<PAGE>

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

                                  FORM 10-QSB

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

For the quarterly period ended:  September 30, 1999 or

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 0R 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from _____________ to ____________

Commission File Number:    0-27252

                           AML COMMUNICATIONS, INC.
       (Exact name of small business issuer as specified in its charter)

        Delaware                                      77-0130894
-------------------------------                   -------------------
(State or Other jurisdiction of                   (IRS Employer
incorporation or organization)                    Identification No.)

         1000 Avenida Acaso
        Camarillo, California                                  93012
        ---------------------                                  -----
(Address of principal executive offices)                     (Zip Code)


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

Check whether the issuer (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 ___

State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date.

Common Stock Outstanding as of October 29, 1999:    6,380,570

Transitional Small Business Disclosure Format: Yes ___  No [X]

Number of pages in this Form 10-Q  SB  15
                                       --
<PAGE>

                           AML COMMUNICATIONS, INC.

                                     INDEX

<TABLE>
<CAPTION>
PART I    FINANCIAL INFORMATION                                                 PAGE
<S>                                                                             <C>

Item 1.   Financial Statements (unaudited)

          Statements of Operations for the three months and six months ended
          September 30, 1999 and September 30, 1998                              3

          Balance Sheets at September 30, 1999 and March 31, 1999                4

          Statements of Cash Flows for the six months ended
          September 30, 1999 and September 30, 1998                              5

          Notes to the Financial Statements                                      6

Item 2.   Management's Discussion and Analysis of
          Financial Condition and Results of Operations                          8

PART II   OTHER INFORMATION

Item 1.   Legal Proceedings                                                     13

Item 4.   Submission of Matters to a Vote of Security Holders                   13

Item 6.   Exhibits and Reports on Form 8-K                                      14

          SIGNATURES                                                            15
</TABLE>

                                       2
<PAGE>

                        PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                           AML COMMUNICATIONS, INC.
                           STATEMENTS OF OPERATIONS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                            Three Months Ended                          Six Months Ended
                                               -----------------------------------------  ----------------------------------------
                                                  September 30,         September 30,         September 30,         September 30,
                                                      1999                 1998                  1999                  1998
                                               -----------------    ------------------    ------------------    ------------------
<S>                                            <C>                  <C>                   <C>                   <C>
Net sales                                             $2,275,000            $1,590,000            $4,553,000            $4,648,000
Cost of goods sold                                     1,350,000             1,098,000             2,804,000             2,877,000
                                               -----------------    ------------------    ------------------    ------------------
    Gross profit                                         925,000               492,000             1,749,000             1,771,000

Operating expenses:
    Selling, general & administrative                    671,000               681,000             1,362,000             1,376,000
    Research and development                             411,000               777,000               793,000             1,289,000
                                               -----------------    ------------------    ------------------    ------------------

Operating loss                                          (157,000)             (966,000)             (406,000)             (894,000)
    Other income, net                                    (67,000)             (112,000)             (130,000)             (220,000)
                                               -----------------    ------------------    ------------------    ------------------
Loss before benefit for                                  (90,000)             (854,000)             (276,000)             (674,000)
    Income taxes
Benefit for income taxes                                       -              (304,000)                    -              (239,000)
                                               -----------------    ------------------    ------------------    ------------------

Net loss                                              $  (90,000)           $ (550,000)           $ (276,000)           $ (435,000)
                                               =================    ==================    ==================    ==================

Basic loss per share                                  $    (0.01)           $    (0.09)           $    (0.04)           $    (0.07)
                                               =================    ==================    ==================    ==================
Basic weighted average number of shares of
    common stock outstanding                           6,266,000             6,270,000             6,266,000             6,284,000
                                               =================    ==================    ==================    ==================

Diluted loss per share                                $    (0.01)           $    (0.09)           $    (0.04)           $    (0.07)
                                               =================    ==================    ==================    ==================
Diluted weighted average number of shares of
    common stock outstanding                           6,266,000             6,270,000             6,266,000             6,284,000
                                               =================    ==================    ==================    ==================
</TABLE>

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

                                       3
<PAGE>

                           AML COMMUNICATIONS, INC.
                                BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                                        September 30,               March 31,
                                                                                            1999                      1999
                                                                                      -----------------         ----------------
                                                                                         (Unaudited)               (Audited)
<S>                                                                                   <C>                       <C>
ASSETS
------
Current Assets:
  Cash and cash equivalents                                                           $       5,697,000         $      6,597,000
  Accounts receivable, net of allowance for doubtful accounts of
          $80,000 at September 30, 1999 and  $42,000 at March 31, 1999                          914,000                  427,000
  Inventories                                                                                 2,193,000                1,783,000
  Income taxes receivable                                                                       534,000                  537,000
  Other current assets                                                                          248,000                  118,000
                                                                                      -----------------         ----------------
     Total current assets                                                                     9,586,000                9,462,000

Property and Equipment, at cost:                                                              4,585,000                4,370,000
  Less - Accumulated depreciation and amortization                                           (2,642,000)              (2,288,000)
                                                                                      -----------------         ----------------
                                                                                              1,943,000                2,082,000

Deferred Taxes                                                                                  288,000                  288,000
Other Assets                                                                                     14,000                  114,000
                                                                                      -----------------         ----------------
                                                                                      $      11,831,000         $     11,946,000
                                                                                      =================         ================
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
  Accounts payable                                                                    $         673,000         $        558,000
  Current portion of capital lease obligations                                                   73,000                   60,000
  Accrued expenses:
      Accrued payroll and payroll related expenses                                              358,000                  349,000
      Accrued commissions                                                                       135,000                   40,000
      Other accrued liabilities                                                                 309,000                  364,000
                                                                                      -----------------         ----------------
       Total current liabilities                                                              1,548,000                1,371,000

Capital Lease Obligations, net of current portion                                               166,000                  185,000

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; 6,266,070 shares issued
       and outstanding at September 30, 1999 and 6,260,129 shares issued and
       outstanding at March 31, 1999                                                             63,000                   63,000
  Capital in excess of par value                                                              9,368,000                9,365,000
  Less treasury stock: 114,500 shares, at cost                                                 (223,000)                (223,000)
  Retained earnings                                                                             909,000                1,185,000
                                                                                      -----------------         ----------------
                                                                                             10,117,000               10,390,000
                                                                                      -----------------         ----------------
                                                                                      $      11,831,000         $     11,946,000
                                                                                      =================         ================
</TABLE>

      The accompanying notes are an integral part of these balance sheets.

                                       4
<PAGE>

                           AML COMMUNICATIONS, INC.
                           STATEMENTS OF CASH FLOWS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                   Six Months Ended
                                                                      -----------------------------------------------
                                                                         September 30,               September 30,
                                                                             1999                        1998
                                                                      ------------------           ------------------
<S>                                                                   <C>                          <C>
Cash Flows from Operating Activities:
  Net loss                                                            $         (276,000)          $         (435,000)
  Adjustments to reconcile net income
     to net cash used in operating activities:
       Depreciation and amortization                                             354,000                      370,000
       Changes in assets and liabilities:
          Decrease (increase) in:
            Accounts receivable                                                 (487,000)                     198,000
            Inventories                                                         (410,000)                     (50,000)
            Income tax receivable                                                  3,000                     (114,000)
            Other assets                                                         (29,000)                     (95,000)
          Increase (decrease) in:
            Accounts payable                                                     115,000                       (4,000)
            Accrued expenses                                                      48,000                     (191,000)
            Income taxes payable                                                       -                     (195,000)
                                                                      ------------------           ------------------
Net cash used in operating activities                                           (682,000)                    (516,000)
                                                                      ------------------           ------------------
Cash Flows from Investing Activities:
  Purchases of property and equipment                                           (215,000)                    (434,000)
                                                                      ------------------           ------------------
Net cash used in investing activities                                           (215,000)                    (434,000)
                                                                      ------------------           ------------------

Cash Flows from Financing Activities:
  Treasury stock repurchase                                                            -                     (119,000)
  Proceeds from exercise of stock options                                          3,000                        3,000
  Principal payments on  capital lease obligations                                (6,000)                     (10,000)
                                                                      ------------------           ------------------
Net cash provided by (used in) financing activities                               (3,000)                    (126,000)
                                                                      ------------------           ------------------
Net decrease in Cash and Cash Equivalents                                       (900,000)                  (1,076,000)
Cash and Cash Equivalents, beginning of period                                 6,597,000                    8,608,000
                                                                      ------------------           ------------------
Cash and Cash Equivalents, end of period                              $        5,697,000           $        7,532,000
                                                                      ==================           ==================

Supplemental disclosures of cash flow information:
  Cash paid during the period for:
     Interest                                                         $           13,000           $            3,000
                                                                      ==================           ==================
     Income taxes                                                     $                -           $          230,000
                                                                      ==================           ==================
</TABLE>

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

                                       5
<PAGE>

                           AML COMMUNICATIONS, INC.
                         NOTES TO FINANCIAL STATEMENTS
                              SEPTEMBER 30, 1999
                                  (Unaudited)

1.   Basis of Presentation

     AML Communications, Inc. (the "Company") is a designer, manufacturer and
marketer of amplifiers and related products for the global wireless industry.
The company currently focuses on the following sectors of the wireless market:
cellular telephony, wireless local loop, personal communications services, two
way paging, low earth orbit satellite networks, and custom wireless
applications.

     The accompanying unaudited financial statements have been prepared in
conformity with generally accepted accounting principles. However, certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
omitted or condensed pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC"). In the opinion of management all adjustments
(consisting of normal recurring adjustments) necessary for a fair presentation
have been included. The results of operations and cash flows for the three and
six month periods presented are not necessarily indicative of the results of
operations for a full year. These financial statements should be read in
conjunction with the Company's March 31, 1999 audited financial statements and
notes thereto included in the Company's Annual Report on Form 10-KSB.

2.   Earnings Per Share

     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).

3.   Inventories

     Inventories include costs of material, 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>
                                       September 30,           March 31,
                                       -------------           ---------
                                           1999                  1999
                                           ----                  ----
                                       (Unaudited)             (Audited)
          <S>                          <C>                    <C>
          Raw materials                   $1,357,000          $1,217,000
          Work-in-process                    502,000             343,000
          Finished goods                     334,000             223,000
                                          ----------          ----------
                                          $2,193,000          $1,783,000
                                          ==========          ==========
</TABLE>

4.   Legal Proceedings

     As described in the Company's Form 10-KSB for the fiscal years ended March
31, 1998 and March 31, 1999, two essentially identical, purported securities
class action lawsuits have been filed against the Company and certain of its
current and former officers and directors. The complaints allege that during the
purported class period of April 10, 1996 to March 25, 1997, defendants made
overly optimistic estimates regarding the Company's anticipated financial
performance for fiscal 1997 and 1998, and overly optimistic statements regarding
the Company's ability to develop and to sell new products for the PCS market,
all allegedly in order to profit from

                                       6
<PAGE>

insider trading at artificially inflated prices. It is management's opinion that
the lawsuit and subsequent claims are without merit. Management intends to
continue to vigorously defend its position

     In the action pending in federal court, entitled Sussman v. AML
                                                      --------------
Communications, Inc., et al., U.S.D.C. Case No. 98-2010 CAS (Ex) (C.D. Cal.),
----------------------------
four lead plaintiffs and co-lead counsel were appointed on June 29, 1998
pursuant to The Private Securities Litigation Reform Act of 1995. On September
3, 1998, plaintiffs filed an amended complaint. The Company responded to the
amended complaint by filing a motion to dismiss the case. A hearing on the
motion to dismiss was held on February 8, 1999. The court took the motion under
submission. On August 2, 1999, in the light of the Ninth Circuit's decision in
In re: Silicon Graphics Litig., 183 F.3d 3970 (9/th/ Cir. 1999), the court
-------------------------------
ordered plaintiffs to show cause why their amended complaint should not be
dismissed. On September 3, 1999, in response to plaintiffs' motion for a stay of
any determination of the motion to dismiss until after a petition for rehearing
in Silicon Graphics was decided, the court stayed the action against the Company
----------------
for 90 days. On October 27, 1999, the Ninth Circuit denied the petition for
rehearing in Silicon Graphics. The parties are required to submit to the court a
             ----------------
joint status report concerning the status of the petition before November 19,
1999. All discovery is stayed unless and until it is determined that plaintiffs
have stated an actionable claim.

     With respect to the action pending in state court, entitled Sussman v. AML
                                                                 --------------
Communications, Inc., et al., Case No. CIV 179776 (Ventura County), all
----------------------------
proceedings have been stayed until the stay of discovery is lifted in the
federal action. Plaintiffs have informed the Company that they intend to file an
amended complaint in the state action once the case proceeds. The Company's
response will be due forty-five (45) days after the filing of the amended
complaint. The Company intends to respond by filing a demurrer, which is the
California equivalent of a motion to dismiss for failure to state a claim.

     The Company currently is not party to any other 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.

                                       7
<PAGE>

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

     This quarterly report contains forward-looking statements which involve
risks and uncertainties. The Company's actual future results may differ
materially from the results discussed in the forward-looking statements. When
used in this report, the words "expects" "anticipates" and "estimates" and
similar expressions are intended to identify forward looking statements. Factors
that might cause a difference include, but are not limited to, product demand
and the rate of market acceptance, the effect of economic conditions, the impact
of competitive products and pricing, delays in product development, capacity and
supply constraints or difficulties, general business and economic conditions,
factors set forth in "Additional Factors That May Affect Future Results" and
other risks detailed in the Company's filings with the Securities and Exchange
Commission. 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.

Results of Operations
---------------------

Three Months Ended September 30, 1999 Compared to Three Months Ended September
30, 1998

     Net sales.  Net sales for the three months ended September 30, 1999 were
$2.3 million compared to net sales of $1.6 million in the three months ended
September 30, 1998, a 43.1% increase. The increase in net sales is largely
attributable to increased sales of the Company's cellular products, which
contributed $1.0 million, or 45.9% of net sales, for the three months ended
September 30, 1999, compared to $453,000, or 28.5% of net sales, for the three
months ended September 30, 1998. The increase in cellular product sales can be
attributed to increased sales for the Company's M30 product line during the
quarter. Sales of Wireless Local Loop ("WLL") products increased to $376,000, or
16.6% of net sales, during the three months ended September 30, 1999, compared
to $16,000, or 1.0% of net sales, during the three months ended September 30,
1998. WLL sales have increased due to greater shipment levels of the Company's
pre-production WLL products. Sales of PCS/paging products decreased to $659,000,
or 29.0% of net sales, for the three months ended September 30, 1999, compared
to $786,000, or 49.4% of net sales, for the three months ended September 30,
1998. Sales of custom products for the three months ended September 30, 1999 was
$198,000, or 8.7% of net sales, compared to $335,000, or 21.1% of net sales, in
the three months ended September 30, 1998.

     Gross profit.  Gross profit for the three months ended September 30, 1999
was $925,000 or 40.7% of net sales, compared to $492,000, or 30.9% of net sales,
for the three months ended September 30, 1998. Production costs decreased to
59.3% of net sales, for the three months ended September 30, 1999 compared to
69.1% of net sales for the three months ended September 30, 1998. Gross profit
increased as a result of the effects from cost containment, greater operating
efficiencies and the absorption of reduced overhead fixed costs at increased
shipment levels. Gains in gross profit were reduced by lower average selling
prices and gross margins for the Company's products in the highly competitive
OEM market. The Company expects that this pressure on selling prices for its
current products will continue in fiscal 2000.

     Selling, general and administrative costs. Selling, general and
administrative costs for the three months ended September 30, 1999, were
$671,000, or 29.5% of net sales, compared to $681,000, or 42.8% of net sales,
for the three months ended September 30, 1998. While the amounts are comparable
in aggregate, the decrease in cost as a percentage of net sales is attributable
to the reduction in marketing and administrative personnel and its related
expenses, lower professional fees, and lower trade show costs. These cost
reductions were offset by increases for higher commission rates for outside
sales representatives and additional travel costs to promote the Company and its
products. The Company believes continued investment in sales and marketing is
necessary to promote the Company's products due to the intensely competitive
nature of the industry.

                                       8
<PAGE>

     Research and development costs. Research and development costs for the
three months ended September 30, 1999 were $411,000, or 18.1% of net sales,
compared to $777,000, or 48.9% of net sales, for the three months ended
September 30, 1998. The decrease is primarily due to reduced labor costs
reflecting the previously announced work force reduction in March 1999, lower
research and development material costs, and lower equipment rental costs. The
Company continues to invest both material and labor in the design and
development of new products for the cellular, PCS, paging, and WLL
communications markets when such products provide the potential for acceptable
margins and return on investment.

     Other income, net.  Other income for the three months ended September 30,
1999 was $67,000 compared to $112,000 for the three months ended September 30,
1998. The decrease is due mainly to a decrease in interest income as a result of
decreased average invested funds.

     Provision/benefit for taxes.  For the three months ended September 30,
1999, the Company recorded no benefit for income taxes, compared to a benefit
for income taxes of $304,000, an effective tax rate of approximately 36%, for
the three months ended September 30, 1998. No benefit for income taxes was
recorded since the Company has utilized all carry-back benefits during the 1999
fiscal year. The difference between the rate used and the statutory rate of
approximately 40% is due to research and development tax credits available to
the Company which reduce taxes payable and tax benefits associated with the
exercise of employee stock options.

     Net loss.  For the reasons set forth above, the Company generated net loss
in the second quarter of fiscal 2000 of $90,000, or 4.0% of net sales, compared
to a net loss of $550,000, or 34.6% of net sales, in the second quarter of
fiscal 1999.

Six Months Ended September 30, 1999 Compared to Six Months Ended September 30,
1998

     Net sales.  Net sales for the six months ended September 30, 1999 were $4.5
million compared to net sales of $4.6 million in the six months ended September
30, 1998, a 2.1% decrease.  The decrease in net sales is largely attributable to
a decrease in sales of the Company's PCS/paging products, which contributed
$748,000, or 16.4% of net sales, for the six months ended September 30, 1999,
compared to $1.6 million or 35.5% of net sales, for the six months ended
September 30, 1998. The decrease in the PCS/paging product sales can be
attributed to the Company fulfilling a large contract to a single customer
during the first quarter of fiscal 1999. Sales of cellular products increased to
$3.0 million, or 66.1% of net sales, for the six months ended September 30,
1999, compared to $2.1 million, or 46.7% of net sales, for the six months ended
September 30, 1998.  The increase in cellular sales is due to greater focus on
sales of existing cellular products during the investigation and development of
new products for cellular and other product segments.  Sales of WLL products
increased to $480,000, or 10.5% of net sales, during the six months ended
September 30, 1999, compared to $236,000, or 5.0% of net sales, during the six
months ended September 30, 1998.  The increase in WLL sales is due to increased
shipment levels of the Company's product. Sales of custom products contributed
$315,000, or 7.0% of net sales for the six months ended September 30, compared
to $593,000, or 12.8% of net sales, in the six months ended September 30, 1998.

     Gross profit.  Gross profit for the six months ended September 30, 1999 was
$1.7 million or 38.4% of net sales, compared to $1.8 million, or 38.1% of net
sales, for the six months ended September 30, 1998. Production costs decreased
to $2.8 million, or 61.6% of net sales for the six months ended September 30,
1999 compared to $2.9 million, or 61.9% of net sales, for the six months ended
September 30, 1998. Gross profit was comparable as a result of gains from
productivity efficiencies offset by lower average selling prices and gross
margins for the Company's products in the highly competitive OEM market. The
Company expects that this pressure on selling prices for its current products
will continue in fiscal 2000.

     Selling, general and administrative costs.  Selling, general and
administrative costs for the six months ended September 30, 1999, were $1.4
million, or 29.9% of net sales, compared to $1.4 million, or 29.6% of net sales,
for the six months ended September 30, 1998. The difference is primarily due to
the reduction in marketing and administrative personnel and its related expenses
and lower professional fees. These cost reductions were offset by increases due
primarily to higher commission rates for outside sales representatives and
additional travel costs to promote the Company and its products. The Company
believes continued investment in sales and marketing is necessary to promote the
Company's products due to the intensely competitive nature of the industry.

                                       9
<PAGE>

     Research and development costs.  Research and development costs for the six
months ended September 30, 1999 were $793,000, or 17.4% of net sales, compared
to $1.3 million, or 27.7% of net sales, for the six months ended September 30,
1998. The decrease is primarily due to reduced labor costs reflecting the
previously announced work force reduction in March 1999, lower research and
development material costs, and lower equipment rental costs. The Company
continues to invest both material and labor in the design and development of new
products for the cellular, PCS, paging, and WLL communications markets when such
products provide the potential for acceptable margins and return on investment.

     Other income, net.  Other income for the six months ended September 30,
1999 was $130,000 compared to $220,000 for the three months ended September 30,
1998. The decrease is due mainly to a decrease in interest income as a result of
decreased average invested funds.

     Provision/benefit for taxes.  For the six months ended September 30, 1999,
the Company recorded no benefit for income taxes, compared to a benefit for
income taxes of $239,000, an effective tax rate of approximately 36%, for the
six months ended September 30, 1998. No benefit for income taxes was recorded
since the Company has utilized all carry-back benefits during the 1999 fiscal
year. The difference between the rate used and the statutory rate of
approximately 40% is due to research and development tax credits available to
the Company which reduce taxes payable and tax benefits associated with the
exercise of employee stock options.

     Net loss.  For the reasons set forth above, the Company generated net loss
in the six months ended September 30, 1999 of $276,000, or 6.1% of net sales,
compared to a net loss of $435,000, or 9.4% of net sales, for the six months
ended September 30, 1999.

Liquidity and Capital Resources
-------------------------------

     Historically, the Company has financed its operations primarily from
internally generated funds and, to a lesser extent, loans from stockholders and
capital lease obligations. In December 1995, the Company completed its 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.

     On August 10, 1998, the Company announced that its 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 will be
purchased from time to time in the open market or in negotiated transactions and
will be 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 during fiscal 1999. The Company did not repurchase any additional
shares during the first six months of fiscal 2000.

     In October 1999, the Company entered into a new revolving bank line of
credit. The agreement is comprised of two separate credit facilities. The
initial facility is a $1,500,000 revolving line of credit, which bears interest
at the bank's reference rate (prime rate) plus 0.50%. The second facility is a
$500,000 non-revolving line of credit with term repayment options, which may be
used to finance up to 100% of the purchase price of equipment used in the
Company's business. The second facility bears an interest rate at the bank's
reference rate plus 1.50%. Both facilities are secured by substantially all of
the Company's assets and expire on October 26, 2000.

     At September 30, 1999 the Company had $5.7 million in cash and cash
equivalents. The Company's operating activities used cash of approximately
$683,000 for the six months ended September 30, 1999 primarily as a result of a
loss from operations, an increase in receivables and an increase in inventories.
The Company's capital expenditures of $215,000 for the six months ended
September 30, 1999 were primarily for manufacturing test equipment, information
system improvements and leasehold improvements.

                                       10
<PAGE>

     The Company believes that the net proceeds from the initial public offering
and the cash provided by operations will be sufficient to finance the Company
for at least the next 12 months. Inflation has not had a significant effect to
date on the Company's results of operations.

Year 2000 Compliance Issue
--------------------------

     The Company uses computer software programs purchased from various
independent vendors who may have written their programs using a two digit date
field rather than a four digit date field to define the applicable year. Such
computer programs which utilize a two digit date field may recognize a date
using "00" as the year 1900 rather than the year 2000 (the "Year 2000 Issue").
The Year 2000 Issue could potentially result in a system failure or in
miscalculations causing disruptions of operations, including among other things,
a temporary inability to process transactions, send invoices or engage in other
similar normal business activities.

     The Company has identified the Year 2000 Issue in certain of its computer
software applications and is in the process of upgrading or replacing such
applications with software which, according to representations from the software
providers, recognize two digit date fields "00" as the year 2000. The Company
plans to test all such applications that have been represented by software
providers to be year 2000 compliant. The Company has completed its assessment of
internal information technology systems that will be affected by the Year 2000
Issue. The affected information technology systems have been upgraded or
replaced to be year 2000 compliant during October 1999. The cost of upgrading or
replacing such applications has not had a material effect on the operations of
the Company and has been and will continue to be funded through operating cash
flows.

     The Company has contacted its key customers, suppliers, and other third
parties with whom the Company exchanges electronic information to determine the
impact, if any, the Year 2000 Issue may have on their information technology
systems, which in turn, would have an impact on the Company. The Company has
reviewed the initial responses from its key customers, suppliers, and other
third parties and assessed any potential impact to the Company. There can be no
assurance that such customers, suppliers or third parties will not suffer
business disruptions due to the Year 2000 Issue. Such failures could have a
material adverse effect on the Company's business, results of operations and
financial condition.

     Because the Company has upgraded or replaced the computer software
applications which run most of its information technology systems (which
software has been represented by the software providers not to be affected by
the Year 2000 Issue) the Company has not developed Year 2000 specific
contingency plans. The Company intends to develop such plans if it identifies a
business function at risk. The Company does not currently anticipate that the
Year 2000 Issue will have a material effect on its business, results of
operations, or financial condition.

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 various OEM base station equipment, 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, our ability
to finance our activities and maintain our financial liquidity and worldwide
economic and political conditions.

     We believe that, to the extent that foreign sales are recognized, we may
face increased risk associated with political and economic instability,
compliance with foreign regulatory rules governing export requirements, tariffs
and other trade barriers, differences in intellectual property protections,
longer accounts receivable cycles, currency fluctuations and general trade
restrictions. If any of these risks materialize, they could have a material
adverse effect on our business, results of operations and financial condition.
We have identified potential new customers serving new markets in developing
countries. Our WLL products offer a viable alternative to the construction of a

                                       11
<PAGE>

wireline infrastructure in such areas. However, to the extent that our customers
delay development or deployment of WLL communications networks and/or technology
continues to evolve, we may experience a material adverse effect on our
business, results of operations and financial condition.

     We have evaluated the credit exposure associated with conducting business
with foreign customers and have concluded that such risk is acceptable.
Nevertheless, any significant change in the economy or a deterioration in United
States trade relations or the economic or political stability of foreign markets
could have a material adverse effect on our business, results of operations and
financial condition.

     Sales to foreign customers are invoiced in U.S. dollars. Accordingly, we
currently do not engage in foreign currency hedging transactions. However, as we
expand further into foreign markets, greater risk associated with general
business, political and economic conditions in those markets, may be
experienced. At such time, we may seek to lessen our exposure through currency
hedging transactions. No assurance can be made that a currency hedging strategy
would be successful in avoiding currency exchange related losses. In addition,
should the relative value of the U.S. dollar in comparison to foreign currencies
increase, the resulting increase in the price of the Company's products to
foreign customers could result in decreased sales which could have a material
adverse impact on our business, results of operations and financial condition.

     We experience significant price competition and expect price competition in
the sale of our products to remain intense. 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. 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 potential future competitors
could have, substantially greater technical, marketing, distribution and other
resources than we do and have, or could have, greater name recognition and
market acceptance of their products and technologies.

     We receive periodic order forecasts from our major customers who have no
obligation to purchase the forecasted amounts. Nevertheless, 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 our 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 operations and
financial condition.

     The markets in which we and our customers compete are 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 the event our newly developed products
are not timely developed or do not gain market acceptance, our business, results
of operations and financial condition could be materially adversely affected.

                                       12
<PAGE>

                          PART II - OTHER INFORMATION

Item 1.   Legal Proceedings

     As described in the Company's Form 10-KSB for the fiscal years ended March
31, 1998 and March 31, 1999, two essentially identical, purported securities
class action lawsuits have been filed against the Company and certain of its
current and former officers and directors. The complaints allege that during the
purported class period of April 10, 1996 to March 25, 1997, defendants made
overly optimistic estimates regarding the Company's anticipated financial
performance for fiscal 1997 and 1998, and overly optimistic statements regarding
the Company's ability to develop and to sell new products for the PCS market,
all allegedly in order to profit from insider trading at artificially inflated
prices. It is management's opinion that the lawsuit and subsequent claims are
without merit. Management intends to continue to vigorously defend its position.

     In the action pending in federal court, entitled Sussman v. AML
                                                      --------------
Communications, Inc., et al., U.S.D.C. Case No. 98-2010 CAS (Ex) (C.D. Cal.),
-----------------------------
four lead plaintiffs and co-lead counsel were appointed on June 29, 1998
pursuant to The Private Securities Litigation Reform Act of 1995. On September
3, 1998, plaintiffs filed an amended complaint. The Company responded to the
amended complaint by filing a motion to dismiss the case. A hearing on the
motion to dismiss was held on February 8, 1999. The court took the motion under
submission. On August 2, 1999, in the light of the Ninth Circuit's decision in
In re: Silicon Graphics Litig., 183 F.3d 3970 (9th Cir. 1999), the court ordered
-------------------------------
plaintiffs to show cause why their amended complaint should not be dismissed. On
September 3, 1999, in response to plaintiffs' motion for a stay of any
determination of the motion to dismiss until after a petition for rehearing in
Silicon Graphics was decided, the court stayed the action against the Company
----------------
for 90 days. On October 27, 1999, the Ninth Circuit denied the petition for
rehearing in Silicon Graphics. The parties are required to submit to the court a
             ----------------
joint status report concerning the status of the petition before November 19,
1999. All discovery is stayed unless and until it is determined that plaintiffs
have stated an actionable claim.

     With respect to the action pending in state court, entitled Sussman v. AML
                                                                 --------------
Communications, Inc., et al., Case No. CIV 179776 (Ventura County), all
----------------------------
proceedings have been stayed until the stay of discovery is lifted in the
federal action. Plaintiffs have informed the Company that they intend to file an
amended complaint in the state action once the case proceeds. The Company's
response will be due forty-five (45) days after the filing of the amended
complaint. The Company intends to respond by filing a demurrer, which is the
California equivalent of a motion to dismiss for failure to state a claim.

     The Company currently is not party to any other 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.

Item 4  Submission of Matters to a Vote of Security Holders

     The Annual Meeting of Stockholders was held on September 22, 1999. The
following matters were submitted to a vote of the Company's stockholders:

Proposal No. 1 - Election of two (2) Class I Directors

     To elect Scott T. Behan and Richard W. Flatow as directors for terms to
expire in 2002. Messrs. Behan and Flatow were directors immediately prior to the
vote and were re-elected as a result of the following vote:

<TABLE>
<CAPTION>
                         Votes For  Votes Against  Votes Withheld
                         ---------  -------------  --------------
<S>                      <C>        <C>            <C>
Scott T. Behan           4,990,867         26,457          31,452
Richard W. Flatow        4,990,867         26,457          31,452
</TABLE>

Jacob Inbar, Kirk A. Waldron, David A. Derby and Gerald M. Starek continue to
serve as directors.

                                       13
<PAGE>

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


(a)             Exhibits

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

         10.24  Intellectual Property Security Agreement

         27     Financial Data Schedule


(b)             Reports on Form 8-K

                The Company filed no current Reports on Form 8-K during the
                quarter ended September 30, 1999.

                                       14
<PAGE>

                                  SIGNATURES

     In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                   AML Communications, Inc.



Date:  November 2, 1999            /s/ David A. Swoish
                                   -------------------------
                                   David A. Swoish
                                   Chief Accounting Officer and
                                   Controller
                                   (Principal Accounting Officer)

                                       15