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 June 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 August 9, 1999.


<PAGE>

                     TEL-INSTRUMENT ELECTRONICS CORPORATION

                                TABLE OF CONTENTS


                                                                            PAGE


Item 1. Financial Statements (Unaudited):

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

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

        Condensed Comparative Statements of Cash Flows -
           Three Months Ended June 30, 1999 and 1998                         3

        Notes to Condensed Financial Statements                              4-6

Item 2. Management's Discussion and Analysis of Financial
           Condition and Results of Operations                               7-9


        SIGNATURES                                                           10

<PAGE>

Item 1 - Financial Statements

<TABLE>
<CAPTION>
                     TEL-INSTRUMENT ELECTRONICS CORPORATION
                      CONDENSED COMPARATIVE BALANCE SHEETS
                        June 30, 1999 and March 31, 1999

                                                             (Unaudited)      (Audited)
                              ASSETS                          June 30,        March 31,
                                                                1999            1999
                                                             -----------    -----------
<S>                                                          <C>            <C>
    Current assets:
      Cash                                                   $    53,831    $    70,617
      Accounts receivable, net of allowance for doubtful         871,865        638,721
          accounts of $15,598 at June 30, 1999 and
          $15,585 at March 31, 1999
      Inventories                                                929,854        713,700
      Prepaid expenses and other current assets                   43,130         39,173
      Deferred income tax benefit - current                       78,300         78,300
                                                             -----------    -----------
    Total current assets                                       1,976,980      1,540,511

    Property, plant and equipment, net
                                                                 170,943        130,901
    Other assets                                                 129,256        128,892
    Deferred income tax benefit                                  392,064        418,204
                                                             -----------    -----------
    Total assets                                               2,669,243      2,218,508
                                                             ===========    ===========

                 LIABILITES & STOCKHOLDERS EQUITY

    Current liabilities:
      Note payable - related party - current portion             100,000        100,000
      Note payable - bank                                        250,000             --
      Convertible subordinated notes - related party              15,000         15,000
      Capitalized lease obligations - current portion              9,941          9,667
      Advance payments                                            55,601        134,767
      Accrued payroll, vacation pay, deferred wages
          payroll taxes and interest on deferred wages           263,981        218,289
      Accounts payable and accrued expenses                      711,799        555,206
                                                             -----------    -----------
    Total current liabilities                                  1,406,322      1,032,929

    Notes payable - related party - non-current portion          250,000        250,000
    Capitalized lease obligations - excluding current port        54,538         16,486
                                                             -----------    -----------
    Total liabilities                                          1,710,860      1,299,415

    Stockholders' equity:
      Common stock                                               210,998        210,998
      Additional paid-in capital                               3,925,854      3,925,854
      Accumulated deficit
                                                              (3,178,469)    (3,217,759)
                                                             -----------    -----------
      Total stockholders' equity                                 958,383        919,093

                                                             -----------    -----------
      Total liabilities and stockholders' equity             $ 2,669,243    $ 2,218,508
                                                             ===========    ===========
</TABLE>

See accompanying notes to condensed financial statements


                                       1
<PAGE>

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

                                                         Three Months Ended
                                                             June 30,
                                                      1999            1998
                                                   -----------    -----------

Sales - government, net                            $   553,428    $   382,740
Sales - commercial, net                                558,401        282,453
                                                   -----------    -----------
   Total sales                                       1,111,829        665,193

Cost of sales                                          465,424        339,306
                                                   -----------    -----------

       Gross margin                                    646,405        325,887

Operating expenses:
   Selling, general and administrative                 290,559        214,524
   Engineering, research and development               278,443        242,012
                                                   -----------    -----------
Total operating expenses                               569,002        456,536
                                                   -----------    -----------

       Income (loss) from operations                    77,403       (130,649)

Other income (expenses):
   Interest income                                       1,615          6,070
   Interest expenses                                   (13,588)       (11,883)
                                                   -----------    -----------

Income (loss) before taxes                              65,430       (136,462)

Provision (benefit) for income taxes                    26,140        (54,516)
                                                   -----------    -----------

Net income (loss)                                       39,290        (81,946)
                                                   ===========    ===========

Basic and diluted income (loss) per common share   $      0.02    $     (0.04)
                                                   ===========    ===========

Dividends per share                                       None           None

Weighted average shares outstanding
          Basic                                      2,109,957      2,094,735
          Diluted                                    2,119,452      2,094,735

See accompanying notes to condensed financial statements

                                       2
<PAGE>

<TABLE>
<CAPTION>
                     TEL-INSTRUMENT ELECTRONICS CORPORATION
                 CONDENSED COMPARATIVE STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                                Three Months Ended
                                                                     June 30,
                                                                 1999          1998
                                                              ---------       ------
<S>                                                           <C>            <C>
(Decrease) increase in cash:
Cash flows from operating activities
Net income (loss)                                             $  39,290      (81,946)
Adjustments to reconcile net (loss) income to cash used
      in operating activities:
        Deferred income taxes                                    26,140      (54,516)
        Depreciation                                             13,274       10,909

Changes in assets and liabilities:
    Increase in accounts receivable                            (233,144)     (98,663)
    Increase in inventories                                    (216,154)     (95,822)
    Increase in prepaid expenses and other current assets        (3,957)     (11,327)
    Increase in other assets                                       (364)     (19,668)
    Increase  (decrease) in accrued payroll, deferred wages
       and vacation pay                                          45,692      (16,189)
   Increase in accounts payable, advance payments
       and accrued expenses                                      77,427       37,265
                                                              ---------    ---------

Net cash used in operations                                    (251,796)    (329,957)
                                                              ---------    ---------

Cash flows from investing activities:
   Cash purchases of property, plant and equipment              (12,911)     (13,276)
                                                              ---------    ---------

Net cash used in investing activities                           (12,911)     (13,276)
                                                              ---------    ---------

Cash flows from financing activities:
    Proceeds from notes payable - bank                          250,000           --
    Repayment of capitalized lease obligations                   (2,079)          --
                                                              ---------    ---------

Net cash provided by financing activities                       247,921           --

Net decrease in cash                                            (16,786)    (343,233)
Cash at beginning of period                                      70,617      585,281
                                                              ---------    ---------

Cash at end of period                                         $  53,831    $ 242,048
                                                              =========    =========
</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 June 30, 1999,  the results of operations for the three
months ended June 30, 1999 and June 30, 1998,  and  statements of cash flows for
the three months ended June 30, 1999 and June 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.  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, 1999.

Note 2    Accounts Receivable

The following table sets forth the components of accounts receivable:


                                                    June 30,           March 31,
                                                      1999                1999
                                                    --------           ---------
Commercial                                         $ 246,517          $ 179,742
Government                                           473,603            359,716
Unbilled revenues                                    167,343            114,848
Allowance for bad debts                              (15,598)           (15,585)
                                                   ---------          ---------

Total                                              $ 871,865          $ 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.

                                       4
<PAGE>

                        TEL-INSTRUMENT ELECTRONICS CORP.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (Continued)


Note 3    Inventories

Inventories consist of:

                                            June 30,        March 31,
                                                1999             1999
                                           ----------------------------
Purchased parts                            $ 529,930        $ 402,804
Work-in-process                              429,544          340,516
Less: Reserve for obsolescence               (29,620)         (29,620)
                                           ----------------------------
                                           $ 929,854        $ 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 three months ended
June 30, 1999, the Company recorded a tax provision of $26,140, which represents
the  effective  federal and state tax rate on the  Company's  net income  before
taxes of $65,430.  The Company has no tax liability.  The $26,140  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.


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 three  months ended June 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 the Company's government and commercial activities.

The Company is organized  primarily on the basis of its avionics  products.  The
government  segment consists primarily of the sale of test equipment to U.S. and
foreign  governments and militaries either direct or through  distributors.  The
commercial  segment  consists of sales of test equipment to domestic and foreign
airlines and to  commercial  distributors.  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. Cost of sales
includes certain allocation factors for indirect costs.


                               Three Months Ended         Three Months Ended
                                  June 30, 1999              June 30, 1998
                           Government     Commercial   Government     Commercial
                           ----------     ----------   ----------     ----------

Sales                       $553,428       558,401      $382,740       282,453
Cost of sales                233,966       231,458       196,001       143,305
                            --------       -------      --------       -------
Gross margin                $319,462       326,943      $187,739       139,148

                                       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 if 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.  However,  there can be no assurance that the U.S. Navy will
exercise 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  quarter  were  $1,111,829  and the  Company
generated  income  before  taxes of  $65,430.  The Company  continues  to invest
heavily in engineering,  research,  and development as the Company  continues to
develop other products for targeted markets.

The  Company's  backlog,   including  the  order  from  the  U.S.  Navy  exceeds
$6,000,000.

Sales

For the three months ended June 30, 1999, net sales increased  $446,636  (67.1%)
as compared to the three months ended June 30, 1998.  Commercial sales increased
$275,948 (97.7%) and government sales increased  $170,688 (44.6%).  The increase
in  commercial  sales  reflects the  favorable  economic  conditions  within the
airline industry.  However, there is no assurance that this trend will continue.
The increase in  government  sales is  attributed to the T-47 family of IFF test
sets,  including  the T-47CC  which  incorporates  a  directional  antenna.  The
increase  is  sales in both  the  commercial  and  government  segments  is also
attributed to the efforts of our international distributors.


                                       7
<PAGE>

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

Results of Operations (continued)

Gross Margin

Gross Margin increased $320,518 (98.4%) for the three months ended June 30, 1998
as compared to the same three months in the prior  fiscal year.  The increase in
gross margin,  for the most part, is attributed to the higher volume.  The gross
margin percentage for the three months ended June 30, 1999 was 58.1% as compared
to 49.0% for the three months ended June 30, 1998.

Operating Expenses

Selling,  general and administrative  expenses increased $76,035 (35.4%) for the
three  months ended June 30, 1999 as compared to the three months ended June 30,
1998.  This increase is attributed to higher sales and marketing  expenses,  the
addition to staff of a Director of Finance, and an increase in salaries.

Engineering,   research  and  development  expenses  increased  $36,431  (15.1%)
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.

Income Taxes

In accordance  with SFAS 109, a provision for income taxes was recognized in the
amount of $26,140 for the three months ended June 30, 1999. For the three months
ended June 30,  1998,  the  Company  recorded a deferred  income tax  benefit of
$54,516,  which  represents  the  effective  federal  and  state tax rate on the
Company's net loss before taxes of $136,642. The Company currently does not have
any tax  liability.  (See  Note 4 to Notes to  Condensed  Comparative  Financial
Statements).

Liquidity and Capital Resources

At June 30,  1999 the  Company  had  positive  working  capital of  $570,658  as
compared to  $507,582 at March 31,  1999.  For the three  months  ended June 30,
1999, cash used in operations was $251,796 as compared to $329,957 for the three
months  ended  June 30,  1998.  This  reduction  in cash used in  operations  is
primarily  attributed to the improvement in the Company's  operating income. The
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.

The  Company  has a line of credit  from  Summit  Bank for  $350,000,  which was
originally  scheduled to expire in July 1999,  however,  the Company  received a
60-day  extension to the  agreement.  The Company is currently in the process of
negotiating  the  extension  of this credit  line with the bank.  As of June 30,
1999, the Company had borrowed  $250,000  against this line for working  capital
needs.

Based upon the  current  backlog  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.


                                       8
<PAGE>

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

Liquidity and Capital Resources (continued)

There was no  significant  impact  on the  Company's  operations  as a result of
inflation for the three months ended June 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.

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
correcetd 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.

                                       9
<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:    August 13, 1999                    By: /s/ Harold K. Fletcher
                                                ----------------------
                                                Harold K. Fletcher
                                                Chairman and President


Date:   August 13, 1999                     By:  /s/ Joseph P. Macaluso
                                                 ----------------------
                                                 Joseph P. Macaluso
                                                 Principal Accounting Officer