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, 2003

                  __    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:

2,144,151 shares of Common stock, $.10 par value as of November 7, 2003.


<PAGE>

                     TEL-INSTRUMENT ELECTRONICS CORPORATION

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

Item 1.     Financial Statements (Unaudited):

            Condensed Comparative Balance Sheets
            September 30, 2003 and March 31, 2003                            1

            Condensed Comparative Statements of Operations -
            Three and Six Months Ended September 30, 2003 and 2003           2

            Condensed Comparative Statements of Cash Flows -
            Six Months Ended September 30, 2003 and 2002                     3

            Notes to Condensed Financial Statements                         4-6

Item 2.     Management's Discussion and Analysis of the Results of
            Operations and Financial Conditions                             7-11

Item 4.     Controls and Procedures                                         12

            Part II - Other Information

Item 6.     Exhibits and Reports on Form 8-K                                12


            Signatures                                                      12

            Certifications                                                 13-14


<PAGE>

Item 1 - Financial Statements

                     TEL-INSTRUMENT ELECTRONICS CORPORATION
                      CONDENSED COMPARATIVE BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                 (Unaudited)
   ASSETS                                                                     September 30, 2003        March 31, 2003
                                                                              ------------------        --------------
<S>                                                                                <C>                     <C>
Current assets:
  Cash and cash equivalents                                                        $1,644,478              $1,680,124
  Accounts receivable, net of allowance for doubtful
      accounts of $36,598 at September 30, 2003 and
      March 31, 2003                                                                1,881,996               1,966,815
  Inventories, net                                                                  2,352,201               2,262,147
  Prepaid expenses and other current assets                                            77,061                  42,587
  Deferred income taxes                                                               679,614                 535,448
                                                                                   ----------              ----------
Total current assets                                                                6,635,350               6,487,121
Property, plant and equipment, net                                                    708,719                 726,594
Other assets                                                                          289,918                  97,462
                                                                                   ----------              ----------
Total assets                                                                        7,633,987               7,311,177
                                                                                   ==========              ==========
LIABILITIES & STOCKHOLDERS EQUITY

Current liabilities:
  Note payable - related party - current portion                                      200,000                 200,000
  Convertible subordinated notes - related party                                        7,500                   7,500
  Capitalized lease obligations - current portion                                      28,231                  28,637
  Accounts payable                                                                    521,608                 503,216
  Deferred revenues                                                                    48,763                  51,203
  Accrued payroll, vacation pay, deferred wages
      payroll taxes and interest on deferred wages                                    485,961                 436,630
   Income taxes payable                                                                    --                 103,924
  Accrued expenses                                                                    954,438               1,001,124
                                                                                   ----------              ----------
Total current liabilities                                                           2,246,501               2,332,234

Notes payable - related party - long-term                                              50,000                  50,000
Capitalized lease obligations - long-term                                               6,989                  21,069
                                                                                   ----------              ----------
Total liabilities                                                                   2,303,490               2,403,303

Commitments and contingencies                                                              --                      --

Stockholders' equity:
   Common stock                                                                       214,418                 213,583
   Additional paid-in capital                                                       3,960,890               3,944,812
   Retained earnings                                                                1,155,189                 749,479
                                                                                   ----------              ----------
Total stockholders' equity                                                          5,330,497               4,907,874
                                                                                   ----------              ----------

Total liabilities and stockholders' equity                                         $7,633,987              $7,311,177
                                                                                   ==========              ==========
</TABLE>

See accompanying notes to condensed financial statements


                                      -1-
<PAGE>

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

<TABLE>
<CAPTION>
                                                        Three Months Ended                      Six Months Ended
                                                Sept. 30, 2003     Sept. 30, 2002     Sept. 30, 2003     Sept. 30, 2002
                                                --------------     --------------     --------------     --------------
<S>                                               <C>                <C>                <C>                <C>
Sales
  Government, net                                 $ 1,762,767        $ 2,608,868        $ 3,632,256        $ 5,013,576
  Commercial, net                                     853,949            374,034          2,042,366            819,059
                                                  -----------        -----------        -----------        -----------
Total Sales                                         2,616,716          2,982,902          5,674,622          5,832,635

Cost of sales                                       1,192,809          1,386,582          2,479,331          2,771,865
                                                  -----------        -----------        -----------        -----------
Gross Margin                                        1,423,907          1,596,320          3,195,291          3,060,770

Operating expenses
  Selling, general & administrative                   714,591            790,593          1,449,590          1,363,661
  Engineering, research, & development                500,138            417,319          1,068,048            869,046
                                                  -----------        -----------        -----------        -----------
Total operating expenses                            1,214,729          1,207,912          2,517,638          2,232,707
                                                  -----------        -----------        -----------        -----------

     Income from operations                           209,178            388,408            677,653            828,063

Other income (expense):
  Interest income                                       5,188              9,313             15,910             15,789
  Interest expense                                     (8,957)           (15,880)           (17,942)           (33,288)
                                                  -----------        -----------        -----------        -----------
Income before taxes                                   205,409            381,841            675,621            810,564

Provision for income taxes                             81,642            152,544            269,911            323,820
                                                  -----------        -----------        -----------        -----------
Net income                                        $   123,767        $   229,297        $   405,710        $   486,744
                                                  ===========        ===========        ===========        ===========

     Basic income per common share                $      0.06        $      0.11        $      0.19        $      0.23
                                                  ===========        ===========        ===========        ===========
     Diluted income per common share              $      0.06        $      0.11        $      0.18        $      0.23
                                                  ===========        ===========        ===========        ===========

Dividends per share                                      None               None               None               None

Weighted average shares outstanding
     Basic                                          2,143,776          2,135,776          2,140,930          2,135,422
     Diluted                                        2,202,281          2,162,386          2,199,435          2,162,032
</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, 2003          Sept. 30, 2002
                                                                                --------------          --------------
<S>                                                                               <C>                    <C>
Cash flows from operating activities:
Net income                                                                        $   405,710            $   486,744
Adjustments to reconcile net income to net cash provided
    by operating activities:
    Deferred income taxes                                                            (144,166)               175,870
     Depreciation and amortization                                                    129,270                107,009
Changes in operating assets or liabilities:
  Decrease (increase) in accounts receivable, net                                      84,819               (451,660)
  (Increase) decrease in inventories, net                                             (90,054)               730,577
  (Increase) decrease in prepaid exp. & other current assets                          (34,474)                 7,152
  (Increase) decrease in other assets                                                (192,456)                 5,237
  Increase in accounts payable                                                         18,392                104,684
  (Decrease) increase in deferred revenues                                             (2,440)                53,334
  Increase  in accrued payroll, vacation pay, deferred
     wages, and payroll taxes                                                          49,331                119,822
  Decrease in income taxes payable                                                   (103,924)                    --
  (Decrease) increase in accrued expenses                                             (46,686)               189,801
                                                                                  -----------            -----------

Net cash provided by operating activities                                              73,322              1,528,570
                                                                                  -----------            -----------
Cash flows from investing activities:
  Cash purchases of property, plant and equipment                                    (111,395)               (52,956)
                                                                                  -----------            -----------
Net cash used in investing activities                                                (111,395)               (52,956)
                                                                                  -----------            -----------
Cash flows from financing activities:
  Proceeds from exercise of stock options                                              16,913                  3,090
  Repayment of capitalized lease obligations                                          (14,486)               (67,580)
                                                                                  -----------            -----------
  Net cash used in financing activities                                                 2,427                (64,490)
                                                                                  -----------            -----------

Net (decrease) increase in cash and cash equivalents                                  (35,646)             1,411,124
Cash and cash equivalents at beginning of period                                    1,680,124              1,198,191
                                                                                  -----------            -----------
Cash and cash equivalents at end of period                                        $ 1,644,478            $ 2,609,315
                                                                                  ===========            ===========

Supplemental information
     Interest paid                                                                $    23,269            $    16,515
                                                                                  ===========            ===========
     Income taxes paid                                                            $   518,000            $   138,737
                                                                                  ===========            ===========
</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, 2003,  the results of  operations  for the
three and six months  ended  September  30, 2003 and  September  30,  2002,  and
statements  of cash  flows  for the six  months  ended  September  30,  2003 and
September 30, 2002. 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, 2003 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, 2003.

Note 2 Accounts Receivable, net

Accounts receivable, net consist of:

                                       September 30, 2003         March 31, 2003

            Commercial                    $   829,987              $   555,076
            Government                      1,088,607                1,448,337
            Allowance for bad debts           (36,598)                 (36,598)
                                          -----------              -----------
            Total                         $ 1,881,966              $ 1,966,815
                                          ===========              ===========

Note 3 Inventories, net

Inventories, net consist of:
                                            September 30, 2003    March 31, 2003

            Purchased parts                    $   781,964         $ 1,074,442
            Work-in-process                      1,624,507           1,289,578
            Finished goods                          83,543              10,940
            Less:  Reserve for obsolescence       (137,813)           (112,813)
                                               -----------         -----------
            Total                              $ 2,352,201         $ 2,262,147
                                               ===========         ===========



                                      -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 Stock Options

The Company accounts for its stock option plan in accordance with the provisions
of Accounting  Principles  Board ("APB")  Opinion No. 25,  "Accounting for Stock
Issued to Employees," and related  interpretations.  The Company has adopted the
disclosure  only provisions of Statement of Financial  Accounting  Standards No.
123 and 148,  "Accounting  for Stock-Based  Compensation"  ("SFAS 123 and 148").
Under SFAS 123 and 148 the Company  provides  pro forma net income and pro forma
earnings  per share  disclosures  for employee  stock  option  grants made since
fiscal  1996 as if the  fair-value-based  method as  defined in SFAS No. 123 has
been applied.  The Company currently does not plan to adopt the fair value based
method prescribed by SFAS 123.

The  Company  estimates  the fair value of each option  using the Black  Scholes
option-pricing model with the following weighted-average  assumptions:  expected
dividend yield of 0.0%, risk-free interest rate of 3.5, volatility at 50% and an
expected life of 5 years. Had the Company determined  compensation cost based on
the fair  market  value at the grant date for its stock  options  under SFAS No.
123, the pro forma amounts are indicated below:

<TABLE>
<CAPTION>
                                                                     Six Months Ended      Six Months Ended
                                                                    September 30, 2003    September 30, 2002
                                                                    ------------------    ------------------
<S>                                                                    <C>                   <C>
            Net income  - as reported                                  $   405,710           $   486,744
            Less fair value of stock options                               (38,507)              (37,929)
                                                                       -----------           -----------
            Net income - pro forma                                         367,203               448,815
                                                                       ===========           ===========

            Basic earnings per share - as reported                          0.19                  0.23
            Basic earnings per share - pro forma                            0.17                  0.21

            Diluted earnings per share - as reported                        0.18                  0.23
            Diluted earnings  per share - pro forma                         0.17                  0.21
</TABLE>


                                      -5-
<PAGE>

                        TEL-INSTRUMENT ELECTRONICS CORP.

               NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)

Note 6 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 avionic 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, 2003                    September 30, 2002

                                      Government         Commercial         Government        Commercial
                                      ----------         ----------         ----------        ----------
<S>                                   <C>                  <C>              <C>                 <C>
            Sales                     $1,762,767           $853,949         $2,608,868          $374,034
            Cost of Sales                748,719            444,090          1,176,531           210,051
                                      ----------           --------         ----------          --------
            Gross Margin              $1,014,046           $409,859         $1,432,337          $163,983
                                      ==========           ========         ==========          ========

<CAPTION>
                                           Three Months Ended                    Three Months Ended
                                           September 30, 2003                    September 30, 2002

                                      Government         Commercial         Government        Commercial
                                      ----------         ----------         ----------        ----------
<S>                                   <C>                  <C>              <C>                 <C>
            Sales                     $3,632,256         $2,042,366         $5,013,576         $819,059
            Cost of Sales              1,475,645          1,003,686          2,310,416          461,449
                                      ----------         ----------         ----------         --------
            Gross Margin              $2,156,611         $1,039,000         $2,703,160         $357,610
                                      ==========         ==========         ==========         ========
</TABLE>


                                      -6-
<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.


                                      -7-
<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

Sales for the three and six months ended  September 30, 2003  declined  $366,186
(12.3%) and $158,013 (2.7%),  as compared to the same periods in the last fiscal
year. The decrease in sales is primarily  attributed to the reduced shipments of
the AN/APM-480 to the U.S.  Navy.  Deliveries of the  AN/APM-480  continue,  but
accounted for only 32.7% and 30.0% of total sales,  respectively,  for the three
and six  months  ended  September  30,  2003,  as  compared  to 64.9% and 59.3%,
respectively,  for the same periods in the prior fiscal  year.  The Company,  in
agreement with the U.S. Navy, has  temporarily  decreased the number of units it
is  currently  shipping  in  anticipation  of these  units  being  returned  for
up-grades  and  enhancements.  The total number of units under  contract has not
changed.  The Company anticipates an improvement in sales during the second half
of the current fiscal year.

The introduction of the TR-220 Multi-Function test set, a sales promotion of the
T-49C Transponder/TCAS test set, and additional sales of Precision DME test sets
partially  offset these lower shipments.  Investment in new product  development
continues as these expenses  increased  19.8% and 22.9%,  respectively,  for the
three and six months ended September 30, 2003, as compared to the previous year.
Research and  development  activities  include the next  generation  of IFF test
sets, developing a foundation technology for future products,  and incorporating
other product enhancements. The Company has also begun work on a bench test set,
which will be a new market and a diversification opportunity for the Company.

The Company has signed a non-binding  letter of intent to acquire privately held
Innerspace Technology,  Inc. (ITI) of Waldwick, NJ. ITI has been in business for
over 30 years designing,  manufacturing  and distributing a variety of shipboard
and   underwater   instruments   to   support   hydrographers,   oceanographers,
researchers,  engineers,  geophysicists,  and surveyors worldwide. ITI has total
annual  sales of  approximately  $1  million  dollars,  and the letter of intent
provides  for a  purchase  price of  $547,000,  options to  purchase  25,000 TEL
shares, and employment arrangements for the two principals, subject to the


                                      -8-
<PAGE>

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

Results of Operations (continued)

Overview (continued)

Company's satisfactory completion of its due diligence investigation, completion
of a definitive  acquisition  agreement,  and approval of the Company's Board of
Directors.  The  Company  hopes to  significantly  increase  the  sales of ITI's
products  by  expanding   distribution  and  enhancing   marketing  and  product
development.  Mr. Harold K. Fletcher,  CEO of Tel-Instrument,  said, "This is an
important first step in the Company's  diversification  program.  We are excited
about this opportunity to penetrate a market outside of our traditional  market.
Together, Tel and ITI will be a strong team." Semaphore Capital Advisors, LLC of
Stamford, CT, advised the Company on this transaction.

The  Company  continues  to  actively  pursue  other  opportunities  in both the
commercial and government markets, both domestically and internationally.

Sales

For the six months  ended  September  30,  2003,  net sales  decreased  $158,013
(2.7%), as compared to the six months ended September 30, 2002. Government sales
decreased  $1,381,320  (27.6%) for the six months  ended  September  30, 2003 as
compared to the six months ended  September  30, 2002.  The decrease in sales is
primarily  attributed  to the reduced  shipments of the  AN/APM-480  to the U.S.
Navy.  Deliveries of the  AN/APM-480  continue,  but accounted for only 30.0% of
total sales for the six months ended  September 30, 2003, as compared  59.3% for
the same period in the prior fiscal year.  The  Company,  in agreement  with the
U.S.  Navy,  has  temporarily  decreased  the  number  of units it is  currently
shipping in  anticipation  of these  units  being  returned  for  up-grades  and
enhancements.  The total number of units under  contract  has not changed.  This
decrease was  partially  offset by an increase in the shipment of Precision  DME
test sets.  Commercial  sales increased  $1,223,307  (149.4%) for the six months
ended  September  30,  2003 as  compared  to the  same  period  last  year.  The
introduction of the TR-220  Multi-Function test set and a sales promotion of the
T-49C  Transponder/TCAS  test set  accounted  for this  increase.  However,  the
commercial  market  remains  weak,  primarily as a result of the weak  financial
position of most commercial airlines.

For the three months ended  September  30, 2003,  net sales  decreased  $366,186
(12.3%),  as compared to the three months ended  September 30, 2002.  Government
sales decreased  $846,101  (32.4%) for the three months ended September 30, 2003
as compared to the three months ended  September 30, 2002. The decrease in sales
is primarily  attributed to the reduced  shipments of the AN/APM-480 to the U.S.
Navy as discussed above. Sales of other government  products also declined,  but
were partially offset by an increase in the shipment of Precision DME test sets.
Commercial  sales  increased  $479,915  (128.3%)  for  the  three  months  ended
September 30, 2003 as compared to the same period last year. The introduction of
the TR-220 Multi-Function test set accounted for most of this increase.


                                      -9-
<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  dollars  increased  $134,521  (4.4%)  for  the six  months  ended
September 30, 2003, as compared to the same period in the prior fiscal year. The
increase  in  gross  margin,  for the  most  part,  is  attributed  to  improved
production  efficiencies,  lower  warranty  costs and higher  margins on certain
products,  partially offset by lower volume. The gross margin percentage for the
six months ended  September  30, 2003 was 56.3% as compared to 52.5% for the six
months ended September 30, 2002.

Gross  margin  dollars  decreased  $172,413  (10.8%) for the three  months ended
September  30,  2003,  as compared to the same period in the prior  fiscal year.
This  decrease in gross  margin,  for the most part,  is attributed to the lower
sales volume.  The gross margin  percentage for the three months ended September
30, 2003 was 54.4% as compared to 53.5% for the three months ended September 30,
2002

Operating Expenses

Selling,  general and  administrative  expenses increased $85,929 (6.3%) for the
six  months  ended  September  30,  2003 as  compared  to the six  months  ended
September  30, 2002. An increase in legal fees  associated  with an appeal of an
award of a  significant  contract  by the U.S.  Army to another  contractor,  an
increase in  administrative  salaries and  consulting  fees,  and an increase in
sales and marketing activities was partially offset by lower selling commissions
and relocation expenses.

Selling,  general and  administrative  expenses decreased $76,002 (9.6%) for the
three  months  ended  September  30, 2003 as compared to the three  months ended
September  30, 2002.  Lower  relocation  expenses for new  employees and selling
commissions was partially offset by an increase in  administrative  salaries and
consulting fees.

Engineering,  research and development  expenses  increased  $82,819 (19.8%) and
$199,002 (22.9%), respectively, for the three and six months ended September 30,
2003, as compared to same periods in the prior fiscal year.  The higher level of
expenditures  is  associated  with  an  increase  in  research  and  development
activities,  including  the next  generation  of IFF  test  sets,  developing  a
foundation  technology  for future  products,  and  incorporating  other product
enhancements. The Company has also begun work on a bench test set, which will be
a new market and diversification opportunity for the Company.

Income Taxes

Income taxes decreased $70,902, and $53,909, respectively, for the three and six
months ended  September  30, 2003 as compared to the same periods last year as a
result of the lower  profit.  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.


                                      -10-
<PAGE>

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

Liquidity and Capital Resources

At September 30, 2003 the Company had positive  working capital of $4,388,849 as
compared to $4,154,887 at March 31, 2003. For the six months ended September 30,
2003,  cash provided by operations was $73,322 as compared to $1,528,570 for the
six months ended  September 30, 2002.  This decrease in cash from  operations is
primarily  attributable  to an  increase  in  inventories,  an increase in other
assets,  a decrease in accrued expenses and payment of income taxes partially by
a decrease  in accounts  receivable.  Cash  declined  $35,646 for the six months
ended September 30, 2003 due primarily to payment of income taxes,  purchases of
capital equipment and an increase in other assets.

The Company has a line of credit of  $1,750,000  from Fleet  Bank..  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,
2003,  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  expired at September 30, 2003 and the Company has received a
commitment from the bank to renew this line for another year.

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 in the
event the cash is needed for an  acquisition.  Some of this cash will be used to
purchase Innerspace Technology, Inc. (see above).

There was no  significant  impact  on the  Company's  operations  as a result of
inflation for the six months ended September 30, 2003.

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, 2003.


                                      -11-
<PAGE>

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, 2003, 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,  2003,  the date of the  evaluation  by the Chief  Executive
Officer and the Principal Accounting Officer.

Item 6. Exhibits and Reports on Form 8-K

            a.    Exhibits

                  Press Release Dated November 12, 2003.

            b.    Reports on Form 8-K.

                  None.

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, 2003                         By: /s/ Harold K. Fletcher
                                                    ----------------------
                                                        Harold K. Fletcher
                                                        Chairman and President

Date: November 14, 2003                         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 14, 2003                               /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 14, 2003                             /s/ Joseph P. Macaluso
                                                    ----------------------
                                                    Joseph P. Macaluso
                                                    Principal Accounting Officer


                                      -14-