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, 2002

          __    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:

2,135,801 shares of Common stock, $.10 par value as of November 4, 2002.


<PAGE>

                     TEL-INSTRUMENT ELECTRONICS CORPORATION

                                TABLE OF CONTENTS

                                                                        PAGE
                                                                        ----

Item 1.     Financial Statements (Unaudited):

            Condensed Comparative Balance Sheets
            September 30, 2002 and March 31, 2002                          1

            Condensed Comparative Statements of Operations -
            Three and Six Months Ended September 30, 2002 and 2001         2

            Condensed Comparative Statements of Cash Flows -
            Six Months Ended September 30, 2002 and 2001                   3

            Notes to Condensed Financial Statements                       4-5

Item 2.     Management's Discussion and Analysis of the Results of
            Operations and Financial Conditions                           6-10

Item 4.     Controls and Procedures                                        10

            Part II - Other Information

Item 5.     Other Information                                              11

Item 6.     Exhibits and Reports on Form 8-K                               11


            Signatures                                                     12

            Certifications                                                13-14


<PAGE>

Item 1 - Financial Statements

                     TEL-INSTRUMENT ELECTRONICS CORPORATION
                      CONDENSED COMPARATIVE BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                               (Unaudited)
ASSETS                                                                      September 30, 2002        March 31, 2002
                                                                            ------------------        --------------
<S>                                                                             <C>                     <C>
Current assets:
   Cash and cash equivalents                                                    $2,609,315              $ 1,198,191
  Accounts receivable, net of allowance for doubtful
      accounts of $36,598 at September 30, 2002 and
      March 31, 2002                                                             1,389,509                  937,849
 Inventories, net                                                                1,751,103                2,481,680
  Prepaid expenses and other current assets                                         40,804                   47,956
  Deferred income taxes                                                            493,130                  669,000
                                                                                ----------              -----------
Total current assets                                                             6,283,861                5,334,676

Property, plant and equipment, net                                                 767,957                  822,010
Other assets                                                                        71,649                   76,886
                                                                                ----------              -----------
Total assets                                                                     7,123,467                6,233,572
                                                                                ==========              ===========

LIABILITIES & STOCKHOLDERS EQUITY

Current liabilities:
  Note payable - related party - current portion                                   250,000                  250,000
  Convertible subordinated notes - related party                                     7,500                    7,500
  Capitalized lease obligations - current portion                                   36,745                  108,845
  Deferred revenues                                                                571,437                  518,103
  Accrued payroll, vacation pay, deferred wages
      payroll taxes and interest on deferred wages                                 519,259                  399,437
  Accounts payable and accrued expenses                                          1,191,195                  896,710
                                                                                ----------              -----------
Total current liabilities                                                        2,576,136                2,180,595

Notes payable - related party - long-term                                          100,000                  100,000
Capitalized lease obligations - long-term                                           56,703                   52,183
                                                                                ----------              -----------
Total liabilities                                                                2,732,839                2,332,778

Commitments and contingencies                                                           --                       --

Stockholders' equity:
   Common stock                                                                    213,583                  213,338
   Additional paid-in capital                                                    3,944,812                3,941,967
   Retained earnings (accumulated deficit)                                         232,233                 (254,511)
                                                                                ----------              -----------
Total stockholders' equity                                                       4,390,628                3,900,794

Total liabilities and stockholders' equity                                      $7,123,467              $ 6,233,572
                                                                                ==========              ===========
</TABLE>

See accompanying notes to condensed financial statements


                                      -1-
<PAGE>

                     TEL-INSTRUMENT ELECTRONICS CORPORATION
                 CONDENSED COMPARATIVE STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                           (Unaudited)
                                                       Three Months Ended               Six Months Ended
                                                Sept. 30, 2002  Sept. 30, 2001    Sept. 30, 2002  Sept. 30, 2001
                                                --------------  --------------    --------------  --------------
<S>                                               <C>            <C>                <C>            <C>
Sales
  Government, net                                 $ 2,608,868    $ 1,652,050        $ 5,013,576    $ 3,460,721
  Commercial, net                                     374,034        534,432            819,059      1,287,450
                                                  -----------    -----------        -----------    -----------
Total Sales                                         2,982,902      2,186,482          5,832,635      4,748,171

Cost of sales                                       1,386,582      1,112,871          2,771,865      2,427,177
                                                  -----------    -----------        -----------    -----------
Gross Margin                                        1,596,320      1,073,611          3,060,770      2,320,994

Operating expenses
  Selling, general & administrative                   790,593        450,783          1,363,661        849,395
  Engineering, research, & development                417,319        379,879            869,046        795,050
                                                  -----------    -----------        -----------    -----------
Total operating expenses                            1,207,912        830,662          2,232,707      1,644,445
                                                  -----------    -----------        -----------    -----------

     Income from operations                           388,408        242,949            828,063        676,549

Other income (expense):
  Interest income                                       9,313          4,736             15,789          9,328
  Interest expense                                    (15,880)       (24,963)           (33,288)       (43,575)
                                                  -----------    -----------        -----------    -----------
Income before taxes                                   381,841        222,722            810,564        642,302

Provision for income taxes                            152,544         85,719            323,820        256,599
                                                  -----------    -----------        -----------    -----------
Net income                                        $   229,297    $   137,003        $   486,744    $   385,703
                                                  ===========    ===========        ===========    ===========
Basic and diluted income
     per common share                             $      0.11    $      0.06        $      0.23    $      0.18
                                                  ===========    ===========        ===========    ===========

Dividends per share                                      None           None               None           None
Weighted average shares outstanding
     Basic                                          2,135,776      2,128,351          2,135,422      2,126,580
     Diluted                                        2,162,386      2,128,918          2,162,032      2,127,147
</TABLE>

See accompanying notes to condensed financial statements


                                      -2-
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                        Six Months Ended
                                                                                Sept. 30, 2002     Sept. 30, 2001
                                                                                --------------     --------------
<S>                                                                               <C>                 <C>
Cash flows from operating activities:
Net income                                                                        $   486,744         $ 385,703
Adjustments to reconcile net income to net cash provided
    by operating activities:
     Deferred income taxes                                                            175,870           187,888
     Depreciation and amortization                                                    107,009           100,503
Changes in operating assets or liabilities:
  Increase in accounts receivable, net                                               (451,660)          (83,562)
  Decrease (increase) in inventories, net                                             730,577          (278,693)
  Decrease in prepaid expenses and other current assets                                 7,152            13,382
  Decrease (increase) in other assets                                                   5,237           (16,151)
  Increase in deferred revenues                                                        53,334           254,383
  Increase (decrease) in accrued payroll, vacation pay,
     deferred wages, payroll taxes & interest on deferred wages                       119,822            (6,945)
  Increase (decrease) in accounts payable and
     accrued expenses                                                                 294,485          (249,606)
                                                                                  -----------         ---------

Net cash provided by operating activities                                           1,528,570           306,902
                                                                                  -----------         ---------

Cash flows from investing activities:
  Cash purchases of property, plant and equipment                                     (52,956)         (156,343)
                                                                                  -----------         ---------
Net cash used in investing activities                                                 (52,956)         (156,343)
                                                                                  -----------         ---------

Cash flows from financing activities:
  Proceeds from exercise of stock options                                               3,090             3,256
  Repayment of capitalized lease obligations                                          (67,580)          (51,162)
                                                                                  -----------         ---------
  Net cash used in financing activities                                               (64,490)          (47,906)
                                                                                  -----------         ---------

Net increase in cash and cash equivalents                                           1,411,124           102,653
Cash and cash equivalents at beginning of period                                    1,198,191           433,438
                                                                                  -----------         ---------
Cash and cash equivalents at end of period                                        $ 2,609,315         $ 536,091
                                                                                  ===========         =========

Supplemental information
     Interest paid                                                                $    16,515         $  42,045
                                                                                  ===========         =========
     Taxes paid                                                                   $   138,737         $  85,400
                                                                                  ===========         =========
     Assets acquired through capital leases                                       $         0         $  61,857
                                                                                  ===========         =========
</TABLE>

See accompanying notes to condensed financial statements


                                      -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, 2002,  the results of  operations  for the
three and six months  ended  September  30, 2002 and  September  30,  2001,  and
statements  of cash  flows  for the six  months  ended  September  30,  2002 and
September 30, 2001. 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, 2002 results included herein have been
derived from the audited financial  statements  included in the Company's annual
report on Form 10-K.  Accordingly,  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, 2002.

Note 2 Accounts Receivable, net

Accounts receivable, net consist of:

                                    September 30, 2002       March 31, 2002
                                    ------------------       --------------
      Commercial                       $   184,096              $ 238,690
      Government                         1,242,011                735,757
      Allowance for bad debts              (36,598)               (36,598)
                                       -----------              ---------
      Total                            $ 1,389,509              $ 937,849
                                       ===========              =========

Note 3 Inventories, net

Inventories, net consist of:

                                        September 30, 2002    March 31, 2002
                                        ------------------    --------------
      Purchased parts                       $   571,652         $   913,917
      Work-in-process                         1,274,160           1,584,701
      Finished goods                             25,604              68,375
      Less: Reserve for obsolescence           (120,313)            (85,313)
                                            -----------         -----------
      Total                                 $ 1,751,103         $ 2,481,680
                                            ===========         ===========


                                      -4-
<PAGE>

                        TEL-INSTRUMENT ELECTRONICS CORP.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)

Note 4 Earnings Per Share

The  Company's  basic  income per share is based on net income for the  relevant
period,  divided by the weighted  average  number of common  shares  outstanding
during the period.  Diluted income per share is based on net income,  divided by
the weighted  average  number of common  shares  outstanding  during the period,
including common share equivalents, such as outstanding stock options.

Note 5 Government and Commercial Sales

Information  has been  presented for the Company's  two  reportable  activities,
government and commercial.

The Company is organized  primarily on the basis of its avionics  products.  The
government  market consists  primarily of the sale of test equipment to U.S. and
foreign  governments and militaries either direct or through  distributors.  The
commercial  market  consists of sales of test  equipment to domestic and foreign
airlines and to commercial  distributors.  The  commercial  market also includes
sales related to repairs and  calibration  which have a lower gross margin.  The
Company primarily  develops and designs test equipment for the avionics industry
and, as such,  the Company's  products and designs may be sold in the government
and commercial markets.

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

<TABLE>
<CAPTION>
                                          Three Months Ended                 Three Months Ended
                                          September 30, 2002                 September 30, 2001
                                       Government     Commercial          Government    Commercial
                                       ----------     ----------          ----------    ----------
<S>                                    <C>             <C>                <C>            <C>
      Sales                            $2,608,868      $374,034           $1,652,050     $534,432
      Cost of Sales                     1,176,531       210,051              864,462      248,409
                                       ----------      --------           ----------     --------
      Gross Margin                     $1,432,337      $163,983           $  787,588     $286,023
                                       ==========      ========           ==========     ========
</TABLE>

<TABLE>
<CAPTION>
                                           Six Months Ended                   Six Months Ended
                                          September 30, 2002                 September 30, 2001
                                       Government     Commercial          Government    Commercial
                                       ----------     ----------          ----------    ----------
<S>                                    <C>             <C>                <C>            <C>
      Sales                            $5,013,576      $819,059           $3,460,721     $1,287,450
      Cost of Sales                     2,310,416       461,449            1,829,765        597,412
                                       ----------      --------           ----------     ----------
      Gross Margin                     $2,703,160      $357,610           $1,630,956     $  690,038
                                       ==========      ========           ==========     ==========
</TABLE>


                                      -5-
<PAGE>

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

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 previous
filings with the Securities and Exchange Commission.

Critical Accounting Policies

In  preparing  our  financial  statements  and  accounting  for  the  underlying
transactions and balances, we apply our accounting policies as disclosed in Note
2 of our Notes to Financial  Statements included in our Form 10-K. The Company's
accounting policies that require a higher degree of judgment and complexity used
in the preparation of financial statements include:

Revenue  recognition  - revenues are  recognized  at the time of shipment to, or
acceptance by customer  provided  title and risk of loss is  transferred  to the
customer.  Provisions,  when  appropriate,  are made  where  the right to return
exists.  Revenues under service  contracts are recognized  when the services are
performed.

Property  and  equipment  - property  and  equipment  are  stated at cost,  less
accumulated  depreciation.  Depreciation  is  provided  using the  straight-line
method over the  estimated  useful lives of the  respective  assets over periods
ranging  from three to eight years.  Useful lives are  estimated at the time the
asset is acquired and are based upon  historical  experience with similar assets
as well as taking  into  account  anticipated  technological  or other  changes.
Leasehold  improvements  are amortized  over the term of the lease or the useful
life of the asset, whichever is shorter.

Inventory  reserves - inventory  reserves are estimated for excess,  slow-moving
and obsolete inventory as well as inventory whose carrying value is in excess of
net realizable  value.  These estimates are based on current  assessments  about
future demands, market conditions and related management initiatives.  If market
conditions  and  actual  demands  are less  favorable  than those  projected  by
management, additional inventory write-downs may be required.

Warranty  reserves - warranty reserves are estimated based upon historical rates
and specific items that are  identifiable  and can be estimated at time of sale.
While  warranty costs have  historically  been within our  expectations  and the
provisions established, future warranty costs could be in excess of our warranty
reserves.  A  significant  increase in these costs  could  adversely  affect our
operating  results  for  the  period  and the  periods  these  additional  costs
materialize.  Warranty  cost accruals are adjusted from time to time when actual
warranty claim experience differs from estimates.


                                      -6-
<PAGE>

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

Critical Accounting Policies (continued)

Accounts  receivable - the Company  performs  ongoing credit  evaluations of its
customers and adjusts credit limits based on customer payment and current credit
worthiness,  as determined by review of their current  credit  information.  The
Company  continuously  monitors  credits and  payments  from its  customers  and
maintains  provision  for  estimated  credit  losses  based  on  its  historical
experience and any specific  customer  issues that have been  identified.  While
such  credit  losses  have  historically  been  within our  expectation  and the
provision  established,  the Company  cannot  guarantee that it will continue to
receive positive results.

Income  taxes - deferred  tax assets and  liabilities  are  determined  based on
differences  between financial reporting and tax bases of assets and liabilities
and are  measured  using  enacted tax rates and laws that will be in effect when
such differences are expected to reverse. The measurement of deferred tax assets
is reduced, if necessary,  by a valuation allowance for any tax benefit which is
not more likely than not to be  realized.  The effect on deferred tax assets and
liabilities  of a change in tax rate is  recognized  in the period that such tax
rate changes are enacted.

Results of Operations

Overview

For the six months ended September 30, 2002, sales increased 22.8% to $5,832,635
and net income  before  taxes  increased  26.2% to $810,564.  Deliveries  of the
AN/APM-480 IFF  (Identification,  Friend or Foe) Transponder Set Test Set to the
U.S.  Navy  continue and  accounted  for 59.3% of total sales for the six months
ended  September  30, 2002.  Government  sales remain  strong as a result of the
deliveries of the AN/APM 480 to the U.S. Navy.  However,  the commercial  market
remains weak.

In  August  2002  the  Company  received  an order  from  the  U.S.  Navy for an
additional 105 AN/APM-480's. The Company has now received orders for 1,182 units
from the U.S. Navy and there are 118 units remaining subject to the option under
the  contract.  Any options not  exercised by the U.S. Navy by February 11, 2003
will expire. However, government contracts are always susceptible to termination
by the  government  for  convenience.  The Company has shipped 744 units through
September 30, 2002 and expects shipments under this contract to continue through
August of next year, unless the balance of the 118 units are exercised, in which
case  deliveries  will  continue  until later in the year.  This program  firmly
established  the Company as one of the leading  suppliers in the  avionics  test
equipment industry, and improved its market position.

The Company  continues to invest heavily in new product  development to meet the
expected  demands  of its  customers  and  remain as one of the  leaders  in the
industry. The Company continues its work on the next generation of IFF test sets
in  anticipation  of U.S.  and  NATO  requirements  for more  sophisticated  IFF
testing.  The Company  anticipates that most of the AN/APM-480's will need to be
upgraded,  in the future, to accommodate the more sophisticated IFF testing. The
Company  recently  introduced  the  T-36C,  Nav/Comm  ramp  test  set,  into the
commercial  market, and the T-47S  Multi-Function  ramp tester into the military
market.  New  products  soon to be  introduced  include  the  T-47G,  TR-220,  a
commercial Multi-Function ramp test set,


                                      -7-
<PAGE>

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

Results of Operations (continued)

Overview (continued)

and the T-462,  the Company's new bench test set. The T-462  capitalizes  on the
Company's  core  technology and is part of the Company's plan to expand into new
markets.

As previously  announced,  the Company strengthened its management team with the
addition of a Chief  Operating  Officer  and a Director of Business  Development
during the quarter.

The Company has been active in responding to customer requests for quotation, in
addition  to  adapting  its product  designs to respond to these  requests.  The
Company  continues  actively to pursue  opportunities in both the commercial and
government markets, both domestically and internationally.

Exploration of  opportunities  in other  government and commercial  markets also
continues  in an attempt to broaden  the  Company's  product  line.  The Company
continues  its efforts with  Semaphore  Capital  Advisors  LLC to pursue  growth
through acquisitions and alliances of compatible businesses or technologies.

Sales

For the three and six months  ended  September  30,  2002,  net sales  increased
$796,420 (36.4%) and $1,084,464 (22.8%),  respectively,  as compared to the same
periods in the prior fiscal year.  Government  sales increased  $955,817 (57.9%)
and  $1,552,854  (44.9%),  respectively,  for the  three  and six  months  ended
September  30,  2002 as  compared  to the  three  months  and six  months  ended
September 30, 2001. The increase in government sales is mainly attributed to the
shipment of the  AN/APM-480  to the U.S.  Navy,  which  accounted  for 54.0% and
59.3%,  respectively,  of the total  sales  for the three and six month  periods
ended  September  30, 2002 as  compared to 47.8% and 44.5% for the same  periods
last year. Sales in these periods also increased as a result of shipments of the
AN/APM-480 to customers other than the U.S. Navy. However,  these increases were
partially  offset by  decreases  in the  Company's  other  government  products.
International government sales have also declined during this period. Commercial
sales decreased  $159,397 (29.8%) and $468,390  (36.4%),  respectively,  for the
three and six months  ended  September  30, 2002 as compared to the same periods
last year.  These  decreases  are  primarily  the result of the  completion of a
contract to a major  freight  carrier,  and the inability as yet to replace this
contract  with a new  contract  due to the  financial  difficulties  encountered
within the commercial airline industry.

Gross Margin

Gross margin  dollars  increased  $522,709  (48.7%) and 739,776  (31.9%) for the
three and six months ended September 30, 2002, respectively,  as compared to the
same  periods in the prior fiscal year.  The increase in gross  margin,  for the
most part,  is  attributed  to an increase in sales  volume,  higher  prices for
limited  units  of  the  AN/APM-480  and,  to a  lesser  extent,  to  production
efficiencies  obtained  as a result of the higher  volume.  These  amounts  were
partially offset by higher warranty costs. The gross margin percentage for the


                                      -8-
<PAGE>

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

Results of Operations (continued)

Gross Margin (continued)

three  months  ended  September  30, 2002 was 53.5% as compared to 49.1% for the
three months ended  September 30, 2001. The gross margin  percentage for the six
months  ended  September  30,  2002 was 52.5% as  compared  to 48.9% for the six
months ended September 30, 2001.

Operating Expenses

Selling,  general and  administrative  expenses  increased  $339,810 (75.4%) and
$514,266 (60.5%), respectively, for the three and six months ended September 30,
2002 as compared to the three and six months ended  September  30,  2001.  These
increases  are  attributed  to added  sales  and  marketing  activities,  higher
commission  expenses,  the addition of a Customer Support  Manager,  a new sales
representative,  and a Director of Business  Development,  including  relocation
expenses for the Director of Business Development. The Company also strengthened
its staff with the addition of a Chief Operating Officer (COO). Fiscal year 2003
expenses  include  recruitment and relocation costs for the COO. The addition of
these  personnel will add to the Company's  expenses,  but  management  believes
these additions are necessary for the Company to continue its growth and provide
for an orderly succession of key personnel.  Selling, general and administrative
expenses  also  increased  as a result of higher  professional  fees,  including
investment-banking services.

Engineering,  research and  development  expenses  increased  $37,440 (9.9%) and
$73,966  (9.3%)  for the same  periods.  The  higher  level of  expenditures  is
associated  with an increase in research and development  activities,  including
the TR-220,  a  multi-function  ramp test set, and the T-462,  the Company's new
bench test set, as well as continued  effort on the next  generation of IFF test
sets.

Income Taxes

Income taxes increased $66,825 and $67,221,  respectively, for the three and six
months ended September 30, 2002 as compared to the same periods last year. These
increases are a result of an improvement in the Company's income.  The provision
for income  taxes  represents  the  effective  federal and state tax rate on the
Company's  income  before  taxes.  The Company has used its net  operating  loss
carryforwards and the Company will pay federal taxes this fiscal year.


                                      -9-
<PAGE>

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

Liquidity and Capital Resources

At September 30, 2002 the Company had positive  working capital of $3,707,725 as
compared to $3,154,081 at March 31, 2002. For the six months ended September 30,
2002, cash provided by operations was $1,528,570 as compared to $306,902 for the
six months ended  September 30, 2001.  This increase in cash from  operations is
primarily  attributable to a reduction in inventories resulting from an increase
in sales, and an increase in accounts payable and accrued  expenses,  as well as
an  increase  in  net  income,  partially  offset  by an  increase  in  accounts
receivable.

The  Company  increased  its line of credit to  $1,750,000  from  Fleet  Bank in
November  2002.  The line of credit  bears an  interest  rate of 0.5%  above the
lender's  prevailing  base  rate,  which  is  payable  monthly,  based  upon the
outstanding  balance.  At  September  30, 2002,  the Company had no  outstanding
balance. The line of credit is collateralized by substantially all of the assets
of the company.  The credit  facility  requires the Company to maintain  certain
financial  covenants.  As of September  30, 2002,  the Company was in compliance
with all financial covenants. The line of credit expires at September 30, 2003.

Based upon the current backlog,  its existing credit line, and cash balance, the
Company  believes that it has sufficient  working  capital to fund its operating
plans for at least the next  twelve  months.  However,  as the  Company  pursues
additional opportunities, the need for additional capital may arise. The Company
will evaluate its alternatives when these  opportunities  arise. The Company has
also  retained  Semaphore  Capital  Advisors as its  investment  bankers to help
pursue  acquisitions  and alliances and, if needed,  to help raise capital.  The
Company maintains its cash balance primarily in a money market account.

There was no  significant  impact  on the  Company's  operations  as a result of
inflation for the six months ended September 30, 2002.

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, 2002.

Item 4. Controls and Procedures

The Company adopted  disclosure  controls and  procedures,  as called for by the
recently   adopted   legislation  and  rules  of  the  Securities  and  Exchange
Commission.  Under rules  promulgated  by the S.E.C.,  disclosure  controls  and
procedures are defined as "those controls or other procedures of the issuer that
are designed to ensure that  information  required to be disclosed by the issuer
in the reports  filed or  submitted  by it under the  Exchange  Act is recorded,
processed,  summarized  and reported,  within the time periods  specified in the
Commission's  rules and forms." The Chief  Executive  Officer and the  Principal
Accounting  Officer of the Company evaluated the Company's  disclosure  controls
and procedures at October 31, 2002, and concluded that they are effective.

Furthermore,  there  were  no  significant  changes  in the  Company's  internal
controls,  or in other factors that could  significantly  affect these  controls
after  October  31,  2002,  the date of the  evaluation  by the Chief  Executive
Officer and the Principal Accounting Officer.


                                      -10-
<PAGE>

Part II. Other Information

Item 5. Other Information

The Board of Directors,  on the  recommendation  of the Compensation  Committee,
directed the Company to pay and redeem  $100,000 of the  previously  matured and
extended  Fletcher  (Chairman/President)  notes and $50,000 of accrued interest,
referred  to in Note 10 to the  Financial  Statements  in Form 10-K for the year
ended  March 31,  2002 (see  below),  during  calendar  year 2002 and $50,000 of
accrued interest in calendar year 2003, leaving an unpaid balance of $250,000.

On March 31, 1997, the Company's  Chairman/President  renegotiated  the terms of
the non-current note  payable-related  party.  This note, along with $250,000 of
other accrued expenses due to the Company's  Chairman/President,  were converted
into  seven  $50,000  convertible  subordinated  notes  (the  "Notes")  totaling
$350,000.  The Notes are due in consecutive  years beginning March 31, 1999 with
the last note due March 31, 2005. In April 2002, Notes,  which were scheduled to
mature  through March 31, 2002,  were extended to September 30, 2002.  The Notes
bear interest at a rate of 10% per annum, payable  semi-annually on the last day
of  September  and March of each year.  The  Company is  required  to prepay the
outstanding  balance  of the  Notes and any  accrued  interest  thereon,  if the
Company sells all or substantially all of its assets. The Notes can be converted
into newly issued common shares of the Company at the conversion  price of $2.50
per share.  The  conversion  prices shall be adjusted  for any stock  dividends,
stock  issuances  or capital  reorganizations.  The Notes may be redeemed by the
Company prior to maturity upon giving written notice of not less than 30 days or
more  than 60 days at a  redemption  price  equal  to 120% of the  principal  if
redeemed two years or more prior to the maturity  date or 110% of the  principal
if redeemed  more than one year,  but less than two years prior to the  maturity
date

Item 6. Exhibits and Reports on Form 8-K

            a.    Exhibits

                  Agreement with Semaphore  capital  Advisors amended as of June
                  1, 2002.

                  Agreement with Charles Palanzo, Chief Operating Officer, dated
                  August 19, 2002.

            b.    Reports on Form 8-K.

                  Report on Form 8-K regarding  changes in  certifying  auditors
                  was submitted on November 13, 2002 under Item 4.


                                      -11-
<PAGE>

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 13, 2002                        By: /s/ Harold K. Fletcher
                                                    ----------------------
                                                    Harold K. Fletcher
                                                    Chairman and President

Date: November 13, 2002                         By: /s/ Joseph P. Macaluso
                                                    ----------------------------
                                                    Joseph P. Macaluso
                                                    Principal Accounting Officer


                                      -12-
<PAGE>

                         Tel-Instrument Electronics Corp
                                CEO Certification

I, Harold K. Fletcher, certify that:

1.    I have  reviewed  this  quarterly  report on Form  10-Q of  Tel-Instrument
      Electronics Corp;

2.    Based on my knowledge,  this quarterly  report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the  circumstances  under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  quarterly  report,  fairly  present in all
      material respects the financial condition,  results of operations and cash
      flows of the  registrant  as of, and for,  the periods  presented  in this
      quarterly report;

4.    The  registrant's  other  certifying  officers and I are  responsible  for
      establishing  and  maintaining  disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
      have:

      a)    designed  such  disclosure  controls and  procedures  to ensure that
            material  information relating to the registrant is made known to us
            by others within registrant, particularly during the period in which
            this quarterly report is being prepared;

      b)    evaluated the effectiveness of the registrant's  disclosure controls
            and  procedures as of a date within 90 days prior to the filing date
            of this quarterly report (the "Evaluation Date"); and

      c)    presented  in  this  quarterly  report  our  conclusions  about  the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date.

5.    The registrant's other certifying officers and I have disclosed,  based on
      our most recent  evaluation,  to the  registrant's  auditors and the audit
      committee of  registrant's  board of directors (or persons  performing the
      equivalent function):

      a)    all significant  deficiencies in the design or operation of internal
            controls which could adversely  affect the  registrant's  ability to
            record,  process,  summarize  and  report  financial  data  and have
            identified for the registrant's  auditors any material weaknesses in
            internal controls; and

      b)    any fraud,  whether or not  material,  that  involves  management or
            other  employees  who have a  significant  role in the  registrant's
            internal controls; and

6.    The registrant's  other  certifying  officers and I have indicated in this
      quarterly report whether or not there were significant changes in internal
      controls or in other  factors  that could  significantly  affect  internal
      controls  subsequent to the date of our most recent evaluation,  including
      any  corrective  actions  with  regard  to  significant  deficiencies  and
      material weaknesses.

Date: November 13, 2002                               /s/ Harold K. Fletcher
                                                      ----------------------
                                                      Harold K. Fletcher
                                                      Chairman and President


                                      -13-
<PAGE>

                         Tel-Instrument Electronics Corp
                                CFO Certification

I, Joseph P. Macaluso, certify that:

1.    I have  reviewed  this  quarterly  report on Form  10-Q of  Tel-Instrument
      Electronics Corp;

2.    Based on my knowledge,  this quarterly  report does not contain any untrue
      statement of a material fact or omit to state a material fact necessary to
      make the statements made, in light of the  circumstances  under which such
      statements were made, not misleading with respect to the period covered by
      this quarterly report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  quarterly  report,  fairly  present in all
      material respects the financial condition,  results of operations and cash
      flows of the  registrant  as of, and for,  the periods  presented  in this
      quarterly report;

4.    The  registrant's  other  certifying  officers and I are  responsible  for
      establishing  and  maintaining  disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
      have:

      a)    designed  such  disclosure  controls and  procedures  to ensure that
            material  information relating to the registrant is made known to us
            by others within registrant, particularly during the period in which
            this quarterly report is being prepared;

      b)    evaluated the effectiveness of the registrant's  disclosure controls
            and  procedures as of a date within 90 days prior to the filing date
            of this quarterly report (the "Evaluation Date"); and

      c)    presented  in  this  quarterly  report  our  conclusions  about  the
            effectiveness of the disclosure controls and procedures based on our
            evaluation as of the Evaluation Date.

5.    The registrant's other certifying officers and I have disclosed,  based on
      our most recent  evaluation,  to the  registrant's  auditors and the audit
      committee of  registrant's  board of directors (or persons  performing the
      equivalent function):

      a)    all significant  deficiencies in the design or operation of internal
            controls which could adversely  affect the  registrant's  ability to
            record,  process,  summarize  and  report  financial  data  and have
            identified for the registrant's  auditors any material weaknesses in
            internal controls; and

      b)    any fraud,  whether or not  material,  that  involves  management or
            other  employees  who have a  significant  role in the  registrant's
            internal controls; and

      6.    The registrant's  other certifying  officers and I have indicated in
            this quarterly report whether or not there were significant  changes
            in internal  controls or in other  factors that could  significantly
            affect internal  controls  subsequent to the date of our most recent
            evaluation,   including  any  corrective   actions  with  regard  to
            significant deficiencies and material weaknesses.

Date: November 13, 2002                             /s/ Joseph P. Macaluso
                                                    ----------------------------
                                                    Joseph P. Macaluso
                                                    Principal Accounting Officer


                                      -14-