<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, 1997 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 
                                     ---       ---

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

Number of shares of Common Stock Outstanding as of  October 31, 1997: 6,246,251


Number of pages in this Form 10-QSB   15
                                      --
<PAGE>
 
                            AML COMMUNICATIONS, INC.
                                        
                                     INDEX
<TABLE>
<CAPTION>
 
                                                                                    PAGE
<S>          <C>                                                                    <C>
PART I                              FINANCIAL INFORMATION      

Item 1.      Financial Statements (unaudited)
 
             Statements of Income for the three month and six month periods ended      3
             September 30, 1997 and September 30, 1996
 
             Balance Sheets at September 30, 1997 and March 31, 1997                   4
 
             Statements of Cash Flows for the six month periods ended                  5
             September 30, 1997 and September 30, 1996
 
             Notes to the Financial Statements                                         6
 
Item 2.      Management's Discussion and Analysis of                                   8
             Financial Condition and Results of Operations
 
PART II      OTHER INFORMATION                                                       
 
Item 6.      Exhibits and Reports of Form 8-K                                         14
 
             SIGNATURES                                                               15
</TABLE>

                                       2
<PAGE>
 
                         PART I - FINANCIAL INFORMATION
                                        
Item 1.  Financial Statements


                            AML COMMUNICATIONS, INC.
                              STATEMENTS OF INCOME
                                  (UNAUDITED)
                                        
<TABLE>
<CAPTION>
                                                    THREE MONTHS ENDED                               SIX MONTHS ENDED
                                        ----------------------------------------      ---------------------------------------------
                                           SEPTEMBER 30,           SEPTEMBER 30,         SEPTEMBER 30,           SEPTEMBER 30, 
                                               1997                    1996                  1997                     1996
                                        ----------------           -------------      ----------------           ------------------
 <S>                                    <C>                        <C>                <C>                        <C>

Net sales                                     $2,805,000               $3,882,000            $5,320,000                  $7,558,000
Cost of goods sold                             1,594,000                1,799,000             2,864,000                   3,507,000
                                        ----------------            -------------      ----------------           ------------------
     Gross profit                              1,211,000                2,083,000             2,456,000                   4,051,000
                                        ----------------            -------------      ----------------           ------------------
Operating expenses:                                                                     
     Selling, general and administrative         619,000                  613,000             1,282,000                   1,319,000
     Research and development                    474,000                  391,000               957,000                     699,000
                                        ----------------            -------------      ----------------           ------------------
                                               1,093,000                1,004,000             2,239,000                   2,018,000
                                        ----------------            -------------      ----------------           ----------------- 
Operating income                                 118,000                1,079,000               217,000                   2,033,000
     Other income, net                           (78,000)                 (60,000)             (158,000)                   (102,000)
                                        ----------------            -------------      ----------------           ------------------
Income before provision for                                                             
      income taxes                               196,000                1,139,000               375,000                   2,135,000
Provision for income taxes                        73,000                  421,000               139,000                     789,000
                                        ----------------            -------------      ----------------           ------------------
Net income                                    $  123,000               $  718,000            $  236,000                  $1,346,000
                                        ================            =============      ================           ==================

Earnings per common share                     $     0.02               $     0.11            $     0.04                  $     0.21
                                        ================            =============      ================           ==================
Weighted average number of shares of                                                    
    common stock outstanding                   6,401,000                6,499,000             6,381,000                   6,499,000
                                        ================            =============      ================           ==================

</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,
                                                                                              1997                       1997
                                                                                       -----------------          -----------------
                                                                                          (Unaudited)                 (Audited)
<S>                                                                                    <C>                        <C>

ASSETS
------
Current Assets:
  Cash and cash equivalents                                                                  $   300,000                $ 4,766,000
  Marketable securities                                                                        7,715,000                  3,259,000
  Accounts receivable, net of allowance for doubtful accounts of
  $66,000 at September 30, 1997 and $297,000 at March 31, 1997                                 2,200,000                  1,910,000
  Inventories                                                                                  2,149,000                  1,961,000
  Other current assets                                                                           139,000                    203,000
                                                                                       -----------------          -----------------
Total current assets                                                                          12,503,000                 12,099,000
                                                                                       -----------------          -----------------
 
Property and Equipment:
  Machinery and equipment                                                                      2,519,000                  2,239,000
  Furniture and fixtures                                                                         120,000                    120,000
  Leasehold improvements                                                                         530,000                    516,000
                                                                                       -----------------          -----------------
                                                                                               3,169,000                  2,875,000
  Less - Accumulated depreciation and amortization                                            (1,212,000)                  (912,000)
                                                                                       -----------------          -----------------
                                                                                               1,957,000                  1,963,000
                                                                                       -----------------          ----------------- 
Deferred Taxes                                                                                   332,000                    332,000
                                                                                       -----------------          -----------------
Other Assets                                                                                     152,000                    149,000
                                                                                       -----------------          -----------------
                                                                                             $14,944,000                $14,543,000
                                                                                       =================          =================
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
  Accounts payable                                                                           $ 1,084,000                $   857,000
  Accrued expenses                                                                               366,000                    603,000
  Income taxes payable                                                                           383,000                    244,000
  Current portion of capital lease obligations                                                    33,000                     40,000
                                                                                       -----------------          -----------------
Total current liabilities                                                                      1,866,000                  1,744,000
                                                                                       -----------------          -----------------
  
Capital Lease Obligations, net of current portion                                                 49,000                     62,000
                                                                                       -----------------          ----------------- 
Commitments and contigencies

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; 6,216,249 shares issued
       and outstanding at September 30, 1997 and 6,082,190 shares issued and
        outstanding at March 31, 1997                                                             62,000                     61,000
  Capital in excess of par value                                                               9,103,000                  9,048,000
  Retained earnings                                                                            3,864,000                  3,628,000
                                                                                       -----------------          ----------------- 
                                                                                              13,029,000                 12,737,000
                                                                                       -----------------          -----------------
                                                                                             $14,944,000                $14,543,000
                                                                                       =================          =================
</TABLE>


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

                                       4
<PAGE>
 
                            AML COMMUNICATIONS, INC.
                            STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                                   Six Months Ended
                                                                                 -------------------------------------------------
                                                                                     September 30,                September 30,
                                                                                         1997                         1996
                                                                                 ------------------             ------------------ 
<S>                                                                              <C>                            <C>
                                                                                                     (UNAUDITED)
Cash Flows from Operating Activities:
  Net income                                                                            $   236,000                $ 1,346,000  
  Adjustments to reconcile net income                                                                                               
     to net cash provided by (used in) operating activities:                                                                        
       Depreciation and amortization                                                        300,000                    226,000  
       Provision for losses on accounts receivable                                                -                     20,000  
       Changes in assets and liabilities:                                                                                           
          Decrease (increase) in:                                                                                                   
            Marketable securities                                                        (4,456,000)                (1,009,000)
            Accounts receivable                                                            (290,000)                  (174,000) 
            Inventories                                                                    (188,000)                  (752,000) 
            Deferred tax asset                                                                    -                     45,000  
            Other assets                                                                     61,000                    (36,000) 
          Increase (decrease) in:                                                                                                  
            Accounts payable                                                                227,000                     54,000  
            Accrued expenses                                                               (237,000)                   (24,000) 
            Income taxes payable                                                            139,000                    358,000  
                                                                                    ---------------              -------------    
Net cash provided by (used in) operating activities                                      (4,208,000)                    54,000  
                                                                                    ---------------              -------------    
 
Cash Flows from Investing Activities:
  Proceeds from disposition of facility held for resale                                           -                  1,300,000
  Purchases of property and equipment                                                      (294,000)                (1,272,000)
                                                                                    ---------------              -------------     
Net cash provided by (used in) investing activities                                        (249,000)                    28,000
                                                                                    ---------------              -------------    
 
Cash Flows from Financing Activities:
  Proceeds from exercise of stock options                                                    56,000                    161,000
  Principal payments on capital lease obligations                                           (20,000)                  (358,000)
                                                                                    ---------------              -------------
Net cash provided by (used in) financing activities                                          36,000                   (197,000)
                                                                                    ---------------              -------------    
Net Decrease in Cash and Cash Equivalents                                                (4,466,000)                  (115,000)
Cash and Cash Equivalents, beginning of period                                            4,766,000                  6,312,000
                                                                                    ---------------              -------------
Cash and Cash Equivalents, end of period                                                $   300,000                $ 6,197,000
                                                                                    ===============              =============
Supplemental disclosures of cash flow information:
  Cash paid during the period for:
     Interest                                                                           $     4,000                $    12,000
                                                                                    ===============              =============
     Income taxes                                                                       $         -                $   135,000    
                                                                                    ===============              =============
</TABLE>



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

                                       5
<PAGE>
 
                            AML COMMUNICATIONS, INC.
                         NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1997
                                  (UNAUDITED)
                                        
1.  Basis of Presentation

         AML Communications, Inc. (the "Company") designs and manufactures
multi-carrier amplifiers, masthead amplifiers and related products for the
cellular, personal communication services ("PCS"), paging and other
communication markets.

         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
month 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, 1997 audited financial
statements and notes thereto included in the Company's Annual Report to
Shareholders on Form 10-KSB.

2.  Earnings Per Share

         Earnings per share are based upon the weighted average number of common
shares outstanding plus the dilutive effect of common stock equivalents. The
earnings per share calculations reflect a 3:2 stock split paid June 28, 1996 to
holders of record on June 5, 1996.  Primary and fully diluted earnings per share
were the same for all periods presented.

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, 1997         March 31, 1997
                                               ------------------         --------------
<S>                                               <C>                       <C>     
                                                                                           
Raw materials                                     $1,685,000                $1,502,000
Work-in-process                                      359,000                   409,000
Finished goods                                       105,000                    50,000
                                                  ----------                ----------
                                                  $2,149,000                $1,961,000
                                                  ==========                ========== 
</TABLE>

                                       6
<PAGE>
 
4.  Marketable Securities

          Marketable securities reported during fiscal year 1997 and during the
first quarter of fiscal year 1998 are interest bearing tax free investments with
maturities of less than one year but greater than three months when purchased.
These securities are readily convertible into cash and are stated at cost, which
approximates market value. During the second quarter of 1998, the Company began
investing in a money market protfolio of taxable and tax advantaged instruments.

                                       7
<PAGE>
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

This filing contains forward-looking statements which involve risks and
uncertainties.  The Company's actual future may differ significantly from the
results discussed in the 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 changes in economic conditions, the impact of
competitive products and pricing, delays in product development, capacity and
supply constraints or difficulties, general business and economic conditions,
and other risks detailed in the Company's Securities and Exchange Commission
filings.


RESULTS OF OPERATIONS
---------------------

Three Months Ended September 30, 1997 and 1996

  Net sales. Net sales for the three months ended September 30, 1997 were $2.8
million compared to $3.9 million in the corresponding period in 1996, a 27.7%
decrease. The decrease in sales is largely attributable to the decrease in
volume of the Company's cellular amplifiers which contributed $2.1 million, or
76.4% of net sales for the quarter ended September 30, 1997. The Company
believes that the decline in the cellular amplifier product line is primarily a
result of the following factors: 1) Original Equipment Manufacturers ("OEM's")
have improved the amplifiers within their base stations enabling the operator to
achieve cost effective performance without having to upgrade to the Company's
amplifier, 2) Macrocell base stations are being developed and sold at
substantially lower prices than before, thereby slowing the sales of microcell
base stations. The Company's multi-carrier amplifier is designed to perform with
the microcell base station; consequently, sales of the Company's amplifiers have
decreased and 3) The industry focus has shifted to the Personal Communications
Services ("PCS") market, slowing further build-out of the cellular infra-
structure. Sales of the PCS and wireless telephony products totaled $61,000, or
2.2% of total sales for the three months ended September 30, 1997, compared to
$261,000, or 6.7% of sales for the three months ended September 30, 1996.

  Sales of the Company's custom products totaled $601,000, or 21.4% of total 
sales for the three months ended September 30, 1997 compare to $611,000, or 
15.7% for the corresponding period in 1996.  The Company expects the custom 
product market to be a stable component of the Company's revenue stream, but to 
decline in the future as a percent of total sales.

  Gross profit.  Gross profit for the three months ended September 30, 1997 was
$1.2 million, or 43.2% of net sales, compared to $2.1 million, or 53.7% of net
sales, for the corresponding period in 1996. The Company's average selling
prices and gross margins for its products have declined as cellular operators
continue to face pressures to reduce costs and as competition intensifies among
suppliers of equipment to the cellular operators.

  Selling, general and administrative costs. Selling, general and administrative
costs for the three months ended September 30, 1997 were $619,000, or 22.1% of
net sales, compared to $613,000, or 15.8% of net sales, for the corresponding
period in 1996. The percentage increase is the result of relatively comparable
costs for labor, trade show and travel expense between the 1997 and 1996 periods
but applied to lower sales in 1997. The Company believes further investment in
sales and marketing will be necessary to promote the Company's products due to
the intensely competitive nature of the industry.

  Research and development costs.  Research and development costs for the three
months ended September 30, 1997 were $474,000, or 16.9% of net sales, compared
to $391,000, or 10.1% of net sales, for the corresponding period in 1996.  The
increase is due primarily to the

                                       8
<PAGE>
 
employment of additional technical staff and increased material costs required
to design and develop new products for cellular, PCS and paging communications
markets.

During the second quarter 1997, the Company received an order to supply paging
amplifiers to the domestic PCS market.  The contract is the first significant
production order for the Company's new product line serving this market.
Subsequent to the end of the second quarter, the Company announced that it 
received Federal Communication Commission approval to market its M30 multi-
carrier amplifier for the U.S. and international cellular marketplace.  A multi-
carrier amplifier replaces the functions of several single carrier power
amplifiers and cavity filters, thereby reducing service providers' maintenance
costs and space requirements while providing increased system flexibility and
call capacity.   The Company continues to focus its efforts on the development
of products for the PCS infrastructure buildup.

  Other income, net.  Other income for the three months ended September 30, 1997
increased to $78,000 compared to $60,000 for the corresponding period in 1996.
The increase is due to interest income on a higher level of investments and a
reduction in interest expense associated with the reduction of certain lease
obligations.

  Provision for income taxes. For the three months ended September 30, 1997, the
Company's provision for income taxes was $73,000, an effective tax rate of 37.2%
compared to $421,000, an effective tax rate of approximately 37.0% for the
corresponding period in 1996. 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 free
interest income generated from certain investments.

  Net income.  For the reasons set forth above, the Company generated a net
income for the three months ended September 30, 1997, of $123,000, or 4.4% of
net sales compared to $718,000, or 18.5% of net sales in the corresponding
period in 1996.

                                       9
<PAGE>
 
SIX MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

  Net sales. Net sales for the six months ended September 30, 1997 were $5.3
million compared to $7.6 million in the corresponding period in 1996, a 29.6%
decrease. The decrease in sales is largely attributable to the decrease in
volume of the Company's cellular amplifiers which contributed $3.6 million, or
67.3% of net sales for the period ended September 30, 1997 compared to $6.0
million, or 79.9% of net sales for the period ended September 30, 1996. The
decline in the cellular amplifier product line is a result of the following
factors: 1) OEM's have improved the amplifiers within their base stations
enabling the operator to achieve cost effective performance without having to
upgrade to the Company's amplifier, 2) Macrocell base stations are being
developed and sold at substantially lower prices than before, thereby slowing
the sales of microcell base stations. The Company's multi-carrier amplifier is
designed to perform with the microcell base station; consequently, sales of the
Company's amplifiers have decreased and 3) The industry focus has shifted to the
PCS market, slowing further build-out of the cellular infra-structure. Sales of
PCS and wireless telephony products totaled $308,000, or 5.8% of total sales for
the six months ended September 30, 1997, compared to $537,000, or 7.1% of sales
for the six months ended September 30, 1996.

Sales of the Company's Custom products totaled $922,000, or 17.3% of total sales
for the six months ended September 30, 1997 compared to $978,000, or 12.9% for
the corresponding period in 1996.  The Company expects the Custom product market
to be a stable component of the Company's revenue stream, but to decline in the
future as a percent of total sales.

During the first quarter of this year the Company reported sales of amplifiers
used in the Low Earth Orbit ("LEO") satellite network of $508,000, which
represents 9.6% of sales for the six months ended September 30, 1997. The LEO
satellite network is designed to provide high-speed digital communication
worldwide through earth gateways. This revenue represents completion of the
Company's contract previously announced in January, 1997 to provide amplifiers
to a customer in the LEO satellite network during the first quarter
of this year. The Company currently has no other contract for the production and
shipment of LEO amplifiers.

  Gross profit.  Gross profit for the six months ended September 30, 1997 was
$2.5 million, or 46.2% of net sales, compared to $4.1 million, or 53.6% of net
sales, for the corresponding period in 1996.  The percentage decrease is a
result of the revenue shortfall that occurred during the year which impeded the
Company's ability to efficiently absorb its labor and overhead expenses. The
Company's average selling prices and gross margins for its products have
declined as cellular operators continue to face pressures to reduce costs and as
competition intensifies among suppliers of equipment to the cellular operators.

  Selling, general and administrative costs.  Selling, general and
administrative costs for the six months ended September 30, 1997 were $1.3
million, or 24.1% of net sales, compared to $1.3 million, or 17.5% of net sales,
for the corresponding period in 1996. The percentage increase is the result of
relatively comparable costs for labor, trade show and travel expense between the
1997 and 1996 periods but applied to lower sales in 1997. The Company believes
further

                                       10
<PAGE>
 
investment in sales and marketing will be necessary to promote the Company's
products due to the intensely competitive nature of the industry.

  Research and development costs.  Research and development costs for the six
months ended September 30, 1997 were $957,000, or 18.0% of net sales, compared
to $699,000, or 9.2% of net sales, for the corresponding period in 1996.  The
increase is due primarily to the employment of additional technical staff and
increased material costs required to design and develop new products for
cellular, PCS and paging communications markets.

During the second quarter 1997, the Company received an order to supply paging
amplifiers to the domestic PCS market.  The contract is the first significant
production order for the Company's new product line serving this market.
Subsequent to the end of the second quarter, the Company announced that it 
received Federal Communication Commission approval to market its M30 multi-
carrier amplifier for the U.S. and international cellular marketplace.  A multi-
carrier amplifier replaces the functions of several single carrier power
amplifiers and cavity filters, thereby reducing service providers' maintenance
costs and space requirements while providing increased system flexibility and
call capacity.   The Company continues to focus its efforts on the development
of products for the PCS infrastructure buildup.

  Other income, net.  Other income for the six months ended September 30, 1997 
was $158,000 compared to $102,000 for the corresponding period in 1996. The
increase is due to interest income on a higher level of investments and a
reduction in interest expense associated with the reduction of certain lease
obligations.

  Provision for income taxes.  For the six months ended September 30, 1997, the
Company's provision for income taxes was $139,000, an effective tax rate of
37.1% compared to $789,000, an effective tax rate of approximately 37.0% for the
corresponding period in 1996. 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 free
interest income generated from certain investments.

  Net income.  For the reasons set forth above, the Company generated a net
income for the six  months ended September 30, 1997, of $236,000, or 4.4% of net
sales compared to $1,346,000, or 17.8% of net sales in the corresponding period
in 1996.

                                       11
<PAGE>
 
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

  Historically, the Company has financed its operations primarily by
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
are also being used to maintain increased inventory and working capital balances
to support higher operating levels.

  In September 1997 the Company renegotiated its revolving bank line of credit.
The new agreement is comprised of two separate credit facilities.  The initial
facility is a $1,250,000 revolving line of credit, which bears interest at the
bank's reference rate (8.5 % at September 30, 1997) 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 80% of the purchase price of equipment used
in the Company's business.  Repayment of borrowings under this facility are in
47 equal monthly installments beginning October 1, 1998, with interest at the
bank's reference rate plus .75%.  Both facilities are secured by substantially
all of the Company's assets and expire on September 1, 1998.  As of September
30, 1997, there were no borrowings outstanding under either facility.

  At September 30, 1997 the Company had $300,000 in cash, and $7.7 million in
short-term marketable securities. The Company's operating activities used cash
of approximately $4,208,000 for the six months ended September 30, 1997
primarily as a result of increases in marketable securities. The Company's
capital expenditures of $294,000 for the six months ended September 30, 1997
were primarily for manufacturing test equipment and information system
improvements.

  The Company believes that the net proceeds from the initial public offering,
together with cash provided by operations and available under the bank line of
credit, 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.

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,

                                       12
<PAGE>
 
new product development, product obsolescence, and significant price erosion
over the life of a product), the Company's ability to timely develop and produce
commercially viable products at competitive prices, the ability of the Company's
products to operate and be compatible with various OEM base station equipment,
the Company's ability to produce products which meet the quality standards of
both existing and potential new customers, the Company's ability to accurately
anticipate customer demand, the Company's ability to manage expense levels, the
availability and cost of components, the Company's ability to finance its
activities and maintain its financial liquidity and worldwide economic and
political conditions.

  The Company has begun to experience significant price erosion in the sales of
its products and expects price competition in the sale of amplifiers to
increase. No assurance can be given that the Company's competitors will not
develop new technologies or enhancements to existing products or introduce new
products that will offer superior price or performance features. The Company
expects its competitors to offer new and existing products at prices necessary
to gain or retain market share. Several of the Company's competitors have
substantial financial resources, which may enable them to withstand sustained
price competition or a downturn in the pricing of its products, or otherwise, in
the future. Substantially all of the Company's competitors have, and potential
future competitors could have, substantially greater technical, marketing,
distribution and other resources than the Company and have, or could have,
greater name recognition and market acceptance of their products and
technologies.

  The Company currently sells a majority of its product into the operator
channel to market.  As a result, the Company receives periodic order forecasts
from its major customers who have no obligation to purchase the forecasted
amounts.  Nonetheless, the Company maintains 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 its major
customers purchase less than the forecasted amounts, the Company will have
higher levels of inventory than otherwise needed, increasing the risk of
obsolescence and the Company will have increased levels of production staff to
support such forecasted orders.  Such higher levels of inventory and increased
employee levels could reduce the Company's liquidity and could have a material
adverse effect on the Company's business, results of operation and financial
condition.

  The markets in which the Company and its customers compete are characterized
by rapidly changing technology, evolving industry standards and communications
protocols, and continuous improvements in products and services.  The Company's
future success depends on its ability to enhance its 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.  The Company believes that to remain competitive in the future it
will need to continue to develop new products, which will require the investment
of significant financial resources in new product development.  In this regard,
in anticipation of the deployment of PCS, the Company has developed a line of
amplifiers for PCS networks.  There can be no assurance that the Company's PCS-
based products will achieve market acceptance, or that the Company will
manufacture such products at competitive prices in sufficient volumes.  In the
event the Company's PCS-based products are not timely developed or do not gain
market acceptance, the Company's business, results of operations and financial 
condition could be materially adversely affected.

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<PAGE>
 
                          PART II - OTHER INFORMATION

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


(a)       Exhibits
 
            10.23   Amendment No. 1 dated September 2, 1997 to Business Loan
                    Agreement dated August 2, 1996 between the Company and
                    Bank of America National Trust and Savings Association.
            27      Financial Data Schedule

(b)       There were no current Reports on Form 8-K filed by the Company during
          the quarter ended September 30, 1997.

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<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 13, 1997      /s/ Kirk A. Waldron
                              -------------------
                              Kirk A. Waldron                             
                              Vice President, Finance and                 
                              Chief Financial Officer                     
                              (Principal Financial and Accounting Officer 
                              and Duly Authorized Officer)                 

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