private placements of 
    common stock with institutions outside of the United States.  In total, 
    581,111 shares of common stock were privately placed at $3.60 per share.
    
    During fiscal 1996, the Company completed several private placements of
    common stock with institutional and private investors outside of the United
    States.  In total 928,676 shares were placed at between $3.30 and $4.75 per
    share.  In addition, 129,032 shares of common stock were sold to Invacare
    Corporation in a private placement, at $3.88 per share.

    During the five months ended March 31, 1997, the Company completed one
    private placement of common stock with institutional and private investors
    outside of the United States. In total 1,289,288 shares of common stock were
    privately placed at $3.50 per share.

(10) Common Stock Options and Warrants

     The Company has three stock option plans, the 1982 and 1992 Incentive and
     Non-Qualified Stock Option Plans and the Non-Employee Director Stock Option
     Plan.  In October 1995, the Financial Accounting Standards Board issued 
                                         
     Statement of Financial Accounting Standards No. 123, Accounting for Stock-
     Based Compensation ("SFAS 123").  This standard defines a fair value method
     of accounting for employee stock options and similar equity instruments. 
     SFAS 123 permits an entity to choose to recognize compensation expense by 
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued



     adopting the new fair value method of accounting or continue to measure
     compensation costs using the intrinsic value methods of accounting
     prescribed by Accounting Principles Board Opinion No. 25, Accounting for
     Stock Issued to Employees ("APB 25").  The Company has elected to continue
     to account for its employee stock compensation plans using the method
     prescribed by APB 25 and, accordingly, because the Company grants its
     options at or above the current market value, no compensation cost has been
     recognized for stock options granted under the Company's stock option
     plans.  Had the Company reported compensation cost as determined by the
     fair value method of accounting for option grants under its stock option
     plans as prescribed by SFAS 123, net loss and net loss per common share
     would have been the proforma amounts indicated.

                                           Five Months          
                                             Ended            Year Ended
                                         March 31, 1997     October 31, 1996

        Net loss - as reported          $ (1,201,085)        (2,904,743)
        Net loss - pro forma            $ (1,462,974)        (3,243,964)
        Net loss per common share -
           as reported                       $(.12)              (.26)
        Net loss per common share -
           pro forma                         $(.14)              (.29)

     The fair value of stock options granted was calculated using the Black
     Scholes option pricing model based on the following assumptions:

                                          Five Months
                                             Ended            Year Ended
                                         March 31, 1997     October 31, 1996

        Expected volatility                  47.6%              49.1%
        Expected dividend yield               0.0%               0.0%
        Risk free interest rate               6.4%               5.6%
        Expected life of options 
           granted                           6 years            6 years
        Fair value of options granted 
          as computed under the Black
          Scholes option pricing model   $1.79 per share    $2.22 per share
     
     Pro forma net loss reflects only options granted in the five months ended
     March 31, 1997, and the year ended October 31, 1996.  Therefore, the full
     impact of calculating compensation cost for stock options under SFAS 123 is
     not reflected in the pro forma net loss amounts presented above because
     compensation cost is reflected over the option vesting periods (ranging 
     from 1 to 3 years) and compensation cost for options granted prior to 
     November 1, 1995, is not considered.
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued


      
     Incentive and Non-Qualified Option Plans  

     The Company reserved 4,104,000 shares of common stock for key employees,
     consultants and key supplier under its Incentive and Non-Qualified Option
     Plans of 1992 and 1982.  Under these option plans the exercise price of 
     each option is set at the fair market value of the common stock on the date
     of grant and the maximum term of the options is 10 years from the date of
     grant.  Options granted to employees vest ratably over a three year period.
     The maximum number of shares that may be granted to any eligible employee
     during the term of the 1982 and 1992 plans is 500,000 shares.  Options
     granted under the Company's plans to employees  require the option holder
     to abide by certain Company policies which restrict their ability to sell
     the underlying common stock.

     The following table summarizes activity under the plans during the last
     three fiscal years and the five months ended March 31, 1997:

                                            Shares Under     Weighted-Average
                                               Option         Exercise Price 

        Outstanding at October 31, 1994      1,914,533            $5.02
        Granted                                100,000             5.00
        Exercised                              (64,786)            1.55
        Forfeited                              (97,515)            5.38

        Outstanding at October 31, 1995      1,852,232             5.12
        Granted                                590,000             4.15
        Exercised                             (100,542)            1.53
        Forfeited                             (315,978)            5.63

        Outstanding at October 31, 1996      2,025,712             4.94
        Granted                                500,000             3.31
        Exercised                              (40,105)            1.57
        Expired                                (30,000)            5.00
        Forfeited                               (4,151)             3.31 
     
        Outstanding at March 31, 1997        2,451,456             4.66

        Exercisable at March 31, 1997        1,566,715             4.97

     The following table presents summarized information about stock options
     outstanding at March 31, 1997:
<TABLE>
<CAPTION>
                                Options Outstanding                   Options Exercisable    
                                     Weighted
                       Number         Average         Weighted         Number       Weighted
      Range of      Outstanding      Remaining         Average       Exercisable     Average
  Exercise Prices   at 3/31/97   Contractual Life   Exercise Price   at 3/31/97   Exercise Price
<C>                 <C>            <C>               <C>             <C>           <C>
   $0.50 - 1.00        113,117       3.0 years          $0.79          113,117        $0.79
    2.25 - 3.31        649,849       8.6 years           3.06          154,000         2.25
    3.50 - 5.00        884,555       7.5 years           4.03          595,663         3.99
    5.38 - 8.13        803,935       6.8 years           7.20          703,935         7.07 
    0.50 - 8.13      2,451,456       7.4 years           4.66        1,566,715         4.97
</TABLE>
<PAGE>
     
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued


     
     Non-Employee Director Stock Option Plan 

     In February 1994, the Company's Board of Directors ratified a Stock Option
     Plan for Non-Employee Directors pursuant to which Directors may elect to
     receive stock options in lieu of cash compensation for their services as
     directors.  The Company has reserved 250,000 shares of common stock for
     issuance pursuant to the exercise of options under the Plan.  The options
     vest ratably over a three-year period beginning one year from the date of
     grant and are exercisable for 10 years from the date of grant.  Option
     prices are equal to the fair market value of common shares at the date of
     grant.

     The following table summarizes activity under the plan:

                                               Shares under     Per share
                                                 option       exercise price  

     Granted during 1994 and outstanding at
       October 31, 1994                           48,000       $ 5.38 - 6.25
     Granted                                      61,333         5.00 - 5.13
     
      Outstanding at October 31, 1995            109,333         5.00 - 6.25
      Granted                                     32,000         4.38

     Outstanding at October 31, 1996                    
       and March 31, 1997                        141,333         4.38 - 6.25
     
     At March 31, 1997, options to purchase 83,556 shares were exercisable.

     Warrants

     In connection with the original issuance of certain subordinated 
     convertible term notes to Advent and Techno, the Company granted Advent 
     and Techno warrants to acquire 790,000 shares of the Company's common 
     stock at the lower of $2.40 per share, being the market value of the 
     Company's stock at the time of issuance or the market price of the common 
     stock averaged over the 30 trading days immediately preceding the date of
     exercise.  The warrants expire August 1997, and allow for a cashless 
     exercise of the warrants into common shares based on the spread between 
     the market price of the common stock on the date of exercise and the $2.40
     exercise price. All of these warrants remain outstanding at March 31, 1997.

     The Company has reserved 300,000 shares of common stock for issuance
     pursuant to a warrant agreement with an investment banking company. 
     Warrants to acquire 200,000 shares of common stock vested on January 20,
     1994, and the remaining 100,000 shares vested on January 20, 1995.  The
     warrants were exercisable for a period of five years, expiring on January
     19, 1999, at a price of $7.63 per share.  Further, the warrants were
     redeemable on a one-time basis only through June 30, 1994, for a like
     number of warrants, at the then current fair market value of the Company's
     common stock with otherwise identical terms.  On April 18, 1994, the
     warrants were redeemed in accordance with the above provision for a like 
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued


     
     number of warrants which are exercisable at a price of $6.00 per share, the
     market price of the common stock of the Company at the date of redemption. 
     The warrants contain transfer restrictions and provisions for the 
     adjustment of the exercise price and the number and type of securities 
     issuable upon exercise based on the occurrence of certain events.  All of 
     these warrants remain outstanding at March 31, 1997.  The estimated fair 
     value of the warrants issued of $50,000 was recorded as compensation for 
     the investment banking services rendered in 1995.   

     In connection with the 1995 common stock issuance, the placement agent was
     issued warrants expiring July 21, 1998, to acquire 150,000 shares of the
     Company's common stock at $5.75 per share.  All of these warrants remain
     outstanding at March 31, 1997.

     In connection with the 1996 private placements, the placement agents were
     issued warrants to acquire 50,000 shares of the Company's common stock at
     $4.75 per share on February 27, 1996, 38,100 shares of the Company's common
     stock at $5.00 per share on May 31, 1996, and 50,000 shares at $4.25 per
     share on September 30, 1996, being the market price of the common stock of
     the Company at the date of each respective grant.  The warrants expire 
     three years from the date of issuance.  All of these warrants remain 
     outstanding at March 31, 1997.

     In connection with the 1997 private placement, the placement agents were
     issued warrants to acquire 225,625 shares of the Company's stock at $3.50
     per share on February 27, 1997, being the average of the closing price of
     the Company' stock for the ten days preceding the closing of such
     placement. The agents were also issued warrants to acquire 50,000 shares
     of the Company's common stock at $4.20 per share on February 27, 1997,
     being 120% of the average closing price of the Company's common stock for
     the ten days preceding the closing of the placement.  All of these warrants
     remain outstanding at March 31, 1997.

(11) Alcan Agreements

     The Company had previously entered into agreements with Alcan.  Under terms
     of the agreements, the Company's then existing motor technology and
     technology resulting from development projects for Alcan were cross-
     licensed between Alcan and the Company.  Royalties from the manufacture 
     and sale of licensed products and a portion of royalties received from the
     sub-licensing of technology to third parties were payable by the licensing
     party to the other if the technology was commercialized.  During 1994, the
     Company and Alcan executed another agreement, in which Alcan assigned to
     the Company all of its rights, title and interests in all technology 
     developed under the original agreements between Alcan and the Company. The
     1994 agreement further provides that the Company shall pay to Alcan 
     royalties of one-half of one percent on revenue derived from the 
     manufacture and sale of products or processes embodying the related 
     technology (the Technology).  The Company has also agreed to offer to 
     Alcan a first right of refusal to acquire any and all intellectual and 
     proprietary property related to the Technology prior to consummating and 
     assignment or sale of any Technology.  In addition, subject to certain 
     conditions, Alcan has agreed to reimburse the Company for 50% of its 
<PAGE>
     
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued



     patent application and maintenance expenditures, up to an amount not to 
     exceed the annual royalties from the Company.

     For the five months ended March 31, 1997, and for the years ended October
     31, 1996, 1995 and 1994, the Company recorded royalty expense of $4,077,
     $9,497, $23,423 and $11,458, respectively, all of which was applied as a 
     reduction of patent application and maintenance expenditures.
     
(12) Significant Customers

     The Company has historically derived significant contract services revenue
     from a few key customers.  The customers from which this revenue has been 
     derived and the percentage of this revenue as a percentage of total 
     contract services revenue is summarized as follows:

                              Five Months
                                 Ended              Year Ended October 31,  
                             March 31, 1997      1996       1995       1994
  
         Customer A          $ 162,500             -           -         -
                  B            113,229             -           -         -
                  C            176,749             -           -         -
                  D               -             378,640   1,720,347   316,740
                  E               -             202,343     880,420   369,595
                  F               -             194,600        -         -   
                  G               -             135,950        -         -
                  H               -                -        657,330      -
                  I               -                -           -      280,496

                             $ 452,478          911,533   3,258,097   966,831

         Percentage of                 
           contract services 
           revenue                65%              63%         81%       59%
        
     
     These customers, in total, also represented 49% and 38% of total accounts
     receivable at March 31, 1997 and October 31, 1996, respectively.

     Contract services revenue derived from contracts with agencies of the U.S.
     Government and from sub-contracts with U.S. Government prime contractors,
     certain portions of which are included in revenue from other key customers
     above, totaled $78,532 for the five months ended March 31, 1997, and
     $800,208, $2,478,350 and $331,440 for the years ended October 31, 1996, 
     1995 and 1994, respectively.
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued



(13) Fair Value of Financial Instruments

     The following methods and assumptions were used to estimate the fair value 
     of each class of financial instruments:

     Cash and cash equivalents, certificates of deposit, accounts receivable,
     notes payable to joint venture participant, and accounts payable:

        The carrying amounts approximate fair value because of the short
        maturity of these instruments.

     Long-term debt:

        The carrying amount of the Company's long-term debt approximates fair
        value since the interest rate on this debt represents the current market
        rate for similar financing available to the Company.

(14) Employee Benefit Plans

     401(k) Plan

     The Company has established a 401(k) Savings Plan (the Plan) under which
     eligible employees may contribute up to 15% of their compensation.  At the
     direction of the participants, contributions are invested in several
     investment options offered by the Plan including the Company's common 
     stock.The Company matches participant contributions on a dollar-for-dollar
     basis on the participant's contributions up to 5 percent of the 
     participant's salary and 25% of participant contributions in excess of this
     limit, subject to certain limitations.  These contributions vest ratably 
     over a three-year period.  Matching contributions to the Plan by the 
     Company were $39,535, $90,935, $98,441 and $95,257 for the five months 
     ended March 31, 1997, and for the years ended October 31, 1996, 1995 and 
     1994, respectively.

     Stock Purchase Plan

     The Company has established a stock purchase plan which allows eligible
     employees to purchase, through payroll deductions, shares of the Company's
     common stock at 85% of the fair market value at specified dates.  The
     Company has reserved 200,000 shares of common stock for issuance under the
     stock purchase plan.  During the five months ended March 31, 1997, the
     Company did not issue any shares under the Stock Purchase Plan.  During the
     years ended October 31, 1996, 1995 and 1994, the Company issued 6,668
     shares, 511 shares and 1,632 shares of common stock, respectively, under 
     the stock purchase plan.
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued




(15) Transition Period Comparative Financial Information (Unaudited)

     The following table sets forth certain unaudited statement of operations
     data for the five months ended March 31, 1996:

         Revenue:
            Contract services                           $   331,761
            Product sales                                   216,325
                                                            548,086
            Operating costs and expenses:
            Costs of contract services                      342,779           
            Costs of product sales                          217,800           
            Research and development                        610,227
            General and administrative                      535,242
            Depreciation and amortization                   153,106
            Royalty                                           2,637
                                                          1,861,791

                    Operating loss                       (1,313,705)

         Other income (expense):
            Interest income                                  46,214
            Interest expense                                (91,780)
            Equity in loss of Taiwan joint
              venture                                       (16,682)
            Minority interest share of earnings
              of consolidated subsidiary                    (28,588) 
            Other                                            37,280
                                                            (53,556)

                    Net loss                            $(1,367,261)

                    Net loss per common share           $   (.13)
       
         Weighted average number of shares
           of common stock outstanding                   10,708,645    

                                     

(16) Subsequent Event

     In June of 1997, the Company entered into a strategic relationship with EV
     Global Motors Company (EVG) to develop and market light electrical
     transportation products.  EVG purchased 1,151,925 shares of the Company's
     common stock in a private transaction from Alcan and purchased warrants to
     acquire an additional 350,000 shares of common stock from other sources. 
     Separately, the Company and EVG entered into a stock purchase agreement
     whereby the Company agreed to purchase 400,000 shares of EVG common stock
     in exchange for 200,000 shares of the Company's common stock.

<PAGE>


ITEM 9. CHANGE IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.


     None.
<PAGE>
                             PART III


Pursuant to instruction G(3) to Form 10-K, the information required in Items 
10-13 is hereby incorporated by reference from the Company's definitive Proxy 
Statement for the Annual Meeting of Shareholder to be held on August 19, 1997, 
to be filed on or about July 7, 1997, pursuant to Regulation 14A.
<PAGE>

                             PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
       
       (a)   1. Financial Statements:
       
                Unique Mobility, Inc. (included in Part II):
       
                   Independent Auditors' Report.
            
                   Consolidated Balance Sheets, March 31, 1997 and October 31,
                     1996.
            
                   Consolidated Statements of Operations for the five months
                     ended March 31, 1997 and each of the years in the three
                     year period ended October 31, 1996.
           
                   Consolidated Statements of Stockholders' Equity for the five
                     months ended March 31, 1997, and each of the years in the
                     three year period ended October 31, 1996.
            
                   Consolidated Statements of Cash Flows for five months ended
                     March 31, 1997 and each of the years in the three year
                     period ended October 31, 1996.
           
                   Notes to Consolidated Financial Statements.
           
                Taiwan UQM Electric Co., Ltd. (included in Part IV):
           
                   Independent Auditors' Report.
           
                   Balance Sheets, December 31, 1996 and 1995.
           
                   Statements of Income for the year ended December 31, 1996,
                     and the period January 17, 1995 to December 31, 1995.
           
                   Statement of Changes in Shareholders' Equity for the year
                     ended December 31, 1996 and the period January 17, 1995,
                     to December 31, 1995.
           
                   Statements of Cash Flows, for the year ended December 31,
                     1996 and the period January 17, 1995 to December 31, 1995.
           
                   Notes to Financial Statements.
           
              
           2. Financial Statement Schedules:
<PAGE>            
                   INDEPENDENT AUDITORS' REPORT
                                 
                                 
                                 
                                 
The Board of Directors and Shareholders of
Taiwan UQM Electric Co., Ltd.

We have examined the balance sheets of Taiwan UQM Electric Co., Ltd. as of
December 31, 1996 and 1995, and the related statements of income, changes in
shareholders' equity and cash flows for the year ended December 31, 1996 and
the period January 17, 1995 to December 31, 1995.  Our examinations were made
in accordance with auditing standards generally accepted in the Republic of
China and the regulations governing such examinations and, accordingly,
included such tests of accounting records and such other auditing procedures as
we considered necessary in the circumstances.

In our opinion, the financial statements referred to above present fairly the
financial position of Taiwan UQM Electric Co., Ltd. as of December 31, 1996 and
1995, and the results of its operations and its cash flows for the year ended
December 31, 1996 and the period January 17, 1995 to December 31, 1995, in
conformity with accounting principles generally accepted in the Republic of
China applied on a consistent basis.


Horwath & Company

Taipei, Republic of China
January 16, 1997
<PAGE>

                          TAIWAN UQM ELECTRIC CO., LTD.
                                 BALANCE SHEETS
                             (In Development Stage)
                           December 31, 1996 and 1995
                    (Amounts Expressed in New Taiwan Dollars)

                                                      December 31         
                                              1996                     1995   
ASSETS                               Amounts         %      Amounts         %   

CURRENT ASSETS                                                                  
   Cash and cash equivalents
     (Notes 2 & 3)                $ 22,510,890    15.08  $ 17,633,984     17.77 
   Other receivables                 1,880,181     1.25        64,511      0.06 
   Other current assets                 69,657     0.05        26,235      0.03 
   Total Current Assets             24,460,728    16.38    17,724,730     17.86 

PROPERTY AND EQUIPMENT                                                          
   (Notes 2, 4 & 7)                                                             
   Cost                                980,842      0.66        -            -  
   Less: accumulated depreciation     (108,473)    (0.07)       -            -  
   Add: construction in progress                                                
     and prepayment for land       122,507,538     82.04   81,114,412     81.74 
   Net                             123,379,907     82.63   81,114,412     81.74 

OTHER ASSETS                                                                    
   Deferred income tax assets
     (Notes 2 & 6)                   1,472,828      0.99      391,844      0.40 


TOTAL ASSETS                      $149,313,463    100.00 $ 99,230,986    100.00 


                                                      December 31             
LIABILITIES AND                               1996                    1995    
SHAREHOLDERS' EQUITY                 Amounts         %       Amounts        %   

CURRENT LIABILITIES                                                             
   Notes payable                   $     4,014       -    $      -          -   
   Other notes payable              15,915,177     10.66         -          -   
   Accrued expenses (Note 7)           703,820      0.47      392,729      0.01 
   Other current liabilities            74,440      0.05       13,788      0.40 
   Total Current Liabilities        16,697,451     11.18      406,517      0.41 

SHAREHOLDERS' EQUITY                                                            
   Common stock-$10 par value,      10,000,000
     shares authorized and issued  100,000,000     66.97  100,000,000    100.77 
   Capital received in advance      37,050,000     24.81        -           -   
   Deficit in development stage
     (Note 5)                       (4,433,988)    (2.96)  (1,175,531)    (1.18)

   Total Shareholders' Equity      132,616,012     88.82   98,824,469     99.59 

TOTAL LIABILITIES
  AND SHAREHOLDERS' EQUITY        $149,313,463    100.00 $ 99,230,986    100.00 

(See accompanying notes to financial statements)
<PAGE>
                         TAIWAN UQM ELECTRIC CO., LTD.
                             STATEMENTS OF INCOME
                            (In Development Stage)
                     For the Year Ended December 31 ,1996 
              and the Period January 17, 1995 to December 31,1995
                   (Amounts Expressed in New Taiwan Dollars)

                                                             January 17,1995 to
                                 1996            1995         December 31, 1996
NET SALES                      $    -          $   -            $    -     
                                                                           
COST OF GOODS SOLD                  -              -                 -     
                                                                           
GROSS PROFIT                        -              -                 -         

OPERATING EXPENSES (Note 7)    (4,617,699)    (1,819,488)       (6,437,187)
                                                                           
OPERATING LOSS                 (4,617,699)    (1,819,488)       (6,437,187)
                                                                           
NON-OPERATING INCOME                                                       
   Interest income                278,258        252,113           530,371  
INCOME BEFORE INCOME TAX       (4,339,441)    (1,567,375)       (5,906,816)
                                                                           
INCOME TAX                                                                 
   (Notes 2 & 6)                                                           
   Current tax expense              -              -                 -     
   Deferred tax benefit         1,080,984        391,844         1,472,828 
                                                                           
NET LOSS                      $(3,258,457)   $(1,175,531)      $(4,433,988)
                                                                           
EARNINGS PER SHARE                                                         
   Net loss                   $     (0.33)   $     (0.31)


(See accompanying notes to financial statements)       
<PAGE>
<PAGE>
                         TAIWAN UQM ELECTRIC CO., LTD.
                 STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                            (In Development Stage)
                      For the Year Ended December 31,1996
              and the Period January 17, 1995 to December 31,1995
                   (Amounts Expressed in New Taiwan Dollars)

                                  Common Stock Issued   
                                                          Capital     Deficit in
                                                          Received   Development
                                  Shares      Amounts    in Advance     Stage   
                                                                                
INITIAL PAID-IN CAPITAL,
  JANUARY 17,1995                2,500,000 $ 25,000,000 $    -       $    -     
                                                                                
Capital increase by cash         7,500,000   75,000,000      -            -     
                                                                                
Net loss for the period
  January 17, 1995 to 
  December 31,1995                   -           -           -       (1,175,531)
                                                                                
BALANCE, DECEMBER 31,1995       10,000,000  100,000,000      -       (1,175,531)
                                                                                
Capital received in advance          -            -      37,050,000            -
                                                                                
Net loss for 1996                    -            -                  (3,258,457)
                                                                                
BALANCE, DECEMBER 31, 1996      10,000,000 $100,000,000 $37,050,000 $(4,433,938)

               (See accompanying notes to financial statements)
<PAGE>

                       TAIWAN UQM ELECTRIC CO., LTD.
                         STATEMENTS OF CASH FLOWS
                          (In Development Stage)
                        For the Year Ended December 31, 1996
             and the Period January 17, 1995 to December 31, 1995
                 (Amounts Expressed in New Taiwan Dollars)

                                                            January 17, 1995 to
                                          1996        1995    December 31,1996 
CASH FLOWS FROM OPERATING ACTIVITIES                                          
  Net loss                            $(3,258,457) $(1,175,531)   $ (4,433,988)
  Adjustments: 
     Depreciation                         108,473         -            108,473 
     Net changes in:                                                            
       Other receivables               (1,815,670)     (64,511)     (1,880,181)
       Other current assets               (43,422)     (26,235)        (69,657)
       Deferred income tax assets      (1,080,984)    (391,844)     (1,472,828)
       Notes payable                        4,014          -             4,014 
       Accrued expenses                   311,091      392,729         703,820 
       Other current liabilities           60,652       13,788          74,440 
  Net Cash Used in Operating 
    Activities                         (5,714,303)  (1,251,604)     (6,965,907)
                                                                                
CASH FLOWS FROM INVESTING ACTIVITIES                                            
   Acquisition of property and 
     equipment                        (26,458,791) (81,114,412)   (107,573,203)
                                                                                
CASH FLOWS FROM FINANCING ACTIVITIES                                            
   Initial paid-in capital and
     capital increase by cash                -     100,000,000     100,000,000 
   Increase in capital received
     in advance                        37,050,000         -         37,050,000 
   Net Cash Provided by 
     Financing Activities              37,050,000  100,000,000     137,050,000 
                                                                                
NET INCREASE IN CASH AND CASH                                                   
   EQUIVALENTS                          4,876,906   17,633,984      22,510,890 
                                                                                
CASH AND CASH EQUIVALENTS AT                                                    
   BEGINNING OF PERIOD                 17,633,984       -                 -    
                                                                               
CASH AND CASH EQUIVALENTS AT                                                   
  END OF PERIOD                       $22,510,890  $17,633,984    $ 22,510,890 

               (See accompanying notes to financial statements)
<PAGE>
                                       
                  TAIWAN UQM ELECTRIC CO., LTD.
                  NOTES TO FINANCIAL STATEMENTS
                      (In Development State)
                    December 31, 1996 and 1995
            (Amounts Expressed in New Taiwan Dollars)


1.   ORGANIZATION AND NATURE OF BUSINESS

     Taiwan UQM Electric Co., Ltd. (the Company) was incorporated on January
     17, 1995, as a company limited by shares under the Company Law of the
     Republic of China.  The Company is mainly engaged in the manufacture and
     sale of motors, motor controllers and related components.  However, the
     Company was still in development stage as of December 31, 1996, and was
     mainly engaged in financial planning, recruitment and training, factory
     construction, etc.


2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     The Company's accounting policies conform with accounting principles
     generally accepted in the Republic of China.

   1)     Cash and cash equivalents

     The statements of cash flows are prepared on the basis of cash and cash
     equivalents.  Cash equivalents are short-term and highly liquid
     investments with original maturities of three months or less.

   2)     Property and equipment

     Property and equipment are stated at cost.  Major additions, replacements
     and betterments are capitalized, while maintenance and repairs are
     expensed currently.

     Depreciation is provided by the straight-line method over the estimated
     useful lives of the respective assets.  Property and equipment which are
     depreciated to residual values and are still in use will be depreciated
     over their remaining useful lives.  When assets are retired or disposed
     of, their cost and related accumulated depreciation are removed from the
     respective accounts.  Any resulting gain or loss is credited or charged
     to income, and the gain after deducting the applicable income tax is
     transferred to capital surplus in the following year.

   3)     Income tax

     The Company provides income tax in accordance with Statement of Financial
     Accounting standards 22 "Accounting for Income Tax."  The tax effects of
     taxable temporary differences are recognized as deferred income tax
     liabilities, while those of deductible temporary differences, loss
     carryover and tax credits are recognized as deferred income tax assets. 
     The valuation allowance is provided on the basis of the estimated
     realizability of deferred income tax assets.
<PAGE>

3.   CASH AND CASH EQUIVALENTS
                                                         December 31         
                                                   1996             1995   

     Cash on hand                            $     26,130    $     8,379
     Checking accounts                             18,647            -    
     Demand deposits                           22,466,113      3,625,605
     Time deposits                                  -         14,000,000
     Total                                   $ 22,510,890    $17,633,984

                                                            
4.   PROPERTY AND EQUIPMENT                                    
                                                        December 31         
                                                   1996             1995   
     Cost                                                   
       Transportation equipment               $   746,306    $      -    
       Furniture and fixtures                     234,536           -    
       Construction in progress                38,093,247           -    
       Prepayment for land                     84,414,291     84,414,412
                                              123,488,380     84,414,412
     Accumulated Depreciation                      82,923           -    
       Transportation equipment                                            
       Furniture and fixtures                      25,550           -    
                                                  108,473           -    
     Net                                     $123,379,907    $84,414,412

     As of December 31, 1996, the Company has signed contracts with Everlight
     Electric Industrial Co., Ltd. to purchase land and factory, aggregating
     $86,563,756 and $96,000,000, respectively. The Company has paid
     $84,414,291 for the land and $36,396,275 for the factory. To secure the
     transactions, the Company has obtained certain collateral's from
     Everlight Electric Industrial Co., Ltd. and its affiliate.


5.   RETAINED EARNINGS

     The Company's Articles of Incorporation provide that 10% of annual net
     income shall be appropriated as legal reserve, and 5% of the remainder
     shall be appropriated as employees' bonus, the remainder shall be
     appropriated at the shareholders' meeting in the following year.

6.   INCOME TAX                                                            

     1)   Summary of deferred income tax assets or liabilities 
     
                                                        December 31          
                                                    1996           1995   
     
     a)Total deferred income tax liabilities  $     -          $   -     
     b)Total deferred income tax assets        1,472,828        391,844 
     c)Valuation allowance for deferred
          income tax assets                         -              -     
     d)Tax effects of temporary differences                                
                                                      December 31, 1996        
                                                    Amounts     Tax effects
      Deferred Organization Cost                  $5,891,311     $1,472,828
                                                            
                                                      December 31, 1995        
                                                    Amounts     Tax effects
      Deferred Organization Cost                  $1,567,375     $  391,844
<PAGE>                                                            

   2)     Classification of deferred income tax assets and liabilities
                                                            
                                                         December 31        
                                                     1996           1995   
     Deferred income tax assets - noncurrent      $1,472,828       $391,844
     Valuation allowance                               -              -    
                                                  $1,472,828     $  391,844

     Deferred income tax liabilities - noncurrent      -              -    
     Net deferred income tax assets - noncurrent  $1,472,828     $  391,844
                                                                           
                                                            
   3)     Income tax                                                       
          
                                                         December 31         
                                                     1996           1995   
     Current income tax expense                   $    -         $    -    
     Deferred income tax benefit                                           
     Deferred organization cost                    1,080,984        391,884
     Net                                          $1,080,984     $  391,884
                                                                           
7.   RELATED PARTIES TRANSACTIONS
                                                            
   1)     Related parties and relationship                                 
                                                            
                                                            
               Related parties                      Relationship      
     Kymco Motor Co., Ltd.                    Major shareholder 

     Turn Luckily Technology Co., Ltd.        Major shareholder 

     Everlight Electric Industrial Co., Ltd.  Its major shareholder is the
                                              director of the Company

     DJ ATO Components Corp.                  Invested by the Company's
                                              major shareholder 
<PAGE>

   2)     Significant transactions with related parties                         
                                           
     a) Rental expense and related payable
                                          1996                        1995     
                                  Rental                    Rental   
                                  expense       Payable     expense    Payable 
     Turn Luckily Technology
       Co., Ltd.                  $ 40,000     $    -     $181,500    $85,575
     DJ ATO Components Corp.       257,143          -        -           -   
     Total                        $297,143     $    -     $181,500    $85,575

     b) Property and equipment                           
                                          1996               Amount Paid as of
                               Transactions  Total amount    December 31, 1996
     Everlight Electric          Purchase  
        Industrial Co. Ltd.       of land    $86,563,756        $84,414,291
                                             plus land value
                                             increment tax      
     Everlight Electric
        Industrial Co., Ltd.    Purchase of   $96,000,000                     
                                factory                          $36,396,275

                                          1995                Amount paid as of
        Everlight Electric     Transactions  Total Amount     December 31, 1995
        Industrial Co., Ltd    Purchase of   $87,994,507        $81,114,412
                                   land      Plus land value
                                             increment tax
<PAGE>

  (b)   Reports on Form 8-K:
  
               Report regarding Memorandum of Understanding for the formation
               of a strategic alliance to import, distribute and market
               electric scooters dated June 18, 1997.
       
               Report regarding completion of offering of common stock  
               pursuant to Regulation S and Regulation D dated March 31, 1997.
       
  (c)         Exhibits   

          3.1  Articles of Incorporation and Bylaws.  Reference is made to 
               Exhibit 3.1 of the Company's Registration Statement on Form S-1 
               (No. 33-42342), which is incorporated herein by reference.

          3.2  Restated Articles of Incorporation.  Reference is made to 
               Exhibit 3.2 of the Company's Quarter Report on Form 10-K for the
               year ended October 31, 1993 (No. 0-9146) which is incorporated 
               herein by reference.

          4.1  Specimen Stock Certificate.  Reference is made to Exhibit 3.1 of 
               the Company Registration Statement on Form 10, dated 
               February 27, 1980 (No. 0-9146) which is incorporated herein by 
               reference.

          10.1 Shareholder Agreement by and among Alcan International Limited, 
               Ray A. Geddes and Unique Mobility, Inc. dated June 7, 1988.  
               Reference is made to Exhibit 10.2 of the Company's Quarterly 
               Report on Form 10-Q for the quarter ended April 30, 1988 
               (No. 0-9146) which is incorporated herein by reference.

          10.2 Unique Mobility, Inc. Incentive and Non-qualified Stock Option 
               Plan (amended and restated effective January 1, 1988). Reference
               is made to Exhibit 10.4 of the Company's Quarterly Report on Form
               10-Q for the quarter ended April 30, 1988 (No. 0-9146).

          10.3 Unique Mobility, Inc. 1992 Stock Option Plan.  Reference is made
               to Exhibit 4.1 to the Company's Registration Statement on Form 
               S-8 (No. 33-47454), which is incorporated herein by reference.

          10.4 Unique Mobility, Inc. Employee Stock Purchase Plan.  Reference 
               is made to Exhibit 4.3 to the Company's Registration Statement 
               on Form S-8 (No. 33-34612), which is incorporated herein by 
               reference. 

          10.5 401(k) Savings Plan of Unique Mobility, Inc.  Reference is made 
               to Exhibit 4.3 to the Company's Registration Statement on Form 
               S-8 (No. 33-34613), which is incorporated herein by reference.

          10.6 Amendment to Shareholder Agreement dated March 25, 1992 between 
               Unique Mobility, Inc., Ray A. Geddes and Alcan International 
               Limited.  Reference is made to Exhibit 19.7 to the Company's 
               Quarterly Report on Form 10-Q for the quarter ended April 30, 
               1992 (No. 0-9146) which is incorporated herein by reference.
 
          10.6 Unique Building Partners, Ltd. Liability Co. Operating Agreement 
               dated September 16, 1992.  Reference is made to Exhibit 10.33 of
               the Company's Registration Statement on Form S-2 (No. 33-53376),
               which is incorporated herein by reference.

          10.8 Lease between the Company and Unique Building Partners, Ltd. 
               Liability Co. dated September 22, 1992.  Reference is made to 
               Exhibit 10.34 of the Company's Registration Statement on Form 
               S-2 (No. 33-53376), which is incorporated herein by reference.
<PAGE>
          10.9 Amended Warrant Agreements between Unique Mobility, Inc. and 
               affiliates of Advent International Corporation and Techno
               Venture U.S.A., Inc.  Reference is made to exhibits 10.1 through
               10.7 to the Company's Quarterly Report on Form 10-Q for the 
               quarter ended April 30, 1993, (No. 0-9146) which is incorporated
               herein by reference.

          10.10 Unique Mobility, Inc. Stock Option Plan for Non-Employee 
                Directors. Reference is made to Exhibit 10.39 of the Company's 
                Quarter Report on Form 10-K (No. 0-9146) for the year ended 
                October 31, 1993 which is incorporated herein by reference. 

          10.11 Warrant Agreement with Arnhold and S. Bleichroeder, Inc.  
                Reference is made to Exhibit 10.41 of the Company's Quarter 
                Report on Form 10-K (No. 0-9146) for the year ended
                October 31, 1993 which is incorporated herein by reference.
 
          10.12 Assignment Agreement with Alcan International Limited.  
                Reference is made to Exhibit 10.3 to the Company's Quarterly 
                Report on Form 10-Q for the quarter ended April 30, 1994 
                (No. 0-9146) which is incorporated herein by reference.

          10.13 Amendment to the 1992 Stock Option Plan of Unique Mobility, Inc.
                Reference is made to Exhibit 10.4 to the Company's Quarterly 
                Report on Form 10-Q for the quarter ended April 30, 1994 
                (No. 0-9146) which is incorporated herein by reference. 

          10.14  Amendment to the 401(k) Savings Plan of Unique Mobility, Inc. 
                 dated January 18, 1995.  Reference is made to Exhibit 10.1 in
                 the Company's Quarterly Report on Form 10-Q for the Quarter 
                 ended  January 31, 1995 (No. 0-9146) which is incorporated 
                 herein by reference. 

          10.15 Amendment to the 1992 Stock Option Plan of Unique Mobility, Inc.
                dated December 7, 1994.  Reference is made to Exhibit 10.2 in 
                the Company's Quarterly Report on Form 10-Q for the Quarter 
                ended  January 31, 1995 (No. 0-9146) which is incorporated 
                herein by reference. 

          10.16 Stock Purchase Agreement by and among Unique Mobility, Inc. and
                Invacare Corporat on dated December 7, 1995.  Reference is made
                to exhibit 10.36 in the Company's Annual Report on Form 10-K 
                for the fiscal year ended October 31, 1995, (No. 1-10869)which
                is incorporated herein for reference.

          10.17 Amendment to the Stock Purchase Agreement by and among Unique 
                Mobility Inc. and Invacare Corporation. Referenced is made to 
                exhibit 10.3 in the Company's Quarterly Report on Form 10-Q for
                the quarter ended April 30, 1996, (No. 0-9146) which is 
                incorporated herein by reference.

          21    Subsidiaries of the Company

          23.1  Consent of KPMG Peat Marwick LLP.

          23.2  Consent of Horwath & Co. (Taiwan)

          27    Financial Data Schedule

<PAGE>
   (d) Financial Statement Schedules

                None.
<PAGE>

                            SIGNATURES

Pursuant to the requirements of Section 13 of the Securities and Exchange Act
of 1934, Unique Mobility, Inc. has duly caused this Annual Report on Form 10-K
to be signed on its behalf by the undersigned, thereunto duly authorized, in
Golden, Colorado on the 26th day of June, 1997.

                      UNIQUE MOBILITY, INC.,
                      a Colorado Corporation
                                 
                   By: "Ray A. Geddes"         
                       Ray A. Geddes
                       Chairman of the Board of Directors

Pursuant to the requirements of the Securities and Exchange Act of 1934, this
Annual Report on Form 10-K has been signed below by the following persons on
behalf of Unique Mobility, Inc., in the capacities indicted and on the date
indicated.

Signature                  Title                          Date

                     
                         Chairman of the Board of Directors
"Ray A. Geddes"          (Principal Executive Officer)         June 26, 1997
 Ray A. Geddes

                          Treasurer and Controller
                          (Principal Financial and
"Donald A. French"        Accounting Officer)                  June 26, 1997
 Donald A. French


"William G. Rankin"       President and Director               June 26, 1997
 William G. Rankin  


"Francis S.M. Hodsoll"    Director                             June 26, 1997
 Francis S.M. Hodsoll


"H. J. Young"             Director                             June 26, 1997
 H. J. Young


"J. B. Richey"            Director                            June 26, 1997
 J. B. Richey