UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
                  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
                        For the Year Ended March 31, 2000

                         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
                             Pacific Stock Exchange
                             Chicago Stock Exchange
                            Frankfurt Stock Exchange
                              Berlin 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  (16,325,359  shares)  computed by reference to the closing  price of
such stock on the American Stock Exchange, as of June 26, 2000:

                                $137,786,030

The number of shares  outstanding  (including shares held by affiliates) of each
of the registrant's classes of common stock, as of June 26, 2000:

                           17,233,345 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  15,  2000  Annual  Meeting  of
Shareholders.


<PAGE>

ITEM 1.     BUSINESS

This  Report may  contain  forward-looking  statements  that  involve  risks and
uncertainties.  These statements may differ materially from actual future events
or results. Readers are referred to the Risk Factors section of the Registration
Statement  on Form S-3 (File No.  333-78525)  filed by the Company with the SEC,
which  identifies  important  risk factors  that could cause  actual  results to
differ from those  contained in the  forward-looking  statements,  including the
Company's  ability to obtain  additional  financing,  the Company's  reliance on
major  customers  and  suppliers  and the  possibility  that  product  liability
insurance may become unavailable. 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.

General

Unique Mobility,  Inc. ("Unique" or the "Company") was incorporated in 1967. The
Company's $0.01 par value common stock trades on the American, Chicago, Pacific,
Frankfurt and Berlin stock exchanges under the symbol "UQM".

Historically,  the Company's revenue has been derived from contract research and
development  services  performed  for  strategic  partners  and  clients and the
limited production and sale of power dense, energy efficient propulsion systems.
Sponsored  research and  development  activities  have  supplemented  internally
funded product development programs.

Over the last two years the  Company's  operations  have  expanded to  encompass
three  business  segments,   technology,   mechanical  products  and  electronic
products.  The Company has three principal  operating  units:  Unique  Mobility,
Inc., located in Golden,  Colorado, which operates as the corporate headquarters
and engineering and product development  center;  wholly owned subsidiary Unique
Power Products,  Inc. ("Unique Power"),  located in Frederick,  Colorado,  which
manufactures  permanent  magnet  electric  motors,   precision  gears  and  gear
assemblies;   and  wholly  owned  subsidiary  Franklin   Manufacturing   Company
("Franklin"), located in St Charles, Missouri which manufactures printed circuit
board assemblies,  cable harness  assemblies,  complete electronic boxes and the
assembly of complete end products.

The Company's  objective is to leverage its technology base and name recognition
to develop,  manufacture and market products in a number of high potential niche
markets in the near  term,  and  automotive  mass  markets  in the longer  term.
Fundamental  to this  strategy  is  maintaining  high  quality  and  competitive
manufacturing capability for products developed by the Company.

The Company also holds minority ownership  positions in Taiwan UQM Electric Co.,
Ltd.  ("Taiwan UQM"), EV Global Motors Company ("EV Global"),  and Windemere Eco
Development Limited ("WED").

Taiwan UQM is a joint venture with Kwang Yang Motor Company,  Ltd. ("KYMCO") and
Turn-Luckily  Technology Co., Ltd. Taiwan UQM, located in Taipei,  Taiwan,  is a
licensee of the Company and  manufacturer  of starter motors and alternators for
gasoline scooters and electric  propulsion  systems for an all electric scooter.
The Company holds a 38.25 percent  ownership  interest in Taiwan UQM. During the
current fiscal year the Company wrote down the carrying value of this investment
to zero. See also footnote 6 to the consolidated financial statements in "Item 8
Financial Statements" below.

<PAGE>

During the fiscal year ended March 31, 2000 the Company  acquired a 33.6 percent
ownership  interest in Unique  Mobility Europa Gmbh ("Unique  Europa"),  a joint
venture with EV Global,  Energy  Conversion  Devices and Haco Trading,  Ltd. The
Company's  ownership interest in Unique Europa,  located in Mittweida,  Germany,
was acquired for DM 50,000 (US $9,573) and a contribution  to surplus of 208,333
newly  issued  shares  of  Unique  common  stock  with a fair  market  value  of
$1,149,894.  On October 8, 1999 the Company  entered into an agreement  with the
shareholders  of Unique  Europa  providing  for the  reduction of its  ownership
interest in Unique  Europa to 5.9 percent in exchange  for a funding  commitment
from one of the shareholders in the amount of DM 3 million (US $1,630,200). As a
result of this  agreement  the  Company  wrote  down its  investment  to zero at
September  30,  1999.  Subsequent  to year end the  Company  sold its  remaining
ownership  and all other rights  relating to its  interest in Unique  Europa for
$400,000 in cash. No gain or loss resulted from this transaction.

The Company owns 400,000 shares of EV Global common stock.  EV Global,  based in
Los Angeles, is a developer and distributor of electric bicycles. In June, 1999,
the Company  acquired an  approximately  9.5 percent  participation  in a $5.225
million convertible note receivable from WED, held by EV Global, for $500,000 in
cash. WED is an environmentally sensitive development of Windemere Island in the
Bahamas.  The entire loan is convertible into  approximately 50.4 percent of the
total  outstanding  equity  of WED,  of  which  the  Company  would  receive  an
approximately 4.8 percent ownership interest.  At September 30, 1999 the Company
wrote down the carrying value of EV Global and WED to zero.


Technology Segment

The  technology  segment  of  the  Company  encompasses  the  operations  of the
Engineering and Product Development Center and the administrative and management
functions  performed by the corporate  headquarters staff and senior executives.
The  Company's  Engineering  and Product  Development  Center  occupies a 40,000
square foot  building  located in Golden,  Colorado  equipped  with research and
development  laboratories,  prototype  build and test  facilities  for  electric
motors, electronic controls,  software, and vehicle integration activities.  The
technology   segment  conducts  sponsored  and   internally-funded   engineering
activities  directed  toward the development of new products and the engineering
of motor and  electronic  controls to meet the  requirements  of our  customer's
specific product application and is the source of engineering  services for both
the mechanical and electronic product segments.

During the past year a number of new and important projects were executed at the
Company's Engineering and Product Development Center including:

o    A  Department  of Energy  funded  project to design  and build an  advanced
     electric  traction system capable of propelling a mid-sized hybrid electric
     or fuel cell electric passenger vehicle. The two year, $750,000 project, is
     focused  on the  development  and  initial  prototype  product  build of an
     innovative  propulsion  system that integrates an energy  efficient  motor,
     gears and  differential  into a complete  system that can deliver up to 100
     horsepower and 1,100 foot pounds of torque to the wheels of the automobile.

o    A two year,  $600,000 project funded by the Department of Defense to design
     and build a  generator  system for the Marine  Corps'  advanced  amphibious
     assault vehicle.

<PAGE>

o    The design of a UQM electric  motor/generator  for General  Motor's Precept
     Technology  Demonstration  vehicle  which was  introduced at the 2000 North
     American  International  Auto Show in  Detroit.  The GM  Precept is a fully
     functional  hybrid electric five passenger family sedan designed to achieve
     80 miles per gallon.  The UQM motor  generator  product is part of the rear
     drive system of the car,  operating as an input to the  transmission  along
     with the engine. The system performs numerous critical functions, including
     engine  starting,  engine  power  assist,  regenerative  braking to capture
     vehicle  braking  energy,  battery  charging and  part-time  driving of the
     vehicle accessories.

o    Design and  delivery of fifty fuel cell UQM  compressor  drive  motors to a
     tier-one automotive  supplier.  The compressor motors are liquid cooled and
     were optimized for the specialized operating characteristics of fuel cells.
     Substantially all fuel cell developers require a high efficiency, small and
     lightweight  motor to drive  the air  transfer  system  to  facilitate  the
     chemical  reaction  inside  the fuel cell that leads to the  production  of
     energy.

o    Design and delivery of high  efficiency UQM  electronic  motor controls for
     use  in  a  tier-one   automotive   suppliers   electrically   powered  air
     conditioning system currently under development. The project is part of the
     automotive  industry's  initiative to replace the current 12-volt passenger
     automobile  electrical  system  with a higher  capacity  42-volt  system to
     increase electric power  availability  within automobiles for such features
     as power  windows,  power seats and seat heaters,  brakes,  music and phone
     systems and global positioning devices.

o    Design and  introduction of a controller area network ("CAN") option on the
     Company's  product line of motors and controllers.  CAN is a cost effective
     two-wire serial  communication  system for real-time  control  applications
     which can replace expensive,  heavy and cumbersome wiring looms. It enables
     the  graphical  visualization  of the  content of  information  sent to and
     between  components,  as well as, the control,  monitoring  and updating of
     components  from remote  locations  over the internet if the components are
     connected to a computer network.

o    Application  of  the  Company's  proprietary  electric  motor  and  control
     technology to one of a  multinational  equipment  makers  products under an
     exclusive  product  development.  Under the terms of an initial  three year
     agreement,  Unique will apply its proprietary  technology to the customer's
     product on an exclusive  basis during  which time the  companies  expect to
     complete a commercial supply agreement to ensure continued  exclusivity for
     the developed product in the markets where the product is sold.

These product  developments  represent the continuation of our strategy to apply
our  proprietary  technology  to enable  our  customer's  products  to achieve a
performance  advantage  in the existing  commercial  markets they serve while we
continue to pursue the developing  markets for advanced  propulsion  systems for
automobiles, trucks and buses and the distributed power generation market.

During  fiscal 2000,  the  technology  segment  generated  revenue of $2,426,152
consisting of $1,702,937 of contract services revenue and $723,215 from the sale
of low volume motor and control  products.  Operating  losses for the technology
segment  amounted  to  $6,293,807,  including  the  effect  of  the  write-downs
previously  mentioned,  compared to an operating  loss of $2,646,442  last year.
Excluding the writedowns, the technology segment had a net loss of $2,189,179 an
improvement of $457,263 over last years net loss. The costs  associated with the
operation of the corporate headquarters, including the salaries of the executive
officers and other corporate  staff,  general  corporate  overhead costs and the

<PAGE>

earnings or losses of minority  owned  affiliates are absorbed by the technology
segment and are not allocated to the mechanical  products or electronic products
segments.



Mechanical Products

The mechanical products segment of the Company encompasses the operations of the
Company's  wholly-owned  subsidiary,  Unique Power  Products,  Inc. Unique Power
Products occupies a 25,000 square foot manufacturing plant located in Frederick,
Colorado  which houses the Company's  gear and motor  manufacturing  operations.
Gear  manufacturing  operations  consist  of  the  precision  grinding  of  both
commercial  and  aerospace  grade gears and the  manufacture  of  complete  gear
assemblies.   Motor   manufacturing   operations  consist  of  the  high  volume
manufacture of the Company's proprietary permanent magnet motors.

During  fiscal  2000,  the  mechanical  products  segment  generated  revenue of
$4,115,557 a 17 percent  increase  over the prior years  revenue of  $3,532,871.
Operating losses for the segment  amounted to $686,423 a 43 percent  improvement
over the  segment's  prior year  operating  loss of  $1,205,556.  EBITDA for the
fiscal year ended March 31, 2000 was $503,414  compared to $(174,155) last year.
Contributing to the growth in revenue and improved financial performance was the
introduction  by Invacare  Corporation  of its Action  Arrow Storm  Series power
wheelchairs with the Gearless Brushless GB motor,  manufactured by Unique Power.
Also contributing to fiscal 2000 financial performance was the production launch
of a smaller  model of the complex  welded  clutch gear  assemblies we currently
supply to Funk Manufacturing Company, a wholly-owned subsidiary of Deere & Co.



Electronic Products Segment

The electronic products segment of the company encompasses the operations of the
Company's  wholly-owned  subsidiary Franklin  Manufacturing Company and includes
the manufacture of thru-hole and surface mount printed circuit board assemblies,
wire harness assemblies,  value-added component assemblies  incorporating either
printed circuit board assemblies,  wire harness assemblies or both, and complete
turn-key  electronic  product  builds.  In addition,  the company is a wholesale
distributor  of  over  70  lines  of  passive  electronic  components.  Franklin
Manufacturing  Company  conducts  its  operations  from  a  31,000  square  foot
manufacturing  plant located in St. Charles,  Missouri.  During fiscal 2000, the
electronic  products  segment  generated  revenue of  $14,056,151,  a 39 percent
increase over the prior year's eleven month revenue from the date of acquisition
of $10,129,729.  Operating  earnings for the segment  improved over five-fold to
$508,423 from $97,928 last year. EBITDA for the fiscal year ended March 31, 2000
nearly  doubled to $1,507,998  compared to $763,117 last year. Key to the growth
in revenue and  profitability  were two new customer  orders.  The first, a $1.1
million  order for the  production of wire  harnesses and printed  circuit board
assemblies  for the North American unit of an  international  maker of elevators
and other people moving products. The second, an order encompassing the turn-key
production of the TRG Pro handheld computer for a licensee of Palm Computing.

Technology

The Company's technology base includes a number of proprietary  technologies and
patents relating to brushless permanent magnet motors, generators and electronic
controls,  together with  software  code and computer area network  design tools
utilized  to  manage  individual  components  and  the  flow of  energy  between

<PAGE>

components in a system.  During  fiscal 2000 the Company  received an additional
patent  covering the packaging of an  electromechanical  brake inside a motor. A
patent  application on a high accuracy  method of detecting motor rotor position
using low cost electronic parts filed last year remains pending.

Attributes  of the  Company's  permanent  magnet motor  technology  include high
operating  efficiencies  (>90%),  packageability  (small  and  lightweight)  and
two-way   operation   as  either  a  motor  or   generator.   High  pole   count
configurations,  together with a relatively large air-gap  dimension,  creates a
higher  torque,   lower  speed  motor  than  possible  with  more   conventional
architectures.  Typically,  the Company's motors feature high copper utilization
(which minimizes energy loss);  hollow  construction (for the interior packaging
of other  components  such as gears  and  electromechanical  brakes);  good heat
rejection; lower iron content; and low mechanical losses.

Attributes  of  the  Company's  microprocessor-based  controllers  include  four
quadrant control  (forward/reverse  and power in/power out),  reduced  switching
losses (which minimizes energy loss) and intelligent control. Patented circuitry
and software  (Phase  Advance  Control)  dynamically  adjusts the phase angle of
current into the motor  windings to increase  base speed by a factor of three to
four times.

Income from  sponsored  development  projects  is recorded as contract  services
revenue  and the  associated  development  costs are  shown as cost of  contract
services in the Company's financial statements.  Internally-funded  research and
development  expenditures  amounted to $378,954  for the fiscal year ended March
31, 2000,  a decline of 43.3 percent from the prior year level of $667,989.  The
decline is attributable to lower levels of manufacturing  engineering activities
and cost-share type sponsored development programs.

In recent  years,  the Company has focused the major portion of its research and
development activities on the development of commercial products, and production
engineering  activities  to lower the cost of  manufacture  of such  products as
opposed to basic  research in the field  although,  the Company has continued to
advance the capability and  performance  of its  proprietary  motor and controls
technology  portfolio.  Management  believes that the Company's future growth is
dependent,  in part, on the continued  advancement of its core  technology,  the
extension  of  its  technological   capabilities  and  its  ability  to  develop
additional products.  Accordingly,  the Company expects to continue to invest in
research and development at approximately the same level as in the current year.

Competition

All of the markets in which the Company  operates  are highly  competitive.  The
markets served by the technology segment are additionally characterized by rapid
changes due to technological  advances that can render existing technologies and
products obsolete.

The technology  segment has developed  advanced electric  propulsion systems and
components  which it hopes to market to vehicle OEM's  throughout  the world for
use in electric,  hybrid electric and fuel cell electric  vehicles.  At present,
the market for such systems is not  significant,  although  various  legislative
mandates and incentives  are expected to accelerate the  development of a market
for vehicles propelled by such systems.  There are numerous companies developing
products that do or soon will compete with the Company's drive systems.  Some of
these companies possess  significantly  greater  financial,  personnel and other
resources than the Company, including established supply arrangements and volume
manufacturing operations.

<PAGE>

The Company  believes its principal  competitors  include  Hitachi,  Matsushita,
Siemens, Delphi, EcoStar and Visteon.

The mechanical  products  segment  competes  primarily in the automotive,  heavy
equipment,  aerospace and medical products industries.  Each of these industries
is extremely  competitive.  The Company will face  substantial  competition on a
continuing  basis  from  numerous  competitors,  many  of  whom  possess  longer
operating  histories,  significantly  greater  financial  resources,  marketing,
distribution and  manufacturing  capability.  The Company believes its principal
competitors include Advanced DC, Owosso Corporation,  Emerson Electric,  General
Electric,   Rockwell  International,   Baldor,  ABB,  Fairfield   Manufacturing,
Precision Gear and Fairlane Gear.

The  electronic   products  segment   competes   primarily  in  the  automotive,
telecommunications,  medical,  computer and  industrial  markets.  Each of these
markets is extremely competitive.  The Company will face substantial competition
on a continuing  basis from numerous  competitors,  many of whom possess  longer
operating  histories,  significantly  greater  financial  resources,  marketing,
distribution and  manufacturing  capability.  The Company believes its principal
competitors  include  Jabil  Circuit,  Plexus,  EFTC  Corporation,   Flextronics
International, Solestica Corporation and Baldwin.

Patents and Trademarks

The Company holds a motor patent,  U.S. Patent No.  5,009,944 issued on April 2,
1991  covering the basic design of its permanent  magnet motors and U.S.  Patent
5,311,092 issued on May 10, 1994 covering subject matter that was not allowed in
the original U.S. Patent. Of the foreign applications,  a patent has been issued
and validated in twelve member countries of the European Patent Office (EPO). In
addition,  corresponding patents have been issued in Australia,  Brazil, Canada,
China, India, Ireland, Israel, Finland, Japan, South Korea, Mexico, New Zealand,
South Africa and Taiwan.

In April 1992, the Company was issued U.S. Patent No. 5,107,151 covering certain
proprietary aspects of its electronic control circuitry. In August 1990, various
international  patent  applications  corresponding to the U.S.  Application were
filed.  Patents  have  been  granted  in  Mexico,   Taiwan,  India  and  Israel.
Applications remain pending in Japan and South Korea.


<PAGE>

The Company was granted U.S. Patent No.  5,319,844 issued June 14, 1994 covering
the method of constructing the motor as disclosed in U.S. Patent No.  5,004,944.
In  March  1991  the  Company   filed  an   International   Patent   Application
corresponding to the U.S. Application;  as a result patents have been granted in
Australia,  Japan, Russia, and South Korea. Patent applications are pending in a
number of other foreign countries.

The Company was granted U.S.  Patent No.  5,382,859 in January,  1995 covering a
novel method of  constructing  a motor  stator.  An additional  U.S.  Patent No.
5,592,731  issued January 14, 1997 covering an additional  invention not covered
in the original patent.  Patent  Applications are pending in a number of foreign
countries.

The Company  was granted  U.S.  Patent No.  5,677,605  on October 14, 1997 which
embodies  a low cost  method  of  controlling  the drive  current  to a motor to
achieve  operating  characteristics  ideal for vehicle traction  drives.  Patent
Applications are pending in a number of foreign countries.

The Company was granted U.S.  Patent No.  5,982,063 on November 9, 1999 covering
the packaging of an electro-mechanical brake inside a motor. Patent applications
are pending in a number of foreign countries.

The Company  registered the letters "UQM" and a stylized  version thereof as its
new  trademark  in the  U.S.  Counterpart  applications  have  been  filed in 26
countries   throughout  the  world  and  24  of  those  countries  have  granted
registrations  or  indicated  them  to  be  allowable.   The  foreign  trademark
registrations and applications  include major markets where the company is doing
business or establishing business contacts.

The Company uses "POWER PHASE" as a trademark to identify its modular  brushless
permanent magnet electric motor drives for electric and hybrid electric vehicles
and has obtained a U.S. Trademark registration.  Corresponding  applications for
trademark  registration  have been  filed in 11  countries  and in the  European
community, which has allowed the application. Registrations have been granted in
Mexico and Canada.

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.

Backlog

The  Company's   technology  segment  had  unperformed  service  contracts  from
customers which will provide payments to the Company upon completion aggregating
approximately  $1,215,495 at May 31, 2000.  The  technology  segment also had an
order backlog for prototype motors and controls of approximately $930,946 at May
31,  2000.  All  such  contracts  are  subject  to  amendment,  modification  or
cancellation.  The Company expects to perform all unperformed  service contracts
and ship motor and controller backlog products over the next twelve months.

The Company's  mechanical products segment had an order backlog of approximately
$3.2 million at May 31, 2000. The Company  expects to ship all backlog  products
within the next twelve months.

The Company's  electronic products segment had an order backlog of approximately
$13.5 million at May 31, 2000. The Company expects to ship all backlog  products
within the next twelve months.

<PAGE>

Customers and Suppliers

The Company has one  significant  customer in its electronic  products  segment,
Tyco  International,  Ltd.,  which  accounted  for  revenue  of  $4,434,454,  or
approximately 22 percent of consolidated revenue.

Principal raw materials and  components  purchased by the Company  include iron,
steel, electronic components, magnet material and copper wire. Most of the above
items are available from several  suppliers and the Company  generally relies on
more than one supplier for each item. Certain components used by the Company are
custom  designs  and if the  Company's  current  supplier  no  longer  made them
available to the Company, the Company could experience production delays.

U.S. Government Contracts

For the year ended March 31, 2000,  $910,770,  or approximately 4 percent of the
Company's  consolidated  revenue was derived from contracts with agencies of the
U.S. Government and from subcontracts with U.S. Government prime contractors.

For the year ended  March 31,  1999,  $758,853,  or  approximately  5 percent of
consolidated  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  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 May 31, 2000,  the Company had 170  full-time  employees.  The Company has
entered into  employment  contracts  with its executive  officers,  one of which
expires  in  April  2000,  and the  other  two in  December,  2002.  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

The Company owns or leases its offices and manufacturing facilities and believes
these  facilities  to be well  maintained,  adequately  insured and suitable for
their  present and  intended  uses.  Information  concerning  facilities  of the
Company as of May 31, 2000, is set forth in the table below:

                                   Ownership or
                         Square  Expiration Date
Location                  Feet      of Lease                 Use

Golden, Colorado (1)     40,000  September 2002      manufacturing,
                                                     laboratories
                                                     and offices

Frederick, Colorado      25,000  Own                 manufacturing
                                                     and offices

St. Charles, Missouri    31,000  March 2007          manufacturing,
                                                     warehouse and
                                                     offices

(1)  The Company is a fifty percent member in a limited  liability company which
     owns this facility.


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 quarter ended March 31, 2000.

<PAGE>

ITEM 5.  MARKET PRICE OF COMMON STOCK

The Company's common stock trades on the American,  Chicago, Pacific,  Frankfurt
and Berlin Stock Exchanges.  The high and low closing prices, by fiscal quarter,
as  reported  by the  American  Stock  Exchange  for the last two  years  are as
follows:

2000                                    High             Low
Fourth Quarter                         $10.88           $3.69
Third Quarter                          $ 4.38           $3.50
Second Quarter                         $ 4.63           $4.06
First Quarter                          $ 6.44           $4.31

1999                                    High             Low
Fourth Quarter                         $ 6.13           $4.25
Third Quarter                          $ 6.19           $4.39
Second Quarter                         $ 7.25           $4.39
First Quarter                          $ 8.31           $6.50

On June 26, 2000 the closing price of the Company's common stock, as reported on
the American Stock  Exchange,  was $8.44 per share and there were 937 holders of
record of the Company's 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.


<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA


                              Unique Mobility, Inc.
                      Consolidated Selected Financial Data
<TABLE>

                         Year        Year       Year   Five Months
                        Ended       Ended      Ended      Ended
                      March 31,   March 31,  March 31,  March 31, Year Ended October 31,
                        2000        1999       1998        1997      1996          1995

<CAPTION>
<S>                <C>            <C>        <C>          <C>      <C>         <C>
Contract Services
Revenue            $  1,702,937   1,517,960  2,790,496    700,132  1,436,484   4,031,951

Product Sales      $ 18,894,923  14,280,458  1,274,236    152,016    611,213     701,700

Operating
Loss               $ (5,688,774) (3,144,592)(3,007,599)(1,120,900)(2,744,606) (1,134,338)

Net Loss           $ (6,471,807) (3,754,070)(3,266,360)(1,201,085)(2,904,743) (1,330,433)

Net Loss
Per Common Share-
basic and diluted  $     (.39)       (.24)      (.23)      (.12)      (.26)       (.13)

Total Assets       $ 24,257,843  27,206,578 19,585,551 12,370,699  8,712,649   7,626,178

 Long-Term
Obligations        $  3,422,459   4,396,127  1,029,924    726,218    744,389     807,003

Cash Dividend
Declared Per
Common Share       $     -0-         -0-        -0-        -0-        -0-         -0-

</TABLE>

<PAGE>

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

Financial Condition

Cash and cash  equivalents at March 31, 2000 was $2,085,115 and working  capital
(the excess of current assets over current  liabilities) was $5,672,559 compared
with $1,537,453 and $2,395,261,respectively, at March 31, 1999.

Accounts  receivable  rose  $219,900  to  $2,821,894  at  March  31,  2000  from
$2,601,994 at March 31, 1999. The increase is primarily  attributable  to higher
levels of revenue at Franklin.

Costs and estimated  earnings on  uncompleted  contracts  increased  $155,654 to
$329,111  at March 31,  2000 from the  fiscal  1999 year end level of  $173,457.
Estimated  earnings on  contracts  in process  declined to $180,293 at March 31,
2000 on costs incurred on contracts in process of $645,425 compared to estimated
earnings on contracts  in process of $285,804 on costs  incurred on contracts in
process of $1,457,955 at March 31, 1999. The decrease is  attributable  to lower
levels of contracts in process at March 31, 2000.

Inventories  rose $332,285 to  $3,120,279  at March 31, 2000 from  $2,787,994 at
March  31,  1999  reflecting  increases  in raw  material  and  work in  process
inventories associated with higher sales levels for the fiscal year.

Prepaid expenses and other current assets rose nominally from their beginning of
the year levels.

The Company  invested  $483,716 for the  acquisition  of property and  equipment
during  fiscal 2000  compared  to  $4,399,114  for the prior  fiscal  year.  The
decrease is attributable  to higher levels of capital  expenditures in the prior
fiscal  year  arising  from  investments  in  manufacturing  equipment  and  the
construction  of a  manufacturing  plant  by the  mechanical  products  segment,
investments in  manufacturing  equipment and tooling by the electronic  products
segment, and investments in equipment by the technology segment.

During the second  quarter,  the  Company  evaluated  its  investments  in three
long-term  investments,  Taiwan UQM Electric Co., Ltd.,  Unique  Mobility Europa
GmbH and EV Global Motors Company and their related  operations.  Based on these
evaluations  the  Company  wrote  down  these  investments  to zero (see "Item 8
Financial  Statements",   notes  6,  7  and  8  to  the  Consolidated  Financial
Statements.)

Patent and trademark  costs,  net of accumulated  amortization,  was $731,282 at
March 31, 2000 an increase of $45,087  from the fiscal 1999 year end level.  The
increase is primarily  attributable to legal and application fees which amounted
to $79,296 and $137,537 in fiscal 2000 and 1999, respectively.

Goodwill, net of accumulated  amortization,  declined to $5,995,463 at March 31,
2000 from  $6,327,841  at March 31, 1999 due to the  amortization  of this asset
over its 20 year useful life.

Accounts  payable  declined  $864,828  to  $1,379,316  at March  31,  2000  from
$2,244,144 at March 31, 1999.  The decrease is primarily  attributable  to lower
amounts due trade vendors.

Other current liabilities  decreased $107,036 to $845,462 at March 31, 2000 from
$952,498 at March 31,  1999.  The  decrease  is  primarily  attributable  to the
payment  of  organization   costs  on  behalf  of  Unique  Europa  and  deferred
compensation associated with the acquisition of Aerocom, Inc.
<PAGE>

Revolving   line-of-credit  declined  $1,100,000  to  zero  at  March  31,  2000
reflecting the application of cash to the reduction of short-term borrowings.

Billings in excess of costs and estimated earnings on uncompleted contracts rose
$10,106 to $79,499 at March 31, 2000 from  $69,393 at March 31, 1999  reflecting
payments by customers for certain sponsored  development contracts in advance of
the performance of the associated project work.

Long-term  debt declined  $973,668 to $3,422,459 at March 31, 2000 primarily due
to scheduled  principal  repayments on the  Company's  term bank debt during the
fiscal year.

Common  stock  and  additional   paid-in  capital   increased  to  $171,942  and
$49,382,877  at  March  31,  2000,   respectively,   compared  to  $162,230  and
$43,412,390  at March 31,  1999.  The  increases  were due to the sale of common
stock in private  offerings  in the amount of  $488,828;  the issuance of common
stock for investment in Germany joint venture of $1,149,894;  proceeds  received
upon the  exercise  of  warrants  of  $3,776,659;  and sales of common  stock to
employees,  directors and  consultants  through the Company's  benefit plans and
option exercises of $807,480.

Notes receivable from officers decreased to zero at March 31, 2000 from $454,063
at March 31, 1999  reflecting the repayment of stock option loans by officers of
the Company during the fiscal year.

Results of Operations

Operations  for the  year  ended  March  31,  2000,  resulted  in a net  loss of
$6,471,807,  or $0.39 per share,  compared to a net loss of  $3,754,070 or $0.24
per share for the year  ended  March 31,  1999 and a net loss of  $3,266,360  or
$0.23 per share for the year ended March 31, 1998.

Operations for the fiscal year ended March 31, 2000 included charges  associated
with the write down of the Company's  investments in Taiwan UQM,  Unique Europa,
EV  Global  and WED  which  resulted  in a charge  to  earnings  of  $4,104,628,
compensation payable to the Company's former CEO of $324,866,  and the write-off
of an uncollectible  customer  account of $254,870.  Excluding these items which
totaled  $4,684,364 or $0.28 per common share, net loss for the year declined 52
percent to  $1,787,443 or $0.11 per common share from the net loss of $3,754,070
or $0.24 per common share for the previous  fiscal year and declined  $1,478,917
or $0.09 per share from the net loss of  $3,266,360  for the  fiscal  year ended
March 31, 1998. Earnings before interest,  taxes,  depreciation and amortization
("EBITDA")  for the  fiscal  year  before  the  foregoing  charges  improved  by
$2,406,699 to $816,348 versus EBITDA of $(1,590,351)  last year and $(2,624,992)
for the fiscal year ended March 31, 1998. EBITDA for the fiscal year ended March
31,  2000  including  the  foregoing   charges  was  $(3,868,016)   compared  to
$(1,590,351) and  $(2,624,992)  for the comparable  fiscal years ended March 31,
1999 and 1998, respectively.

Revenue from contract services  increased 12 percent to $1,702,937 during fiscal
2000 compared to $1,517,960  for the year ended March 31, 1999.  The increase in
contract  services  revenue  in  fiscal  2000  over  the  fiscal  1999  level is
attributable  to  increased  levels  of  sponsored  development  activities  and
improved  program  pricing.  Revenue  from  contract  services  for fiscal  1999
declined  46 percent to  $1,517,960  compared to  $2,790,496  for the year ended
March 31, 1998. The decrease in contract services revenue is attributable to the
Company's  focus on executing  sponsored  development  programs  that results in
commercial production opportunities.
<PAGE>

Product sales during fiscal 2000 increased 32 percent to $18,894,923 compared to
$14,280,458  for the year ended  March 31,  1999.  The  increase  in the current
fiscal  year over last  fiscal  year is due,  to an  expanded  customer  base at
Franklin and  improved  order volume from  existing  customers at Unique  Power.
Product  sales during  fiscal 1999 rose eleven fold to  $14,280,458  compared to
$1,274,236  for the year ended  March 31,  1998.  The  increase  in fiscal  1999
product  sales over the  comparable  fiscal 1998 amount is  attributable  to the
acquisition of Aerocom Industries, Inc. and Franklin and internal revenue growth
at these entities subsequent to their acquisition.

Consolidated  gross  profit  margins for fiscal 2000  increased  to 15.4 percent
compared to a margin of 8.2 and 11.0  percent for years ended March 31, 1999 and
1998,  respectively.  Gross  profit on contract  services  was 23.7  percent for
fiscal 2000  compared  to 3.0 and 5.6  percent for fiscal 1999 and fiscal  1998,
respectively.  The  improvement  in  contract  services  margins for fiscal 2000
versus  fiscal  1999 is  attributable  to  reduced  levels of cost  overruns  on
development programs.  The decrease in contract services margins for fiscal 1999
versus  fiscal 1998 is  attributable  to project cost overruns and lower average
billing rates.  Gross profit margins on product sales were 14.6 percent compared
to 8.7 and 23.1 percent in fiscal 1999 and 1998,  respectively.  The increase in
margins  on  product  sales in  fiscal  2000  versus  fiscal  1999 is  primarily
attributable  to higher  levels of revenue  resulting in improved  absorption of
overhead  costs.  The  decrease in product  sales  margins in fiscal 1999 versus
fiscal 1998 is primarily  attributable to higher levels of depreciation  charges
on manufacturing  equipment arising from the acquisition of Aerocom and Franklin
which are  charged to cost of  product  sales.  Depreciation  charged to cost of
product sales  amounted to $1,435,630,  $1,117,397,  and $96,444 in fiscal 2000,
1999 and 1998, respectively.

Research  and  development  expenditures  in fiscal  2000  declined  to $378,954
compared to $667,989 and $902,407  for fiscal 1999 and 1998,  respectively.  The
decrease in fiscal 2000 versus  fiscal 1999 is generally  attributable  to lower
levels of internally-funded  development activities. The decrease in fiscal 1999
versus  fiscal  1998  was   attributable  to  declining  levels  of  development
expenditures   on  the  product   launch  of  wheelchair   motors  for  Invacare
Corporation.

General and  administrative  expense for fiscal 2000 was $4,036,732  compared to
$3,461,161 and $2,121,340 for fiscal 1999 and 1998,  respectively.  The increase
in general and administrative  expenses in fiscal 2000 versus fiscal 1999 is due
to the accrual of  compensation  payable to the  Company's  former CEO under the
terms of his employment agreement and the write-off of an uncollectible  account
receivable from a customer. The increase in fiscal 1999 expenditures over fiscal
1998 is generally  attributable to the  consolidation  of additional  costs upon
completion of the acquisition of Franklin.

Write-down of  investments  for the fiscal year ended March 31, 2000  represents
charges resulting from the Company's  impairment of its investment in EV Global,
Unique Europa,  Taiwan UQM and a note  receivable  from WED. See also "Financial
Condition"  above and  "Item 8  Financial  Statements"  notes 6, 7, and 8 to the
consolidated financial statements below.

Interest  income for fiscal 2000  declined to $59,369  compared to $111,365  and
$191,186  in fiscal  1999 and 1998,  respectively.  The  decrease in fiscal 2000
versus fiscal 1999 and fiscal 1999 versus fiscal 1998 is  attributable  to lower
levels of cash and cash  equivalents  throughout each fiscal year as compared to
the prior year.

Interest  expense rose to $483,298  during  fiscal 2000 compared to $338,396 and
$96,073  for fiscal  1999 and 1998,  respectively.  The  increase in fiscal 2000
versus fiscal 1999 is  attributable  to higher  levels of borrowings  throughout
fiscal 2000 on the Company's lines-of-credit. The increase in fiscal 1999 versus

<PAGE>

fiscal  1998 is  attributable  to the  consolidation  of  Franklin  and  Aerocom
subsequent  to fiscal  1998 and  higher  levels  of term  debt at  Unique  Power
Products and Franklin arising from significant capital expenditures at each unit
for facility and equipment.

Equity in loss of Taiwan joint  venture  declined to $186,538 for the year ended
March 31, 2000  compared to $417,801  and $246,648 for the years ended March 31,
1999 and 1998, respectively.  The decrease for fiscal 2000 versus fiscal 1999 is
due to the Company's write-down of its investment in Taiwan UQM at September 30,
1999 at which time it ceased  recording  its  pro-rata  shares of the  operating
losses of Taiwan UQM. The  increase in fiscal 1999 versus  fiscal 1998 is due to
expanded staffing and operations at Taiwan UQM.

Equity in loss of Germany joint venture was $93,632 for the year ended March 31,
2000.  The  increase  is  attributable   to  the  Company's   recording  of  its
proportionate  share of losses incurred by Unique Europa prior to the write-down
in its investment in Unique Europa at September 30, 1999.

Liquidity and Capital Resources

The Company's cash balances and liquidity throughout the fiscal year ended March
31, 2000 were  adequate to meet  operating  needs.  For the year ended March 31,
2000 net cash used by operations was  $1,744,746  compared to $2,334,761 for the
comparable  prior year.  The  improvement is primarily  attributable  to reduced
levels of cash used to fund operating losses. Cash used by investing  activities
for the year ended March 31, 2000 amounted to $1,015,393  compared to $8,385,291
for the prior fiscal year. The decrease is  attributable  to the  acquisition of
Franklin  Manufacturing  Company,  the construction of a manufacturing  plant in
Frederick,  Colorado  and related  equipment  purchases  during the prior fiscal
year.  The  Company's  cash  requirements  throughout  the  period  were  funded
primarily through the sale of common stock to investors,  cash received upon the
exercise of  outstanding  common stock  warrants and options,  and borrowings on
available bank facilities.

During the second quarter the Company  wrote-down  its  investments in EV Global
and its related  investment in WED,  Unique Europa and Taiwan UQM as a result of
its evaluation of each investment's  potential to achieve profitable  operations
over the near term and the  Company's  ability to recover the carrying  value of
its  investment.  Subsequent  to the end of the fiscal year the Company sold its
ownership  and all other rights  relating to its  interest in Unique  Europa for
$400,000  in  cash.  No gain or loss  resulted  from the  Company's  sale of its
interest in Unique  Europa.  The Company has no future  funding  obligations  to
either EV Global or WED.  Pursuant to the terms of the Joint  Venture  Agreement
governing the  operations of Taiwan UQM upon the unanimous vote of the directors
of Taiwan UQM the  shareholders  of Taiwan UQM may be  obligated  to  contribute
additional  capital.  The Company  holds two seats on the board of  directors of
Taiwan UQM and therefore has the ability to restrict or eliminate future capital
calls by Taiwan  UQM.  Although  the  Company  cannot be required to fund future
capital  calls by  Taiwan  UQM,  it could  suffer a  dilution  of its  ownership
interest in the event of the sale of additional equity by Taiwan UQM to others.

Unique Power has a line-of-credit  facility with a commercial bank in the amount
of $750,000 which is scheduled for renewal in October 2000. At March 31, 2000 no
amount was drawn against this  facility.  All financing of Unique Power has been
unconditionally guaranteed by Unique as the parent entity.

Franklin  has a  line-of-credit  with a  commercial  bank in the  amount of $2.5
million  which is  scheduled  for renewal in August  2000.  At March 31, 2000 no

<PAGE>

amount was drawn  against  this  facility.  All  financing  of Franklin has been
unconditionally guaranteed by Unique as the parent entity.

The  Company  believes  that  its  existing  cash  balances  and  existing  bank
lines-of-credit are sufficient to meet its operating capital requirements for at
least the next twelve months,  exclusive of acquisition financing  requirements.
For the longer-term, the Company expects to continue its strategy of growing its
business  through  expanding  its product  line of permanent  magnet  motors and
controllers,  seeking strategic alliances to accelerate the commercialization of
its technology and pursuing synergistic and accretive acquisitions.  The Company
expects to finance its future  growth from existing  cash  resources,  cash flow
from  operations,  if any, and through the issuance of equity or debt securities
or a  combination  thereof.  There  can,  however,  be no  assurance  that  such
financing or capital will be available on terms  acceptable  to the Company.  In
the event  financing  or  capital  for  future  growth as  envisioned  under the
Company's  strategy is not  available,  the Company  will modify its strategy to
operate on existing cash balances, cash flow from operations, and available bank
facilities.

Quantitative and Qualitative Disclosures about Market Risk

Market risk is the potential  loss arising from adverse  changes in market rates
and prices,  such as foreign  currency  exchange and interest rates. The Company
does not use financial  instruments to any degree to manage these risks and does
not  hold or  issue  financial  instruments  for  trading  purposes.  All of the
Company's  product sales, and related  receivables are payable in U.S.  dollars.
The Company is subject to interest rate risk on its bank  lines-of-credit  which
have variable  interest  rates,  however,  no amounts were  outstanding on these
lines at  March  31,  2000.  Interest  rates on  long-term  debt are  fixed  and
approximate current market rates as of March 31, 2000.





<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,  2000  and  1999,  and  the  related
consolidated  statements of operations,  stockholders'  equity and comprehensive
income  (loss),  and cash flows for each of the years in the  three-year  period
ended  March  31,  2000.  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 38.25 percent owned
investee  company).  The  Company's  investment  at March 31, 1999 in Taiwan UQM
Electric  Co., Ltd. was  $1,595,432,  and for the years ended March 31, 1999 and
1998 the Company  recognized  equity in the losses of Taiwan UQM  Electric  Co.,
Ltd. of $417,801 and $246,648,  respectively. 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 years ended March 31, 1999 and 1998 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  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, 2000 and 1999, and the results of their  operations
and their cash flows for each of the years in the three-year  period ended March
31, 2000, in conformity with generally accepted accounting principles.



                                     KPMG LLP


Denver, Colorado
May 8, 2000
<PAGE>
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Consolidated Balance Sheets



                                                March 31,             March 31,
Assets                                            2000                  1999

Current assets:
   Cash and cash equivalents                 $  2,085,115             1,537,453
   Accounts receivable (note 15)                2,821,894             2,601,994
   Costs and estimated earnings in excess
     of billings on uncompleted contracts
     (note 3)                                     329,111               173,457
   Inventories (note 4)                         3,120,279             2,787,994
   Prepaid expenses                               192,492               248,441
   Other                                          400,068               340,658

           Total current assets                 8,948,959             7,689,997

Property and equipment, at cost:
   Land (notes 5 and 10)                          517,080               444,480
   Building (notes 5 and 10)                    2,678,525             2,675,763
   Molds                                          102,113               102,113
   Transportation equipment                       146,386               195,890
   Machinery and equipment (note 10)           10,462,893            10,098,430
                                               13,906,997            13,516,676
   Less accumulated depreciation               (5,365,304)           (3,643,341)

           Net property and equipment           8,541,693             9,873,335

Investment in Taiwan joint venture (note 6)          -                1,595,432

Investment in EV Global (note 7)                     -                1,000,000

Patent and trademark costs, net of
  accumulated amortization of $125,078
  and $90,869                                     731,282               686,195

Goodwill, net of accumulated amortization
  of $656,696 and $324,318 (note 2)             5,995,463             6,327,841

Other assets                                       40,446                33,778

                                             $ 24,257,843            27,206,578

                                                                     (Continued)




<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Consolidated Balance Sheets, Continued



                                                March 31,             March 31,
Liabilities and Stockholders' Equity              2000                  1999

Current liabilities:
   Accounts payable                          $  1,379,316             2,244,144
   Other current liabilities (note 9)             845,462               952,498
   Current portion of long-term
     debt (note 10)                               972,123               928,701
   Revolving line-of-credit (note 10)                -                1,100,000
   Billings in excess of costs and
     estimated earnings on uncompleted
     contracts (note 3)                            79,499                69,393

          Total current liabilities             3,276,400             5,294,736

Long-term debt, less current portion
  (note 10)                                     3,422,459             4,396,127

          Total liabilities                     6,698,859             9,690,863

Minority interest in consolidated
  subsidiary (note 5)                             413,066               399,591

Stockholders' equity (notes 12 and 13):
   Common stock, $.01 par value, 50,000,000
     shares authorized; 17,194,192 and
     16,222,932 shares issued                     171,942               162,230
   Additional paid-in capital                  49,382,877            43,412,390
   Accumulated deficit                        (32,024,601)          (25,552,794)
   Accumulated other comprehensive income        (384,300)             (451,639)
   Notes receivable from officers                    -                 (454,063)

          Total stockholders' equity           17,145,918            17,116,124

Commitments (notes 6, 10, 17, and 19)




                                             $ 24,257,843            27,206,578


See accompanying notes to consolidated financial statements.


<PAGE>
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Consolidated Statements of Operations




                                            Year       Year          Year
                                           Ended       Ended        Ended
                                         March 31,    March 31,    March 31,
                                           2000         1999         1998
Revenue (note 15):
   Contract services                  $  1,702,937    1,517,960    2,790,496
   Product sales                        18,894,923   14,280,458    1,274,236
                                        20,597,860   15,798,418    4,064,732

Operating costs and expenses:
   Costs of contract services            1,300,052    1,471,827    2,635,599
   Costs of product sales               16,133,891   13,033,930      980,034
   Research and development                378,954      667,989      902,407
   General and administrative            4,036,732    3,461,161    2,121,340
   Amortization of goodwill                332,377      308,103       16,215
   Write down of investments             4,104,628         -            -
   Write-down of inventory                    -            -         416,736
                                        26,286,634   18,943,010    7,072,331

           Operating loss               (5,688,774)  (3,144,592)  (3,007,599)

Other income (expense):
   Interest income                          59,369      111,365      191,186
   Interest expense                       (483,298)    (338,396)     (96,073)
   Equity in loss of Taiwan joint
     venture (note 6)                     (186,538)    (417,801)    (246,648)
   Equity in loss of Germany joint
     venture (note 8)                      (93,632)        -            -
   Minority interest share of earnings
     of consolidated subsidiary            (80,823)     (72,596)     (70,905)
   Other                                     1,889      107,950      (36,321)
                                          (783,033)    (609,478)    (258,761)

           Net loss                   $ (6,471,807)  (3,754,070)  (3,266,360)

           Net loss per common share -
             basic and diluted (note 1o)     (.39)      (.24)        (.23)

Weighted average number of shares
  of common stock outstanding           16,573,391   15,960,966    13,924,434


See accompanying notes to consolidated financial statements.


<PAGE>
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Consolidated Statements of Stockholders' Equity and Comprehensive Income (Loss)

<TABLE>

                                      Number of                                 Accumulated    Notes
                                       common             Additional   Accumu-     other     receivable             Total
                                       shares    Common    paid-in     lated   comprehensive  due from  Treasury stockholders'
                                       issued     stock    capital     deficit     loss       officers   stock      equity
<CAPTION>
<S>                                  <C>         <C>      <C>        <C>            <C>       <C>          <C>     <C>

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

Issuance of common stock in private
  offerings, net of offering
  costs of $341,202 (note 11)           626,875    6,269   4,667,528        -          -         -          -      4,673,797
Issuance of common stock upon
  exercise of employee and
  directors options                     226,332    2,263   1,081,888        -          -         -          -      1,084,151
Issuance of common stock upon
  exercise of warrants                  918,026    9,180   1,923,195        -          -         -          -      1,932,375
Issuance of common stock under
  employee stock purchase plan            7,523       75      23,963        -          -         -          -         24,038
Issuance of common stock for services     4,000       40      28,480        -          -         -          -         28,520
Compensation expense accrued for
  issuance of common stock options
  granted for services                     -        -         19,000        -          -         -          -         19,000
Issuance of common stock for
  acquisition of Aerocom                371,555    3,716   3,035,602        -          -         -          -      3,039,318
Issuance of common stock for
  investment in EV Global               200,000    2,000     998,000        -          -         -          -      1,000,000
Comprehensive income (loss):
   Net loss                                -        -           -      (3,266,360)     -         -          -     (3,266,360)
   Translation adjustment                  -        -           -           -      (386,689)     -          -       (386,689)
Total comprehensive income (loss)                                                                                 (3,653,049)

Repayment of officers' notes             (2,654)     (27)    (19,380)       -          -       27,590       -          8,183

Balances at March 31, 1998           15,394,621  153,946  38,852,446   (21,798,724) (420,480)  (56,056)     -     16,731,132

Issuance of common stock in private
  offerings, net of offering
  costs of $33,671 (note 11)            123,125    1,231     950,098         -          -         -         -        951,329
Issuance of common stock upon
  exercise of employee and directors
  options                               329,339    3,294     942,316         -          -     (794,341)     -        151,269
Issuance of common stock upon
  exercise of warrants                   68,600      686     297,689         -          -         -         -        298,375
Issuance of common stock under
  employee stock purchase plan            3,120       31      15,089         -          -         -         -         15,120
Issuance of common stock for services    17,845      179      91,303         -          -         -         -         91,482
Compensation expense accrued for
  issuance of common stock options
  granted for services                     -        -         19,000         -          -         -         -         19,000
Issuance of common stock for
  acquisition of Franklin               286,282    2,863   2,244,449         -          -         -         -      2,247,312
Comprehensive income (loss):
   Net loss                                -        -           -      (3,754,070)      -         -         -     (3,754,070)
   Translation adjustment                  -        -           -            -       (31,159)     -         -        (31,159)
Total comprehensive income (loss)                                                                                      (3,785,229)

Repayment of officers' notes               -        -           -            -          -      396,334      -        396,334

Balances at March 31, 1999           16,222,932 $162,230  43,412,390  (25,552,794)  (451,639) (454,063)     -     17,116,124

</TABLE>
                                                                    (Continued)


<PAGE>
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Consolidated  Statements  of  Stockholders'  Equity  and  Comprehensive  Income,
Continued


<TABLE>

                                   Number of                                 Accumulated    Notes
                                    common             Additional   Accumu-     other     receivable             Total
                                    shares    Common    paid-in     lated   comprehensive  due from  Treasury stockholders'
                                    issued     stock    capital     deficit     loss       officers   stock      equity
<CAPTION>
<S>                                   <C>        <C>      <C>           <C>       <C>        <C>        <C>       <C>

Issuance of common stock
  in private offerings, net
  of offering costs $11,235           88,900     889      487,939       -          -         -          -         488,828
Issuance of common stock upon
  exercise of employee
  and directors options              204,970   2,050      774,671       -          -         -        (3,062)     773,659
Issuance of common stock upon
  exercise of warrants               493,087   4,931    3,771,728       -          -         -          -       3,776,659
Issuance of common stock under
  employee stock purchase plan         9,072      91       33,730       -          -         -          -          33,821
Compensation expense accrued for
  issuance of common stock
  options granted for services          -        -         46,368       -          -         -          -          46,368
Issuance of common stock for
  investment in Germany joint
  venture                            208,333    2,083   1,147,811       -          -         -          -       1,149,894
Adjustment in purchase price of
  Franklin and Aerocom                  -        -           -          -          -         -      (167,395)    (167,395)
Comprehensive income (loss):
   Net loss                             -        -           -    (6,471,807)      -         -          -      (6,471,807)
   Translation adjustment               -        -           -          -        67,339      -          -          67,339
Total comprehensive income (loss)                                                                                      (6,404,468)

Retirement of treasury shares        (33,102)    (332)   (291,760)      -          -         -       292,092         -
Repayment of officers' notes            -        -           -          -          -      454,063   (121,635)     332,428

Balances at March 31, 2000        17,194,192 $171,942  49,382,877 (32,024,601) (384,300)     -          -      17,145,918

</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE>
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Consolidated Statements of Cash Flows


<TABLE>

                                                            Year          Year          Year
                                                            Ended        Ended         Ended
                                                           March 31,    March 31,     March 31,
                                                             2000         1999          1998
<CAPTION>
<S>                                                    <C>            <C>          <C>

Cash flows used by operating activities:
   Net loss                                            $ (6,471,807)  (3,754,070)  (3,266,360)
   Adjustments to reconcile net loss to
     net cash used by operating activities:
        Write-down of investments                         4,104,628         -            -
        Depreciation and amortization                     2,120,493    1,825,323      545,295
        Minority interest share of earnings of
          consolidated subsidiary                            80,823       72,596       70,905
        Non-cash compensation expense for
          common stock, stock options and
          warrants issued for services                       46,368      110,482       47,520
        Equity in loss of Taiwan joint venture              186,538      417,801      246,648
        Equity in loss of Germany joint venture              93,632         -            -
        Loss (gain) on sale of property and equipment        (1,875)        -          32,180
        Write-off of patent costs                              -            -          18,731
        Other                                               (16,241)      (8,373)         -
        Change in operating assets and liabilities:
           Accounts receivable and costs and
             estimated earnings in excess of
             billings on uncompleted contracts             (452,207)     231,768     (609,588)
           Inventories                                     (423,027)  (1,444,538)     331,294
           Prepaid expenses and other current assets        (50,313)    (361,498)     (41,084)
           Accounts payable and other current liabilities  (971,864)     506,805     (395,256)
           Billings in excess of costs and estimated
             earnings on uncompleted contracts               10,106       68,943     (659,357)

               Net cash used by operating activities     (1,744,746)  (2,334,761)  (3,679,072)

Cash used by investing activities:
   Cash paid for acquisition of subsidiary, net                -      (3,848,640)    (337,702)
   Acquisition of property and equipment                   (483,716)  (4,399,114)    (703,562)
   Increase in patent and trademark costs                   (79,296)    (137,537)    (110,411)
   Proceeds from sale of property and equipment              63,327         -          25,250
   Investment in other long-term assets                    (515,708)        -            -
               Net cash used by investing activities     (1,015,393)  (8,385,291)  (1,126,425)

Cash flows provided by financing activities:
   Proceeds from borrowings                              10,898,494   10,827,358       -
   Repayment of debt                                    (12,928,740)  (7,320,466)    (212,440)
   Repayment of note payable for investment
     in Taiwan joint venture                                   -            -      (1,345,285)
   Proceeds from sale of common stock, net                  488,828      951,329    4,673,797
   Issuance of common stock upon exercise
     of employee options, net of note repayments          1,106,087      547,603    1,092,334
   Issuance of common stock under employee
     stock purchase plan                                     33,821       15,120       24,038
   Issuance of common stock upon exercise of warrants     3,776,659      298,375    1,932,375
   Distributions paid to holders of minority interest       (67,348)     (67,347)     (67,346)
               Net cash provided by financing activities  3,307,801    5,251,972    6,097,473

Increase (decrease) in cash and cash equivalents            547,662   (5,468,080)   1,291,976
Cash and cash equivalents at beginning of period          1,537,453    7,005,533    5,713,557

Cash and cash equivalents at end of period             $  2,085,115    1,537,453    7,005,533

Interest paid in cash during the period                $    488,601      314,983      129,599

</TABLE>
                                                                     (Continued)

<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Consolidated Statements of Cash Flows, Continued



Non-cash investing and financing transactions:


Translation adjustments of $(67,339),  $31,159,  $386,689, were recorded for the
years ended March 31, 2000, 1999 and 1998, respectively.

In February  2000,  the Company  accepted  10,675  shares of its $0.01 par value
common  stock with a fair market  value of $90,742 in  satisfaction  of purchase
price  adjustments   arising  subsequent  to  the  acquisition  of  Franklin  in
accordance with the provisions of the Franklin Purchase Agreement.

In March 2000,  the Company  accepted 7,762 shares of its $0.01 per share common
stock with a fair market  value of $76,653 in  satisfaction  of  purchase  price
adjustments  arising subsequent to the acquisition of Aerocom in accordance with
the provisions of the Aerocom Purchase Agreement.

In May 1999, the Company acquired 33.6 percent  ownership  interest in a Germany
joint venture. Pursuant to this transaction the Company issued 208,333 shares of
common stock with an aggregate value of $1,149,894 in exchange for its ownership
interest.

In April 1998, the Company  purchased all of the  outstanding  stock of Franklin
Manufacturing  Company for $4 million cash and 286,282  shares of the  Company's
common stock (see note 2).

In January 1998, the Company  purchased all of the outstanding  stock of Aerocom
Industries,  Inc. for $337,702 cash and 371,555  shares of the Company's  common
stock (see note 2).

In June 1997, the Company entered into a stock purchase agreement with EV Global
Motors Company (EVG) whereby the Company  exchanged 200,000 shares of its common
stock for 400,000 shares of EVG (see note 7).


<PAGE>

In  accordance  with the  provisions of the  Company's  stock option plans,  the
Company  accepts as payment of the exercise  price or as repayment of promissory
notes  from  officers  issued  under  the  option  plans,  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 or promissory  note repayment.  For the
years ended March 31, 2000 and 1999,  the Company issued 5,000 and 15,870 shares
of  common  stock  for an  aggregate  exercise  price  of  $3,750  and  $15,870,
respectively,  for which the  Company  received  355 and 2,308  shares of common
stock as payment for the exercise price.  In addition,  for the year ended March
31, 2000 the Company  received  14,310 shares of common stock with a fair market
value of $121,635 in  repayment  of  promissory  notes  issued  under the option
plans.  The  shares  received  were  recorded  at cost  as  treasury  stock  and
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 year ended March 31,  1999,  the Company  issued
267,362  shares of common stock for an aggregate  exercise price of $794,341 for
which the Company received  promissory notes for the same amount.  There were no
notes  receivable  exchanged  for the exercise of options  during the year ended
March 31, 2000 and March 31, 1998.

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)  Description of Business

          Unique Mobility,  Inc. and subsidiaries  (the "Company") is engaged in
          the research,  development and  commercialization  of permanent magnet
          electric  motors and the  electronic  controls  for such  motors,  the
          grinding and manufacturing of high precision gears and the manufacture
          and  sale  of  electronic  circuit  board  assemblies,   wire  harness
          assemblies and other  electronic  products.  The Company's  revenue is
          derived  primarily from product sales to customers in the  automotive,
          agriculture,  telecommunications,  industrial,  medical and  aerospace
          markets,  and from contract  research and  development  services.  The
          Company is impacted by other factors such as the continued  receipt of
          contracts from  industrial and  governmental  parties,  its ability to
          protect and maintain the  proprietary  nature of its  technology,  its
          continued  product and  technological  advances and the ability of the
          Company and its partners to commercialize its products and technology.

     (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.

          Investments in affiliated  entities in which the Company has less than
          a  50  percent   ownership   interest  and  the  ability  to  exercise
          significant  influence are accounted for by the equity  method.  Under
          the equity method,  the investment is originally  recorded at cost and
          subsequently  adjusted to  recognize  the  Company's  share of the net
          income or losses of the affiliates.  Recognition of any such losses is
          generally  limited  to the  extent  of the  Company's  investment  in,
          advances to, commitments and guarantees for the investee.

          Other  investments,  in which  the  Company  has a  minimal  ownership
          interest and does not exercise significant  influence,  are carried at
          cost.

          The minority interests as of March 31, 2000 and 1999, consisted of the
          other  stockholders'  ownership  interests  in  a  subsidiary  of  the
          Company. See Note 5.

     (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.



<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued



     (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  buildings,
          which are  depreciated  over 31 years.  Maintenance  and  repairs  are
          charged to expense as incurred.

     (f)  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 costs to maintain the patents in
          good standing.  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.

     (g)  Goodwill

          The excess of the  consideration  exchanged over the fair value of the
          net  assets   obtained  in   acquisitions  is  recorded  as  goodwill.
          Amortization of goodwill is calculated using the straight-line  method
          over a period of 20 years.

     (h)  Long-Lived Assets

          The Company  accounts for  long-lived  assets in  accordance  with the
          provisions 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 be reviewed for impairment whenever
          events or changes in  circumstances  indicate that the carrying amount
          of an asset may not be recoverable.

     (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.
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued



          Contract  costs include all direct  materials,  subcontract  and labor
          costs and other indirect costs.  General and administrative  costs are
          charged  to  expense  as  incurred.  At the time a loss on a  contract
          becomes known, the entire amount of the estimated 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.

     (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 and operating  loss and tax credit  carryforwards.  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.  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 or stock  options 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  or the fair  market  value of the stock
          option determined using an appropriate option pricing model.

     (m)  Foreign Currency Translation

          The net assets of foreign investments of the Company are 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  until  realized.   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)  Comprehensive Loss

          Comprehensive  loss consists of net loss and other  comprehensive loss
          items  which  under  generally  accepted  accounting   principles  are
          excluded  from net loss but included as a component  of  stockholders'
          equity. For the years ended March 31, 2000 and 1999, accumulated other
          comprehensive  loss consisted  entirely of unrealized foreign currency
          losses.

     (o)  Loss Per Common Share

          Statement  of Financial  Accounting  Standards  No. 128,  Earnings per
          Share ("SFAS 128"),  requires  presentation of both basic earnings per
          share and diluted  earnings  per share.  Basic  earnings  per share is
          computed by dividing  income or loss available to common  shareholders
          by the weighted average number of common shares outstanding during the
          periods presented.  Diluted earnings per share is computed by dividing
          income or loss available to common shareholders by all outstanding and
          dilutive  potential  shares during the periods  presented,  unless the
          effect is antidilutive.

     (p)  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.

     (q)  Reclassifications

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

(2)  Acquisitions

          On April 30, 1998, the Company acquired all of the outstanding  common
          stock of Franklin  Manufacturing  Company  ("Franklin") for $4 million
          cash and 286,282 shares of the Company's common stock. The total value
          of the  consideration  exchanged was  $6,247,316.  The acquisition has
          been  accounted for using the purchase  method of  accounting  and the
          results of Franklin's  operations have been included with those of the
          Company since April 30, 1998.

          On January 16,  1998,  the  Company  acquired  all of the  outstanding
          common  stock of Aerocom  Industries,  Inc.  ("Aerocom")  for cash and
          shares  of  the  Company's  common  stock  totaling  $3,377,020.   The
          acquisition  has been  accounted  for  using  the  purchase  method of
          accounting and the results of Aerocom's  operations have been included
          with those of the Company  since  January 16, 1998.

<PAGE>

UNIQUE  MOBILITY,INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued


(3)  Costs and Estimated Earnings in Excess of Billings on Uncompleted Contracts
     and  Billings  in Excess of Costs and  Estimated  Earnings  on  Uncompleted
     Contracts

     At March 31, 2000,  the estimated  period to complete  contracts in process
     ranged  from  1  to  17  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,
     2000, within eighteen months.

     The  following summarizes contracts in process at March 31, 2000, and 1999:

                                                 March 31,       March 31,
                                                   2000            1999

         Costs incurred on uncompleted
         contracts                              $ 645,425        1,457,955
         Estimated earnings                       180,293          285,804
                                                  825,718        1,743,759
       Less billings to date                     (576,106)      (1,639,695)

                                                $ 249,612          104,064
         Included in the accompanying balance
         sheets as follows:
           Costs and estimated earnings
             in excess of billings on
             uncompleted contracts              $ 329,111          173,457
           Billings in excess of costs and
             estimated earnings on
             uncompleted contracts                (79,499)         (69,393)

                                                $ 249,612          104,064

(4)    Inventories

       Inventories at March 31, 2000, and 1999 consist of:

                                                 March 31,       March 31,
                                                   2000            1999

          Raw materials                        $ 2,446,779       2,205,042
          Work in process                          627,131         452,653
          Finished products                         46,369         130,299

                                               $ 3,120,279       2,787,994


<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued



(5)  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 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.

(6)  Investment in Taiwan Joint Venture

     The Company has a 38-1/4 percent  interest in a joint  venture,  Taiwan UQM
     Electric Co., Ltd.  ("Taiwan  UQM"),  with Kwang Yang Motor Co.,  Ltd., and
     Turn-Luckily Technology Co., Ltd.

     Since its inception,  Taiwan UQM has incurred substantial  operating losses
     and the Company has  reported  its  proportionate  share of such losses and
     foreign exchange rate  fluctuations as a reduction in the recorded value of
     its investment in Taiwan UQM under the equity method of accounting. Because
     of continued  operating losses at September 30, 1999 the Company  evaluated
     this investment relative to its potential to achieve profitable  operations
     over the  near-term  and the  Company's  potential  to recover the recorded
     value of its  investment.  Based on its assessment of these factors and the
     uncertainty of recovering its investment, on September 30, 1999 the Company
     wrote down the carrying value of this  investment  from $1,476,233 to zero.
     Consequently,  the  Company  discontinued  recording  its  share of the net
     losses of the joint venture subsequent to the date of the write-down. Prior
     to the write  down the  Company  reported  its  proportionate  share of the
     losses of Taiwan UQM under the equity method of  accounting.  Due to timing
     considerations,  the financial  position and results of operations  for the
     Taiwan  joint  venture  have been  included in the  Company's  consolidated
     financial statements on a three-month time lag.

     The cumulative foreign currency translation adjustments with respect to the
     Taiwan joint  venture  were  calculated  using the average  rates in effect
     during the six months ended September 30, 1999 and the years ended December
     31, 1998 and 1997,  respectively,  and the exchange  rates in effect at the
     respective September 30, 1999 and December 31, 1998 balance sheet dates.

<PAGE>
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued


     Summarized unaudited financial information for Taiwan UQM is as follows:

                                                    December 31,   December 31,
       Financial Position                               1999           1998

       Current assets                               $   663,362        607,889
       Noncurrent assets-land, property
         and equipment                                6,757,107      6,647,023
              Total assets                            7,420,469      7,254,912

       Current liabilities                            1,696,809        682,073
       Noncurrent liabilities                         2,373,091      2,401,775
       Stockholders' equity                           3,350,569      4,171,064

              Total liabilities and equity          $ 7,420,469      7,254,912

                                         Year           Year           Year
                                        Ended          Ended          Ended
                                     December 31,   December 31,   December 31,
       Results of Operations            1999           1998           1997

       Revenue                      $   871,071        127,638           663
       Expenses                      (1,905,178)    (1,219,928)     (597,278)

       Net loss                     $(1,034,107)    (1,092,290)     (596,615)

(7)  Investment in EV Global

     The Company owns 400,000  shares of EV Global  Motors  Company (EVG) common
     stock. EVG sells electric bicycles.

     In  June  1999,  the  Company   acquired  an   approximately   9.5  percent
     participation  in  a  $5.225  million   convertible  note  receivable  from
     Windermere Eco Development Limited, a Bahamian company ("WED") held by EVG,
     for $500,000 in cash. WED is an  environmentally  sensitive  development of
     Windermere  Island in the  Bahamas.  The entire  loan is  convertible  into
     approximately  50.4  percent  of  the  total  outstanding  equity  of  WED.
     Therefore,  if EVG converts the loan, Unique will have the right to receive
     approximately 4.82 percent of the equity of WED.

     Because of  continuing  operating  losses  reported by these  investees  at
     September  30, 1999 the Company  evaluated  its  investment  in EVG and WED
     relative  to their  potential  to achieve  profitable  operations  over the
     near-term and the Company's  potential to recover the carrying value of its
     investment in each Company.  Based on its assessment of these  factors,  on
     September  30, 1999 the Company  wrote down the carrying  value of EVG from
     $1,000,000  to zero and the carrying  value of its interest in the WED note
     receivable from $515,708 to zero.



<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued



(8)  Investment in Germany Joint Venture

     In May, 1999, the Company and three other entities  formed a German private
     company, Unique Mobility Europa GmbH (Europa), to develop and manufacture a
     battery-electric   cargo  and  passenger  vehicle.   Europa  was  initially
     capitalized with DM50,000 cash (US $9,573) and a contribution to surplus of
     625,000 shares of Unique Mobility, Inc. common stock, of which 208,333 were
     newly issued shares contributed by the Company in exchange for 33.6 percent
     ownership interest in Europa.

     On  October  8,  1999  the  Company  entered  into an  agreement  with  the
     Shareholder's  of  Europa  providing  for the  reduction  of its  ownership
     percentage to 5.9 percent.  As a result of this agreement and the Company's
     assessment  of the potential  for Europa to achieve  profitable  operations
     over the  near-term  and the  Company's  potential  to recover the carrying
     value of its  investment,  the Company wrote down the carrying value of its
     investment from $1,112,687 to zero at September 30, 1999.

     Subsequent to year end the Company sold its remaining ownership interest in
     Europa  for  $400,000  in  cash.  No gain or loss  was  recognized  on this
     transaction.

(9)  Other Current Liabilities

     Other current liabilities at March 31, 2000 and 1999, consist of:

                                                         March 31,    March 31,
                                                           2000         1999

       Accrued interest                                 $  21,360      28,623
       Accrued legal and accounting fees                   71,275      66,205
       Accrued payroll, consulting, personal property
         taxes and real estate taxes                      339,263     268,729
       Accrued material purchases                         327,828     285,722
       Other                                               85,736     303,219

                                                        $ 845,462     952,498

(10) Long-term debt

     Long-term debt at March 31, 2000 and 1999 consists of:

                                                         March 31,    March 31,
                                                           2000         1999
       Note payable to bank, payable in monthly
         installments with interest at 8.65%; matures
         July 2003; secured by land and building       $   871,675     903,338
       Note payable to bank, payable in monthly
         installments with interest at 9.1%; matures
         October 2007; secured by land and building        622,486     676,652


<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued



       Notes payable to bank, payable in monthly
         installments with interest at 8.5%; matures
         October 2001, April, May, October and
         December 2005; secured by equipment            1,190,456     1,451,242
       Note payable to bank, payable in monthly
         installments with interest at 8.125%; matures
         August 2001; secured by accounts receivable,
         inventory and equipment                          416,667       729,167
       Note payable to bank, payable in monthly
         installments with interest at 7.70%; matures
          March 2004; secured by equipment              1,240,545     1,500,000
       Note payable to bank, payable in monthly
         installments with interest at 9.50%; matures
         June 2006; secured by equipment                   52,753          -
       Note payable to commercial lender, payable in
         monthly installments with interest at 6.38%;
         matures October 1999                                -           50,648
       Capital lease obligation                              -           13,781
                Total long-term debt                    4,394,582     5,324,828
       Less current portion                               972,123       928,701

                Long-term debt, less current portion  $ 3,422,459     4,396,127

     Certain  of the above  loan  agreements  require  the  Company  to  achieve
     specific  financial and operating  requirements.  As of March 31, 2000, the
     Company was in compliance with all covenants.

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

                    2001                 $   972,123
                    2002                     769,990
                    2003                     617,317
                    2004                     666,847
                    2005                     351,385
                    Thereafter             1,016,920

                                         $ 4,394,582

     Lines of credit

     At March 31, 2000, the Company has lines of credit of $.75 million and $2.5
     million with no amount drawn against either facility. The $.75 million line
     of credit  expires in October 2000.  The $2.5 million line of credit is due
     on demand, but if no demand is made, it is due August 15, 2000. Interest on
     the lines of credit is payable  monthly at prime plus .75%  (9.75% at March
     31, 2000) and prime less .50% (8.50% at March 31, 2000), respectively. Both
     lines have various  covenants which limit the Company's  ability to dispose
     of assets,  merge with another  entity,  and pledge trade  receivables  and
     inventories as collateral. The Company is also required to maintain
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued



     certain  financial  ratios  as  defined  in  the  agreements.   Outstanding
     borrowings  under both lines of credit are secured by accounts  receivable,
     inventory and general  intangibles,  and are limited to certain percentages
     of eligible accounts receivable and inventory.

(11) 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:

                                           Year Ended   Year Ended  Year Ended
                                            March 31,    March 31,   March 31,
                                              2000          1999       1998

      Computed "expected" tax benefit     $(2,200,414) (1,276,384) (1,110,562)
      Increase (decrease) in taxes
        resulting from:
            Amortization of goodwill
              not deductible for tax          107,286      97,915        -
            Expiration of net operating
              loss carry-forwards              76,822      89,369        -
            Increase in valuation
              allowance for net deferred
              tax assets                    2,160,758     906,668   1,015,804
            Other, net                       (144,452)    182,432      94,758

      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,   March 31,
                                                         2000        1999
       Deferred tax assets:
          Research and development credit
            carryforwards                            $    78,568      97,565
          Net operating loss carryforwards             9,631,018   8,617,380
          Write-down of investments                    1,070,460        -
                    Total deferred tax assets         10,780,046   8,714,945

       Less valuation allowance                       10,686,792   8,513,003

               Net deferred tax assets, net of
                  valuation allowance                     93,254     201,942
               Deferred tax
                  liabilities - property and
                  equipment                               93,254     201,942

               Net deferred tax
                  liability                         $       -           -

<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued


     As of March 31,  2000,  the Company had net  operating  loss  carryforwards
     (NOL) of  approximately  $28.0 million for U.S.  income tax purposes  which
     expire in varying amounts through 2019.  Approximately  $2.5 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. 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
     the  Company  fails  to  satisfy  the  continuity  of  business  enterprise
     requirement for the two-year period following an ownership change.

(12) Stockholders' Equity

     During the year ended  March 31,  2000,  the  Company  completed  a private
     placement of 88,900 shares of common stock with an institutional  investor.
     Cash proceeds to the Company, net of offering costs was $488,828.

     During the year ended March 31,  1998,  the Company  completed  one private
     placement  with  institutional  and  private  investors  of  750,000  units
     consisting of one share of the Company's  common stock and one warrant at a
     price of $8.00 per unit. Each warrant is exercisable  into one share of the
     Company's  common  stock at $8.00 per share and  expires two years from the
     date of issuance. Of the 750,000 units that were privately placed,  626,875
     were issued in March 1998 and the  remaining  123,125  were issued in April
     1998.

(13) Common Stock Options and Warrants

     Incentive and Non-Qualified Option Plans

     The  Company  has  reserved  5,104,000  shares  of  common  stock  for  key
     employees,   consultants   and  key  suppliers   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 options that may be granted to any
     eligible  employee  during the term of the 1982 and 1992 plans is 1,000,000
     options. 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.

<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued



     The following table summarizes activity under the plans:

                                               Shares Under    Weighted-Average
                                                  Option        Exercise Price

         Outstanding at March 31,1997             2,451,456         4.66
         Granted                                    601,000         7.88
         Exercised                                 (210,332)        4.75
         Forfeited                                  (13,772)        4.80

         Outstanding at March 31, 1998            2,828,352         5.34
         Granted                                    650,000         5.20
         Exercised                                 (331,647)        2.90
         Forfeited                                 (109,151)        7.68

         Outstanding at March 31, 1999            3,037,554         5.49
         Granted                                    495,000         8.31
         Exercised                                 (204,970)        3.79
         Forfeited                                  (96,190)        6.12

         Outstanding at March 31, 2000            3,231,394        $6.01

         Exercisable at March 31, 2000            2,183,315        $5.54

     The following  table presents  summarized  information  about stock options
     outstanding at March 31, 2000:

                            Options Outstanding             Options Exercisable
                                  Weighted      Weighted               Weighted
                  Number         Average       Average     Number      Average
    Range of    Outstanding      Remaining     Exercise  Exercisable   Exercise
Exercise Prices  at 3/31/00  Contractual Life   Price     at 3/31/00    Price

  $0.50 - 1.00       18,959      0.9 years      $0.75       18,959      $0.75
  $2.25 - 3.31      470,360      5.5 years      $3.03      470,360      $3.03
  $3.50 - 5.00    1,021,756      6.5 years      $4.26      651,979      $4.07
  $5.38 - 8.75    1,720,319      6.9 years      $7.93    1,042,017      $7.60
  $0.50 - 8.75    3,231,394      6.5 years      $6.01    2,183,315      $5.54

     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  500,000  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.


<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued



     The following table presents summarized activity under the plan:

                                            Shares Under        Weighted-Average
                                               Option            Exercise Price

         Outstanding March 31, 1997            141,333               $ 5.23
         Granted                                64,000                 7.13
         Exercised                             (16,000)                5.38

         Outstanding at March 31, 1998         189,333                 5.86
         Granted                                64,000                 5.06

         Outstanding at March 31, 1999         253,333                 5.66
         Granted                                 9,275                 4.25
         Forfeited                            (221,333)                5.59

         Outstanding at March 31, 2000          41,275               $ 5.68

         Exercisable at March 31, 2000          16,000               $ 6.44

     The following  table presents  summarized  information  about stock options
     outstanding for non-employee directors:

                              Options Outstanding           Options Exercisable
                                  Weighted      Weighted                Weighted
                   Number         Average       Average    Number       Average
    Range of     Outstanding      Remaining     Exercise Exercisable    Exercise
Exercise Prices   at 3/31/00  Contractual Life   Price    at 3/31/00     Price

  $4.25 - 6.00     25,275         8.8 years      $4.76      5,333        $5.06
  $6.25 - 7.13     16,000         7.4 years      $7.13     10,667        $7.13
  $4.25 - 7.13     41,275         8.3 years      $5.68     16,000        $6.44

     Statement  of  Financial  Accounting  Standards  No.  123,  Accounting  for
     Stock-Based  Compensation  ("FAS  123")  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
     adopting  the new fair value  method of  accounting  or continue to measure
     compensation  costs using the intrinsic value methods  prescribed by APB25.
     The Company  accounts for stock options  granted to employees and directors
     of the Company under the intrinsic  value method.  Stock options granted to
     non-employees  under the Company's 1992 Stock Option Plan are accounted for
     under the fair value method. Had the Company reported compensation costs as
     determined  by the fair value  method of  accounting  for option  grants to
     employees and directors,  net loss and net loss per common share would have
     been the pro forma amounts indicated in the following table:

<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued




                                     Year Ended     Year Ended      Year Ended
                                   March 31, 2000 March 31, 1999  March 31, 1998

     Net loss - as reported          $(6,471,807)    (3,754,070)   (3,266,360)
     Compensation expense - current
       period option grants             (163,069)      (129,406)     (821,800)
     Compensation expense - prior
       period option grants           (1,390,466)    (1,274,213)     (619,654)


     Net loss - pro forma            $(8,025,342)    (5,157,689)   (4,707,814)
     Net loss per common share -
       as reported                     $ (.39)          (.24)         (.23)
     Net loss per common share -
       pro forma                       $ (.48)          (.32)         (.34)

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

                                    Year Ended      Year Ended     Year Ended
                                  March 31, 2000  March 31, 1999 March 31, 1998

Expected volatility                   48.7%          48.3%          48.1%
Expected dividend yield                0.0%           0.0%           0.0%
Risk free interest rate                6.8%           5.4%           5.7%
Expected life of option granted     6 years        6 years        6 years
Fair value of options granted
  as computed under the Black
  Scholes option pricing models  $4.78 per share $2.74 per share $4.15 per share

     Pro forma net loss  reflects  only the fair value  compensation  expense of
     options  granted  since  November  1, 1995.  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.  Future pro forma compensation cost by
     fiscal year,  assuming no additional grants by the Company to employees and
     directors, is as follows:

                Fiscal Year           Pro Forma
                   Ended            Compensation
                 March 31,             Expense

                   2001              $1,304,217
                   2002              $1,171,983
                   2003              $  540,812
     Warrants

     As  discussed  in Note 12, the  Company  completed a private  placement  in
     fiscal  1998 of  750,000  units  consisting  of one  common  share  and one
     warrant.  Of the 750,000  units  privately  placed,  626,875 were issued in
     March 1998 and the  remaining  123,125  were issued in April 1998.  Also in
     connection  with the 1998  private  placement,  the  placement  agents were
     issued  warrants in March 1998, to acquire  176,588 shares of the Company's
     common stock at an exercise price of $8.00 per share.  The warrants  expire
     two years from the date of  issuance.  During March 2000,  warrants
<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued



     to acquire 436,212 shares of the Company's  common stock at $8.00 per share
     were  exercised  resulting in cash  proceeds to the Company of  $3,489,696.
     Warrants to purchase  299,375  shares of common  stock were  extended for a
     period of eighteen months at the fair value of such extension  resulting in
     cash proceeds to the Company of $78,151. In March 2000, warrants to acquire
     179,000 shares expired unexercised.

     In connection with the 1997 private  placement,  the placement  agents were
     issued  warrants to acquire  225,625  shares of the  Company's  stock at an
     exercise  price of $3.50 per share and warrants to acquire 50,000 shares at
     an exercise price of $4.20 per share.  The warrants expire three years from
     the date of issuance. No warrants were outstanding at March 31, 2000.

     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
     an exercise price of $4.75 per share, 38,100 shares of the Company's common
     stock at an  exercise  price of $5.00 per share,  and  50,000  shares at an
     exercise price of $4.25 per share. The warrants expire three years from the
     date of issuance. No warrants were outstanding at March 31, 2000.

     In connection with a 1995 private placement, the placement agent was issued
     warrants to acquire  150,000  shares of the  Company's  common  stock at an
     exercise price of $5.75 per share. The warrants expire three years from the
     date of issuance. No warrants were outstanding at March 31, 2000.

     The  Company  has  reserved  300,000  shares of common  stock for  issuance
     pursuant to a warrant  agreement with an investment  banking  company.  The
     warrants  were  exercisable  at a price of $6.00 per share  over a two year
     term. No warrants were outstanding at March 31, 2000.

(14) Alcan Royalty Agreement

     During 1994, the Company and Alcan Aluminium Limited ("Alcan")  executed an
     agreement in which Alcan  assigned to the Company all of its rights,  title
     and interests in certain motor technology  developed under a program funded
     by Alcan.  This  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.  For the years ended March 31, 2000,  1999 and 1998 the Company
     recorded  royalty  expense of $23,612,  $14,240 and $14,999,  respectively,
     under this agreement.


<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued



(15) Significant Customers

     The Company has  historically  derived  significant  revenue from a few key
     customers. The customers from which more than 10% of total revenue has been
     derived and the percentage of revenue is summarized as follows:

                                        Year Ended  Year Ended   Year Ended
                                         March 31,   March 31,    March 31,
                                           2000        1999         1998

       Customer A                       $ 4,434,454       -            -
                B                              -     3,108,929         -
                C                              -          -         707,771
                D                              -          -         571,924

                                        $ 4,434,454  3,108,929    1,279,695

       Percentage of revenue                 22%        20%          31%

     The significant  customer for the years ended March 31, 2000 and 1999, were
     customers in the Company's  Electronic Products Segment. For the year ended
     March  31,  1998  the  significant  customers  were  all  customers  of the
     Technology  Segment.  These customers,  in total, also represented 18%, 19%
     and 0% of total  accounts  receivable  at March  31,  2000,  1999 and 1998,
     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  $910,770,  $758,853 and $846,740 for the years ended March
     31, 2000, 1999 and 1998,respectively.

(16) 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 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 providing comparable security to
     the lender.

<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued



(17) 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. The Company  currently matches 33%
     of  participants  contributions,  subject  to  certain  limitations.  These
     contributions vest ratably over a three-year period. Matching contributions
     to the Plan by the Company  were  $97,715,  $107,455  and  $100,212 for the
     years ended March 31, 2000, 1999 and 1998, respectively.

     Stock Purchase Plan

     The Company has  established a Stock  Purchase  Plan which allows  eligible
     employees to purchase, through payroll deductions,  shares of the Compan'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 years ended March 31, 2000, 1999 and 1998,
     the  Company  issued  9,072,  3,120  and  7,523  shares  of  common  stock,
     respectively, under the Stock Purchase Plan.

(18) Segments

     The Company has three reportable segments: technology,  mechanical products
     and electronic  products.  The technology segment encompasses the Company's
     technology-based   operations   including  core  research  to  advance  its
     technology,  application  engineering and product  development and job shop
     production of prototype  components  as well as its corporate  headquarters
     and executive management.  Salaries of the executive officers and corporate
     general and administrative  expense is allocated entirely to the technology
     segment.  The mechanical  products segment  encompasses the manufacture and
     sale of permanent  magnet  motors,  precision  gears,  gear  assemblies and
     related mechanical  products.  The electronic  products segment encompasses
     the manufacture  and sale of wire harness  assemblies,  electronic  circuit
     board assemblies and electronic products.

     For the year ended March 31, 2000,  intersegment  sales or  transfers  were
     $96,894.  During the years ended March 31, 1999 and 1998 intersegment sales
     or transfers were immaterial.

     The Company's  reportable  segments are strategic business units that offer
     different  products and services.  They are managed separately because each
     business requires different business strategies.

<PAGE>

UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued



     The following table summarizes  significant financial statement information
     for each of the reportable segments for the year ended March 31, 2000:

                                          Mechanical    Electronic
                           Technology      Products      Products      Total

Revenue                   $ 2,426,152     4,115,557     14,056,151   20,597,860
Interest income                56,621         2,748           -          59,369
Interest expense              (61,894)     (194,427)      (226,977)    (483,298)
Depreciation and
  amortization               (352,485)     (933,092)      (502,538)  (1,788,115)
Write-down of
  investments              (4,104,628)         -              -      (4,104,628)
Goodwill amortization            -          (62,318)      (270,060)    (332,378)
Equity in loss of
  Taiwan joint venture       (186,538)         -              -        (186,538)
Equity in loss of
  German joint venture        (93,632)         -              -         (93,632)
Segment earnings (loss)    (6,293,807)     (686,423)       508,423   (6,471,807)
Segment assets              7,955,110     6,396,297      9,906,436   24,257,843
Expenditures for
  segment assets          $  (261,606)     (141,912)      (159,494)    (563,012)

     The following table summarizes  significant financial statement information
     for each of the reportable segments for the year ended March 31, 1999:

                                          Mechanical    Electronic
                           Technology      Products      Products      Total

Revenue                   $ 2,135,818     3,532,871     10,129,729   15,798,418
Interest income                88,307        23,058           -         111,365
Interest expense              (67,306)     (165,473)      (105,617)    (338,396)
Depreciation and
  amortization               (399,823)     (804,246)      (313,151)  (1,517,220)
Goodwill amortization            -          (61,682)      (246,421)    (308,103)
Equity in loss of
  Taiwan joint venture       (417,801)         -              -        (417,801)
Segment earnings (loss)    (2,646,442)   (1,205,556)        97,928   (3,754,070)
Segment assets              8,032,683     7,495,481     11,678,414   27,206,578
Expenditures for
  segment assets          $  (487,550)   (2,418,688)    (1,630,413)  (4,536,651)

     The following table summarizes  significant financial statement information
     for each of the reportable segments for the year ended March 31, 1998:


<PAGE>
UNIQUE MOBILITY, INC.
AND SUBSIDIARIES

Notes to Consolidated Financial Statements, Continued


                                          Mechanical
                           Technology      Products        Total

Revenue                  $  3,489,586       575,146      4,064,732
Interest income               155,480        35,706        191,186
Interest expense              (75,473)      (20,600)       (96,073)
Depreciation and
  amortization               (383,137)     (145,943)      (529,080)
Goodwill amortization            -          (16,215)       (16,215)
Equity in loss of
  Taiwan joint venture       (246,648)         -          (246,648)
Segment loss               (3,243,204)      (23,156)    (3,266,360)
Segment assets             12,757,776     6,827,775     19,585,551
Expenditures for
  segment assets         $   (278,568)     (535,405)      (813,973)

(19) Commitments and Contingencies

     Employment Agreements

     The Company has entered into employment  agreement with two of its officers
     which expire December 31, 2002 and with one officer which expires April 30,
     2001.  The aggregate  annual  future  compensation  under these  agreements
     through the expiration date is $1,274,138.

     Lease Commitments

     The Company has entered into  operating  lease  agreements for office space
     and  equipment  which expire at various times through 2007. As of March 31,
     2000, the future minimum lease payments under operating leases with initial
     noncancelable terms in excess of one year are as follows:

               Year ending March 31:
                  2001                                $   301,637
                  2002                                    272,597
                  2003                                    251,444
                  2004                                    253,961
                  2005                                    252,140
                  Thereafter                              504,280

                                                      $ 1,836,059

     Rental expense under these leases totaled approximately $377,000,  $327,000
     and $0 for the years ended March 31, 2000, 1999 and 1998, respectively.

     Litigation

     The Company is involved in various claims and legal actions  arising in the
     ordinary  course of business.  In the opinion of  management,  the ultimate
     disposition of these matters will not have a material adverse effect on the
     Company's financial position.
<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  15,  2000,  to be filed on or about July 5,  2000,  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, 2000 and March 31,
                    1999.

                    Consolidated  Statements of  Operations  for the years ended
                    March 31, 2000, 1999 and 1998.

                    Consolidated   Statements   of   Stockholders'   Equity  and
                    Comprehensive  Income  (Loss) for the years  ended March 31,
                    2000, 1999 and 1998.

                    Consolidated  Statements  of Cash Flows for the years  ended
                    March 31, 2000, 1999 and 1998.

                    Notes to Consolidated Financial Statements.

             2.     Financial Statement Schedules:

                    None.

     (b) Reports on Form 8-K:


                    Report  regarding the exercise of warrants to acquire common
                    stock dated March 20, 2000.

                    Report regarding the write-down of the Company's  investment
                    in three joint ventures dated October 15, 1999.

                    Report regarding the Company's investment in Unique Mobility
                    Europa GmbH and Windermere ECO Development Limited
                    dated May 11, 1999.

(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.

<PAGE>

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.
10.7 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.
10.9 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.
10.10Warrant 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.
10.11Assignment  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.
10.12Amendment 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.
10.13Amendment 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.
10.14Amendment  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.
10.15Stock Purchase  Agreement by and among Unique  Mobility,  Inc. and Invacare
     Corporation  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.
10.16Amendment to the Stock  Purchase  Agreement  by and among Unique  Mobility,
     Inc.  and  Invacare  Corporation.  Reference is made to Exhibit 10.3 in the

<PAGE>

     Company's  Quarterly  Report on Form 10-Q for the  quarter  ended April 30,
     1996, (No. 0-9146) which is incorporated herein by reference.
10.17Incentive Stock Option  Agreement with Ray A. Geddes,  Reference is made to
     Exhibit 10.1 in the Company's Quarterly Report on Form 10-Q for the quarter
     ended  September 30, 1997,  (No.  0-9146) which is  incorporated  herein by
     reference.
10.18Non-qualified Stock Option Agreement with Ray A. Geddes,  Reference is made
     to  Exhibit  10.2 in the  Company's  Quarterly  Report on Form 10-Q for the
     quarter ended September 30, 1997, (No. 0-9146) which is incorporated herein
     by reference.

21   Subsidiaries of the Company

23.1 Consent of KPMG Peat Marwick LLP.

27   Financial Data Schedule


<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, 2000.

                                              UNIQUE MOBILITY, INC.,
                                              a Colorado Corporation

                                              By: "William G. Rankin"
                                              William G. Rankin
                                              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
"William G. Rankin"       Directors and President
William G. Rankin         (Principal Executive Officer)          June 26, 2000

                          Treasurer and Secretary
                          (Principal Financial and
"Donald A. French"        Accounting Officer)                    June 26, 2000
 Donald A. French


"Ray A. Geddes"           Director                               June 26, 2000
Ray A. Geddes



Ernest H. Drew            Director


"Stephen J. Roy"          Director                               June 27, 2000
Stephen J. Roy


"J. B. Richey"            Director                               June 28, 2000
J. B. Richey


<PAGE>