-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AZAmmN7alR1bHIyc+yL1+xDVXFPNGmcV8Haz2toe8LAVzgMWGcaeKTnnQYEzxSHH OlX9W25d0VTcgX7zIZRePg== /in/edgar/work/20000629/0000315449-00-000009/0000315449-00-000009.txt : 20000920 0000315449-00-000009.hdr.sgml : 20000920 ACCESSION NUMBER: 0000315449-00-000009 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000629 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIQUE MOBILITY INC CENTRAL INDEX KEY: 0000315449 STANDARD INDUSTRIAL CLASSIFICATION: [3621 ] IRS NUMBER: 840579156 STATE OF INCORPORATION: CO FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 001-10869 FILM NUMBER: 663911 BUSINESS ADDRESS: STREET 1: 425 CORPORATE CIRCLE CITY: GOLDEN STATE: CO ZIP: 80401 BUSINESS PHONE: 3032782002 MAIL ADDRESS: STREET 1: 425 CORPORATE CIRCLE CITY: GOLDEN STATE: CO ZIP: 80401 10-K 1 0001.txt FORM 10-K 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. 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. 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. 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 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 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. 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. 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. 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. 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. 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. ITEM 6. SELECTED FINANCIAL DATA Unique Mobility, Inc. Consolidated Selected Financial Data 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
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-
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. 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. 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 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 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. 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 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) 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. 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. UNIQUE MOBILITY, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity and Comprehensive Income (Loss) 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
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
(Continued) UNIQUE MOBILITY, INC. AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity and Comprehensive Income, Continued 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
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
See accompanying notes to consolidated financial statements. UNIQUE MOBILITY, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Year Year Year Ended Ended Ended March 31, March 31, March 31, 2000 1999 1998
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
(Continued) 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). 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. 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. 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. 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). 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. 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 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. 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. 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 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 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 $ - - 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. 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. 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: 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 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. 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. 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. 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: 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. ITEM 9. CHANGE IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None. 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. 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. 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 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 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 EX-23 2 0002.txt Exhibit 23.1 Consent of Independent Auditors The Board of Directors and Shareholders Unique Mobility, Inc.: Our report dated May 8, 2000, states that we did not audit the financial statements of Taiwan UQM Electric Co., Ltd. (a 38.25% owned investee company). 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 year ended March 31, 1999 and 1998 is based solely on the report of the other auditors. We consent to the incorporation by reference in the registration statements on Form S-8 (Nos. 33-23113, 33-24071, 33-34612, 33-35055, 33-34613, 33-41325, 33-64852, 33-47454, 33-81430 and 33-92288) and in the registration statements on Form S-3 (Nos. 33-6116, 33-63399, 333-01919, 333-13883, 333-44597, 333-23843, 33-50393, 333-52861, 333-67313 and 333-78525) of Unique Mobility, Inc. of our report dated May 8, 2000 relating to the 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, which report appears in the March 31, 2000 Annual Report on Form-K of Unique Mobility, Inc. /s/KPMG LLP KPMG LLP EX-27 3 0003.txt FDS --
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS OF UNIQUE MOBILITY, INC. AND CONSOLIDATED SUBSIDIARIES AS OF MARCH 31, 2000, AND THE CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 2000, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000315449 Unique Mobility, Inc. 1 year Mar-31-2000 Apr-1-1999 Mar-31-2000 2,085,115 0 2,821,894 0 3,449,390 8,948,959 13,906,997 5,365,304 24,257,843 3,276,400 4,394,582 0 0 49,554,819 (32,408,901) 17,145,918 18,894,923 20,597,860 16,133,891 26,286,634 360,993 0 483,298 (6,471,807) 0 (6,471,807) 0 0 0 (6,471,807) (.39) (.39)
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