SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K ANNUAL REPORT Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended December 31, 1998 A. Full title of the plan and address of the plan, if different from that of the issuer named below: COMARCO, Inc. SAVINGS AND RETIREMENT PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: COMARCO, Inc. Bentall Executive Centre 1551 North Tustin Avenue, Suite 840 Santa Ana, CA 92705 COMARCO, INC. SAVINGS AND RETIREMENT PLAN FINANCIAL STATEMENTS (Including Supplemental Schedules) December 31, 1998 and 1997 (With Independent Auditors' Report Thereon) COMARCO, INC. SAVINGS AND RETIREMENT PLAN INDEX TO Financial Statements AND SUPPLEMENTAL SCHEDULES Page ---- Independent Auditors' Report 4 Statements of Net Assets Available for Plan Benefits as of December 31, 1998 and 1997 5 Statements of Changes in Net Assets Available for Plan Benefits for the Years Ended December 31, 1998, 1997 and 1996 6 Notes to Financial Statements 7 SUPPLEMENTAL SCHEDULES Schedule 1 - Item 27a - Schedule of Assets Held for Investment Purposes As of December 31, 1998 14 Schedule 2 - Item 27d- Schedule of Reportable Transactions Year Ended December 31, 1998 15 The additional schedules required under the Employee Retirement Income Security Act of 1974 and regulations issued by the Department of Labor are not presented because they are not applicable or are not a required disclosure. INDEPENDENT AUDITORS' REPORT The Board of Directors COMARCO, Inc.: We have audited the accompanying statements of net assets available for plan benefits of the COMARCO, Inc. Savings and Retirement Plan (the "Plan") as of December 31, 1998 and 1997, and the related statements of changes in net assets available for plan benefits for each of the years in the three-year period ended December 31, 1998. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan as of December 31, 1998 and 1997, and the changes in net assets available for plan benefits for each of the years in the three-year period ended December 31, 1998, in conformity with generally accepted accounting principles. Our audits of the Plan's financial statements as of December 31, 1998 and 1997, and for each of the years in the three-year period ended December 31, 1998 were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of Assets Held for Investment Purposes, Loans or Fixed Income Obligations and Reportable Transactions are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements, and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. McLean, Virginia May 14, 1999 COMARCO, INC. SAVINGS AND RETIREMENT PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS December 31, 1998 and 1997 1998 1997 ---- ---- ASSETS Cash and cash equivalents (Note 3) $ 116,000 $ 19,000 Investment in 187,000 shares in 1998 and 193,000 shares in 1997 of COMARCO common stock, at fair value (Note 3) 4,489,000 4,247,000 Investment in mutual funds, at fair value (Note 3) CGCM Small Cap Growth Fund 2,972,000 2,623,000 CGCM Large Cap Growth Fund 3,993,000 2,760,000 CGCM Large Cap Value Fund 3,249,000 3,031,000 CGCM International Fund 1,506,000 1,258,000 CGCM Long Term Bond 1,002,000 1,006,000 CGCM Stable Value Fund 3,756,000 2,944,000 CGCM Emerging Market Fund 56,000 22,000 ------ --------- Total Investment in Mutual Funds 16,534,000 13,644,000 Participant Loans 268,000 355,000 ------------- ------------- Total Assets 21,407,000 18,265,000 LIABILITIES Fees payable (Note 6) - - ------------- ------------ Net assets available for plan benefits $ 21,407,000 $ 18,265,000 ========== ========== See accompanying notes to the financial statements. COMARCO, INC. SAVINGS AND RETIREMENT PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS Years Ended December 31, 1998, 1997 and 1996 1998 1997 1996 ---- ---- ---- Net assets available for plan benefits, beginning of year $ 18,265,000 $ 15,615,000 $ 12,274,000 ---------- ---------- ---------- Additions: Contributions: Employer 828,000 602,000 526,000 Employee 1,841,000 1,569,000 1,326,000 Rollovers 246,000 96,000 1,100,000 Interest and dividends 218,000 127,000 215,000 Realized and unrealized appreciation of investments 2,356,000 2,445,000 1,732,000 ---------- ---------- ---------- Total additions 5,489,000 4,839,000 4,899,000 ---------- ---------- ---------- Deductions: Plan distributions 2,241,000 2,082,000 1,441,000 Realized and unrealized depreciation of investments 20,000 12,000 38,000 Administrative expenses (Note 6) 86,000 95,000 79,000 ---------- ---------- ---------- Total deductions 2,347,000 2,189,000 1,558,000 ---------- ---------- ---------- Net assets available for plan benefits, end of year $ 21,407,000 $ 18,265,000 $ 15,615,000 ============= ============= ============ See accompanying notes to the financial statements. COMARCO, INC. SAVINGS AND RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS December 31, 1998, 1997 and 1996 1. Description of the Plan The following description of the COMARCO, Inc. Savings and Retirement Plan (Plan) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. General. The Plan is a defined contribution plan covering substantially all full-time employees of COMARCO, Inc. ("the Company" or "the Plan Sponsor") who have three months of service and are age 18 or older. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Contributions. Employee contributions to the Plan may range from 1% to 15% of eligible earnings and the Company contributes 100% of the first 3% of earnings that a participant contributes to the Plan with two exceptions. At one location, the Company match is 5%. Employees at another location are permitted to contribute up to 20% with no Company match. All forfeitures of terminated participants' non-vested accounts are used to offset Plan expenses. In addition, the Company may, at its discretion, make an additional contribution each year to the Plan. Participant Accounts. Each participant's account is credited with the participant's contribution and the Company's matching contribution plus Plan earnings less Plan expenses not paid by the Company. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. At December 31, 1998 and 1997, 717 and 709 participants, respectively, had assets in the Plan. Loans. Effective January 1, 1995, the Plan permits participants to obtain loans from their account balances, subject to certain IRS limitations. The loans are repaid over fixed time periods. Vesting. Participants are vested at all times in their voluntary contributions and, in certain circumstances, the matching Company contributions plus actual earnings thereon. Company contributions generally vest over a 7 year graded vesting schedule. Exceptions to this graded vesting are the Company contributions which are invested in the Company's Stock-100 Fund, which are immediately 100% vested. (The Stock 100 Fund is no longer an investment option for the participants). Payment of Benefits. On termination of service, a participant may elect to receive either a lump-sum amount equal to the value of his or her account, annual installments, or monthly annuity payments. Participants with accrued benefits greater than $5,000 may elect to delay receiving benefits until reaching age 65. Investment Options. Participant contributions to the Plan are made to one of the eight investment options (Stable Value, Long Term Bond, Small Cap Growth, Large Cap Growth, Large Cap Value, International, Emerging Markets or Company Stock) as designated by the participant. All investment options other than COMARCO shares are provided through the Smith Barney TRAK program, and consist of fund shares. 2. Significant Accounting Policies Basis of Accounting - The Plan prepares its financial statements on the accrual basis of accounting. Payment of Benefits - Benefits are recorded when paid. Investment Valuation and Income Recognition - The Plan's investments are stated at fair value in the accompanying statements of net assets available for plan benefits except for its investment in investment contracts, which are valued at their respective contract values. Fair value is determined based on quoted market prices. The difference between cost and fair value of investments is recognized as a realized gain or loss at the date of disposition using the first-in, first-out method. Purchases and dispositions are recorded on a trade-date basis. Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of additions and deductions during the reporting period. Actual results could differ from those estimates. 3. Investments All amounts contributed to the Plan have been deposited with the Funding Agent, SBS Trust. The following table presents the fair values of investments. Investments that represent 5% or more of the Plan's net assets are separately identified. December 31, 1998 December 31, 1997 ----------------- ----------------- Identity of Party and Shares or Carrying Shares or Carrying Description of Asset Principal Amount Amount Principal Amount Amount --------------------- ---------------- -------- ---------------- -------- Cash and Cash Equivalents: SBS Short Term Investment Fund $ 116,000 $ 19,000 Mutual Funds: CGCM Small Cap Growth Fund 176,000 2,972,000 155,000 2,623,000 CGCM Large Cap Growth Fund 177,000 3,993,000 162,000 2,760,000 CGCM Large Cap Value Fund 249,000 3,249,000 288,000 3,031,000 CGCM International Fund 131,000 1,506,000 126,000 1,258,000 CGCM Long Term Bond 114,000 1,002,000 115,000 1,006,000 CGCM Stable Value Fund 354,000 3,756,000 295,000 2,944,000 CGCM Emerging Market Fund 11,000 56,000 3,000 22,000 ------ ------ Total Mutual Funds 16,534,000 13,644,000 ---------- ---------- Participant Loans 268,000 355,000 COMARCO common stock 187,000 4,489,000 193,000 4,247,000 --------- --------- Total Investments $ 21,407,000 $18,265,000 ========== ========== 4. Investment Contracts The Stable Value option is a blend of individual investment contracts (purchased by COMARCO and which all matured in 1997) and the Consulting Group Capital Markets (CGCM) Stable Value Fund. The contracts are included in the financial statements at contract value, which approximates fair value. Contract value represents contributions made under the contract, plus earnings, less administrative expenses. Investment contracts in the Stable Value Fund are considered fully benefit responsive as they provide reasonable access to the fund by the Plan's participants with a liquidity guarantee. There are no reserves against contract value for credit risk of the contract issuer or otherwise. The average yield and crediting interest rate were 6.3% and 5.1% for the years ended December 31, 1998 and 1997, respectively. The crediting interest rate is based upon an agreed upon formula with the issuer. 5. Changes in Net Assets by Investment Program The changes in net assets by investment program for the years ended December 31, 1996, 1997, and 1998 are as follows: Stable Value Stock Long Term Large Cap Fund Fund International Bond Growth ---------------------------------------------------------------------------- Net assets available for plan benefits January 1, 1996 $2,842,000 $2,717,000 $952,000 $893,000 $1,275,000 Additions: Contributions: Employer $84,000 $63,000 $82,000 $39,000 $112,000 Employee $174,000 $99,000 $183,000 $83,000 $256,000 Rollovers $11,000 $1,066,000 $16,000 $1,000 $2,000 Interest and dividends $53,000 $0 $15,000 $53,000 $11,000 Realized and unrealized appreciation $125,000 $622,000 $39,000 $0 $300,000 of investments -------------------------------------------------------------------------- Subtotal $447,000 $1,850,000 $335,000 $176,000 $681,000 -------------------------------------------------------------------------- Transfer between funds $207,000 ($606,000) $59,000 ($205,000) $131,000 Deductions: Plan distributions $407,000 $241,000 $103,000 $46,000 $117,000 Realized and unrealized depreciation of investments $0 $0 $0 $38,000 $0 Administrative expenses $10,000 $0 $5,000 $4,000 $7,000 -------------------------------------------------------------------------- Subtotal $417,000 $241,000 $108,000 $88,000 $124,000 -------------------------------------------------------------------------- Net assets available for plan benefits December 31, 1996 $3,079,000 $3,720,000 $1,238,000 $776,000 $1,963,000 ============================================================================ 5. Changes in Net Assets by Investment Program (table continued) Large Cap Small Cap Participant Holding/ Value Growth Notes Other Total ------------------------------------------------------------------------------- Net assets available for plan benefits January 1, 1996 $1,652,000 $1,490,000 $218,000 $235,000 $12,274,000 Additions: Contributions: Employer $88,000 $156,000 $0 ($98,000) $526,000 Employee $210,000 $354,000 $0 ($33,000) $1,326,000 Rollovers $1,000 $3,000 $0 $0 $1,100,000 Interest and dividends $61,000 $0 $22,000 $0 $215,000 Realized and unrealized appreciation $319,000 $325,000 $0 $2,000 $1,732,000 of investments ---------------------------------------------------------------------------- Subtotal $679,000 $838,000 $22,000 ($129,000) $4,899,000 ---------------------------------------------------------------------------- Transfer between funds $112,000 $158,000 $88,000 $56,000 $0 Deductions: Plan distributions $131,000 $282,000 $14,000 $100,000 $1,441,000 Realized and unrealized depreciation of investments $0 $0 $0 $0 $38,000 Administrative expenses $9,000 $9,000 $0 $35,000 $79,000 ---------------------------------------------------------------------------- Subtotal $140,000 $291,000 $14,000 $135,000 $1,558,000 ---------------------------------------------------------------------------- Net assets available for plan benefits December 31, 1996 $2,303,000 $2,195,000 $314,000 $27,000 $15,615,000 ============================================================================ 5. Changes in Net Assets by Investment Program (continued) Stable Value Stock Emerging Long Term Large Cap Fund Fund International Markets Bond Growth --------------------------------------------------------------------------------- Net assets available for plan benefits January 1, 1997 $3,079,000 $3,720,000 $1,238,000 $0 $776,000 $1,963,000 Additions: Contributions: Employer $72,000 $83,000 $65,000 $1,000 $32,000 $120,000 Employee $180,000 $151,000 $160,000 $3,000 $82,000 $324,000 Rollovers $6,000 $14,000 $2,000 $0 $3,000 $31,000 Interest and dividends $42,000 $0 $0 $0 $54,000 $0 Realized and unrealized appreciation $162,000 $720,000 $0 $0 $57,000 $578,000 of investments --------------------------------------------------------------------------------- Subtotal $462,000 $968,000 $227,000 $4,000 $228,000 $1,053,000 --------------------------------------------------------------------------------- Transfer between funds $208,000 ($66,000) ($72,000) $24,000 $33,000 ($61,000) Deductions: Plan distributions $780,000 $370,000 $121,000 $0 $26,000 $180,000 Realized and unrealized depreciation of investments $0 $0 $5,000 $6,000 $0 $0 Administrative expenses $25,000 $5,000 $9,000 $0 $5,000 $16,000 --------------------------------------------------------------------------------- Subtotal $805,000 $375,000 $135,000 $6,000 $31,000 $196,000 --------------------------------------------------------------------------------- Net assets available for plan benefits December 31, 1997 $2,944,000 $4,247,000 $1,258,000 $22,000 $1,006,000 $2,759,000 ================================================================================= 5. Changes in Net Assets by Investment Program (table continued) Large Cap Small Cap Participant Holding/ Value Growth Notes Other Total --------------------------------------------------------------------------- Net assets available for plan benefits January 1, 1997 $2,303,000 $2,195,000 $314,000 $27,000 $15,615,000 Additions: Contributions: Employer $90,000 $151,000 $0 ($12,000) $602,000 Employee $266,000 $402,000 $0 $1,000 $1,569,000 Rollovers $24,000 $16,000 $0 $0 $96,000 Interest and dividends $0 $0 $28,000 $3,000 $127,000 Realized and unrealized appreciation $704,000 $224,000 $0 $0 $2,445,000 of investments ------------------------------------------------------------------------ Subtotal $1,084,000 $793,000 $28,000 ($8,000) $4,839,000 ------------------------------------------------------------------------ Transfer between funds ($12,000) ($129,000) $80,000 ($5,000) $0 Deductions: Plan distributions $329,000 $216,000 $67,000 ($7,000) $2,082,000 Realized and unrealized depreciation of investments $0 $0 $0 $1,000 $12,000 Administrative expenses $15,000 $20,000 $0 $0 $95,000 ------------------------------------------------------------------------ Subtotal $344,000 $236,000 $67,000 ($6,000) $2,189,000 ------------------------------------------------------------------------ Net assets available for plan benefits December 31, 1997 $3,031,000 $2,623,000 $355,000 $20,000 $18,265,000 ======================================================================== 5. Changes in Net Assets by Investment Program (continued) Stable Value Stock Emerging Long Term Large Cap Fund Fund International Markets Bond Growth ----------------------------------------------------------------------------------- Net assets available for plan benefits January 1, 1998 $2,944,000 $4,247,000 $1,258,000 $22,000 $1,006,000 $2,759,000 Additions: Contributions: Employer $84,000 $121,000 $78,000 $10,000 $37,000 $174,000 Employee $195,000 $206,000 $161,000 $25,000 $88,000 $399,000 Rollovers $4,000 $30,000 $1,000 $1,000 $71,000 $74,000 Interest and dividends $0 $0 $42,000 $1,000 $58,000 $18,000 Realized and unrealized appreciation $243,000 $363,000 $262,000 $0 $37,000 $1,062,000 of investments ----------------------------------------------------------------------------------- Subtotal $526,000 $720,000 $544,000 $37,000 $291,000 $1,727,000 ----------------------------------------------------------------------------------- Transfer between funds $735,000 ($101,000) ($193,000) $16,000 $67,000 ($144,000) Deductions: Plan distributions $401,000 $373,000 $102,000 $0 $360,000 $338,000 Realized and unrealized depreciation of investments $0 $0 $0 $19,000 $0 $0 Administrative expenses $48,000 $4,000 $1,000 $0 $2,000 $11,000 ----------------------------------------------------------------------------------- Subtotal $449,000 $377,000 $103,000 $19,000 $362,000 $349,000 ----------------------------------------------------------------------------------- Net assets available for plan benefits December 31, 1998 $3,756,000 $4,489,000 $1,506,000 $56,000 $1,002,000 $3,993,000 =================================================================================== 5. Changes in Net Assets by Investment Program (table continued) Large Cap Small Cap Participant Holding/ Value Growth Notes Other Total ------------------------------------------------------------------------------ Net assets available for plan benefits January 1, 1998 $3,031,000 $2,623,000 $355,000 $20,000 $18,265,000 Additions: Contributions: Employer $129,000 $195,000 $0 $0 $828,000 Employee $327,000 $441,000 $0 ($1,000) $1,841,000 Rollovers $38,000 $27,000 $0 $0 $246,000 Interest and dividends $63,000 $0 $27,000 $9,000 $218,000 Realized and unrealized appreciation $313,000 $76,000 $0 $0 $2,356,000 of investments ------------------------------------------------------------------------- Subtotal $870,000 $739,000 $27,000 $8,000 $5,489,000 ------------------------------------------------------------------------- Transfer between funds ($321,000) ($99,000) ($43,000) $83,000 $0 Deductions: Plan distributions $326,000 $276,000 $71,000 ($6,000) $2,241,000 Realized and unrealized depreciation of investments $0 $0 $0 $1,000 $20,000 Administrative expenses $5,000 $15,000 $0 $0 $86,000 ------------------------------------------------------------------------- Subtotal $331,000 $291,000 $71,000 ($5,000) $2,347,000 ------------------------------------------------------------------------- Net assets available for plan benefits December 31, 1998 $3,249,000 $2,972,000 $268,000 $116,000 $21,407,000 =========================================================================== 6. Expenses of the Plan The Plan provides that all reasonable expenses for custodial costs and fees incurred for the benefit of the Plan are to be paid by the Plan to the extent they are not paid by the Company. Total Plan expenses of approximately $86,000, $95,000, and $79,000 in 1998, 1997 and 1996 respectively, were paid by the Plan. Plan expenses accrued as of December 31, 1998 and 1997 were $0. 7.Income Tax Status The Internal Revenue Service has determined and informed the Company by letter dated February 9, 1995, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRS. 8.Plan Termination The Company intends to continue the plan indefinitely, but reserves the right at any time to terminate the Plan subject to the provisions of ERISA. Upon termination of the Plan, a participant's fund share shall become 100% vested and shall become payable in accordance with the "payment of benefits" article of the Plan. COMARCO, INC. SAVINGS AND RETIREMENT PLAN Item 27a - Schedule of Assets Held for Investment Purposes As of December 31, 1998 (a) (b) (c) (d) (e) Identity of issue, Description of investment including borrower, lessor maturity date, rate of interest, Current or similar party collateral, par or maturity value Cost Value - ------------------------------------------------------------------------------------------------------------------------- * SBS TRUST Short Term Investment Fund 116,438 116,438 * CGCM Consulting Group Cap Mkts Fund 114,395 shares 958,844 1,002,098 of Long Term Bond Investments Fund * CGCM Consulting Group Cap Mkts Fund 249,152 shares 2,997,817 3,248,947 of Large Cap Value Equity Investments Fund * CGCM Consulting Group Cap Mkts Fund 131,396 shares 1,368,827 1,505,803 of International Equity Investments Fund * CGCM Consulting Group Cap Mkts Fund 11,166 shares 75,719 56,054 of Emerging Market Equity Investments Fund * CGCM Consulting Group Cap Mkts Fund 176,826 shares 2,687,184 3,992,740 of Large Cap Growth Equity Investments Fund * CGCM Consulting Group Cap Mkts Fund 176,383 shares 2,853,895 2,972,055 of Small Cap Growth Equity Investments Fund * CGCM Consulting Group Cap Mkts Fund 353,996 shares 3,415,044 3,755,901 of Stable Value Investments Fund * COMARCO, Inc. COMARCO, Inc. common stock 1,767,859 4,488,648 187,027 shares, quote $24.00 * Plan Participants Participant Loans 267,775 267,775 COMARCO, Inc. Various dates and rates of 9% to 10% ---------- ---------- 16,509,402 21,406,459 ========== ========== * Party in interest COMARCO, INC. SAVINGS AND RETIREMENT PLAN Item 27d - Schedule of Reportable Transactions Year Ended December 31, 1998 Cost of Asset Purchase Selling Cost of on Transaction Net Gain Identity of Party Involved Description of Asset Price Price Asset Date or (Loss) - ----------------------------------------------------------------------------------------------------------------------------------- Purchases: Smith Barney Trust RDA Cash Reserve Account 3,950,128 --- 3,950,128 3,950,128 --- Smith Barney Trust CGCM Small Cap Growth Fund 1,164,175 --- 1,164,175 1,164,175 --- Smith Barney Trust CGCM Large Cap Growth Fund 1,279,445 --- 1,279,445 1,279,445 --- Smith Barney Trust CGCM Large Cap Value Fund 1,226,826 --- 1,226,826 1,226,826 --- Smith Barney Trust CGCM Stable Value Fund 1,649,763 --- 1,649,763 1,649,763 --- Smith Barney Trust RDA Cash Reserve Account --- 3,833,995 3,833,995 3,833,995 --- Smith Barney Trust CGCM Small Cap Growth Fund --- 817,623 798,757 798,757 18,866 Smith Barney Trust CGCM Large Cap Growth Fund --- 983,249 722,988 722,988 260,261 Smith Barney Trust CGCM Large Cap Value Fund --- 968,753 804,342 804,342 164,411 Smith Barney Trust CGCM Stable Value Fund --- 1,039,527 950,979 950,979 88,548 This schedule of reportable transactions represents a series of transactions involving the same issue during the year ended December 31, 1998, which amounts in the aggregate to more than 5 percent ($913,000) of the fair value of total plan assets as of January 1, 1998. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrator has duly caused this annual report to be signed by the undersigned thereunto duly authorized. COMARCO, Inc. SAVINGS AND RETIREMENT PLAN BY: Don M. Bailey President & Chief Executive Officer COMARCO, Inc. DATE: June 25, 1999