<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

/X/ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934

                    FOR THE FISCAL YEAR ENDED MARCH 31, 2001

/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

              For the transition period from _________ to _________

                         Commission File Number 0-27250

                            AML COMMUNICATIONS, INC.
            --------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

               DELAWARE                                 77-0130894
     -------------------------                 ---------------------------
   (State or other jurisdiction of         (I.R.S. Employer Identification No.)
    incorporation or organization)

   1000 AVENIDA ACASO, CAMARILLO, CALIFORNIA                          93012
-----------------------------------------------------------------------------
   (Address of principal executive offices)                         (Zip Code)

                                 (805) 388-1345
                            -------------------------
                (Issuer's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:


      Title of each class            Name of each exchange on which registered
    -----------------------          -----------------------------------------
              NONE                                    NONE

        Securities registered pursuant to Section 12(g) of the Act:


                                    Title of Class
                                 --------------------
                              COMMON STOCK, $.01 PAR VALUE


Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
   ---    ---

Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained in this form, 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-KSB or any amendment to
this Form 10-KSB.  /X/

Issuer's revenues for its most recent fiscal year:  $ 5,071,000.

The aggregate market value of the voting and non-voting common equity held by
non-affiliates of the Registrant on June 25, 2001, was approximately
$4,110,698. The per share stock price for computational purposes was $0.91,
based on the closing sale price per share for the Registrant's common stock
on the NASDAQ National Market on June 25, 2001. This value is not intended to
be a representation as to the value or worth of the Registrant's common
stock. The number of non-affiliates of the Registrant has been calculated by
subtracting the number of shares held by persons affiliated with the
Registrant from the number of outstanding shares. The number of shares of the
Registrant's common stock outstanding on June 25, 2001 was 6,932,389.

DOCUMENTS INCORPORATED BY REFERENCE: Portions of the Registrant's definitive
Proxy Statement for the Annual Meeting of Stockholders to be held on
September 12, 2001, are incorporated by reference into Items 10 and 11 of
Part III of this Form 10-KSB. The Proxy Statement will be filed within 120
days after the end of the fiscal year covered by this report.

Transitional Business Disclosure Format (Check One).  Yes    No  X
                                                          ---  ---

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     This Annual Report on Form 10-KSB, the exhibits hereto and the information
incorporated by reference herein contain "forward looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and such forward looking statements involve risks
and uncertainties. When used in this report, the words "expects," "anticipates"
and "estimates" and similar expressions are intended to identify forward looking
statements. Such statements are subject to risks and uncertainties that could
cause actual results to differ materially from those projected. These risks and
uncertainties include those discussed below and those discussed in "Management's
Discussion and Analysis of Financial Conditions and Results of Operations" or
incorporated by reference herein. AML Communications, Inc., undertakes no
obligation to publicly release any revisions to these forward looking statements
to reflect events or circumstances after the date this report is filed with the
Securities and Exchange Commission or to reflect the occurrence of unanticipated
events.

                                     PART I

ITEM 1.   DESCRIPTION OF BUSINESS

INTRODUCTION

     AML Communications, Inc., ("AML" or the "Company") was incorporated in
California in 1986 as Advanced Milliwave Laboratories, Inc. Early in 1994, the
Company changed its name to AML Communications, Inc. In December 1995, in
conjunction with the initial public offering of its common stock, the Company
changed its state of incorporation from California to Delaware. In May 1996, the
Company moved its principal office and manufacturing facility to its current
location, 1000 Avenida Acaso, Camarillo, California, 93012.

     AML designs and manufactures single and multicarrier, RF and microwave,
power and low noise amplifiers for a variety of frequency ranges and
transmission protocols. These products typically find use in a variety of
commercial and defense communications markets including cellular, Personal
Communications Services (PCS), Microwave Defense Communications, Optical
Networks, Broadband Wireless Access (BWA), and wireless messaging. Our products
support a wide range of analog and digital formats including Code Division
Multiple Access (CDMA), Time Division Multiple Access (TDMA), Global System for
Mobile communications (GSM), Wide band CDMA (WCDMA), and Advanced Mobile Phone
System (AMPS), among others. Power amplifiers are used to boost signal
transmission, and low noise amplifiers improve signal reception.

     The Company was founded to develop and manufacture hybrid microcircuit
microwave and RF amplifiers to support the communications market. We also
developed a product line of highly linear moderate power amplifiers. In 1994, we
became active in the BWA market, then known as Wireless Local Loop (WLL) and
developed a multicarrier linear power amplifier supporting this market in the
300-450 MHz range. In late 1994, we developed a multicarrier linear RF power
amplifier specifically for boosting signal strengths in the cellular
communications market. We marketed this multicarrier product directly to the
domestic cellular service providers. In 1995 through 1996, we developed
derivative multicarrier cellular products at alternative power levels to support
differing needs in the service provider market.

     In the fourth quarter of fiscal 1997, we experienced a significant decrease
in our revenue, attributable to several factors. Original equipment
manufacturers (OEMs) offered significantly reduced prices on their improved base
station products, and the service providers began to outsource the
infrastructure build out and maintenance to their OEM equipment providers who
used their own equipment in the cell site. Also, the mobile communications
industry focused substantial financial and human resources on the build out of
the nascent PCS services, and competitors began to offer similar or improved
products within the domestic US market.

     As a result, we decided to change our market focus and concentrate on
selling to the OEM customer base. Late in fiscal 1997, AML entered the satellite
communications gateway market by offering a high power linear amplifier for data
transmission applications in a Low Earth Orbit (LEO) network. In fiscal 1998, we
received significant revenue from an OEM in the South American market and
introduced products for the PCS markets and the wireless messaging market. We
also invested heavily in the BWA market for applications with Korean and
European OEMs.

     During fiscal 1999, we developed a new generation of our original cellular
multicarrier products and continued to develop and diversify our customer base
and invest in the development of BWA products. We experienced significant
negative impacts to our revenue because of the delay and cancellation of
customer BWA rollout programs.

     In February 1999, AML announced a change in management. Mr. Kirk A. Waldron
was appointed President and Chief Executive Officer of AML following the
resignation of Mr. Jacob Inbar. Mr. Scott T. Behan was appointed Executive Vice


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President of Sales and Marketing following Mr. Edwin J. McAvoy's resignation
of his position as Vice President. Mr. McAvoy was, in turn, appointed
Director of Custom Programs. Both Mr. Waldron and Mr. Behan were also elected
to the Board of Directors following the resignations of Dr. Tiberiu Mazilu
and Mr. McAvoy from the Board. In March 1999, AML announced the appointment
of Gerald M. Starek to our Board of Directors, expanding the board to six
members.

     In August 1999, we received our ISO 9001 certification, a uniform worldwide
quality management system standard. In August of 1999, we successfully
transitioned our production technology from traditional batch assembly to a
flexible, self-balancing, one piece flow process. We believe this substantially
increases our capacity and production efficiency to support growth.

     In January 2000, to expand our hybrid microwave product line, we purchased
a product line and certain assets of a company serving the military small signal
amplifier market. This purchase was intended to bolster our hybrid microwave
product line and position that segment of our business for future growth into
the defense higher frequency segments of the market. Orders received from the
purchased product line will be manufactured in AML's current facility.

     In November 2000, we appointed Fred Sturm to the Board of Directors,
increasing the board to seven members.

     In February 2001, we announced a change in management. Mr Jacob Inbar was
re-appointed to President and Chief Executive Officer following the resignation
of Mr. Kirk Waldron. Additionally, two other co-founders, Dr. Tiberiu Mazilu and
Mr. Ed McAvoy were appointed to the Board of Directors as well as to the
positions of Vice President-Engineering and Vice President-Marketing,
respectively. Our new management has taken immediate action to reduce losses and
negative cash flow in a number of areas including renegotiations of existing
contracts, manpower reductions, salary reductions, and fixed costs cutting. We
expect that these measures will have a positive impact on cash flow and
profitability as we go forward. We cannot assure you that the revenue levels
will generate positive cash flow.

     In March 2001 we closed a private placement of common stock for $500,000
with a group of investors led by Jacob Inbar. These funds have provided us with
additional cash reserves to fund our future operations. It is highly likely that
we will need additional funding to finance growth or offset additional
operational losses.

     AML believes our future success depends upon our ability to broaden our
product offerings, increase our customer base, and capture volume product
delivery opportunities. While we continually attempt to expand our customer
base, we cannot give any assurance that a major customer will not reduce, delay
or eliminate its purchases from us. Such a reduction would have a material
adverse effect on our business, results of operations, and financial condition.

     A limited number of OEMs account for a majority of RF amplifier purchasers
in the wireless equipment market, and our future success is dependent upon our
ability to establish and maintain relationships with these types of customers.
Additionally the company's future depends on the ability to generate new
products, mostly as part of a standard line of products (i.e. products we
developed that are intended to be sold to many customers).

     We have experienced, and expect to continue to experience in most cases,
declining average sales prices for our wireless products. Wireless
infrastructure manufacturers have come under increasing price pressure from
wireless service providers, which in turn has resulted in downward pricing
pressure on our products. In addition, ongoing competitive pressures in the RF
amplifier market have put continued pressure on us to continually reduce the
sales price of our products. Consequently, we believe that in order to maintain
or improve our existing gross margins in the near term, we must achieve
manufacturing cost reductions, and in the long term develop new products that
incorporate advanced features that generate higher gross margins.

BUSINESS STRATEGY

      We intend to utilize our knowledge base in wireless design and
manufacturing to offer variations of existing products as well as to selectively
develop new products for the wireless market. Our limited financial resources,
as well as the slowdown in the wireless market, will limit the level of new
product introductions to this market to those which will provide adequate
margins or in which potential or existing customers will share the costs of the
new product development.

     Utilizing our extensive knowledge in Microwave Integrated Circuits ("MIC")
design capabilities, the company intends to expand the products offered as part
of our full line catalog. Such products are intended toward the Optical and
Defense markets. We also intend to utilize the MIC design capabilities toward
higher value added products for new markets.


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     In addition, AML's business strategy remains to improve our manufacturing
technology for high performance RF amplifiers used in digital communications
networks and includes the following key elements: (i) provide leading technology
to the amplifier industry through research and product development that
continues to improve our products' technical performance and establish new
levels of technical performance, to improve our manufacturing productivity and
efficiency; (ii) leverage our technical and manufacturing agility to increase
market share and expand our relationships with existing customers; (iii) focus
our business growth through the expansion of our customer base in the wireless
network OEMs and MIC arenas ; (iv) maintain our focus on the quality,
reliability and manufacturability of our RF amplifier products.

MARKETS

     We sell our RF amplifier products into various segments of the wireless
communications market. Our primary focus is on the digital mobile communications
(PCS and cellular), MIC, BWA, and wireless messaging markets. In fiscal 2001, we
derived approximately 21.8% of our revenues from the cellular market, 51.8% from
the PCS and wireless messaging market and 25.6% from the MIC products.

     CELLULAR AND PCS. Cellular networks utilize a number of base stations with
high power antennas to serve a geographical region. Each region is broken down
into a number of smaller geographical areas, or "cells." Each cell has its own
base station which uses wireless technology to receive subscribers calls and
transmit those calls through the wireline Public Switched Telephone Network
(PSTN). Cellular networks operate within the 800 and 900 MHz bandwidths of the
radio spectrum. PCS networks operate in a substantially similar manner as
cellular networks, except that PCS networks operate at 1800 and 1900 MHz
bandwidths and utilize only digital transmission protocols. Transmissions at the
higher frequencies utilized by PCS networks have shorter transmission waves as
compared to cellular frequency transmissions, which tends to limit the distances
PCS transmissions can travel without significant degradation. Lower frequency
signals penetrate into buildings and other obstacles better than higher
frequency signals. Therefore, PCS networks operating at the higher frequency
ranges should require smaller operating cells and more base stations than
existing cellular networks to cover the same total geographic region.

     In analog cellular networks, each base station is allocated a certain
number of frequency channels, each of which can carry only one call at a time.
Originally, cellular base stations in analog networks used single carrier RF
power amplifiers for each frequency channel allocated to the cell. Many analog
cellular networks are now utilizing a process known as adaptive channel
allocation in order to increase network capacity. In adaptive channel
allocation, which is optimized with multi-carrier RF power amplifiers, unused
channels in cells are temporarily reallocated to augment more heavily utilized
adjacent cells. The signals are amplified simultaneously through a multi-carrier
RF power amplifier which allows for the simultaneous amplification of all
channels within a base station. Multi-carrier RF power amplifiers require
significantly higher linearity than do single carrier designs, but do not
require separate, high-maintenance, tunable cavity filters. By eliminating the
need for separate cavity filters for each channel, multi-carrier RF power
amplifiers reduce overall deployment and maintenance costs associated with base
stations. While adaptive channel allocation using multi-carrier linear
amplifiers has increased the capacity of analog networks, many service providers
still require additional capacity to serve the increased flow of transmissions
through their networks. This has led many service providers to move from analog
networks to digital networks. In digital networks, calls are segmented into time
slots or codes and transmitted across the entire bandwidth of allocated
spectrum, rather than in single channels of that spectrum. The calls are then
reassembled when received at the base station or cellular phone. While using the
entire bandwidth of allocated spectrum results in greater system capacity, there
is a greater likelihood that even minimal background noise will result in
interrupted or dropped calls. Accordingly, linear amplification is even more
critical in digital networks than in their analog counterparts. AML provides
linear multi-carrier RF power amplifiers which are located in base stations and
work to increase the signal strength of outgoing transmissions. Our single
carrier and multi-carrier RF power amplifiers work in base stations with a
variety of other sophisticated electronic equipment, including receivers, radios
and oscillators.

     MIC AMPLIFIERS. These hybrid microwave circuits are sold to OEM customers
with broadband, microwave frequency, component requirements. These parts
typically support applications including surveillance, optics, signal detection,
satellite communication and telemetry. They are used in both the transmission
and reception signal paths. The technology permits accurate, reproducible,
volume products supporting broad bandwidths and higher frequencies to be
designed and manufactured. Moderate volume requirements and custom design
requirements characterize these markets.

     BROADBAND WIRELESS ACCESS. Formerly known as WLL, the BWA market refers to
wireless products designed for fixed or limited mobility applications which
provide and/or replace traditional wireline telephone systems. These systems are
finding increasing use as alternative "last mile" solutions to providing high
speed wireless data capability to outlying areas that have no access to
traditional "cabled" high speed data access such as DSL (Digital Subscriber
Line), CATV (Community Access Television), or fiber optic services. BWA systems
are often far less expensive to install than "wired"


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systems, particularly for low-density areas. The BWA markets span a wide
range of frequencies and protocols dependent upon the geopolitical
requirements of regions. AML has developed and continues to develop its
product offering to support this market.

     WIRELESS MESSAGING. The wireless messaging networks consist of a
substantial number of local and nationwide transceivers that distribute and
collect information from numerous handheld wireless messaging handsets. These
handsets allow the user to perform functions such as accessing the internet,
retrieving and responding to e-mail, and instant messaging, among others. The
wireless messaging protocols are being adapted to deliver greater amounts of
digital information, requiring high power, linear amplification for transmission
from the base stations, and low noise tower mount receive amplifiers to maximize
the sensitivity of the base station reception. AML has provided low noise tower
mount receive amplifiers and RF power amplifiers to several wireless messaging
network operators. Currently, the two largest markets for wireless messaging
products are the domestic U.S. and China.

PRODUCTS

     We designed and manufactured during the year single and multicarrier RF
power amplifiers and low noise receive amplifiers that are sold into the
Cellular and PCS, MIC, BWA and wireless messaging markets.

     CELLULAR AND PCS. We have offered our M series cellular multicarrier
amplifiers since 1994. These are linear multicarrier RF power amplifiers
suitable for use in the amplification of analog and digital communications
formats. These products range in power levels from 30 to 140 watts and provide
flexible features/options such as AC or DC supply operation, replaceable input
modules that allow wide variation and combination of signal gain and connection
types. For the PCS market, we have developed several RF low noise receive and
single channel power amplifiers for various OEMs. These products offer cost
effective amplification of their respective formats to support the OEM
requirements. We have integrated real time embedded microprocessor control
within some of these products to assist in the manufacturability and field
diagnostic capabilities. Typical power levels range from 4 watts to 80 watts.

     MIC . We produce standard hybrid microwave circuit products that are listed
in our web-based catalog and selection guide. We also produce derivative
products that are based upon minor modification of the catalog items. The
frequencies range from 50kHz to 30GHz. Power levels range from less than one
milliwatt to several watts.

     BWA. We have developed, and continue to develop products in support of the
BWA market. These products include base station RF power and low noise receive
amplifiers as well as tower mounted RF power and low noise receive products.
Typical system applications include CDMA and TDMA protocols with output powers
ranging from 2 to 10 watts. These systems operate at various frequencies ranging
from below 400 MHz to above 30 GHz. We use our linearization technology along
with our knowledge of RF device technology capability to select the appropriate
implementation for each application.

     WIRELESS MESSAGING. We have has developed a wide range of receive products
to support the wireless messaging market. These products include tower mount
receive amplifiers, RF power amplifiers, and base station receive multicouplers.
We believe these products offer excellent performance in terms of maximizing
receive sensitivity while minimizing the effects of interference from
alternative services. We also offer derivative products of our cellular RF power
amplifier product line to support the wireless messaging base station
transmission requirements.

     Our RF power amplifiers range in price from $500 to over $10,000 per
amplifier, depending upon technology, complexity, quantity, and implementation.
Our receive products range in price from $400 to $7,000 per amplifier, depending
upon system requirements and implementation.

CUSTOMERS

     We sell products to wireless OEM manufacturers worldwide, including
Transcept, Airnet, and Repeater Technologies. We also sold products to wireless
network operators such as AT&T Wireless Services, MCI/Worldcom, BellSouth, and
Weblink Wireless. Our MIC products are sold to Microwave Defense Communications
and Optical Network manufacturers, including Raytheon, Boeing, Anritsu, and JDS
Uniphase.

     For the fiscal year ended March 31, 2001, our largest customer was
Transcept, which accounted for approximately 22.4% of net sales. AT&T was our
second largest customer with approximately 12.0% of net sales. The loss of
either of these customers, or a significant loss, reduction, or rescheduling of
orders from any of our customers could have a material adverse effect on our
business, results of operations and financial condition.


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MARKETING AND DISTRIBUTION, INTERNATIONAL SALES

     We sell our products through a combination of a technically proficient
direct sales force and independent sales representatives. We also utilize a
network of independent sales representatives selected for their familiarity with
our potential customers and their knowledge of the wireless infrastructure,
microwave defense communications and optical network equipment markets. Both the
direct sales personnel and independent sales representatives generate product
sales, provide product and customer service, and provide customer feedback for
product development. In addition, the sales personnel and independent sales
representatives receive support from our marketing, product support and customer
service departments.

     AML's marketing efforts are focused on establishing and developing
long-term relationships with potential customers. Sales cycles for certain of
our products, particularly our base station RF power amplifiers, are lengthy,
typically ranging from six to eighteen months. Our customers typically conduct
significant technical evaluations of our products before making purchase
commitments. In addition, as is customary in the industry, sales are made
through standard purchase orders which can be subject to cancellation,
postponement or other types of delays. While certain customers provide us with
forecasted needs, they are not bound by such forecasts.

WARRANTY

     AML's warranty varies by product type and typically covers defects in
material and workmanship. We perform warranty obligations and other maintenance
services at our facilities in Southern California.

PRODUCT DEVELOPMENT

     We invest significant resources in the research and development of new
methods to improve amplifier performance, including reduced noise, and increased
efficiency in the RF amplification process. We also invest significant resources
in the development of new amplifier products to support transmission protocols,
including Enhanced Data Rate for GSM Evolution (EDGE), and WCDMA. Our
development efforts also seek to reduce the cost and increase the manufacturing
efficiency of new and existing products. Our research and development staff
consisted of 20 people as of March 31, 2001. Expenditures for research and
development amounted to approximately $2.9 million in fiscal 2001 and $1.9
million in fiscal 2000.

COMPETITION

     The wireless communications infrastructure equipment industry is extremely
competitive and is characterized by rapid technological change, new product
development, rapid product obsolescence, evolving industry standards, and
significant price erosion over the life of a product. Our products compete on
the basis of the following key characteristics: performance, functionality,
reliability, pricing, quality, designs that can be efficiently manufactured in
large volumes, time-to-market delivery capabilities and compliance with industry
standards. While we believe we compete favorably with respect to the foregoing
characteristics, there can be no assurance that we will be able to continue to
do so.

     Our current competitors include Chesapeake Microwave, Powerwave
Technologies, Inc., Spectrian Corporation, and Stealth Microwave, Inc., in
addition to the amplifier manufacturing operations captive within certain of the
leading wireless infrastructure OEMs such as Ericsson, Lucent, Motorola, Nokia
and Samsung. Some competitors have significantly greater financial, technical,
manufacturing, sales, marketing and other resources than AML and have achieved
greater name recognition for their existing products and technologies than we
have. We cannot guarantee that we will be able to successfully increase our
market penetration or our overall share of the RF amplifier marketplace. Our
results of operations could be adversely impacted if we are unable to
effectively increase our share of the RF amplifier marketplace.

     AML's success depends in large, upon the rate at which wireless
infrastructure OEMs incorporate our products into their systems. We believe that
a substantial portion of the present worldwide production of RF amplifiers is
captive within the internal manufacturing operations of a small number of
leading wireless infrastructure manufacturers such as Ericsson, Lucent,
Motorola, Nokia and Samsung. Some of these companies regularly evaluate whether
to manufacture their own RF amplifiers rather than purchase them from
third-party vendors such as AML. These companies could also directly compete


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with AML by selling their RF amplifiers to other manufacturers and operators,
including our customers. These companies may enter into joint ventures or
strategic relationships with our competitors. Our results of operations, net
sales and profitability could be adversely impacted if certain OEMs were to
actively market RF power amplifier products in direct competition with us or
continue to manufacture RF power amplifiers internally or enter into joint
ventures or other strategic relationships with our competitors. If we are not
successful in increasing the use of our products by the leading wireless
infrastructure OEMs, there would be a material adverse effect on our business,
financial condition and results of operations.

     The MIC portion of our business is highly competitive. Our main competitors
include Miteq, Celeritek, CTT, JCA Technology, etc. Although most of the
competitors have significantly higher resources than the company has, we believe
that our technical abilities in implementing MIC amplifiers do not differ to the
same degree.

     We have experienced significant price competition and expect price
competition in the sale of RF/Microwave amplifiers to increase. No assurance can
be given that our competitors will not develop new technologies or enhancements
to existing products or introduce new products that will offer superior price or
performance features. We expect our competitors to offer new and existing
products at prices necessary to gain or retain market share. Certain of our
competitors have substantial financial resources, which may enable them to
withstand sustained price competition or a market downturn better than us. There
can be no assurance that we will be able to compete successfully in the pricing
of our products, or otherwise, in the future.

MANUFACTURING AND SUPPLIERS

     Our headquarters and our manufacturing facility are located in Camarillo,
California. Our manufacturing process involves the assembly of numerous
individual components and precise fine-tuning by production technicians. The
parts and materials we use consist primarily of printed circuit boards,
specialized subassemblies, fabricated housings, relays, and small electric
circuit components, such as integrated circuits, semiconductors, resistors and
capacitors.

     We obtained ISO 9001 certification, a uniform worldwide quality management
system standard, on our headquarters and manufacturing facility located in
Camarillo, California. Numerous customers and potential customers throughout the
world, particularly in Europe, require their suppliers be ISO certified. In
addition, many customers require their suppliers to purchase components only
from subcontractors that are ISO certified.

     We currently procure, and expect to continue to procure, certain components
from single source manufacturers due to unique component designs as well as
certain quality and performance requirements. In addition, in order to take
advantage of volume pricing discounts, we purchase certain customized components
from single sources. We have experienced, and may in the future experience,
shortages of single-source components. In such event, we may have to make
adjustments to both product designs and production schedules which could result
in delays in production and delivery of products. Such delays could have an
adverse effect on our operating results and financial condition.

INTELLECTUAL PROPERTY

     We rely on trade secrets and patents to protect our intellectual property.
We execute confidentiality and non-disclosure agreements with our employees and
limit access to and distribution of our proprietary information. We own several
patents relating to multicarrier power amplifier circuits and implementation. We
have an on-going program which encourages applications for both U.S. and
international patents for various aspects of our technology. These efforts allow
us to rely upon the knowledge and experience of our management and technical
personnel and our ability to market our existing products and to develop new
products. The departure of any of our management and technical personnel, the
breach of their confidentiality and non-disclosure obligations to AML, or the
failure to achieve our intellectual property objectives may have a material
adverse effect on our business, financial condition and results of operations.

     We believe our success depends upon the knowledge and experience of our
management and technical personnel and our ability to market our existing
products and to develop new products. We do not have non-compete agreements with
our employees who are employed on an "at-will" basis. Therefore, employees may
and have left us to go to work for a competitor. While we believe that we have
adequately protected our proprietary technology, and we will take all
appropriate and reasonable legal measures to protect it, the use of our
processes by a competitor could have a material adverse effect on our business,
financial condition and results of operations.

     Our ability to compete successfully and achieve future revenue growth will
depend, in part, on our ability to protect our proprietary technology and
operate without infringing upon the rights of others. We may not be able to
successfully protect


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our intellectual property, and our intellectual property or proprietary
technology may otherwise become known or be independently developed by
competitors. In addition, the laws of certain countries in which our products
have been or may be sold may not protect our products and intellectual
property rights to the same extent as the laws of the United States.

     The inability to protect our intellectual property and proprietary
technology could have a material adverse effect on our business, financial
condition and results of operations. As the number of patents, copyrights and
other intellectual property rights in our industry increases, and as the
coverage of these rights and the functionality of the products in the market
further overlap, we believe that companies in our industry may face more
frequent infringement claims. We may in the future be notified that we are
infringing upon certain patent or other intellectual property rights of others.
Although we are not aware of any pending or threatened intellectual property
lawsuits against us, we cannot guarantee that such litigation or infringement
claims will not occur in the future. Such litigation or claims could result in
substantial costs and diversion of resources and could have a material adverse
effect on our business, results of operations and financial condition. A third
party claiming infringement may also be able to obtain an injunction or other
equitable relief, which could effectively block our ability or our customer's
ability to distribute, sell or import allegedly infringing products. If it
appears necessary or desirable, we may seek licenses from third parties covering
intellectual property that we are allegedly infringing. No assurance can be
given, however, that any such licenses could be obtained on terms acceptable to
us, if at all. The failure to obtain the necessary licenses or other rights
could have a material adverse effect on our business, financial condition and
results of operations.

GOVERNMENT REGULATION

     Radio frequency transmissions and emissions, and certain equipment used in
connection therewith, are regulated in the United States, Canada and
internationally. We often must obtain regulatory approval in connection with the
manufacture and sale of our products, and by AML's customers to operate AML's
products. We cannot assure you that the United States Federal Communications
Commission (FCC), International Telecommunications Union (ITU), European
Telecommunications Standard Institute (ETSI), or other organizations charged
with regulating the requirements of RF equipment, will not adopt more stringent
regulations for the communications industry. If such regulations are adopted,
AML, the OEMs and the wireless system operators may be required to alter the
manner in which radio signals are transmitted, or otherwise to alter the
equipment transmitting such signals, which could materially and adversely affect
AML's products and markets. The enactment by federal, state, local or
international governments of new laws or regulations, or a change in the
interpretation of existing laws or regulations, could affect the market for
AML's products. Recent deregulation of international communications industries,
along with recent RF spectrum allocations made by the FCC, have increased the
potential demand for our products by providing users of those products with
opportunities to establish new wireless personal communications services.
However, there can be no assurances that the trend toward deregulation and
current regulatory developments favorable to the promotion of new and expanded
personal communications services will continue or that other future regulatory
changes will have a positive impact on the Company. The increasing demand for
wireless communications has exerted pressure on regulatory bodies worldwide to
adopt new standards for such products, generally following extensive
investigation of and deliberation over competing technologies. The delays
inherent in this governmental approval process may cause the cancellation,
postponement or rescheduling of the installation of communications systems by
our customers.

EMPLOYEES

     As of March 31, 2001, AML had 61 full-time employees, including 20 in
research and development; 32 in manufacturing, production engineering and
quality assurance; six in administration; and three in sales, marketing, order
entry and customer support. We believe the success of our business depends, in
part, on our ability to attract and retain qualified personnel, particularly
qualified scientific, technical and key management personnel. Our employees are
not governed by collective bargaining agreements. We believe our relationships
with are employees are good.

ENVIRONMENTAL REGULATIONS

     We are subject to federal, state and local governmental regulations
relating to the storage, discharge, handling, emission, generation, manufacture
and disposal of toxic or other hazardous substances used to manufacture our
products. We believe we are currently in compliance in all material respects
with such regulations. Failure to comply with current or future regulations
could result in the imposition of substantial fines on AML, suspension of


                                      8

<PAGE>


production, alteration of our manufacturing processes, cessation of our
operations, or other actions which could materially and adversely affect our
business, financial condition and results of operations.

ITEM 2.   DESCRIPTION OF PROPERTY

     The Company's administrative, engineering and manufacturing facilities are
located in a 25,000 square foot leased building in Camarillo, California. The
lease for this space expires in April 2003. We believe that our current
facilities are in reasonable condition and provide adequate expansion
capabilities.


ITEM 3.   LEGAL PROCEEDINGS

     The Company may be subject, from time to time, to various legal proceedings
relating to claims arising out of our operations in the ordinary course of our
business. We are not currently party to any legal proceedings, the adverse
outcome of which, individually or in the aggregate, would have a material
adverse effect on the business, financial condition or results of operations of
the Company.


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

     Not applicable.


                                       9


<PAGE>

                                     PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
            MATTERS

     Our common stock trades on the NASDAQ National Market under the symbol
"AMLJ." The table below sets forth the high and low sales prices for the
Company's common stock on the NASDAQ National Market for the periods indicated.

<TABLE>
<CAPTION>

                                                               Price Range of Common Stock
                                                                 High                Low
                                                                 ----                ---
<S>                                                            <C>                  <C>
Fiscal year ended March 31, 2000
First quarter.........................................           $ 1.75             $ 1.13
Second quarter........................................           $ 4.56             $ 1.25
Third quarter.........................................           $ 5.69             $ 2.28
Fourth quarter........................................           $11.00             $ 3.63

Fiscal year ended March 31, 2001
First quarter ........................................           $ 5.25             $ 2.63
Second quarter .......................................           $ 4.50             $ 2.38
Third quarter........................................            $ 3.63             $ 1.06
Fourth quarter........................................           $ 2.75             $ 0.50

</TABLE>

At June 25, 2001 there were approximately 69 holders of record of the Company's
common stock.

     We have not paid cash dividends and do not anticipate paying cash dividends
in the foreseeable future. We expect to utilize future earnings to finance
future growth. The actual amount of any dividends paid would be subject to the
discretion of the Board of Directors of the Company and would depend on the
Company's operations, financial and business requirements, compliance with bank
covenants and other factors.


ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS


RESULTS OF OPERATIONS

     The following table summarizes the Company's results of operations both in
dollars and as a percentage of net sales for the fiscal years ended March 31,
2000 and 2001.

<TABLE>
<CAPTION>

(Dollars in thousands)                                          Year Ended March 31,
                                                 ------------------------------------------------
                                                            2000                   2001
                                                 -----------------------  -----------------------
<S>                                              <C>            <C>       <C>             <C>
Revenues
      Cellular and wireless telephony .......    $ 5,431         68.9%    $ 1,148         22.7%
      PCS and wireless messaging ............      1,713         21.8       2,628         51.8
      MIC and other .........................        733          9.3       1,295         25.5
                                                 -------       ------     -------       ------
          Total net sales ...................      7,877        100.0       5,071        100.0
      Cost of goods sold ....................      5,285         67.1       6,580        129.7
                                                 -------       ------     -------       ------


                                       10

<PAGE>


      Gross profit (loss) ...................      2,592         32.9      (1,509)        29.7
      Operating expenses:
         Selling, general and administrative.      2,594         32.9       2,385         47.0
         Research and development ...........      1,917         24.3       2,937         57.9
                                                 -------       ------     -------       ------
      Operating loss ........................     (1,919)       (24.3)     (6,831)      (134.7)
      Other income, net .....................       (242)        (3.0)        (18)        (0.4)
                                                 -------       ------     -------       ------
      Loss before income taxes ..............     (1,677)       (21.3)     (6,813)      (134.3)
      Income tax expense ....................         --         --          (288)        (5.7)
                                                 -------       ------     -------       ------
      Net loss ..............................    $(1,677)       (21.3)%   $(7,101)      (140.0)%
                                                 =======       ======     =======       =======
</TABLE>

FISCAL YEARS ENDED MARCH 31, 2001 AND 2000

     NET SALES. Net sales for fiscal 2001 were $5.1 million compared to $7.9
million in fiscal 2000. Cellular and wireless telephony products contributed
$1.1 million, or 22.6% of net sales in fiscal 2001 compared to $5.4 million,
or 68.9 % of sales in fiscal 2000. The decrease in cellular and wireless
telephony products is attributable to reduced shipment levels due to
long-term development of new products for new customers and short term delays
for existing orders, our decision to focus on new product development in
other non-cellular frequencies such as PCS and wireless messaging, and due to
the fulfillment of large orders for cellular and wireless telephony products
during the first half of fiscal 2000. Sales of PCS and wireless messaging
products totaled $2.6 million, or 51.8% of net sales in fiscal 2001, compared
to $1.7 million, or 21.82% of net sales in fiscal 2000. The increase in sales
of PCS and wireless messaging products can be attributed to the
aforementioned emphasis upon product development in the PCS and wireless
messaging markets and the successful launch and delivery of new products for
this market. MIC and other sales were $1,296,000, or 25.5% of net sales in
fiscal 2001 compared to $733,00 or 9.3% of net sales in fiscal 2000. The
increase reflects the strategic decision management made at the end of fiscal
2000 to focus more on this market including the purchase of rights to a line
of hybrid microwave circuit products and the hiring engineering talent with
experience in this segment. We expect to see continued growth in this market
and we are moving to capitalize on opportunities within the market, including
defense and optical amplifiers. Sales of products outside the United States
represented approximately 10.8% and 3.9% of net sales during fiscal 2000 and
2001, respectively.

     GROSS PROFIT/LOSS. Gross loss for fiscal 2001 was $1.5 million, or 29.7%
of net sales, compared to a gross profit of $2.6 million, or 32.9% of net
sales, in fiscal 2000. The decrease in margin can be contributed to changes
to the Company's management team and their new marketing strategies, where a
$1.4 million one time write down of inventory was recorded relating to
obsolete, slow moving, and discontinued product lines, lower average selling
prices and gross margins for our products in the competitive OEM market, and
increased allocated overhead costs including labor and related costs. We
expect the pressure on selling prices in the wireless markets to continue in
fiscal 2002.

     SELLING, GENERAL AND ADMINISTRATIVE COSTS. Selling, general and
administrative costs for fiscal 2001 were $2.4 million, or 47.0% of net sales,
compared to $2.6 million, or 32.9% of net sales, for fiscal 2000. The aggregate
decrease is attributable to reduced commissions expense at lower sales volumes
and reduced commission rates, as we cancelled agreements with independent sales
representatives and utilized salaried Company sales representatives. The savings
were partially offset by increased sales and administration labor and benefit
costs including one time severance arrangements related to the change in
management in February 2001, and due to increased professional fees. We believe
continued investment in marketing and administration is necessary to compete
profitably in the intensely competitive wireless industry.

     RESEARCH AND DEVELOPMENT COSTS. Research and development costs for fiscal
2001 were $2.9 million, or 57.9% of net sales, compared to $1.9 million, or
24.3% of net sales, for the corresponding period in fiscal 2000. The increase is
due primarily to additional labor and material costs utilized for new product
development for the PCS and wireless messaging markets, one-time charges for
material related to the termination of unmarketable projects in fiscal 2001, and
due to higher depreciation expense related to increased levels of capital
equipment required to design and develop new products for the PCS and wireless
telephony markets.

     OTHER INCOME, NET. Other income for fiscal 2001 decreased to $18,000
compared to $242,000 for fiscal 2000. The reduction is due to increased interest
expense related to the additional leased equipment and to a reduction in


                                      11

<PAGE>

interest income generated from invested cash. The cash balances are a function
of the net proceeds from the Company's public offering in December 1995 and from
the net cash flow as a result of operations.

     INCOME TAX EXPENSE. We recorded a charge for taxes of $288,000 in fiscal
2001 compared to no income tax expense or benefit for fiscal 2000. During the
3rd quarter of fiscal 2001, the Company elected to increase its valuation
allowance related to its $288,000 deferred tax asset due to the uncertainty of
realizing tax benefits from that asset. The Company did not record any benefit
from taxes related to the losses accumulated during fiscal 2001 as it had
utilized its net operating loss carryback during fiscal 1999.

     NET LOSS. For the reasons set forth above, the Company generated a net loss
in fiscal 2001 of $7.1 million, or 140.0% of net sales compared to a net loss of
$1.7 million, or 21.3% of net sales in fiscal 2000.


LIQUIDITY AND CAPITAL RESOURCES

     Historically, we have financed our operations primarily from internally
generated funds and, to a lesser extent, loans from stockholders and capital
lease obligations. In December 1995, we completed an initial public offering of
1,725,000 shares of common stock (including the exercise of the underwriters'
over allotment option), raising net proceeds of approximately $7.7 million. Of
such net proceeds, $425,000 was used to repay loans from certain stockholders
and the remainder has been used to expand manufacturing capability through the
leasing and outfitting of substantially larger facilities, the acquisition of
equipment sufficient to produce higher product quantities and the employment and
training of additional employees capable of expanding production and sales. The
net proceeds of the initial public offering have also been used to maintain
inventory and working capital balances, and increased research and development
expenses.

     In August 1998, we announced that the Board of Directors authorized a stock
buyback program of up to 400,000 shares of the Company's outstanding common
stock. Shares repurchased pursuant to the buyback were purchased from time to
time on the open market and are being held for issuance in connection with the
future exercise of employee stock options. During fiscal 2001, we did not
repurchase any additional shares in open market transactions and have retained
the 114,500 shares repurchased during fiscal 1999.

     In April 2000, we entered into two non-cancelable capital leases to acquire
test equipment valued in aggregate at $47,000. The terms of the leases are
identical and call for 36 equal monthly aggregate payments of $1,524 commencing
in May 2000 and at an annual interest rate of 9.9%.

     In August 2000, we entered into two non-cancelable capital leases to
acquire manufacturing equipment valued in aggregate at $342,000. The terms of
the lease are identical and call for 60 monthly payments commencing in August
2000 with an initial payment amount of $10,962. The payment amount decreases to
$7,393 in September 2001 and to $4,911 in September 2002. The annual interest
rate is 8.59%.

     In October 2000, we entered into a non-cancelable capital lease to acquire
manufacturing equipment valued in aggregate at $36,000. The terms of the lease
call for 60 monthly payments commencing in November 2000 with an initial amount
of $1,090. The payment amount decreases to $727 in November 2001 and to $487 in
November 2002. The annual interest rate is 10.71%.

     In November 2000, we renewed our line of credit with Silicon Valley Bank
for $1,000,000. This revolving line of credit bears interest at the bank's
reference rate (prime rate) plus 1.00 percent (9.00% at March 31, 2001). This
line of credit is secured by substantially all of the Company's assets and
expires on November 9, 2001. As of March 31, 2001, there was $143,000 in
outstanding borrowings under the line of credit. Borrowings under the line of
credit are subject to a borrowing base of accounts receivable and there are no
financial covenants. In connection with the renewal of the line of credit, we
issued the bank a warrant to purchase 27,429 shares of common stock at a price
of $2.1875 per share and we have recorded a charge of $59,000 as shown on the
statement of stockholders equity in the financial statements. This warrant
expires on November 9, 2007.

     In February 2001, we entered into two non cancelable capital leases to
acquire manufacturing equipment valued in aggregate at $111,000. The terms of
the leases are identical and call for 48 and 60 monthly payments of $969 and


                                      12
<PAGE>


$1721, respectively. Payments for these leases commenced in March, 2001 and the
leases bear interest rates of 14.9% and 12.7% respectively.

     In March 2001, we entered into a non-cancelable capital lease to acquire
manufacturing equipment valued in aggregate at $23,000. The terms of the lease
call for 36 monthly payments commencing in April 2001 with a payment amount of
$809. The annual interest rate is 15.0%.

     At March 31, 2001, we had $860,000 in cash and cash equivalents. The
Company's operating activities used cash of approximately $3.9 million in fiscal
2001 primarily as a result of a loss from operations. The Company's capital
expenditures of $382,000 for fiscal 2001 were primarily for manufacturing test
equipment and information system upgrades and additions.

     Our auditors have included an explanatory paragraph relating to our ability
to continue as a going concern as of and for the year ended March 31, 2001, in
their Report of Independent Certified Public Accountants included in our audited
financial statements contained elsewhere in this report. For the year ended
March 31, 2001, we incurred a net loss of $ 7.1 million, negative cash flows
from operations of approximately $3.9 million and an accumulated deficit of $7.6
million. The auditors consider these factors to raise substantial doubt about
the Company's ability to continue as a going concern.

     Recovery of the Company's assets is dependent upon future events, the
outcome of which is indeterminable. Successful completion of the Company's
development program and its transition to the attainment of profitable
operations is dependent upon the Company achieving a level of sales adequate to
support the Company's cost structure. In addition, realization of a major
portion of the assets in the accompanying balance sheet is dependent upon the
Company's ability to meet its financing requirements and the success of its
plans to sell products. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or
amounts and classification of liabilities that might be necessary should the
Company be unable to continue in existence.

     The Company believes the funds provided from the private placement and the
borrowing capacity from its line of credit may not be sufficient to finance the
Company for the next 12 months. The Company is attempting to procure additional
sources of financing in the event that the capital available as of March 31,
2001 is insufficient. Other sources may include, but not be limited to, an
equity investment in the Company by a third party. There are, however, no
assurances that the Company will be able to successfully obtain additional
financing at terms acceptable to the Company


ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS

     Future operating results may be impacted by a number of factors that could
cause actual results to differ materially from those stated herein, which
reflect management's current expectations. These factors include industry
specific factors (including the reliance upon continued growth of the wireless
communications market, significant competition in the communications
infrastructure equipment industry characterized by rapid technological change,
new product development, product obsolescence, and significant price erosion
over the life of a product), our ability to timely develop and produce
commercially viable products at competitive prices, the ability of our products
to operate and be compatible with base station equipment of various OEMs, our
ability to produce products which meet the quality standards of both existing
and potential new customers, our ability to accurately anticipate customer
demand, our ability to manage expense levels, the availability and cost of
components, and our ability to finance our activities, maintain our financial
liquidity, and worldwide economic and political conditions.

     We were notified by Nasdaq on April 16, 2001 that our stock had failed
to maintain a minimum market value of public float ("MVPF") of $5,000,000
over the 30 consecutive trading days prior to the notice as required by the
Nasdaq Market under Marketplace Rule 4450(a)(2).  On May 2, 2001 we were
notified by Nasdaq that our common stock had failed to maintain a minimum bid
price of $1.00 over the 30 consecutive trading days prior the notice as
required by the Nasdaq Market under Marketplace rule 4450(a)(5).  The Company
has been given ninety (90) days from the date of each notice to comply with
each of the minimum requirements of the above rules or Nasdaq will notify the
Company that its securities will be delisted.  If Nasdaq, in its discretion,
decides to delist our common stock, we would have the right to appeal that
decision, however, we cannot assure you that such an appeal would be
successful.  If our common stock is delisted, then we may apply for listing
on the Nasdaq SmallCap Market, subject to Nasdaq's approval. If our common
stock is not approved for trading on the Nasdaq SmallCap Market, then our
common stock may trade only in the secondary markets in the so-called "pink
sheets" or Nasdaq's "OTC Bulletin Board."  Delisting from the Nasdaq National
Market could adversely affect the liquidity and price of our common stock and
it could have a long-term adverse impact on our ability to raise capital in
the future.  The Company intends to take whatever actions necessary to attain
the requirements on the Nasdaq National Market, however, no assurances can be
that it will be successful in maintaining its current listing.

     We experience significant price competition and expect price competition in
the sale of our products to remain very competitive. No assurances can be given
that the Company's competitors will not develop new technologies or enhancements
to existing products or introduce new products that will offer superior price or
performance features. We expect our competitors to offer new and existing
products at prices necessary to gain or retain market share. Several of our
competitors have substantial financial resources, which may enable them to
withstand sustained price competition or a downturn in the pricing of their
products, in the future. Substantially all of our competitors have, and


                                       13

<PAGE>

potential future competitors could have, substantially greater technical,
marketing, distribution and other resources than we have, or could have, greater
name recognition and market acceptance of their products and technologies.

     We expect our customers to continue to establish demanding
specifications for quality, performance and reliability that must be met by
our products. Products as complex as those offered by us often encounter
development delays and may contain undetected defects or failures when first
introduced or after commencement of commercial shipments. There can be no
assurances that defects or failures will not occur in the future relating to
the Company's product quality, performance and reliability that may have a
material adverse effect on our business, financial condition and results of
operations.

     We received our ISO 9001 quality certification, a uniform worldwide quality
management system standard, for its headquarters and manufacturing facility
located in Camarillo, California in August 1999. Numerous customers and
potential customers throughout the world, particularly in Europe, require that
their suppliers be ISO certified. In addition, many such customers require that
their suppliers purchase components only from subcontractors that are ISO
certified. Failure to maintain such quality certifications may affect current
and future orders and could have a material adverse effect on our business,
financial condition and results of operations.

     Sales of products outside the United States represented approximately 10.8%
and 3.9% of net sales during fiscal 2000 and 2001, respectively. We are actively
pursuing international customers, although no assurances can be given as to the
degree of success of the Company's strategic plan. International sales involve a
number of inherent risks, including imposition of government controls, currency
exchange fluctuations, potential insolvency of international distributors and
representatives or customers, reduced protection for intellectual property
rights in some countries, the impact of recessionary environments in economies
outside the United States, political instability and generally longer receivable
collection periods, as well as tariffs and other trade barriers. In addition,
because substantially all our foreign sales are denominated in U.S. dollars,
increases in the value of the dollar relative to the local currency would
increase the price of our products in foreign markets and make our products
relatively more expensive and less price competitive than competitors' products
that are priced in local currencies. There can be no assurances that these
factors will not have a material adverse effect on our future international
sales and, consequently, on our business, financial condition and results of
operations.

     We currently sell a majority of our product into the wireless OEM market.
As a result, we receive periodic order forecasts from our major customers who
have no obligation to purchase the forecasted amounts. Nonetheless, we maintain
significant work in process and raw materials inventory as well as increased
levels of technical production staff to meet order forecasts and/or management's
projections. To the extent major customers purchase less than the forecasted
amounts, we will have higher levels of inventory than otherwise needed,
increasing the risk of obsolescence and we will have increased levels of
production staff to support such forecasted orders. Such higher levels of
inventory and increased employee levels could reduce our liquidity and could
have a material adverse effect on our business, results of operation and
financial condition.

     Demand for wireless infrastructure equipment is driven by demand for
wireless service. Although demand for power amplifiers has grown in recent
years, if demand for wireless services fails to increase or increases slower
than we or our customers currently anticipate, our business, financial condition
and results of operations would be materially and adversely affected.

     The markets in which we and our customers compete is characterized by
rapidly changing technology, evolving industry standards and communications
protocols and continuous improvements in products and services. Our future
success depends on our ability to enhance our current products and to develop
and introduce in a timely manner new products that keep pace with technological
developments, industry standards and communications protocols, compete
effectively on the basis of price, performance and quality, adequately address
OEM customer and end-user customer requirements, and achieve market acceptance.
We believe that to remain competitive in the future we will need to continue to
develop new products, which will require the investment of significant financial
resources in new product development. In this regard, with the deployment of
PCS, we have developed a line of amplifiers for PCS networks. We have also
developed several WLL products and have still more in development. There can be
no assurances that we will manufacture such products at competitive prices in
sufficient volumes.


                                       14

<PAGE>

     Our quarterly and annual results have in the past been, and will continue
to be, subject to significant fluctuations due to a number of factors, any of
which could have a material adverse effect on our business, financial condition
and results of operations. There can be no assurance that we will not experience
such fluctuations in the future. We establish our expenditure levels for product
development and other operating expenses based on expected revenues, and
expenses are relatively fixed in the short term. As a result, variations in
timing of revenues can cause significant variations in quarterly results of
operations. There can be no assurances that we will be profitable on a
quarter-to-quarter basis in the future. We believe that period-to-period
comparisons of our financial results are not necessarily meaningful and should
not be relied upon as an indication of future performance. Due to these factors,
it is likely that in some future quarter or quarters our revenues or operating
results will not meet the expectations of public stock market analysts or
investors. In such event, the market price of the Company's common stock would
be materially adversely affected.

QUANTITATIVE AND QUALItative DISCLOSURES ABOUT MARKET RISK

     Our primary market risk exposure is interest rate risk. As of March 31,
2001, our line of credit facilities were the only debt facilities subject to
variable interest rates. We will monitor the level of risk by keeping variable
rate exposures at acceptable levels.


                                       15

<PAGE>




ITEM 7.   FINANCIAL STATEMENTS


                          INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

                                                                                             Page
                                                                                             ----
<S>                                                                                          <C>
Reports of Independent Certified Public Accountants........................................  17-18

Balance Sheet as of March 31, 2001.........................................................   19

Statements of Operations for the years ended March 31, 2000 and March 31, 2001.............   20

Statements of Stockholders' Equity for the years ended March 31, 2000 and March 31, 2001...   21

Statements of Cash Flows for the years ended March 31, 2000 and March 31, 2001.............   22

Notes to Financial Statements..............................................................  23-30
</TABLE>


                                       16


<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Board of Directors and Shareholders

AML Communications, Inc.

We have audited the accompanying balance sheet of AML Communications, Inc. as of
March 31, 2001, and the related statements of operations, comprehensive loss,
shareholders' equity, and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the 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 audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AML Communications, Inc. as of
March 31, 2001, and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles generally accepted in
the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, during the year ended March 31, 2001, the Company incurred
a net loss of $7,101,000, and it had negative cash flows from operations of
$3,919,000. In addition, the Company had an accumulated deficit of $7,593,000 as
of March 31, 2001. These factors, among others, as discussed in Note 2 to the
financial statements, raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


SINGER LEWAK GREENBAUM & GOLDSTEIN LLP


Los Angeles, California

June 13, 2001


                                       17

<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To AML Communications, Inc.:

We have audited the accompanying balance sheet of AML Communications, Inc. (a
Delaware Corporation) as of March 31, 2000 (not presented herein), and the
related statements of operations, stockholders' equity and cash flows for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the 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 audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AML Communications, Inc. as of
March 31, 2000, and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles generally accepted in
the United States.



ARTHUR ANDERSEN LLP

Los Angeles, California

May 19, 2000


                                       18


<PAGE>

                            AML COMMUNICATIONS, INC.

                                  BALANCE SHEET
                              AS OF MARCH 31, 2001

<TABLE>
<S>                                                                                 <C>

ASSETS

Current Assets:
     Cash and cash equivalents ..............................................       $    860,000
     Accounts receivable, net of allowance for doubtful accounts of $57,000 .            740,000
     Inventories ............................................................          1,138,000
     Other current assets ...................................................            345,000
                                                                                    ------------
          Total current assets ..............................................          3,083,000
Property and Equipment, at cost: ............................................          5,697,000
     Less--Accumulated depreciation and amortization ........................         (3,828,000)
                                                                                    ------------
                                                                                       1,869,000
Other assets ................................................................            118,000
                                                                                    ------------
                                                                                    $  5,070,000
                                                                                    ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
     Accounts payable .......................................................       $  1,438,000
     Line of credit .........................................................            143,000
     Current portion of capital lease obligations ...........................            185,000
        Accrued expenses:
             Accrued payroll and payroll related expenses ...................            285,000
             Other accrued expenses .........................................            318,000
                                                                                    ------------
               Total current liabilities ....................................          2,369,000

Capital lease obligations, net of current portion ...........................            412,000
Commitments and Contingencies
Stockholders' Equity:
     Preferred stock, $.01 par value:
          1,000,000 shares authorized; no shares issued or
          outstanding .......................................................                 --
     Common stock, $.01 par value:
          15,000,000 shares authorized;
          6,932,389 shares issued and 6,817,889 shares outstanding ..........             69,000
     Capital in excess of par value .........................................         10,036,000
     Treasury stock-- 114,500 shares, at cost ...............................           (223,000)
     Accumulated deficit ....................................................         (7,593,000)
                                                                                    ------------
             Total stockholders' equity .....................................          2,289,000
                                                                                    ------------
                                                                                    $  5,070,000
                                                                                    ============
</TABLE>
The accompanying notes are an integral part of these financial statements.


                                       19

<PAGE>

                            AML COMMUNICATIONS, INC.

                            STATEMENTS OF OPERATIONS

                   FOR THE YEARS ENDED MARCH 31, 2000 AND 2001

<TABLE>
<CAPTION>
                                                                      Year Ended
                                                             ------------------------------
                                                               March 31,         March 31,
                                                                2000              2001
                                                             -----------        -----------
<S>                                                          <C>                <C>
Net sales ............................................       $ 7,877,000        $ 5,071,000
Cost of goods sold ...................................         5,285,000          6,580,000
                                                             -----------        -----------

          Gross profit(loss) .........................         2,592,000         (1,509,000)

Operating Expenses:
     Selling, general and administrative .............         2,594,000          2,385,000
     Research and development ........................         1,917,000          2,937,000
                                                             -----------        -----------
                                                               4,511,000          5,322,000
                                                             -----------        -----------
          Operating loss .............................        (1,919,000)        (6,831,000)

Other (Income) Expense:
     Interest income .................................          (269,000)          (104,000)

     Interest expense ................................            27,000             82,000
     Other ...........................................                --              4,000
                                                             -----------        -----------
                                                                (242,000)           (18,000)
                                                             -----------        -----------
          Loss before
             income tax expense ......................        (1,677,000)        (6,813,000)

Income tax expense ...................................                --           (288,000)
                                                             -----------        -----------

          Net loss ...................................       $(1,677,000)       $(7,101,000)
                                                             ===========        ===========


Basic and Diluted Loss Per Common Share ..............       $     (0.27)       $     (1.02)
                                                             ===========        ===========
Basic and Diluted Weighted Average Number of Shares of
Common Stock Outstanding .............................         6,270,000          6,932,000
                                                             ===========        ===========
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                       20

<PAGE>

                            AML COMMUNICATIONS, INC.

                       STATEMENTS OF STOCKHOLDERS' EQUITY

                   FOR THE YEARS ENDED MARCH 31, 2000 AND 2001

<TABLE>
<CAPTION>

                                                                                                        RETAINED
                                                          CAPITAL IN                                    EARNINGS
                                  COMMON STOCK            EXCESS OF             TREASURY STOCK         ACCUMULATED
                            SHARES            AMOUNT      PAR VALUE           SHARES     AMOUNT          DEFICIT         TOTALS
                            ------------   ------------   ------------  ------------   ------------  --------------   ------------
<S>                         <C>            <C>            <C>           <C>            <C>           <C>              <C>
Balance, March 31,1999 ..      6,260,129   $     63,000   $  9,365,000      (114,500)  $   (223,000)   $  1,185,000   $ 10,390,000

   Exercise of stock
     options ............         55,127          1,000        115,000            --             --              --        116,000

   Net loss .............             --             --             --            --             --    (1,677,000))     (1,677,000)
                            ------------   ------------   ------------  ------------   ------------    ------------   ------------

Balance, March 31,2000 ..      6,315,256         64,000      9,480,000      (114,500)      (223,000)       (492,000)     8,829,000

   Exercise of stock
     options ............          1,750             --          2,000            --             --              --          2,000

   Private placement ....        615,383          5,000        495,000            --             --              --        500,000

   Issuance of Warrants .             --             --         59,000            --             --              --         59,000

   Net loss .............             --             --             --            --             --      (7,101,000)    (7,101,000)
                            ------------   ------------   ------------  ------------   ------------    ------------   ------------

Balance, March 31,2001 ..      6,932,389   $     69,000   $ 10,036,000      (114,500)  $   (223,000)   $ (7,593,000)  $  2,289,000
                            ============   ============   ============  ============   ============    ============   ============
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                       21

<PAGE>



                             AML COMMUNICATIONS, INC.

                            STATEMENTS OF CASH FLOWS

                     FOR THE YEARS ENDED MARCH 31, 2000 AND 2001


<TABLE>
<CAPTION>

                                                                    Year Ended
                                                          ------------------------------
                                                             March 31,         March 31,
                                                              2000              2001
                                                          -------------      ------------
<S>                                                       <C>                <C>
Cash Flows from Operating Activities:
     Net loss .......................................      $(1,677,000)      $(7,101,000)
     Adjustments to reconcile net loss to net cash
        used in operating activities:
          Depreciation and amortization .............          763,000           940,000
          Changes in assets and liabilities:
             Decrease (increase) in:
                    Accounts receivable .............         (707,000)          394,000
                    Inventories .....................         (557,000)        1,203,000
                    Income tax receivable ...........          537,000                --
                    Other current assets ............         (294,000)          166,000
                    Other assets ....................               --           184,000
             Increase (decrease) in:
                    Accounts payable ................          286,000           594,000
                    Accrued expenses ................          (42,000)         (109,000)
                    Income taxes payable ............          190,000          (190,000)
                                                           -----------       -----------
                    Net cash used in operating
                       activities ...................       (1,501,000)       (3,919,000)
                                                           -----------       -----------
Cash Flows from Investing Activities:
     Purchases of property and equipment ............         (490,000)         (382,000)
                                                           -----------       -----------
                    Net cash used in investing
                       activities ...................         (490,000)         (382,000)
                                                           -----------       -----------
Cash Flows from Financing Activities:
     Proceeds from exercise of stock options ........          116,000             2,000
     Proceeds from private stock placement ..........               --           500,000
     Proceeds from line of credit ...................               --           143,000
     Principal payments capital lease obligations ...          (63,000)         (143,000)
                                                           -----------       -----------
                    Net cash provided by financing
                       activities ...................           53,000           502,000
                                                           -----------       -----------
Net decrease in Cash and Cash Equivalents ...........       (1,938,000)       (3,799,000)
Cash and Cash Equivalents, beginning of year ........        6,597,000         4,659,000
                                                           -----------       -----------
Cash and Cash Equivalents, end of year ..............      $ 4,659,000       $   860,000
                                                           ===========       ===========
Supplemental disclosures of cash flow information:
     Cash paid during the period for:
              Interest .............................      $    26,000       $    82,000
                                                           ===========       ===========
              Income taxes .........................      $         0       $   190,000
                                                           ===========       ===========
     Non-cash transactions:

              Debt incurred to purchase equipment ..      $    24,000       $   558,000
                                                           ===========       ===========
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                      22

<PAGE>

                            AML COMMUNICATIONS, INC.

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 2001

1.    LINE OF BUSINESS

     AML Communications, Inc. is a designer, manufacturer and marketer of
amplifiers and related products for the global wireless communications industry.
The Company currently focuses on the following sectors of the wireless market:
cellular telephony, microwave integrated circuits, broadband wireless access,
personal communications services, wireless messaging, low earth orbit satellite
networks, and optical communications.


2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      BASIS OF PRESENTATION

     The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. However, during the year ended March 31, 2001, the
Company incurred a net loss of $ 7.1 million and it had negative cash flows from
operations of approximately $3.9 million. In addition, the Company had an
accumulated deficit of $7.6 million as of March 31, 2001. These factors raise
substantial doubt about the Company's ability to continue as a going concern.

     Recovery of the Company's assets is dependent upon future events, the
outcome of which is indeterminable. Successful completion of the Company's
development program and its transition to the attainment of profitable
operations is dependent upon the Company achieving a level of sales adequate to
support the Company's cost structure. In addition, realization of a major
portion of the assets in the accompanying balance sheet is dependent upon the
Company's ability to meet its financing requirements and the success of its
plans to sell products. The financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or
amounts and classification of liabilities that might be necessary should the
Company be unable to continue in existence.

     The Company is currently negotiating with certain investors about raising
additional sources of financing in addition to the $500,000 raised in March 2001
through a private placement offering. Other sources may include, but are not
limited to, an equity investment in the Company by a third party. There are,
however, no assurances that the Company will be able to successfully obtain
financing at terms acceptable to the Company.

     CONCENTRATION OF CASH

     The Company considers all liquid investments with an original maturity of
three months or less to be cash equivalents. As of March 31, 2001, the Company
had cash and cash equivalent balances totaling $682,000 in financial
institutions which were in excess of federally insured amounts.

     CREDIT RISK

     The Company performs ongoing credit evaluations of its customers' financial
conditions and generally does not require collateral on accounts receivable,
hence the accounts receivable are unsecured and the Company is at risk to the
extent such amounts become uncollectable. As of March 31, 2001, two customers
comprised 41.6% and 16.5% of accounts receivable, respectively.

     During fiscal 2000, the Company had sales to two customers which
represented 43.0% and 19.9% of net sales, respectively. During fiscal 2001, the
Company had sales to two customers which represented 22.4% and 12.0% of net
sales, respectively.


                                        23

<PAGE>

     The Company's customers are comprised primarily of cellular service
providers, original equipment manufacturers ("OEMs"), and miliary sub
contractors. Customers are located primarily throughout the United States.
However, the Company also had sales to customers in South America, Western
Europe, Canada, Israel, and Russia. During the fiscal years ended March 31, 2000
and March 31, 2001, international sales were $849,000, or 10.8% of net sales and
$199,000, or 3.9% of net sales, respectively.

     INDUSTRY RISK

     The wireless communications equipment industry is highly competitive and is
characterized by rapid technology change, new product development, product
obsolescence, evolving industry standards and substantial price erosion over the
life of a product. The Company continues to be subject to such risk.

     REVENUE RECOGNITION

     The Company recognizes revenue from product sales at the time of shipment.

     In December 1999, the Securities and Exchange Commission staff released
Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements," to provide guidance on the recognition, presentation, and
disclosure of revenue in financial statements. Changes in accounting to apply
the guidance in SAB No. 101 may be accounted for as a change in accounting
principle effective April 1, 2000. SAB No. 101 has not had a material effect
on the Company's revenue recognition and results of operations

     INVENTORIES

     Inventories include costs of materials, labor and manufacturing overhead
and are stated at the lower of cost (first-in, first-out) or market, and consist
of the following:

<TABLE>
<CAPTION>

                                         March 31, 2001
                                         -------------
<S>                                      <C>
                  Raw materials.......       $ 865,000
                  Work in process......        186,000
                  Finished goods......          87,000
                                         -------------
                                           $ 1,138,000
                                         =============
</TABLE>

     DEPRECIATION AND AMORTIZATION

     Property and equipment are being depreciated and amortized on the
straight-line basis over the following estimated useful lives:

                  Machinery and equipment.....................3 to 5 years
                  Furniture and fixtures......................5 years
                  Leasehold improvements......................Life of lease

     The Company capitalizes expenditures that materially increase asset lives
and charges ordinary repairs and maintenance to operations as incurred. When
assets are sold or otherwise disposed of, the cost and related depreciation or
amortization are removed from the accounts and any resulting gain or loss is
included in other income (expense) in the accompanying statements of operations.

     Property and equipment consist of the following:


                                      24

<PAGE>


<TABLE>
<CAPTION>

                                                               March 31, 2001
                                                               ------------
<S>                                                            <C>
                  Machinery and equipment...................    $ 4,932,000
                  Furniture and fixtures....................        131,000
                  Leasehold improvements....................        634,000
                                                               ------------
                                                                $ 5,697,000
                                                               ============

</TABLE>

Depreciation expense for the years ended March 31, 2000 and March 31, 2001
were $763,000 and $940,000, respectively.

Included within property and equipment is $846,000 of assets under capital
leases for which $134,000 of accumulated depreciation has been charged.

     WARRANTY AND CUSTOMER SUPPORT

     The Company typically warrants its products against defects in materials
and workmanship for a period of one year from the date of shipment. A provision
for estimated future warranty and customer support is recorded when products are
shipped. To date, warranty and customer support costs have not been material.

     EARNINGS (LOSS) PER SHARE

     Earnings per share calculations are in accordance with Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings per Share".
Accordingly, "basic" earnings per share is computed by dividing net income or
loss by the weighted average number of shares outstanding for the year.
"Diluted" earnings per share is computed by dividing net income or loss by the
total of the weighted average number of shares outstanding plus, if applicable,
the dilutive effect of outstanding stock options (applying the treasury stock
method).

Due to the loss in fiscal 2000 and fiscal 2001, the effect of outstanding
options was not included as the effect would be anti-dilutive.

     USE OF ESTIMATE IN PREPARATION OF FINANCIAL STATEMENTS

     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.

     BUSINESS SEGMENTS

     The Company operates as one reportable business segment. The Company
designs, manufactures, and markets amplifiers and related products for the
global wireless communications industry including, cellular, wireless telephony,
microwave integrated circuits, broadband wireless access, personal
communications services, wireless messaging, and optical communications. The
revenues earned by each market category are as follows:

<TABLE>
<CAPTION>

(DOLLARS IN THOUSANDS)
                                                                            YEAR ENDED MARCH 31,
                                                              -----------------------------------------------
                                                                     2000                      2001
                                                              ----------------------   ----------------------
<S>                                                           <C>            <C>       <C>         <C>
Revenues
Cellular and wireless telephony.............................. $   5,431        68.9%     $1,148       22.7%
PCS and wireless messaging..................................      1,713        21.8       2,628       51.8
MIC and other...............................................        733         9.3       1,295       25.5
                                                              ---------       -----    --------    -------
Total net sales.............................................      7,877       100.0       5,071      100.0
</TABLE>

     RESEARCH AND DEVELOPMENT COSTS


                                      25

<PAGE>


     Research and development costs are charged to expense as incurred.

     FAIR VALUE OF FINANCIAL INSTRUMENTS

     The Company measures its financial assets and liabilities in accordance
with generally accepted accounting principles. For certain of the Company's
financial instruments, including cash and cash equivalents, accounts receivable,
notes receivable - related parties, accounts payable, and accrued expenses, the
carrying amounts approximate fair value due to their short maturities. The
amount shown for short-term loans also approximates fair value because current
interest rates offered to the Company for short-term loans of similar maturities
are substantially the same or the difference is immaterial.

     ADVERTISING COSTS

     The Company expenses advertising costs as incurred. Advertising costs for
the years ended March 31, 2000 and 2001 were $67,000 and $87,000, respectively.

     RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     In March 2000, the Financial Accounting Standards Board ("FASB") issued
FASB Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation," (an Interpretation of Accounting Principles Bulletin Opinion No.
25 ("APB 25")) ("FIN 44"). FIN 44 provides guidance on the application of APB
25, particularly as it relates to options. The effective date of FIN 44 is July
1, 2000, and the Company has adopted FIN 44 as of that date.

     In June 2000, the FASB issued SFAS No. 138, "Accounting for Certain
Instruments and Certain Hedging Activities." This statement is not applicable to
the Company.

     In June 2000, the FASB issued SFAS No. 139, "Rescission of FASB Statement
No. 53 and Amendments to Statements No. 63, 89, and 121." This statement is not
applicable to the Company.

     In September 2000, the FASB issued SFAS No. 140, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities, a
replacement of FASB Statement No. 125." This statement is not applicable to the
Company.

3.   DEBT AND LEASE COMMITMENTS

     BANK LINE OF CREDIT

     In November 2000, the Company renewed its line of credit with Silicon
Valley Bank for $1,000,000. This revolving line of credit bears interest at the
bank's reference rate (prime rate) plus 1.00 percent (9.00% at March 31, 2001).
This line of credit is secured by substantially all of the Company's assets and
expires on November 9, 2001. As of March 31, 2001, there was $143,000 in
outstanding borrowings under the line of credit. Borrowings under the line of
credit are subject to a borrowing base of accounts receivable and there are no
financial covenants. In connection with the renewal of the line of credit, the
Company issued the bank a warrant to purchase 27,429 shares of common stock at a
price of $2.1875 per share. This warrant expires on November 9, 2007.

     CAPITAL AND OPERATING LEASE OBLIGATIONS

     The Company leases its office space, manufacturing facility and certain
equipment under long-term operating leases expiring at various dates through
April 2003. Total rent expense under these operating leases was approximately
$155,000 and $159,000 during the years ended March 31, 2000 and 2001,
respectively. Included in property and equipment is approximately $846,000 of
equipment, which is leased under non-cancelable leases, accounted for as capital
leases which expire through January, 2006. The effective interest rate for these
leases range from 8.6% to 15.0%.


                                       26

<PAGE>


     Total minimum lease payments under the above leases are as follows:

<TABLE>
<CAPTION>

                                                                Capital       Operating
                                                                 Leases         Leases          Total
                                                                --------       ---------     ----------
<S>                                                            <C>             <C>           <C>
     Year ending March 31,
         2002.............................................     $ 241,000       $ 164,000     $  405,000
         2003.............................................       202,000         171,000        373,000
         2004.............................................       140,000          15,000        155,000
         2005.............................................        96,000              --         96,000
         Thereafter.......................................        45,000              --         45,000
                                                                --------       ---------     ----------
                                                                 724,000       $ 350,000     $1,074,000
     Less--Amount representing interest....................     (127,000)      =========     ==========
                                                                ---------
     Present value of minimum lease payments..............       597,000
     Less--Current portion.................................     (185,000)
                                                                ---------
                                                               $ 412,000
                                                                =========
</TABLE>


4.   INCOME TAXES

     The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards No. 109 ("SFAS 109"). Under SFAS 109, deferred
income tax assets or liabilities are computed based on the temporary difference
between the financial statement and income tax bases of assets and liabilities
using the currently enacted marginal income tax rate. Deferred income tax
expenses or credits are based on the changes in the deferred income tax assets
or liabilities from period to period.

     The Company recorded a provision for income taxes for the year ended March
31, 2001 due to the increase in valuation allowance.


Differences between the benefit from income taxes and income taxes at the
statutory federal income tax rate for years ended March 31, 2000 and 2001 are as
follows:

<TABLE>
<CAPTION>

                                                                MARCH 31,                     MARCH 31,
                                                                  2000                          2001
                                                      --------------------------    -------------------------
                                                         AMOUNT          PERCENT      AMOUNT         PERCENT
                                                      ------------      --------    ------------     --------
<S>                                                   <C>               <C>         <C>              <C>
Income tax at statutory federal rate ...........      $  (570,000)       (34.0%)    $(2,316,000)       (34.0%)

State income taxes, net of federal
income tax .....................................               --           --               --           --

Effect of permanent differences ................            6,000          0.4            4,000          0.5
Change in valuation allowance ..................          913,000         54.4        3,018,000         54.5
Other ..........................................         (349,000)       (20.8)        (418,000)       (18.0)
                                                      ------------      --------    ------------     --------
                                                      $         0          0.0%     $   288,000         (4.0%)
                                                      ============      ========    ============     ========
</TABLE>

Under SFAS 109, deferred tax assets may be recognized for temporary differences
that will result in deductible amounts in future periods and for loss carry
forwards. A valuation allowance is recognized if, based on the weight of
available evidence, it is more likely than not that some portion or all of the
deferred tax asset will not be realized.


                                       27

<PAGE>


     A detail of the Company's deferred tax asset as of March 31, 2001 follows:

<TABLE>
<S>                                                           <C>
         Inventory reserves.............................     $   358,000
         Allowance for doubtful accounts................          22,000
         Accrued vacation...............................          32,000
         Accrued bonus..................................          41,000
         Accrued warranty and customer support..........          12,000
         Other..........................................           6,000
         General tax credit carryforwards...............         504,000
         Net operating loss carryforwards...............       3,701,000
         Depreciation...................................          69,000
                                                              ----------
                                                               4,745,000
         Valuation allowance............................      (4,745,000)
                                                              ----------
                                                             $         0
                                                              ===========
</TABLE>

      As of March 31, 2001, the Company had federal net operating loss
carryforwards of approximately $9.6 million, expiring at various dates though
2021.


5.   STOCKHOLDERS' EQUITY

     STOCK OPTION PLAN

     The Company's Stock Incentive Plan provides for the granting of
non-qualified and incentive stock options to purchase up to 1,596,586 shares of
common stock for periods not to exceed 10 years. Options typically vest 25%
after one year from the date of grant with remaining options vesting at a rate
of 25% per year thereafter. Options may be granted to employees, officers,
directors and consultants. Activity under this plan is as follows:

<TABLE>
<CAPTION>

                                                          WEIGHTED
                                       NUMBER OF          AVERAGE
                                        SHARES          EXERCISE PRICE
                                       ---------        --------------
<S>                                    <C>              <C>
Outstanding at March 31, 1999           451,092           $   3.74

Granted .....................           268,000               1.96
Exercised ...................           (55,127)              2.10
Canceled ....................           (55,413)              3.27
                                      ----------
Outstanding at March 31, 2000           608,552               3.07

Granted .....................           377,000               1.98
Exercised ...................            (1,750)              1.22
Canceled ....................          (392,645)              2.62
                                      ----------
Outstanding at March 31, 2001           591,157           $   2.75
                                      ==========
</TABLE>


     The weighted average fair value for options granted during each year was
$1.81 and $1.54 for fiscal 2000 and fiscal 2001, respectively.

     The number of common stock options available for grant as of each year were
115,279 for fiscal 2000 and 630,924 for fiscal 2001.


                                       28

<PAGE>

     Options outstanding at March 31, 2000 and related weighted average price
and life information is as follows:

<TABLE>
<CAPTION>

                                              WEIGHTED             TOTAL
                             TOTAL            AVERAGE            WEIGHTED                               WEIGHTED
  RANGE OF EXERCISE         OPTIONS        REMAINING LIFE         AVERAGE            OPTIONS             AVERAGE
        PRICES            OUTSTANDING         (YEARS)         EXERCISE PRICE       EXERCISABLE       EXERCISE PRICE
----------------------- ---------------- ------------------- ------------------ ------------------- ------------------
<S>                     <C>              <C>                 <C>                <C>                 <C>
    $1.00 - $ 1.94         346,875              7.9                $ 1.31              59,688            $ 1.20
    $1.95 - $ 2.81          63,500              8.9                $ 2.56               8,750            $ 2.09
    $2.82 - $ 3.88          96,750              7.3                $ 3.35              19,750            $ 3.70
    $3.89 - $ 6.67          60,532              6.4                $ 5.77              40,399            $ 5.96
    $6.68 - $15.75          23,500              4.0                $13.88              22,625           $ 14.10
    -----------------     --------            -----                ------            --------           -------
    $1.00 - $15.75         591,157              7.6                $ 2.75             151,212            $ 4.78
</TABLE>

      As of March 31, 2000, there were 111,488 options exercisable with a
weighted average exercise price of $6.02.

     As permitted by SFAS 123, the Company continues to apply the accounting
rules of APB 25 and FIN 44 governing the recognition of compensation expense
from its Stock Incentive Plan. Such accounting rules measure compensation
expense on the first date at which both the number of shares and the exercise
price are known. Under the Company's plan, this would typically be the grant
date. To the extent that the exercise price equals or exceeds the market
value of the stock on the grant date, no expense is recognized. As options
are generally granted at exercise prices not less than the fair market value
on the date of grant, no compensation expense is recognized under this
accounting treatment in the accompanying statements of operations.

The fair value of options at date of grant was estimated using the Black-Scholes
model with the following weighted average assumptions:

<TABLE>
<CAPTION>

                                                                2000              2001
                                                              --------          --------
<S>                                                           <C>               <C>
     Expected life (years)...................................    10                10
     Dividend yield..........................................    --                --

</TABLE>

     The interest rate range is 5.3% - 6.2% and the volatility is 100%. The
estimated stock-based compensation cost calculated using the assumptions totaled
$481,000 and $284,000 in fiscal 2000 and fiscal 2001, respectively. This would
result in a pro forma net loss resulting from the increased compensation cost of
$2,158,000, or $(0.34) per diluted share in fiscal 2000, and pro forma net loss
of $7,384,000, or $(1.07) per diluted share in fiscal 2001. The effect of
stock-based compensation on the net loss for fiscal 2000 and 2001 may not be
representative of the effect on pro forma net income (loss) in future years
because compensation expense related to grants made prior to fiscal 1997 is not
considered.

     WARRANTS

     In connection with the initial public offering in December 1995, the
Company sold the underwriters five-year warrants to purchase an aggregate of
150,000 shares of the Company's common stock at $6.40 per common share. The
warrants expired December 2000 unexercised.

     In connection with the renewal of the Company's Line of Credit facility
through Silicon Valley Bank, the Company sold Silicon Valley Bank warrants to
purchase an aggregate of 27,429 shares of the Company's common stock at $2.1875
per common share and have recorded a charge of $59,000 as shown on the
statements of stockholders equity in the financial statements. This warrant
expires in November 2007. As of March 31, 2001, none of the shares related to
this warrant have been exercised.

     In connection with the private placement of $500,000 by a group of
investors led by Jacob Inbar, the Company issued warrants to the non-employee
investors to purchase a total of 40,000 shares of the Company's common stock at
a price of $1.125. The Company has not recorded a charge in connection to these
warrants as the charge is considered to be immaterial to the financial
statements. These warrants expire in March, 2006.


                                      29

<PAGE>

     STOCK REPURCHASE PROGRAM

     In August 1998, the Company announced that its board of directors
authorized a stock repurchase program of up to 400,000 shares of the Company's
outstanding common stock. Shares repurchased pursuant to the repurchase program
were bought from time to time in the open market and are held for issuance in
connection with the future exercise of employee stock options. The Company
repurchased 114,500 shares at an aggregate cost of $224,000 in fiscal year 1999.
For the year ended March 31, 2001, the Company did not repurchase any shares in
open market transactions.

6.    EMPLOYEE BENEFIT PLAN

     The Company has a defined contribution 401(k) employee retirement plan
(the "Plan"). Under the terms of the Plan, eligible employees, as defined,
may contribute from 1% to 16% of their pre-tax earnings to the Plan. At its
discretion, the Company may match the employees' contribution up to 6%. The
Company made no matching contribution for the years ended March 31, 2000 and
2001. In year ended March 31, 2000, the Company approved a discretionary
contribution of $57,900.  However, it has not been paid and has been accrued
on the Company's balance sheet. Additionally, no discretionary contributions
were made for year ended March 31, 2001.

7.   SIGNIFICANT FOURTH QUARTER ADJUSTMENTS

     In connection with the Company's new management team in February 2001
and their new marketing strategies, the Company recorded an expense of
$1,389,000 in the fourth quarter of 2001 relating to the write-down of
inventory.  In addition, the Company also recorded a charge of $337,000 for
the difference between the book inventory and the physical inventory at the
year end.

8.   LEGAL PROCEEDINGS

     The Company may be subject, from time to time, to various legal proceedings
relating to claims arising out of its operations in the ordinary course of its
business. The Company currently is not party to any legal proceedings, the
adverse outcome of which, individually or in the aggregate, management believes
would have a material adverse effect on the business, financial condition or
results of operations of the Company.

9.   SUBSEQUENT EVENTS

     The Company was notified by Nasdaq on April 16, 2001 that its stock had
failed to maintain a minimum market value of public float ("MVPF") of
$5,000,000 over the 30 consecutive trading days prior to the notice as
required by the Nasdaq Market under Marketplace Rule 4450(a)(2).  On May 2,
2001 AML was notified by Nasdaq that its common stock had failed to maintain
a minimum bid price of $1.00 over the 30 consecutive trading days prior the
notice as required by the Nasdaq Market under Marketplace rule 4450(a)(5).
The Company has been given ninety (90) days from the date of each notice to
comply with each of the minimum requirements of the above rules or Nasdaq
will notify the Company that its securities will be delisted.  If Nasdaq, in
its discretion, decides to delist our common stock, the Company would have
the right to appeal that decision, however, the Company cannot assure that
such an appeal would be successful.  If AML's common stock is delisted, then
the Company may apply for listing on the Nasdaq SmallCap Market, subject to
Nasdaq's approval.  If AML's common stock is not approved for trading on the
Nasdaq SmallCap Market, then the Company's common stock may trade only in the
secondary markets in the so-called "pink sheets" or Nasdaq's "OTC Bulletin
Board."  Delisting from the Nasdaq National Market could adversely affect the
liquidity and price of the Company's common stock and it could have a
long-term adverse impact on our ability to raise capital in the future.  The
Company intends to take whatever actions necessary to attain the requirements
on the Nasdaq National Market, however, no assurances can be that it will be
successful in maintaining its current listing.

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

     On May 1, 2001, a report on Form 8-K dated April 25, 2001 was filed under
Item 4 to report a change in the Company's Certifying Accountant. Specifically,
AML wished to dismiss Arthur Andersen LLP effective April 25, 2001, in order to
reduce costs. The decision to dismiss Arthur Andersen LLP was approved by the
Company's


                                       30

<PAGE>

Board of Directors. On April 25, 2001 the Company also engaged Singer Lewak
Greenbaum & Goldstein, LLP to be our Certifying Accountant. A response to the
filing of Form 8K by Arthur Andersen, LLP has been incorporated by reference.


                                       31

<PAGE>




                                 PART III

ITEM 9.   DIRECTORS AND EXECUTIVE OFFICERS

DIRECTORS AND EXECUTIVE OFFICERS

     The Board of Directors consists of seven directors divided into three
classes serving staggered three-year terms. The following table sets forth
certain information with respect to the executive officers and directors of the
Company:

<TABLE>
<CAPTION>

NAME                         AGE     POSITION                                                TERM EXPIRES
----                         ---     --------                                                ------------
<S>                          <C>     <C>                                                     <C>
Jacob Inbar                  52      Chairman of the Board, President and Chief              2003
                                     Executive Officer

Tiberiu Mazilu               55      Vice President, Engineering and Director                2002

Edwin J. McAvoy              57      Secretary, Vice President, Sales                        2001
                                     and Director
David A. Derby               60      Director                                                2003
Richard W. Flatow            60      Director                                                2002
Gerald Starek                60      Director                                                2001
Fred Sturm                   43      Director                                                2001
</TABLE>

     All officers are appointed by and serve at the discretion of the Board of
Directors. There are no family relationships among any directors or officers of
the Company.

     JACOB INBAR is a co-founder of the Company, has been a Director since its
inception and has been the Company's Chairman of the Board of Directors since
December 1995. Mr. Inbar has held the positions of President and Chief Executive
Officer since February 2001 and previously held these positions from the
Company's inception until February 1999. Mr. Inbar holds a B.S. in Electrical
Engineering from Ben Gurion University, Israel and an M.B.A. from California
Lutheran University.

     TIBERIU MAZILU, PH.D. is a co-founder of the Company and has served as its
Vice President of Engineering since February 2001 and as a Director since March
2001. Dr. Mazilu previously served as the Company's Technical Fellow from March
2000 until February 2001, as Vice President, Engineering from February 1999 to
March 2000, as Vice President, Custom Products and Director from January 1987 to
February 1999. Dr. Mazilu served as the Company's Chairman of the Board from
January 1987 until September 1995. Dr. Mazilu holds a Ph.D. in Electrical
Engineering, with a specialty in electromagnetics, from the University of
California, Los Angeles.

     EDWIN J. MCAVOY is a co-founder of the Company and has served as its
VicePresident, Sales and Marketing and as a Director since March 2001. Mr.
McAvoy previously served as the Company's VicePresident, Sales and Marketing and
as a Director from November 1986 until February, 1999 and then as Director of
Custom Programs from March 1999 to September 2000. Mr. McAvoy holds a B.S.
degree in Applied Engineering from Technical College, Grimsby, England.

     DAVID A. DERBY has been a Director of the Company since December 1995, and
has been President, Chief Executive Officer and a Director of Datron Systems
Incorporated (NASDAQ: DTSI), a manufacturer of radio and satellite communication
systems and products, since May 1982. In April 1998, Mr. Derby was elected
Chairman of the Board of Datron Systems Incorporated.

     RICHARD W. FLATOW has been a Director of the Company since December 1995
and has been the President of RWF Enterprises, a management consulting firm,
since 1994. From 1993 to 1994, Mr. Flatow was President and


                                       32

<PAGE>

Chief Executive Officer of Futurekids, Inc., a franchiser of computer
training for children. Previously, Mr. Flatow was a Managing Partner and
Senior Consultant for Hankin & Co., a middle-market management consulting
firm.

     GERALD M. STAREK has been a Director of the Company since March 1999, and
has served as a Director of Advanced Energy Industries, Inc. since 1998 (NASDAQ:
AEIS). From 1993 to 1995, Mr. Starek served on the Board of Directors of Systems
Chemistry, Inc., a privately held company that was purchased in 1995 by
SubMicron Systems, Inc.. Previously, Mr. Starek served as President, Chief
Executive Officer and Chairman of the Silicon Valley Group, a supplier of
automated wafer processing equipment for the semiconductor industry that he
founded in 1977.

     FRED M. STURM has been Chief Executive Officer, President and Director of
California Amplifier, Inc. (NASDAQ: CAMP) since August 1997. From 1990 to 1997,
Mr. Sturm was President of Chloride Power Systems (USA), and Managing Director
of Chloride Safety, Security, and Power Conversion (UK), both of which are part
of Chloride Group, PLC (LSE: CHLD). From 1979 to 1990, he held a variety of
general management positions with M/A-Com and TRW Electronics, which served RF
and microwave markets.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Act"), requires directors, certain officers of the Company and persons holding
more than 10% of the Company's Common Stock to file reports concerning their
ownership of Common Stock by dates established under the Act and also requires
that the Company disclose in this annual report on Form 10-KSB any
non-compliance with those requirements during the fiscal year ended March 31,
2001. Based solely upon a review of reports delivered to the Company for fiscal
2001, all Section 16(a) filing requirements were satisfied.


ITEM 10.   EXECUTIVE COMPENSATION

     Information required by this item is incorporated by reference to the
information under the captions "Executive Compensation" and "Election of
Directors" in the Company's definitive proxy statement for the 2001 Annual
Meeting of Stockholders to be held on September 12, 2001.


ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNER AND MANAGEMENT

     Information required by this item is incorporated by reference to the
information under the caption "Principal Stockholders" in the Company's
definitive proxy statement for the 2001 Annual Meeting of the Stockholders to be
held on September 12, 2001.


ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


      In March, 2001, the Company agreed to a private placement in the form of
an equity investment worth $500,000 to a group of investors led by Mr. Jacob
Inbar, the Company's President and Chief Executive Officer. Under the terms of
the agreement, the common stock will be priced at $0.812 per share, which
represents a discount of twenty-five percent of the average closing share price
for the previous three days. In consideration for receiving unregistered shares
of common stock, the non-management members of the investor group will receive
warrants for 40,000 shares priced at $1.125, the closing price on March 13,
2001. The Company has not recorded a charge in connection to these warrants as
the charge is considered to be immaterial to the financial statements. These
warrants expire in March, 2006.


                                       33

<PAGE>

ITEM 13.   EXHIBITS, LIST AND REPORTS ON FORM 8-K

     (a) The following are attached as Exhibits to this Form 10-KSB:

<TABLE>
<S>                 <C>
            3.1     Articles of Incorporation(1)
            3.2     Bylaws(1)
           10.1     AML Communications, Inc. Stock Incentive Plan(1)
           10.2     Form of Incentive Stock Option Agreement(1)
           10.3     Form of Non-employee Director Incentive Stock Option Agreement(1)
           10.4     Incentive Stock Option Agreement, dated August 1, 1994,
                    between the Company and Jacob Inbar.(7)
           10.5     Stock Option Agreement, dated December 15, 1995, between the
                    Company and David A. Derby.(7)
           10.6     Stock Option Agreement, dated August 28, 1996, between the
                    Company and David A. Derby.(7)
           10.7     Stock Option Agreement, dated December 15, 1995, between the
                    Company and Richard W. Flatow.(7)
           10.8     Stock Option Agreement, dated August 28, 1996, between the
                    Company and Richard W. Flatow.(7)
           10.9     Incentive Stock Option Agreement, dated April 28, 1997,
                    between the Company and Kirk A. Waldron.(7)
           10.10    Form of Indemnity Agreement(1)
           10.11    Standard offer, Agreement and Escrow Instructions for
                    Purchase of Real Estate dated January 30, 1996, between the
                    Company and Parr-Bohn Properties, Ltd. II, a California
                    Limited Partnership(2)
           10.12    Lease, dated March 11, 1996, between the Company and
                    Parr-Bohn Properties, Ltd. II, a California Limited
                    Partnership(3)
           10.13    Business Loan Agreement dated August 2, 1996, between the
                    Company and Bank of America National Trust and Savings
                    Association (4)
           10.14    Security Agreement dated August 2, 1996, between the Company
                    and Bank of America National Trust and Savings
                    Association(4)
           10.15    Amendment No. 1 dated September 2, 1997 to Business Loan
                    Agreement dated August 2, 1996 between the Company and Bank
                    of America National Trust and Savings Association(5)
           10.16    Stock Incentive Plan of AML Communications, Inc., as Amended
                    and Restated on June 24, 1998 (6)
           10.17    Form of amended Non-employee Director Stock Option
                    Agreement. (6)
           10.18    Amendment No. 2 dated September 1, 1998 to Business Loan
                    Agreement dated August 2, 1996 between the Company and Bank
                    of America National Trust and Savings Association. (6)
           10.19    Change in Control Agreement dated August 25, 1998 between
                    the Company and Kirk A. Waldron.(8)
           10.20    Employment Agreement dated February 23, 1999 between the
                    Company and Jacob Inbar.(8)
           10.21    Employment Agreement dated February 23, 1999 between the
                    Company and Tiberiu Mazilu (8)
           10.22    Employment Agreement dated February 23, 1999 between the
                    Company and Edwin J. McAvoy.(8)
           10.23    Loan and Security Agreement dated October 26, 1999 between
                    the Company and Silicon Valley Bank. (9)
           10.24    Intellectual Property Security Agreement.(9)
           10.25    Loan and Security Agreement dated November 10, 2000 between
                    the Company and Silicon Valley Bank. (10)
           10.26    Intellectual Property Security Agreement dated November 10,
                    2000 between the Company and Silicon Valley Bank. (10)
           10.27    Warrant to purchase stock dated November 9, 2000 between the
                    Company and Silicon Valley Bank. (10)
           10.28    Change in Control Agreement dated December 20, 2000 between
                    the Company and Karl R. Brier. (11)
           10.29    Change in Control Agreement dated December 20, 2000 between
                    the Company and Scott T. Behan. (11)
           10.30    Change in Control Agreement dated December 20, 2000 between
                    the Company and Kevin W. Pietramala. (11)
           10.31    Settlement and Release Agreement dated January 17, 2001
                    between the Company and Jacob Inbar. (11)


                                        34

<PAGE>

           10.32    Copy of letter from Arthur Andersen LLP to the Securities
                    and Exchange Commission (12)
           23.1     Consent of Singer Lewak Greenbaum & Goldstein, LLP
           23.2     Consent of Arthur Andersen, LLP
          (1)       Previously filed with the Securities and Exchange Commission
                    as an exhibit to the Registration Statement on Form SB-2 No.
                    33-99102-LA and incorporated herein by reference
          (2)       Previously filed with the Securities and Exchange Commission
                    as an exhibit to Current Report on Form 8-K of the Company,
                    as filed with the Securities and Exchange Commission on
                    March 13, 1996 and incorporated herein by reference
          (3)       Previously filed with the Securities and Exchange Commission
                    as an exhibit to the Company's Form 10-KSB for fiscal year
                    ended March 31, 1996 and incorporated herein by reference
          (4)       Previously filed with the Securities and Exchange Commission
                    as an exhibit to the Company's Form 10-Q for the quarter
                    ended September 30, 1996 and incorporated herein by
                    reference.
          (5)       Previously filed with the Securities and Exchange Commission
                    as an exhibit to the Company's Form 10-QSB for the quarter
                    ended September 30, 1997 and incorporated herein by
                    reference.
          (6)       Previously filed with the Securities and Exchange Commission
                    as an exhibit to the Company's Form 10-QSB for the quarter
                    ended September 30, 1998 and incorporated herein by
                    reference.
          (7)       Previously filed with the Securities and Exchange Commission
                    as an exhibit to the Company's Form 10-KSB for the fiscal
                    year ended March 31, 1998 and incorporated herein by
                    reference.
          (8)       Previously filed with the Securities and Exchange Commission
                    as an exhibit to the Company's Form 10-KSB for the fiscal
                    year ended March 31, 1999 and incorporated herein by
                    reference
          (9)       Previously filed with the Securities and Exchange Commission
                    as an exhibit to the Company's Form 10-QSB for the quarter
                    ended December 31, 1999 and incorporated herein by
                    reference.
          (10)      Previously filed with the Securities and Exchange Commission
                    as an exhibit to the Company's Form 10-QSB for the quarter
                    ended September 30, 2000 and incorporated herein by
                    reference.
          (11)      Previously filed with the Securities and Exchange Commission
                    as an exhibit to the Company's Form 10-QSB for the quarter
                    ended December 31, 2000 and incorporated herein by reference
          (12)      Previously filed with the Securities and Exchange Commission
                    as an exhibit to the Company's Form 8K dated May 1, 2001 and
                    incorporated herein by reference
          +         Management contract or compensatory plan or arrangement
                    required to be filed as an exhibit to this Form 10-KSB

</TABLE>

(b)      Reports on Form 8-K

         1.         On May 1, 2001, a report on Form 8-K dated April 25, 2001
                    was filed under Item 4 to report a change in the Company's
                    certifying accountant.


                                        35

<PAGE>

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

AML Communications, Inc.

By:       /s/ Jacob Inbar                            Dated:      June 29, 2001
     -----------------------------                         -------------------
              Jacob Inbar
    President and Chief Executive Officer



In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

<TABLE>
<CAPTION>

       Signature                                Title                            Date
------------------------------              -----------------------             -------------------
<S>                                         <C>                                 <C>
     /s/  Jacob Inbar                       President, Chief                    June 29, 2001
--------------------------------            Executive Officer and
     Jacob Inbar                            Chairman of the Board


     /s/ Tiberiu Mazilu                     Vice President-Engineering          June 29, 2001
--------------------------------            and Director
     Tiberiu Mazilu


     /s/  Edwin J. McAvoy                   Secretary, Vice                     June 29, 2001
--------------------------------            President-Sales,
     Edwin J. McAvoy                        and Director


    /s/  David A. Swoish                    Director of Finance                June 29, 2001
--------------------------------            Chief Accounting Officer
      David A. Swoish


      /s/  David A. Derby                   Director                           June 29, 2001
--------------------------------
     David A. Derby


      /s/  Richard W. Flatow                Director                           June 29, 2001
--------------------------------
    Richard W. Flatow


     /s/ Gerald M Starek                    Director                           June 29, 2001
--------------------------------
    Gerald M. Starek


     /s/ Fred Sturm                         Director                           June 29, 2001
--------------------------------
        Fred Sturm
</TABLE>


                                       36

<PAGE>

                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

   EXHIBIT
   NUMBER                                      DESCRIPTION
   ------                                      -----------
<S>            <C>
    3.1        Articles of Incorporation(1)

    3.2        Bylaws(1)

   10.1        AML Communications, Inc. Stock Incentive Plan(1)

   10.2        Form of Incentive Stock Option Agreement(1)

   10.3        Form of Non-employee Director Incentive Stock Option Agreement(1)

   10.4        Incentive Stock Option Agreement, dated August 1, 1994, between
               the Company and Jacob Inbar.(7)

   10.5        Stock Option Agreement, dated December 15, 1995, between the
               Company and David A. Derby.(7)

   10.6        Stock Option Agreement, dated August 28, 1996, between the
               Company and David A. Derby.(7)

   10.7        Stock Option Agreement, dated December 15, 1995, between the
               Company and Richard W. Flatow.(7)

   10.8        Stock Option Agreement, dated August 28, 1996, between the
               Company and Richard W. Flatow. (7)

   10.9        Incentive Stock Option Agreement, dated April 28, 1997, between
               the Company and Kirk A. Waldron.(7)

   10.10       Form of Indemnity Agreement(1)

   10.11       Standard offer, Agreement and Escrow Instructions for Purchase of
               Real Estate dated January 30, 1996, between the Company and
               Parr-Bohn Properties, Ltd. II, a California Limited
               Partnership(2)

   10.12       Lease, dated March 11, 1996, between the Company and Parr-Bohn
               Properties, Ltd. II, a California Limited Partnership(3)

   10.13       Business Loan Agreement dated August 2, 1996, between the Company
               and Bank of America National Trust and Savings Association(4)

   10.14       Security Agreement dated August 2, 1996, between the Company and
               Bank of America National Trust and Savings Association(4)

   10.15       Amendment No. 1 dated September 2, 1997 to Business Loan
               Agreement dated August 2, 1996 between the Company and Bank of
               America National Trust and Savings Association(5)

   10.16       Stock Incentive Plan of AML Communications, Inc., as Amended and
               Restated on June 24, 1998 (6)

   10.17       Form of amended Non-employee Director Stock Option Agreement. (6)

   10.18       Amendment No. 2 dated September 1, 1998 to Business Loan
               Agreement dated August 2, 1996 between the Company and Bank of
               America National Trust and Savings Association. (6)

   10.19       Change in Control Agreement dated August 25, 1998 between the
               Company and Kirk A. Waldron(8)

   10.20       Employment Agreement dated February 23, 1999 between the Company
               and Jacob Inbar.(8)

   10.21       Employment Agreement dated February 23, 1999 between the Company
               and Tiberiu Mazilu,(8)

   10.22       Employment Agreement dated February 23, 1999 between the Company
               and Edwin J. McAvoy.(8)

   10.23       Loan and Security Agreement dated October 26, 1999 between the
               Company and Silicon Valley Bank. (9)

   10.24       Intellectual Property Security Agreement.(9)

   10.25       Loan and Security Agreement dated November 10, 2000 between the
               Company and Silicon Valley Bank. (10)

   10.26       Intellectual Property Security Agreement dated November 10, 2000
               between the Company and Silicon Valley Bank. (10)

   10.27       Warrant to purchase stock dated November 9, 2000 between the
               Company and Silicon Valley Bank. (10)

   10.28       Change in Control Agreement dated December 20, 2000 between the
               Company and Karl R. Brier. (11)

   10.29       Change in Control Agreement dated December 20, 2000 between the
               Company and Scott T. Behan. (11)

   10.30       Change in Control Agreement dated December 20, 2000 between the
               Company and Kevin W. Pietramala. (11)

   10.31       Settlement and Release Agreement dated January 17, 2001 between
               the Company and Jacob Inbar. (11)

   10.32       Copy of letter from Arthur Andersen LLP to the Securities &
               Exchange Commission. (12)

   23.1        Consent of Singer Lewak Geeenbaum & Goldstein, LLP

   23.2        Consent of Arthur Andersen LLP
</TABLE>

--------------

               (1)      Previously filed with the Securities and Exchange
                        Commission as an exhibit to the Registration Statement
                        on Form SB-2 No. 33-99102-LA and incorporated herein by
                        reference.


                                       37

<PAGE>


               (2)      Previously filed with the Securities and Exchange
                        Commission as an exhibit to Current Report on Form 8-K
                        of the Company, as filed with the Securities and
                        Exchange Commission on March 13, 1996, and incorporated
                        herein by reference.

               (3)      Previously filed with the Securities and Exchange
                        Commission as an exhibit to the Company's Form 10-KSB
                        for fiscal year ended March 31, 1996 and incorporated
                        herein by reference.

               (4)      Previously filed with the Securities and Exchange
                        Commission as an exhibit to the Company's Form 10-Q for
                        the quarter ended September 30, 1996 and incorporated
                        herein by reference.

               (5)      Previously filed with the Securities and Exchange
                        Commission as an exhibit to the Company's Form 10-QSB
                        for the quarter ended September 30, 1997 and
                        incorporated herein by reference.

               (6)      Previously filed with the Securities and Exchange
                        Commission as an exhibit to the Company's Form 10-QSB
                        for the quarter ended September 30, 1998 and
                        incorporated herein by reference.

               (7)      Previously filed with the Securities and Exchange
                        Commission as an exhibit to the Company's Form 10-KSB
                        for the fiscal year ended March 31, 1998 and
                        incorporated herein by reference.

               (8)      Previously filed with the Securities and Exchange
                        Commission as an exhibit to the Company's Form 10-KSB
                        for the fiscal year ended March 31, 1999 and
                        incorporated herein by reference.

               (9)      Previously filed with the Securities and Exchange
                        Commission as an exhibit to the Company's Form 10-QSB
                        for the quarter ended December 31, 1999 and incorporated
                        herein by reference.

               (10)     Previously filed with the Securities and Exchange
                        Commission as an exhibit to the Company's Form 10-QSB
                        for the quarter ended September 30, 2000 and
                        incorporated herein by reference.

               (11)     Previously filed with the Securities and Exchange
                        Commission as an exhibit to the Company's Form 10-QSB
                        for the quarter ended December 31, 2000 and incorporated
                        herein by reference.

               (12)     Previously filed with the Securities and Exchange
                        Commission as an exhibit to the Company's Form 8K dated
                        May 1, 2001 and incorporated herein by reference


                                       38