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


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

                                    FORM 10-Q

   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

   ___        TRANSITION REPORT PURSUANT TO SECTION 13 OR
               15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

              Commission File No. 33-18978

                        TEL-INSTRUMENT ELECTRONICS CORP.
              (Exact name of the Registrant as specified in Charter)

              New Jersey                                   22-1441806
              (State of Incorporation)             (I.R.S. Employer ID Number)

              728 Garden Street, Carlstadt, New Jersey           07072
              (Address of Principal Executive Offices)        (Zip Code)

              Registrant's Telephone No. including Area Code: 201-933-1600


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

                                         Yes   X         No ____

Indicate the number of shares  outstanding of the issuer's  common stock,  as of
the latest practical date:

2,109,957 shares of Common stock, $.10 par value as of November 1, 1999.



<PAGE>


                     TEL-INSTRUMENT ELECTRONICS CORPORATION
                     --------------------------------------

                                TABLE OF CONTENTS
                                ------------------



                                                                      PAGE
                                                                      ----


Item 1.  Financial Statements (Unaudited):

         Condensed Comparative Balance Sheets
            September 30, 1999 and March 31, 1999                      1

         Condensed Comparative Statements of Operations -
            Three and Six Months Ended September 30, 1999 and 1998     2

         Condensed Comparative Statements of Cash Flows -
            Six Months Ended September 30, 1999 and 1998               3

         Notes to Condensed Financial Statements                       4-7

Item 2.    Management's Discussion and Analysis of Financial
              Condition and Results of Operations                      8-11

                                SIGNATURES                             11


<PAGE>


1



Item 1 - Financial Statements

<TABLE>
<CAPTION>


                     TEL-INSTRUMENT ELECTRONICS CORPORATION
                     --------------------------------------
                      CONDENSED COMPARATIVE BALANCE SHEETS
                      ------------------------------------
                      September 30, 1999 and March 31, 1999

                                                                   (Unaudited)        (Audited)
ASSETS                                                           September 30,        March 31,
                                                                         1999              1999
                                                             -----------------  ---------------
<S>                                                              <C>               <C>

Current assets:
  Cash                                                              $  83,868        $  70,617
  Accounts receivable, net                                            890,720          638,721
  Inventories                                                       1,021,293          713,700
  Prepaid expenses and other current assets                            33,637           39,173
  Deferred income tax benefit - current                                78,300           78,300
                                                             -----------------  ---------------

Total current assets                                                2,107,818        1,540,511
                                                             -----------------  ---------------

Property, plant, and equipment, net                                   227,010          130,901
Other assets                                                          145,604          128,892
Deferred income tax benefit                                           348,661          418,204
                                                             -----------------  ---------------

Total assets                                                        2,829,093        2,218,508
                                                             =================  ===============

LIABILITIES & STOCKHOLDERS EQUITY

Current liabilities:
  Note payable - related party - current portion                      100,000          100,000
  Note payable - bank                                                 250,000                -
  Convertible subordinate notes - related party                        15,000           15,000
  Capitalized lease obligations - current portion                      35,306            9,667
  Advance Payments                                                     39,165          134,767
  Accrued payroll, vacation pay, deferred wages.
    payroll taxes, and interest on deferred wages                     282,092          218,289
  Accounts payable and accrued expenses                               749,940          555,206
                                                             -----------------  ---------------

Total current liabilities                                           1,471,503        1,032,929
                                                             -----------------  ---------------

Notes payable - related party - non-current portion                   250,000          250,000
Capitalized lease obligations - excluding current portion              83,967           16,486
                                                             -----------------  ---------------

Total liabilities                                                   1,805,470        1,299,415

Stockholders' equity
  Common stock                                                        210,998          210,998
  Additional paid-in capital                                        3,925,854        3,925,854
  Accumulated deficit                                             (3,113,229)      (3,217,759)
                                                             -----------------  ---------------

Total stockholders' equity                                          1,023,623          919,093
                                                             -----------------  ---------------

Total liabilities and stockholders' equity                         $2,829,093       $2,218,508
                                                             =================  ===============
</TABLE>


See accompanying notes to condensed financial statements


                                       1

<PAGE>


<TABLE>
<CAPTION>


                                          TEL-INSTRUMENT ELECTRONICS CORPORATION
                                          --------------------------------------
                                      CONDENSED COMPARATIVE STATEMENTS OF OPERATIONS
                                      ----------------------------------------------
                                                        (Unaudited)

                                                          Three Months Ended                        Six Months Ended
                                                September 30,        September 30,       September 30,        September 30,
                                                          1999                1998                 1999                1998
                                              -----------------    ----------------    -----------------   -----------------
<S>                                                <C>                <C>                 <C>                   <C>
Sales
  Government, net                                    $ 811,287           $ 418,472          $ 1,364,715           $ 801,212
  Commercial, net                                      525,507             607,204            1,083,908             889,657
                                              -----------------    ----------------    -----------------   -----------------
Total Sales                                          1,336,794           1,025,676            2,448,623           1,690,869

Cost of sales                                          634,996             425,504            1,100,420             764,810
                                              -----------------    ----------------    -----------------   -----------------
Gross Margin                                           701,798             600,172            1,348,203             926,059

Operating expenses
  Selling, general & administrative                    277,680             258,704              568,239             473,228
  Engineering, research, & development                 302,859             327,532              581,302             569,544
                                              -----------------    ----------------    -----------------   -----------------
Total operating expenses                               580,539             586,236            1,149,541           1,042,772

     Income (loss) from operations                     121,259              13,936              198,662           (116,713)

Other income (expense):
  Interest income                                        2,083               2,484                3,698               8,554
  Interest expense                                    (14,699)             (9,611)             (28,287)            (21,494)
                                              -----------------    ----------------    -----------------   -----------------
Income (loss) before taxes                             108,643               6,809              174,073           (129,653)

Provision (benefit) for income taxes                    43,403               2,720               69,543            (51,796)
                                              -----------------    ----------------    -----------------   -----------------

Net income (loss)                                     $ 65,240            $  4,089            $ 104,530          $ (77,857)
                                              =================    ================    =================   =================
Basic and diluted income (loss)
     per common share                                   $ 0.03              $ 0.00               $ 0.05            $ (0.04)


Dividends per share                                       None                None                 None                None
Weighted average shares outstanding
     Basic                                           2,109,957           2,095,298            2,109,957           2,095,056
     Diluted                                         2,122,896           2,118,317            2,122,896           2,118,075
</TABLE>

See accompanying notes to condensed financial statements


                                       2

<PAGE>


<TABLE>
<CAPTION>



                                            TEL-INSTRUMENT ELECTRONICS CORPORATION
                                            --------------------------------------
                                        CONDENSED COMPARATIVE STATEMENTS OF CASH FLOWS
                                        ----------------------------------------------
                                                         (Unaudited)
                                                         -----------
                                                                                               Six Months Ended
                                                                                                 September 30,
                                                                                            1999                 1998
                                                                                 ----------------    ----------------
<S>                                                                                  <C>                <C>
Increase (decrease) in cash:
Cash flows from operating activities
Net income (loss)                                                                       $104,530          $ (77,857)
Adjustments to reconcile net income (loss) to cash used
    in operating activities:
     Deferred income taxes                                                                69,543            (51,796)
     Depreciation                                                                         31,962              20,339
Changes in operating assets or liabilities:
  Increase in accounts receivable and unbilled revenues                                (251,999)           (220,670)
  Increase in inventories                                                              (307,593)            (79,968)
  Decrease (increase) in prepaid expenses and other current assets                         5,536            (14,316)
  Increase in other assets                                                              (16,712)            (24,656)
  Increase (decrease) in accrued payroll, deferred wages and
     vacation pay                                                                         63,803               (808)
  Increase (decrease) in accounts payable, advance payments and
     accrued expenses                                                                     99,132             (3,022)
                                                                                 ----------------    ----------------

Net cash used in operations                                                            (201,798)           (452,754)
                                                                                 ----------------    ----------------

Cash flows from investing activities:
  Cash purchases of property, plant and equipment                                       (26,171)            (53,689)
                                                                                 ----------------    ----------------
Net cash used in investing activities                                                   (26,171)            (53,689)
                                                                                 ----------------    ----------------

Cash flows from financing activities:
  Proceeds from exercise of stock options                                                      -                 843
  Proceeds from notes payable - bank                                                     250,000                   -
  Repayment of capitalized lease obligations                                             (8,780)                   -
                                                                                 ----------------    ----------------
  Net cash provided by financing activities                                              241,220                 843
                                                                                 ----------------    ----------------

Net increase (decrease) in cash                                                           13,251           (505,600)
Cash at beginning of period                                                               70,617             585,281
                                                                                 ----------------    ----------------

Cash at end of period                                                                   $ 83,868            $ 79,681
                                                                                 ================    ================

Capitalized lease obligations                                                           $101,900                   -
                                                                                 ================    ================

Interest paid                                                                           $ 39,934            $ 19,786
                                                                                 ================    ================

See accompanying notes to condensed financial statements
</TABLE>


                                       3

<PAGE>


                        TEL-INSTRUMENT ELECTRONICS CORP.
                        -------------------------------
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                     ---------------------------------------


Note 1    Basis of Presentation
------    ---------------------

In the opinion of management,  the accompanying  unaudited  condensed  financial
statements  contain  all  adjustments   (consisting  only  of  normal  recurring
accruals)  necessary to present fairly the financial  position of Tel-Instrument
Electronics  Corp. as of September 30, 1999,  the results of operations  for the
three and six months  ended  September  30, 1999 and  September  30,  1998,  and
statements  of cash  flows  for the six  months  ended  September  30,  1999 and
September 30, 1998. These results are not necessarily  indicative of the results
to be expected for the full year.

The financial  statements have been prepared in accordance with the requirements
of Form 10-Q and  consequently  do not include  disclosures  normally made in an
Annual Report on Form 10-K. The March 31, 1999 results included herein have been
derived from the audited financial  statements  included in the Company's annual
report on Form 10-K. The financial statements included herein should be reviewed
in conjunction  with the financial  statements and notes thereto included in the
Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1999.


Note 2    Accounts Receivable
------    -------------------

The following table sets forth the components of accounts receivable:

                                              September 30,        March 31,
                                                       1999            1999
                                                       ----            ----

                 Commercial                        $228,641        $179,742
                 Government                         577,063         359,716
                 Unbilled revenues                  100,614         114,848
                 Allowance for bad debts           (15,598)        (15,585)
                                                   --------        --------

                 Total                             $890,720        $638,721
                                                   ========        ========

Sales are recognized primarily upon shipment of products,  except in the case of
long-term contracts wherein sales are recognized on the percentage-of-completion
method.

Sales  associated  with the  documentation  and test  portion  of the U.S.  Navy
contract have been recorded on the  percentage-of-completion  method. Under this
approach,  sales and gross margin are  recognized  based upon the ratio of costs
incurred to date to total estimated contract costs.  Unbilled revenues represent
recoverable  costs and accrued profit not billed  resulting from the application
of percentage-of-completion  accounting. Actual billing of these amounts will be
based upon actual billing terms. In August 1999, the Company  received the first
production order for 230 test sets with a value of approximately  $3,000,000. In
September  1999,  the U.S.  Navy  increased  the quantity  ordered to 251 units,
bringing the total order to over $3,300,000.


                                       4

<PAGE>


                        TEL-INSTRUMENT ELECTRONICS CORP.
                        -------------------------------
               NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)
               ---------------------------------------------------


Note 3    Inventories
------    -----------

Inventories consist of:
                                                September 30,        March 31,
                                                        1999             1999
                                                        ----             ----

            Purchased Parts                         $637,591         $402,804
            Work-in-process                          413,322          340,516
            Less:  Reserve for Obsolescence         (29,620)         (29,620)
                                                    --------         --------

            Total                                $ 1,021,293         $713,700
                                                 ===========         ========


Note 4     Income Taxes
------     ------------

The Company,  in accordance  with FASB 109, has recognized a deferred income tax
benefit based upon the expected  utilization of net operating loss carryforwards
as the Company  believes  that it is more likely than not that it will realize a
portion of its  operating  losses  before they expire.  For the six months ended
September  30,  1999,  the Company  recorded a tax  provision  of $69,543  which
represents the effective  federal and state tax rate on the Company's net income
before  taxes  of  $174,073.  The  Company  has no tax  liability.  The  $69,543
decreased  the Company's  deferred  income tax benefit by the same amount in the
accompanying  balance sheet. The Company expects to utilize this deferred income
tax benefit in the future for tax reporting  purposes.  The Company continues to
evaluate the impact of FASB 109. At March 31,  1999,  the Company had a deferred
tax asset of $1,542,000 and recorded a valuation allowance of $1,045,496 against
this asset.


Note 5    Earnings Per Share
------    ------------------

The  Company's  basic income  (loss) per share is based on net income (loss) for
the relevant  period,  divided by the weighted  average  number of common shares
outstanding  during the period.  Diluted income (loss) per share is based on net
income  (loss),  divided  by  the  weighted  average  number  of  common  shares
outstanding  during the period,  including  common  share  equivalents,  such as
outstanding  stock  options.  Common share  equivalents  are not included in the
calculation  for the six months ended  September 30, 1998 since the effect would
be antidilutive.


                                       5

<PAGE>


                        TEL-INSTRUMENT ELECTRONICS CORP
                        -------------------------------.
               NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)
               ---------------------------------------------------

Note 6    Government and Commercial Sales
------    -------------------------------

In 1999,  the Company  adopted SFAS 131. The prior years'  information  has been
restated  to  present   separately  the  Company's   government  and  commercial
activities.

The Company  primarily  develops  and designs  test  equipment  for the avionics
industry  and,  as such,  the  Company's  products  and  designs are sold in the
government and commercial markets.  Government sales consist of the sale of test
equipment  to U.S.  and foreign  governments  and  militaries  either  direct or
through  distributors.  Commercial  sales consist of sales of test  equipment to
domestic and foreign airlines and to commercial distributors.

The table below  presents  information  about sales and gross  margin.  Costs of
sales includes certain allocation factors for indirect costs.


<TABLE>
<CAPTION>


                                             Three Months Ended                        Three Months Ended
                                             September 30, 1999                        September 30, 1998
                                       Government          Commercial            Government          Commercial
                                       ----------          ----------            ----------          ----------
               <S>                     <C>               <C>                     <C>                <C>
                Sales                    811,287            525,507                418,472            607,204
                Cost of Sales            411,923            223,073                190,932            234,572
                                         -------            -------                -------            -------
                Gross Margin             399,364            302,434                227,540            372,632
</TABLE>

<TABLE>
<CAPTION>


                                              Six Months Ended                          Six Months Ended
                                             September 30, 1999                        September 30, 1998
                                       Government           Commercial            Government         Commercial
                                       ----------           ----------            ----------         ----------
               <S>                     <C>                 <C>                    <C>                <C>

               Sales                   1,364,715           1,083,908              801,212            889,657
               Cost of Sales             645,889             454,531              386,933            377,877
                                       ---------          ----------              -------            -------
               Gross Margin              718,826             629,377              414,279            511,780
</TABLE>



Note 7    Line of Credit
------    --------------


In July 1999, the Company renegotiated its line of credit of $250,000,  maturing
in July 2000.  Interest is payable  monthly at an interest  rate of 1% above the
lender's  prevailing base rate. The line is  collateralized by substantially all
of the assets of the Company.  During the six months ended  September  30, 1999,
the Company had borrowed all of the $250,000 for working capital needs.

Note 8    Note Payable - Related party
------    ----------------------------

The  outstanding  $50,000 note due March 31, 1999 was  extended  until March 31,
2000.


Note 9    Convertible Subordinated Note - Related party
------    ---------------------------------------------

The $15,000  convertible  subordinated  note due March 31, 1999 was  extended to
March 31, 2000.


                                       6

<PAGE>



Item 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
          -------------------------------------------
          RESULTS OF OPERATIONS AND FINANCIAL CONDITION
          ---------------------------------------------

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

A number of the statements made by the Company in this report may be regarded as
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation Reform Act of 1995.

Forward-looking  statements  include,  among others,  statements  concerning the
Company's outlook, pricing trends and forces within the industry, the completion
dates of capital projects,  expected sales growth, cost reduction strategies and
their  results,   long-term  goals  of  the  Company  and  other  statements  of
expectations, beliefs, future plans and strategies, anticipated events or trends
and similar expressions concerning matters that are not historical facts.

All  predictions  as to future  results  contain a measure  of  uncertainty  and
accordingly,  actual  results  could differ  materially.  Among the factors that
could cause a difference are: changes in the general economy;  changes in demand
for the Company's products or in the cost and availability of its raw materials;
the  actions of its  competitors;  the success of our  customers;  technological
change;  changes in  employee  relations;  government  regulations;  litigation,
including  its  inherent  uncertainty;  difficulties  in  plant  operations  and
materials;   transportation,   environmental   matters;   and  other  unforeseen
circumstances.  A number of these factors are discussed in the Company's filings
with the Securities and Exchange Commission.


Overview
--------

In August 1999 the Company  received  the first  production  order from the U.S.
Navy for 230 test sets for a total value of over  $3,000,000.  This order is the
first under the contract which includes options for up to 1,300 units, which the
U.S.  Navy can  exercise,  on  behalf  of all U.S.  military  services,  through
calendar  year 2001.  In September  1999 the U.S.  Navy  increased  the quantity
ordered to 251 units,  bringing  the total  order to over  $3,300,000.  However,
there can be no assurance that the U.S. Navy will exercise the balance of all of
its purchase options under this contract.  The Company expects to begin shipping
these units at the end of the fourth quarter of the current fiscal year.

Sales for the first half of the current  fiscal year totaled  $2,448,623 and the
Company  generated  income  before taxes of $174,073.  The Company  continues to
invest heavily in engineering, research, and development as the Company develops
other products for targeted markets.

For the first six months of the current fiscal year the Company  received orders
approximating $6,500,000,  including the order from the U.S. Navy. The Company's
backlog,  including  the  order  from the U.S.  Navy,  for which  shipments  are
scheduled to begin at the end of the fourth  quarter of the current fiscal year,
currently exceeds $6,500,000.


                                       7

<PAGE>




Item 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
           -------------------------------------------
           RESULTS OF OPERATIONS AND FINANCIAL CONDITION (continued)
           ---------------------------------------------------------

Results of Operations (continued)
---------------------------------

Sales
-----

Total sales increased  $311,118  (30.3%) and $757,754  (44.8%) for the three and
six months  ended  September  30,  1999,  respectively,  as compared to the same
periods in the prior fiscal year.

Government  sales increased  $392,815 (93.9%) and $563,503 (70.3%) for the three
and six months ended September 30, 1999, respectively,  as compared to the three
and six months ended  September 30, 1998.  The increase in  government  sales is
attributed  primarily to the T-47 family of IFF test sets, including the T-47CC,
which  incorporates  a directional  antenna,  and the T-47N,  which  includes an
interrogator  test function.  During the second quarter,  the Company  completed
delivery  of all the  units  of the  T-47CC  ramp  test  sets to the  Australian
military through its exclusive distributor.

Commercial sales decreased  $81,697 (13.5%) for the three months ended September
30, 1999 as compared to the three months  ended  September  30,  1998.  However,
commercial  sales increased  $194,251 (21.8%) for the six months ended September
30, 1999 as compared to the same period last year.  The  increase in  commercial
sales for the six months reflects the favorable  economic  conditions within the
airline  industry.  The decrease in sales in the second quarter is attributed to
the timing of the  orders  received.  However,  there is no  assurance  that the
positive trend in the commercial  market for the first six months of the current
fiscal year will  continue.  The  increase in sales in both the  commercial  and
government   segments   resulted   also  from  the  efforts  of  the   Company's
international distributors.

Gross Margin
------------

Gross Margin  increased  $101,626 (16.9%) and $422,144 (45.6%) for the three and
six months ended September 30, 1999 as compared to the same periods in the prior
fiscal year.  The increase in gross margin,  for the most part, is attributed to
the higher volume. Gross margin was negatively affected in the second quarter as
a result of the  introduction of new products and the associated  learning curve
in building these more sophisticated  products.  The gross margin percentage for
the three months ended September 30, 1999 was 52.5% as compared to 58.5% for the
three months ended  September 30, 1998. The gross margin  percentage for the six
months  ended  September  30,  1999 was 55.1% as  compared  to 54.8% for the six
months ended September 30, 1998.

Operating Expenses
------------------

Selling,  general  and  administrative  expenses  increased  $18,976  (7.3%) and
$95,011  (20.1%)  for the three  and six  months  ended  September  30,  1999 as
compared to the three and six months ended  September 30, 1998. This increase is
attributed  to higher sales and marketing  expenses,  the addition to staff of a
Director of Finance,  an increase in  salaries  and  compensation  expense,  and
higher legal expenses, all partially offset by lower sales commissions.

Engineering,  research and development expenses decreased $24,673 (7.5%) for the
three months ended  September 30, 1999 as compared to the same period last year.
For  the  six  months  ended  September  30,  1999  engineering,   research  and
development  expenses increased $11,758 (2.1%). These expenditures are primarily
associated  with the  finalization  of the design of the T-47M IFF test sets for
the U.S. Navy and the development of additional products, such as the T-47CC and
T-47N.


                                       8

<PAGE>



Item 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
           -------------------------------------------
           RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Continued)
           ---------------------------------------------------------

Results of Operations (continued)
---------------------------------

Income Taxes
------------

In accordance  with SFAS 109, a provision for income taxes was recognized in the
amount of $69,543  for the six months  ended  September  30,  1999.  For the six
months ended  September  30, 1998,  the Company  recorded a deferred  income tax
benefit of $51,796, which represents the effective federal and state tax rate on
the Company's net loss before taxes of $129,653.  The Company currently does not
have any tax liability.  (See Note 4 to Notes to Condensed Comparative Financial
Statements).


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

At September  30, 1999 the Company had positive  working  capital of $636,315 as
compared to $507,582 at March 31, 1999.  For the six months ended  September 30,
1999,  cash used in operations  was $201,798 as compared to $452,754 for the six
months ended  September 30, 1998.  This  reduction in cash used in operations is
primarily attributed to the improvement in the Company's operating income.

Increases in accounts  receivable and inventories  were partially  offset by the
Company's operating income,  borrowings from the bank in the amount of $250,000,
and increases in accounts payable and other accrued liabilities.

In July 1999, the Company renegotiated its line of credit for $250,000, maturing
July 2000.  During the six months  ended  September  30,  1999,  the Company had
borrowed all of the $250,000 for working capital needs.

Based upon the current  backlog,  expected sales and available  working capital,
the Company  believes that it has sufficient  working  capital to fund its plans
for the next twelve  months.  At present,  the Company  does not expect to incur
significant  long-term  needs  for  capital  outside  of  its  normal  operating
activities. However, the Company continues to seek additional credit in order to
increase working capital.  The Company has been closely  monitoring its accounts
receivable  collections and payments to vendors during this period of increasing
sales.

There was no  significant  impact  on the  Company's  operations  as a result of
inflation for the six months ended September 30, 1999.

These  financial  statements  should be read in  conjunction  with the Company's
Annual Report on Form 10-K to the  Securities  and Exchange  Commission  for the
fiscal year ended March 31, 1999.


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

Many existing  computer  programs use only  two-digits to identify a year in the
date field.  These programs were designed and developed without  considering the
impact of the  upcoming  change in the Year 2000.  Some older  computer  systems
stored  dates  with  only a  two-digit  year  with an  assumed  prefix  of "19".
Consequently,  this limits those  systems to dates between 1900 and 1999. If not
corrected,  many  computer  systems  and/or  applications  could  fail or create
erroneous results by or at the year 2000.


                                       9

<PAGE>


Item 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
           -------------------------------------------
           RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Continued)
           ---------------------------------------------------------


Year 2000 Issue (continued)
---------------------------

The Company  has  reviewed  the  potential  impact of the Year 2000 issue.  This
assessment included a review of the impact of the issue in four areas: products,
manufacturing  systems,  business systems, and other areas. The Company does not
anticipate that the Year 2000 issue will impact  operations or operating results
or require future  material  expenditures.  The Company's  products are not date
sensitive.  In  addition,  the  Company  is in the  process  of  contacting  its
suppliers to determine as to whether they are Year 2000  compliant.  The Company
relies  on  its  customers,  suppliers,  utility  service  providers,  financial
institutions, and other partners in order to continue normal business relations.
The Company is continuing to evaluate alternatives and develop contingency plans
for key  business  partners.  Year 2000  disruptions  in the  operations  of key
business partners could also impact the Company's ability to fulfill some of its
contractual obligations.  At this time, it is impossible to assess the impact of
the Year 2000 issue on each of these  organizations.  There can be no  guarantee
that the systems of other unrelated entities on which the Company relies will be
corrected on a timely basis and will not have a material  adverse  effect on the
Company.

The discussion of the Company's efforts, and management's expectations, relating
to Year 2000 compliance are forward-looking statements. The Company's ability to
achieve  Year 2000  compliance  and the level of  incremental  costs  associated
therewith,  could be adversely impacted by, among other things, the availability
and cost of  programming  and  testing  resources,  vendors'  ability  to modify
proprietary  software,  and  unanticipated  problems  identified  in the ongoing
compliance review.


SIGNATURES
----------

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

                                          TEL-INSTRUMENT ELECTRONICS CORP.

Date:   November 3, 1999                   By: /s/ Harold K. Fletcher
                                               ----------------------
                                               /s/ Harold K. Fletcher
                                              Chairman and President


Date:   November 3, 1999                   By: /s/ Joseph P. Macaluso
                                               ----------------------
                                               /s/ Joseph P. Macaluso
                                              Principal Accounting Officer


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<PAGE>






                                INDEX TO EXHIBITS
                                -----------------


27        Financial  data  schedule  which is  submitted  electronically  to the
          Securities  and Exchange  Commission for  information  only and is not
          filed.


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