Form 10-Q


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                   QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For Quarter Ended April 30, 2000                 Commission File Number 0-5449



                                  COMARCO, Inc.
             (Exact name of registrant as specified in its charter)

                 CALIFORNIA                                95-2088894
                 ----------                            --------------
(State or other jurisdiction of                        (I.R.S. Employer
 incorporation or organization)                      Identification Number)

2 Cromwell, Irvine, California                               92618
------------------------------                               -----
(Address of principal executive office)                    (Zip Code)

Registrant's telephone number, including area code      (714) 599-7400
                                                        --------------



Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                           Yes      X      No
                                                  -----       -----

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of May 31, 2000.

                          Common Stock,
                          $.10 Par Value                   4,376,487 Shares
                          --------------                   ----------------



<PAGE>


Index to Form 10-Q
                                                                        Page No.
                                                                        --------
PART I.        FINANCIAL INFORMATION

  Item 1.  Financial Statements (Unaudited)

       Condensed Consolidated Balance Sheets
           April 30, 2000 and January 31, 2000                             1

       Condensed Consolidated Statements of Income
           Quarters Ended April 30, 2000 and April 30, 1999                2

       Condensed Consolidated Statements of Cash Flows
           Quarters Ended April 30, 2000 and April 30, 1999                3

       Condensed Consolidated Statements of Comprehensive Income
           Quarters Ended April 30, 2000 and April 30, 1999                4

       Notes to Condensed Consolidated Financial Statements                5

  Item 2. Management's Discussion and Analysis of Results of
               Operations and Financial Condition                          9

  Item 3. Quantitative and Qualitative Disclosures about Market Risk      14


PART II.  THER INFORMATION

  Item 1.      Legal Proceedings                                          15

  Item 2.      Changes in Securities                                      15

  Item 3.      Defaults Upon Senior Securities                            15

  Item 4.      Submission of Matters to a Vote of Security Holders        15

  Item 5.      Other Information                                          15

  Item 6.      Exhibits and Reports on Form 8-K                           15

  Signature                                                               16



<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1.       FINANCIAL STATEMENTS

                         COMARCO, Inc. and Subsidiaries
                      Condensed Consolidated Balance Sheets
<TABLE>


                                                        April 30, 2000             January 31, 2000
ASSETS                                                     (Unaudited)                 (Audited)
------
<S>                                                     <C>                        <C>
Current assets:
         Cash and cash equivalents                      $       5,738,000          $      5,064,000
         Short-term investments                                 3,329,000                 3,721,000
         Accounts receivable, net                               9,276,000                 6,695,000
         Inventory                                              5,270,000                 4,852,000
         Deferred tax asset                                     2,908,000                 2,908,000
         Net assets available for sale                          5,717,000                 9,361,000
         Other current assets                                   3,321,000                 2,651,000
                                                        -----------------          ----------------

Total current assets                                           35,559,000                35,252,000

Property and equipment, net                                     3,276,000                 2,763,000
Software development costs, net                                 6,329,000                 5,839,000
Intangible assets, net                                          2,144,000                 2,222,000
Other assets                                                      777,000                    72,000
                                                        -----------------          ----------------

TOTAL ASSETS                                            $      48,085,000          $    46,148,000
                                                        =================          ===============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
         Accounts payable                               $         797,000          $        666,000
         Deferred revenue                                       2,765,000                 3,077,000
         Accrued liabilities                                    8,511,000                 8,052,000
                                                        -----------------          ----------------

Total current liabilities                                      12,073,000                11,795,000
Deferred income taxes                                           2,599,000                 2,599,000
Minority interest                                                 114,000                     -

Stockholders' equity:
         Common stock, $.10 par value,
           33,750,000 shares authorized,
           4,366,387 and 4,340,362 shares
           outstanding at April 30, 2000 and
           January 31, 2000, respectively                         437,000                   434,000
         Paid-in capital                                        5,244,000                 4,692,000
         Accumulated other comprehensive income:
           Unrealized investment gains                              3,000                     3,000
         Retained earnings                                     27,615,000                26,625,000
                                                        -----------------          ----------------

Total stockholders' equity                                     33,299,000                31,754,000
                                                        -----------------          ----------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY              $      48,085,000          $     46,148,000
                                                        =================          ================

See accompanying notes to the condensed consolidated financial statements.
</TABLE>


                         COMARCO, Inc. and Subsidiaries
                   Condensed Consolidated Statements of Income
                   -------------------------------------------
                                   (Unaudited)
<TABLE>
                                                                       Quarters Ended
                                                                       ---------------
                                                       April 30, 2000                  April 30, 1999
                                                       --------------                  --------------
<S>                                                   <C>                            <C>
Revenues:
   Product sales                                      $    7,332,000                  $      6,661,000
   Services                                                2,765,000                         1,181,000
                                                           ---------                         ---------
                                                          10,097,000                         7,842,000
                                                          ----------                         ---------

Cost of sales:
   Product sales                                           3,134,000                         3,166,000
   Services                                                1,674,000                           815,000
                                                           ---------                           -------
                                                           4,808,000                         3,981,000
                                                           ---------                         ---------

Gross profit                                               5,289,000                         3,861,000
Selling, general and administrative costs                  2,881,000                         2,103,000
Engineering and support costs                              1,109,000                           879,000
                                                           ---------                           -------

Operating income                                           1,299,000                           879,000

Net interest income                                           64,000                            80,000
Minority interest in earnings                                     (1)                              -
                                                        -------------                         --------

Income before income taxes                                 1,362,000                           959,000

Income tax expense                                           497,000                           350,000
                                                             -------                           -------

Net income from continuing operations                        865,000                           609,000

Net income from discontinued operations                      198,000                           350,000
                                                             -------                           -------

Net income                                            $    1,063,000                  $        959,000
                                                      ==============                  ================

Earnings per share - continuing operations:
   Basic                                              $          .20                  $            .14
                                                      ==============                  ================
   Diluted                                            $          .18                  $            .12
                                                      ==============                  ================

Earnings per share - discontinued operations:
   Basic                                              $          .04                  $            .08
                                                      ==============                  ================
   Diluted                                            $          .04                  $            .08
                                                      ==============                  ================

Earnings per share:
   Basic                                              $          .24                  $            .22
                                                      ==============                  ================
   Diluted                                            $          .22                  $            .20
                                                      ==============                  ================

See accompanying notes to the condensed consolidated financial statements.
</TABLE>


<PAGE>
                         COMARCO, Inc. and Subsidiaries
                 Condensed Consolidated Statements of Cash Flows
                 -----------------------------------------------
                                   (Unaudited)
<TABLE>
                                                                                           Quarters Ended

                                                                              April 30, 2000             April 30, 1999
                                                                              --------------             --------------
<S>                                                                        <C>                        <C>
Cash flows from operating activities:
    Net income from continuing operations                                  $         865,000          $        609,000
    Adjustments to reconcile net income from continuing
     operations to net cash provided (used) by operating activities:
       Depreciation and amortization                                                 976,000                   814,000
       Provision for doubtful accounts receivable                                      6,000                     6,000
       Changes in operating assets and liabilities:
           Decreases in investments                                                  381,000                    98,000
           Decrease (increase) in accounts receivable                             (2,587,000)                4,056,000
           Increase in inventory                                                    (418,000)                 (474,000)
           Decrease (increase) in other current assets                                30,000                   (50,000)
           Decrease (increase) in other assets                                        (5,000)                   12,000
           Increase in current liabilities                                           278,000                   228,000
                                                                           -----------------          ----------------

    Net cash provided (used) by operating activities                                (474,000)                5,299,000
                                                                           ------------------         ----------------

Cash flows from investing activities:
    Proceeds from sales of investments                                                11,000                   233,000
    Purchases of property and equipment                                             (804,000)                 (162,000)
    Software development costs                                                    (1,097,000)                 (818,000)
                                                                           ------------------         -----------------

    Net cash used in investing activities                                         (1,890,000)                 (747,000)
                                                                           ------------------         -----------------

Cash flows from financing activities:
    Proceeds from issuance of common stock                                           596,000                    31,000
    Purchase of common stock                                                             -                    (549,000)
                                                                           ------------------         -----------------

    Net cash provided (used) by financing activities                                 596,000                 (518,000)
                                                                           -----------------          ----------------

Net increase (decrease) in cash and cash equivalents -
     continuing operations                                                        (1,768,000)                4,034,000
Net increase in cash and cash equivalents -
    discontinued operations                                                        2,442,000                   657,000
                                                                           -----------------          ----------------

Net increase in cash and cash equivalents                                            674,000                 4,691,000
Cash and cash equivalents, beginning of period                                     5,064,000                 3,220,000
                                                                           -----------------          ----------------

Cash and cash equivalents, end of period                                   $       5,738,000          $      7,911,000
                                                                           =================          ================

Supplemental disclosures of cash flow information
  Cash paid during the quarter for:
       Interest                                                            $             -            $             -
       Income taxes                                                                    2,000                   271,000

See accompanying notes to the condensed consolidated financial statements.

</TABLE>

<PAGE>




                         COMARCO, Inc. and Subsidiaries
            Condensed Consolidated Statements of Comprehensive Income
            ---------------------------------------------------------
                                   (Unaudited)

<TABLE>
                                                                          Quarters Ended
                                                               April 30, 2000              April 30, 1999
                                                               --------------              --------------
   <S>                                                         <C>                        <C>
   Net income                                                  $    1,063,000             $       959,000

   Other comprehensive income:
      Unrealized holding gains on investments,
         net of tax                                                         -                           -
                                                               --------------             ---------------

   Comprehensive income                                        $    1,063,000             $        959,000
                                                               ==============             ================

</TABLE>


See accompanying notes to the condensed consolidated financial statements.


<PAGE>


                         COMARCO, Inc. and Subsidiaries
              Notes to Condensed Consolidated Financial Statements
               April 30, 2000, January 31, 2000, and April 30,1999
                                   (Unaudited)

1.     General

       The accompanying  interim financial  statements have been prepared by the
       Company's  management in accordance  with generally  accepted  accounting
       principles  and in  conjunction  with the  rules and  regulations  of the
       Securities  and Exchange  Commission  ("SEC").  Certain  information  and
       footnote  disclosures  required for annual financial statements have been
       condensed or excluded pursuant to SEC rules and regulations. Accordingly,
       the interim  financial  statements do not include all of the  information
       and footnotes required by generally accepted accounting principles in the
       United  States of  America  for  complete  financial  statements.  In the
       opinion of management,  the interim financial statements presented herein
       reflect  all  adjustments  of a normal  and  recurring  nature  which are
       considered  necessary  for a fair  presentation  of the  results  for the
       interim  periods  presented.  The results of  operations  for the interim
       period are not necessarily indicative of the results that may be expected
       for the year ended January 31, 2001. These financial statements should be
       read in conjunction with the audited  consolidated  financial  statements
       and the notes  thereto  included in the  Company's  Annual Report on Form
       10-K for the year ended January 31, 2000.

2.     Discontinued Operations

       In July 1999,  the Company  announced  that it was embarking on a plan to
       strengthen the Company's  focus on the wireless  communications  products
       and services business area. This plan, which was formalized at the end of
       the  quarter  ended  October 31,  1999,  involves  selling the  Company's
       information  technology and staffing  services product lines.  Therefore,
       this segment is presented as  discontinued  operations  and prior periods
       have been restated. The Company has engaged an investment banking firm to
       market  and sell the  discontinued  segment.  As of June  13,  2000,  the
       Company  has  closed  three  out of  six  currently  planned  divestiture
       transactions,  including  the sale of the Company's  commercial  staffing
       business.  The aggregate  consideration received to date is $3.5 million,
       which  includes  $2.1  in cash  and a  two-year  promissory  note of $1.4
       million.  The Company has signed an agreement for the sale of the airport
       management business and is negotiating  agreements with buyers for all of
       the remaining discontinued  businesses.  The Company cannot determine the
       amount of gain that may result from the sale,  however it does not expect
       to  realize  a loss on the sale.  At the  conclusion  of the  divestiture
       process, the Company will consist of the parent company, Comarco Wireless
       Technologies,  Inc., and its  wholly-owned  subsidiary,  Comarco Wireless
       International,  Inc.  The  Company  operates  in  one  business  segment,
       wireless   communication   products  and  services.   Revenues  from  the
       discontinued  segment  were  $11.0  million  and  $13.3  million  for the
       quarters ended April 30, 2000 and 1999, respectively. Operating income of
       the discontinued segment was $353,000 and $587,000 for the quarters ended
       April 30, 2000 and 1999, respectively.

3.     Significant Accounting Policies - Per Share Information

       The Company  computes basic and diluted net income per share based on the
       weighted-average  number of shares of common stock and  potential  common
       stock outstanding during the period. Potential common stock, for purposes
       of  determining  diluted  earnings  per share,  includes  the  effects of
       dilutive  stock  options.  The effect of such  potential  common stock is
       computed using the treasury stock method.  Comparative earnings per share
       data have been restated for prior periods. Consolidated net income of the
       Company  used for  diluted  earnings  per share  purposes is diluted as a
       result of stock options issued by the


       Company's   subsidiaries   which  enable  their  holders  to  obtain  the
       subsidiaries'  common  stock.  Basic and diluted net income per share are
       calculated as follows:
<TABLE>

                                                                                     Quarters Ended

                                                                     April 30, 2000              April 30, 1999
                                                                     --------------              --------------

         <S>                                                            <C>                      <C>
         Basic:
         Net income from continuing operations                          $    865,000             $     609,000
         Weighted average shares outstanding                               4,352,000                 4,456,000
                                                                           ---------                 ---------

         Basic income per share from continuing operations              $        .20             $         .14
                                                                        ============             =============


         Net income from discontinued operations                        $    198,000             $     350,000
         Weighted average shares outstanding                               4,352,000                 4,456,000
                                                                           ---------                 ---------

         Basic income per share from discontinued operations              $      .04                $      .08
                                                                          ==========                ==========


         Net income                                                     $  1,063,000             $     959,000
         Weighted average shares outstanding                               4,352,000                 4,456,000
                                                                           ---------                 ---------

         Basic income per share                                           $      .24                $      .22
                                                                          ==========                ==========


         Diluted:

         Net income from continuing operations                          $    865,000             $     609,000
         Less - net income allocated to subsidiary
           dilutive stock options outstanding                                (50,000)                  (44,000)
                                                                        ------------              -------------

         Net income used in calculation of diluted
           income per share from continuing operations                  $    815,000             $      565,000
                                                                        ============             ==============


         Weighted average shares outstanding                               4,352,000                  4,456,000
         Plus - common equivalent shares (determined
           using the "treasury stock" method) representing
           shares issuable upon exercise of stock options                    249,000                    208,000
                                                                             -------                    -------

         Weighted average number of shares used in
           calculation of diluted income per share from
           continuing operations                                           4,601,000                  4,664,000
                                                                           =========             ==============

         Diluted income per share from continuing
           operations                                                     $      .18                $       .12
                                                                          ==========                ===========


         Net income from discontinued operations                        $    198,000             $      350,000
         Less - net income allocated to subsidiary
           dilutive stock options outstanding                                     -                           -
                                                                        ------------                 ----------

         Net income used in calculation of diluted
           income per share from discontinued operations                $    198,000             $      350,000
                                                                        ============             ==============


         Weighted average shares outstanding                               4,352,000                  4,456,000
         Plus - common equivalent shares (determined
           using the "treasury stock" method) representing
           shares issuable upon exercise of stock options                    249,000                    208,000
                                                                             -------                    -------

         Weighted average number of shares used in
           calculation of diluted income per share from
           discontinued operations                                         4,601,000                  4,664,000
                                                                           =========             ==============

         Diluted income per share from discontinued
           operations                                                     $      .04                 $      .08
                                                                          ==========                 ==========


         Net income                                                     $  1,063,000             $      959,000
         Less - net income allocated to subsidiary
           dilutive stock options outstanding                                (50,000)                   (44,000)
                                                                        ------------               -------------

         Net income used in calculation of diluted
           income per share                                             $  1,013,000             $       915,000
                                                                        ============               =============


         Weighted average shares outstanding                               4,352,000                   4,456,000
         Plus - common equivalent shares (determined
           using the "treasury stock" method) representing
           shares issuable upon exercise of stock options                    249,000                     208,000
                                                                             -------                     -------

         Weighted average number of shares used in
           calculation of diluted income per share                         4,601,000                   4,664,000
                                                                           =========                   =========


         Diluted income per share                                         $      .22                  $      .20
                                                                          ==========                  ==========
</TABLE>


4.     Commitments and Contingencies

       The Company is subject to legal  proceedings and claims that arise in the
       ordinary  course  of  business.  In the  opinion  of  management  and the
       Company's legal counsel, the amount of ultimate liability with respect to
       these actions will not materially  affect the financial  condition of the
       Company.

       The Company is  experiencing  a greater  percentage  of its  discontinued
       operations'  information  technology and staffing  services  revenue from
       fixed-price  and fixed  labor  rate  contracts  versus  cost-reimbursable
       contracts.  Fixed-price and fixed labor-rate  contracts shift more of the
       performance risk to the Company.  Therefore, if the Company's assumptions
       or  performance  do not meet  expectations,  operating  results  could be
       negatively impacted.


5.     Reclassifications

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





<PAGE>


ITEM 2.    MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF RESULTS  OF OPERATIONS AND
           FINANCIAL CONDITION


A.       FORWARD-LOOKING STATEMENTS AND RISK FACTORS

              Except  for  the  historical  information  contained  herein,  the
              matters discussed in this Form 10-Q are forward-looking statements
              within the meaning of Section 21E of the  Securities  Exchange Act
              of 1934,  as amended,  and Section  27A of the  Securities  Act of
              1933, as amended, that involve risks and uncertainties. The actual
              results that the Company  achieves may differ  materially from any
              forward-looking  projections due to such risks and  uncertainties.
              Factors  which  could  cause  a  material  difference  in  results
              include,  but are not  limited  to, the  following:  regional  and
              national economic  conditions;  changes in interest rates; changes
              in  government   spending  polices  and/or  decisions   concerning
              specific programs;  individual business decisions of customers and
              business partners;  developments in technology;  new and expanding
              product lines;  competition  for employee  resources;  competitive
              factors and pricing  pressures;  the Company's  ability to achieve
              the  objectives of its business  plans,  including the disposal of
              its  discontinued  businesses;  and changes in government  laws or
              regulations.  Words such as "believes,"  "anticipates," "expects,"
              "future,"  "intends,"  and  similar  expressions  are  intended to
              identify  forward-looking  statements  but are  not the  exclusive
              means of identifying such statements.  A more complete  discussion
              of business  risks is included in the  Company's  Annual Report on
              Form 10-K for the year ended January 31, 2000.

              The  Company  has  experienced,  in each of the past six years,  a
              seasonal fluctuation in wireless communications products activity,
              with  greater  sales in the  latter  half of its  fiscal  year and
              lesser  amounts in the first  half,  although  this trend has been
              declining over the same six years. This fluctuation may or may not
              continue  due to a  number  of  factors,  including:  the  timing,
              cancellation,  or delay of  customer  orders;  the  timing  of new
              product  introductions  by the  Company  or its  competitors;  the
              deployment  schedule of wireless  network  operators in both North
              American and international  markets,  which can be delayed by both
              economic and  political  issues;  the size of  customers'  capital
              budgets,  which are the traditional source of customer funding for
              the purchase of the Company's  products;  market acceptance of the
              Company and its customers'  products;  variations in manufacturing
              capacities,  efficiencies  and costs; the availability and cost of
              parts  exacerbated  by the very tight  market for  electrical  and
              semiconductor  components;  capacity  and  production  constraints
              associated  with  single  source  component  suppliers;  and other
              competitive   factors.   Historically,   the   Company  has  often
              recognized a substantial portion of its revenues in the last month
              of any given quarter. Because the Company's operating expenses are
              based on anticipated  revenue levels and because a high percentage
              of the Company's  expenses are relatively fixed, a small variation
              in  the  timing  of  the   recognition  of  revenues  could  cause
              significant  variations  in  operating  results  from  quarter  to
              quarter.  The  nature  of  the  wireless  communications  products
              business  is  inherently  unpredictable;  sales  and  profits  may
              fluctuate  significantly  from quarter to quarter;  and therefore,
              period-to-period  comparisons  of its  operating  results  are not
              necessarily  meaningful and such comparisons cannot be relied upon
              as indicators of future performance.

              The Company's future product  prospects will depend in part on its
              ability to enhance the functionality of its existing products in a
              timely  and  cost-effective  manner;  to  identify,  develop,  and
              achieve market  acceptance of new products;  the  availability and
              cost of parts  exacerbated by the very tight market for electrical
              and  semiconductor  components;  and the capacity  and  production
              constraints  associated  with single source  component  suppliers.
              There can be no assurance that the Company will be able to respond
              to technological  advances,  changes in customer requirements,  or
              changes in regulatory requirements or industry standards,  and any
              significant  delays in  development,  introduction  or shipment of
              products, or achievement of acceptable product costs, could have a
              material  adverse  effect  on the  Company's  business,  operating
              results and financial condition.

              The  Company  faces  additional  risk  factors in  developing  its
              wireless  communications  products  business,  including:  foreign
              marketing,    capital   requirements,    technical   requirements,
              employees,  competition,  and proprietary information.  A negative
              impact to any of these risk factors could have a material  adverse
              effect on the Company's business, operating results, and financial
              condition.  Foreign  marketing risks include:  the need for export
              licenses; tariffs and other potential trade restrictions;  changes
              in laws  governing the  imposition of duties,  quotas,  taxes,  or
              other  charges  relating to the import or export of its  products;
              and changes in foreign  currency  exchange  rates which can impact
              customers' demand for the Company's  products and their ability to
              pay for the Company's products.  Other companies having a presence
              or doing business overseas may have advantages over the Company in
              these  areas.  Certain  components  used  by  the  Company  in its
              existing  products  are only  available  from  single or a limited
              number of suppliers,  and the inability by any of these  suppliers
              to fulfill Company  requirements  may result in an interruption in
              production.  Access  to the  technical  design  of  air  interface
              devices is  essential  for the Company to  anticipate  and develop
              compatible  wireless  communications   products,   therefore,  the
              inability to obtain such technical designs on a timely basis would
              have a direct impact on product design and schedule. The Company's
              future success also depends in large part on the continued service
              of its key  personnel,  and on its  ability to continue to attract
              and  retain  qualified   employees,   especially   highly  skilled
              engineers,  for whom  competition  in the industry is intense.  In
              addition,  the  ability of the  Company  to  compete  successfully
              depends  upon a number  of  factors,  including  the rate at which
              customers  accept the  Company's  products  in  overseas  markets,
              product quality and performance,  experienced  sales and marketing
              personnel,   rapid  development  of  new  products  and  features,
              evolving  industry  standards,  and the  number  and nature of the
              Company's competitors.  There can be no assurance that the Company
              will be able to compete  successfully  in the future.  The Company
              relies on a combination of patents, trade secrets, copyrights, and
              contractual rights to protect its intellectual property. There can
              be no  assurance  that  the  steps  taken by the  Company  will be
              adequate  to protect  its  technology;  in  addition,  the laws of
              certain foreign  countries in which the Company's  products may be
              sold do not protect the Company's  intellectual property rights to
              the same extent as do the laws of the United States.


B.       RESULTS OF OPERATIONS

              In July 1999,  the Company  announced  that it was  embarking on a
              plan  to   strengthen   the   Company's   focus  on  the  wireless
              communications  products and services  business  area.  This plan,
              which was  formalized  at the end of the quarter ended October 31,
              1999,  involves selling the Company's  information  technology and
              staffing  services  product  lines.  Therefore,  this  segment  is
              presented as  discontinued  operations and prior periods have been
              restated.  The Company has engaged an  investment  banking firm to
              market and sell the discontinued segment. As of June 13, 2000, the
              Company has closed three out of six currently planned  divestiture
              transactions,  including  the  sale  of the  Company's  commercial
              staffing business. The aggregate consideration received to date is
              $3.5 million,  which  includes $2.1 million in cash and a two-year
              promissory  note  of $1.4  million.  The  Company  has  signed  an
              agreement for the sale of the airport  management  business and is
              negotiating  agreements  with  buyers  for  all of  the  remaining
              discontinued  businesses.  The Company cannot determine the amount
              of gain that may result from the sale, however, it does not expect
              to  realize  a  loss  on  the  sale.  At  the  conclusion  of  the
              divestiture  process,  the  Company  will  consist  of the  parent
              company, Comarco Wireless Technologies, Inc., and its wholly-owned
              subsidiary,  Comarco Wireless  International,  Inc. The Company is
              operating in one business segment, wireless communication products
              and services.

              Results of Continuing Operations

              During the first quarter of Fiscal Year 2001 (year ending  January
              31,  2001),   the  Company   recorded   revenues  from  continuing
              operations  of $10.1  million,  up 29% from the  revenues  of $7.8
              million for the  comparable  period of a year  earlier.  Increased
              quarter-to-quarter  revenue is primarily due to mobile information
              services,  which began in the fourth  quarter of Fiscal Year 2000;
              an increase in the sale of wireless test and measurement  products
              to major cellular  carriers;  and increased sales of the Company's
              wireless callboxes,  partially offset by reduced revenues from its
              mobile  power  products as the Company  transitions  to its second
              generation product, a 70-watt universal power adapter. The Company
              has also begun a major product transition to the new X-series test
              and  measurement  platform.  The first of the X-series  family was
              released  in  March  2000.  The X-50  platform  will  support  all
              multiple access  technologies:  CDMA,  IS-136,  GSM, and iDEN. The
              Company  expects  the  level of sales  activity  for its  wireless
              callboxes  will  continue  to  be at  historical  levels  for  the
              remaining  quarters of Fiscal Year 2001,  while services  revenues
              will  increase  significantly  with the full rollout of its mobile
              information services.

              The Company's orders for wireless communications products totalled
              $17.0  million for the first  quarter of Fiscal Year 2001, up from
              $8.5  million  from  the   comparable   prior   period.   For  the
              twelve-month  periods  ended  April  30,  2000  and  1999,  orders
              received  were  $51.8  million  and $36.8  million,  respectively.
              Because of the long sales cycle  involved in selling the Company's
              wireless products and services and the high contract value of each
              order,  the  Company  believes  that  orders are best  analyzed by
              looking at a  twelve-month  time period,  as orders can  fluctuate
              significantly  from  quarter  to  quarter.  The value of  unfilled
              orders including  deferred  revenue for outstanding  post-contract
              support  and  extended  warranty  obligations  at April  30,  2000
              totalled $28.1 million.  This balance consisted of $7.6 million of
              product and service revenues,  $17.7 million of long-term wireless
              application  callbox  maintenance  contracts,  and $2.8 million of
              deferred  revenue  for  outstanding   post-contract   support  and
              extended warranty obligations.

              The  Company  expects  a  rapid   proliferation  of  portable  and
              stationary computing and communication systems and appliances that
              are  connected  by wireless  communication  networks to the public
              internet, private intranet, private local area networks,  servers,
              and other  terminal  devices.  The Company  provides  products and
              services  for  these  markets  and  with  its  core   technologies
              consisting  of  wireless   network  design,   wireless   appliance
              interfaces  and  wireless  design  technologies,  plans to provide
              additional   products  and  services  to  end-users   and  network
              operators.  Based on this current strategy,  the Company forecasts
              that a growing percentage of its revenues and profit may come from
              services in the future.

              Gross profit from continuing  operations increased to $5.3 million
              in the first quarter of Fiscal Year 2001, up 36% from $3.9 million
              for the comparable  period of the prior fiscal year.  Gross profit
              percentage  of revenue was 52% in the first quarter of Fiscal Year
              2001  compared  with 50% for the  comparable  period  of the prior
              fiscal  year.  The  increase is due to  increased  sales of higher
              margin wireless test and measurement products and services.

              Indirect  costs were $4.0  million in the first  quarter of Fiscal
              Year 2001, up from $3.0 million for the  comparable  period of the
              prior  fiscal  year.  The Company  has  experienced  increases  in
              selling, general and administrative costs as well as in sustaining
              engineering,  research  and  development  and  support  costs as a
              result  of  executing  its  current  plan  to  develop  additional
              products and services for the wireless marketplace.  These efforts
              included continuing development of the Company's second generation
              portable  power  adapter;  its RAP(TM)  Central  wireless  revenue
              assurance system and services, which is an emerging market for the
              Company;  and  expenses to launch and grow its mobile  information
              services business.

              The Company is continuing its software product development program
              in its continuing  operations'  wireless  communications  products
              business. In accordance with Financial Accounting Standard No. 86,
              Accounting for the Costs of Computer Software to be Sold,  Leased,
              or Otherwise  Marketed,  the Company  capitalized  $1,097,000  and
              $818,000, during the first quarters of Fiscal Years 2001 and 2000,
              respectively. The increase in the amount capitalized is due to the
              product development efforts discussed above. Corresponding amounts
              amortized   in  such   periods   were   $657,000   and   $568,000,
              respectively.  These  amounts are in addition to the  engineering,
              research and development and support expense discussed above.

              Operating  income from  continuing  operations was $1.3 million in
              the first quarter of Fiscal Year 2001, up from $.9 million for the
              comparable period of the prior fiscal year.  Operating income as a
              percentage  of  revenues  was 13% for the first  quarter of Fiscal
              Year  2001,  up from 12% for the  comparable  period  of the prior
              fiscal year.  This  year-to-year  increase in operating  income is
              primarily  due  to  higher  gross  profit  contribution  from  the
              increased  sales of wireless  test and  measurement  products  and
              services, offset by increased indirect costs, as discussed above.

              Net interest income  (interest  income less interest  expense) for
              the first  quarter of Fiscal Year 2001  amounted  to  $64,000,  as
              compared to $80,000 for the comparable  period of the prior fiscal
              year.  The  decrease is  principally  due to a  reduction  in cash
              available  to invest from an average of $6.7  million in the first
              quarter of Fiscal  Year 2000 to an average of $5.9  million in the
              first  quarter of Fiscal Year 2001  (excludes  investments  in the
              Company's deferred compensation plan for executives).

              The  Company's  effective tax rate for the first quarter of Fiscal
              Year 2001 is 36.5%, the same as the comparable period of the prior
              fiscal year.

              The overall increase in continuing operations' net income from the
              prior year is primarily  due to higher  gross profit  contribution
              dollars as discussed above.


              Results of Discontinued Operations

              As previously discussed,  in July 1999, the Company announced that
              it was  embarking on a plan to strengthen  the Company's  focus on
              the wireless  communications  products and services business area.
              This plan,  which was  formalized  at the end of the quarter ended
              October  31,  1999,  involves  selling the  Company's  information
              technology and staffing services product lines.

              Revenues  provided  by  the  Company's   discontinued   operations
              decreased  21%,  from $13.3 million in the first quarter of Fiscal
              Year 2000 to $11.0  million in the first  quarter  of Fiscal  Year
              2001. The decrease in period-to-period  revenue is principally due
              to the sale of the Company's commercial staffing business in March
              2000.

              Operating income (revenues less direct costs,  indirect costs, and
              depreciation and  amortization)  for the  discontinued  segment is
              down from  $587,000  in the first  quarter of Fiscal  Year 2000 to
              $353,000 in the first  quarter of Fiscal Year 2001.  This decrease
              is  principally  due  to the  sale  of  the  Company's  commercial
              staffing business in March 2000.

              The  Company  is   experiencing   a  greater   percentage  of  its
              discontinued   operations'  information  technology  and  staffing
              services  revenue from  fixed-price and fixed labor rate contracts
              versus   cost-reimbursable   contracts.   Fixed-price   and  fixed
              labor-rate  contracts  shift more of the  performance  risk to the
              Company. Therefore, if the Company's assumptions or performance do
              not meet  expectations,  operating  results  could  be  negatively
              impacted.


C.       FINANCIAL CONDITION

              The  Company  signed  a  loan  agreement  with  a  bank  effective
              September 26, 1994,  which was last amended  effective  August 21,
              1998.  The loan  agreement  consists  of a $10  million  revolving
              credit facility,  which expires June 30, 2000. The Company expects
              to renew the loan  agreement  under similar terms and  conditions.
              The  revolving  credit  facility is  unsecured  provided  that the
              Company  maintains  certain   covenants.   Currently,   management
              anticipates  that  cash flow will  remain  at a level  which  will
              enable the Company to avoid  utilizing the credit  facility except
              to support letters of credit and acquisition  financing,  and that
              the  Company  will be able to  purchase  investments  on a regular
              basis.  The Company's cash and investment  balances  averaged $5.9
              million   (includes  highly  liquid  long-term   investments  with
              maturities  of 12 to 36 months  and  excludes  investments  in the
              Company's  deferred  compensation plan for executives)  during the
              first quarter of Fiscal Year 2001. However,  maintaining such cash
              balances is  predicated  on the Company  maintaining  its business
              base  and is  subject  to the  cost of  financing  new  contracts,
              acquisitions, geographic expansion, product development costs, and
              stock  re-purchases.  As previously  discussed,  in July 1999, the
              Company  announced  that it was  embarking on a plan to strengthen
              the Company's  focus on the wireless  communications  products and
              services business area. This plan, which was formalized at the end
              of the  quarter  ended  October  31,  1999,  involves  selling the
              Company's  information  technology and staffing  services  product
              lines.

              During  the first  quarter  of Fiscal  Year  2001,  the  Company's
              average days' sales in accounts  receivable  increased,  primarily
              due to the timing of several  significant  sales at the end of the
              quarter.

              Several additional key factors indicating the Company's  financial
             condition include:
<TABLE>
                                          April 30, 2000       January 31, 2000
                                          --------------       ----------------
              <S>                        <C>                   <C>
              Current ratio                          2.95                  2.99
              Working capital            $     23,486,000      $     23,457,000
              Book value per share                  $7.63                 $7.32
</TABLE>
              The Company continued to demonstrate  solid financial  strength in
              the above  financial  factors  during the first  quarter of Fiscal
              Year 2001 due to continued profitable activity.

              During the first  quarter of Fiscal  Year 2001,  the  Company  had
              ($.5) million of cash flows from operating activities, as compared
              to $5.3 million in the prior year's first  quarter.  This decrease
              is primarily due to the increase in accounts  receivable  from the
              timing of significant sales in the quarter, as discussed above.

              The Company has a significant  commitment for capital expenditures
              at April 30,  2000 for Comarco  Wireless  Technologies,  Inc.  The
              Company has developed and intends to continue to develop  numerous
              new  product  line  extensions  for  the  wireless  communications
              industry. This software product development program is expected to
              be funded from the Company's  current  working  capital and future
              cash flows.  The amounts  capitalized  in the  Company's  wireless
              communications  products  business in  accordance  with  Financial
              Accounting  Standard No. 86,  Accounting for the Costs of Computer
              Software  to be  Sold,  Leased,  or  Otherwise  Marketed,  totaled
              $1,097,000  and $818,000,  respectively,  in the first quarters of
              Fiscal Year 2001 and 2000. Corresponding amounts amortized in such
              periods were $657,000 and $568,000, respectively.

              The  Company's   Board  of  Directors   has   authorized  a  stock
              re-purchase  program of up to  2,000,000  shares.  As of April 30,
              2000,  the Company  has  re-purchased  and  retired  approximately
              1,456,000  shares.  Over the term of the  program,  which began in
              1992,  the  average  price paid per share  re-purchased  under the
              program was $11.06.

              The Company is subject to legal  proceedings and claims that arise
              in the ordinary course of business.  In the opinion of management,
              the amount of ultimate  liability  with  respect to these  actions
              will not materially affect the financial  condition of the Company
              (see  Note 4 of the  Notes  to  Condensed  Consolidated  Financial
              Statements).  The Company is experiencing a greater  percentage of
              its discontinued  operations'  information technology and staffing
              services  revenue from  fixed-price and fixed labor rate contracts
              versus   cost-reimbursable   contracts.   Fixed-price   and  fixed
              labor-rate  contracts  shift more of the  performance  risk to the
              Company. Therefore, if the Company's assumptions or performance do
              not meet  expectations,  operating  results  could  be  negatively
              impacted.

              The  Company  believes  that its cash  flow  from  operations  and
              available  bank  borrowings  will be  sufficient  to  satisfy  the
              current and anticipated capital requirements for operations.


ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

              The  Company  is  exposed  to market  risk,  including  changes in
              interest rates and currency  exchange rates. As of April 30, 2000,
              the  Company  had no accounts  receivable  denominated  in foreign
              currencies. The Company's standard terms require foreign customers
              to pay for the  Company's  products with U.S.  dollars.  For those
              orders  denominated in foreign  currencies,  the Company may limit
              its exposure to losses from foreign  currency  transactions by the
              purchase of forward foreign exchange  contracts.  Such activity to
              date has been insignificant.

<PAGE>
                           PART II - OTHER INFORMATION


ITEM1.        LEGAL PROCEEDINGS

              The Company is subject to Legal  proceedings and claims that arise
              in  the  ordinary  course  of its  business.  In  the  opinion  of
              management, the amount of ultimate liability with respect to these
              actions will not materially affect the Company's operating results
              and financial condition. In particular, see Note 4 of the Notes to
              Condensed Consolidated Financial Statements.


ITEM 2.       CHANGES IN SECURITIES

              Not applicable.


ITEM 3.       DEFAULTS UPON SENIOR SECURITIES

              Not applicable.


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

              Not applicable.


ITEM 5.       OTHER INFORMATION

              Not applicable.


ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

       (a)    Exhibits

              The following exhibits are included herewith:

              ll. Schedule of Computation of Net Income Per Share

       (b)    Reports on Form 8-K

              None.

<PAGE>
                                    SIGNATURE



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.




                                  COMARCO, Inc.
                     ---------------------------------------
                                  (Registrant)




June 14, 2000




                   --------------------------------------------
                                 Thomas P. Baird
                             Chief Financial Officer
              (Authorized Officer and Principal Financial Officer)