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, 1997

          ___       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:

2,035,181 shares of Common stock, $.10 par value as of August 4, 1997.

<PAGE>

                     TEL-INSTRUMENT ELECTRONICS CORPORATION

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
Item 1.  Financial Statements (Unaudited):

         Condensed Comparative Balance Sheets
           June 30, 1997 and March 31, 1997                                 1

         Condensed Comparative Statements of Operations -
           Three Months Ended June 30, 1997 and 1996                        2

         Condensed Comparative Statements of Cash Flows -
           Three Months Ended June 30, 1997 and 1996                        3

         Notes to Condensed Financial Statements                            4

Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations                              5-7

         SIGNATURES                                                         7

<PAGE>

Item 1 - Financial Statements

                     TEL-INSTRUMENT ELECTRONICS CORPORATION
                      CONDENSED COMPARATIVE BALANCE SHEETS
                        June 30, 1997 and March 31, 1997

                                                     (Unaudited)    (Unaudited)
                              ASSETS                   June 30,      March 31,
                                                         1997          1997
                                                     -----------    -----------
Current assets:
  Cash                                               $   328,480        528,636
  Accounts receivable, net of allowance for
  doubtful accounts of $65,521 at June 30, 1997 
  and March 31, 1997, respectfully                       506,306        302,737
  Inventories                                            453,204        352,173
  Other current assets                                     6,521          6,944
  Deferred income tax benefit - current                   78,300         78,300
                                                     -----------    -----------

      Total current assets                             1,372,811      1,268,790

Office and manufacturing equipment, net                   42,521         45,492
Other assets, net                                         71,884         71,884
Deferred income tax benefit                              203,561        261,900
                                                     -----------    -----------
      Total assets                                     1,690,777      1,648,066
                                                     ===========    ===========

      LIABILITIES AND STOCKHOLDER'S EQUITY

Current liabilities:
   Accrued payroll, deferred wages and vacation pay      347,746        342,432
   Accounts payable and accrued expenses                 435,049        485,380
                                                     -----------    -----------

      Total current liabilities                          782,795        827,812

Convertible subordinated notes - related parties         365,000        365,000
                                                     -----------    -----------
      Total liabilities                                1,147,795      1,192,812
                                                     ===========    ===========
Stockholders' equity:
   Common stock                                          203,097        203,097
   Additional paid-in capital                          3,901,052      3,901,052
   Accumulated deficit                                (3,561,167)    (3,648,895)
                                                     -----------    -----------

   Total stockholders' equity                            542,982        455,254
                                                     -----------    -----------
   Total liabilities and stockholders' equity        $ 1,690,777      1,648,066
                                                     ===========    ===========

See accompanying notes to condensed financial statements


                                       1
<PAGE>

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

                                                        Three Months Ended
                                                              June 30,
                                                        1997          1996    
                                                   -----------    ----------- 
Sales:                                                            
  Government, net                                  $   557,514        431,039 
  Commercial, net                                      313,309        202,568 
                                                   -----------    ----------- 
Total sales                                            870,823        633,607 
                                                                  
Cost of sales                                          336,220        279,594 
                                                   -----------    ----------- 
     Gross margin                                      534,603        354,013 
                                                                  
Operating expenses:                                               
  Selling, general and administrative                  218,930        215,365 
  Engineering,research and development                 157,945        111,251 
                                                   -----------    ----------- 
Total operating expenses                               376,875        326,616 
                                                   -----------    ----------- 
     Profit from operations                            157,728         27,397 
                                                                  
Other income (expenses):                                          
  Interest income                                        6,082            225 
  Interest expense                                     (17,743)       (16,886)
                                                   -----------    ----------- 
                                                                 
Income before incomes                                  146,067         10,736 

Provision for income taxes                              58,339           --
                                                   -----------    ----------- 

Net income                                              87,728         10,736
                                                   ===========    =========== 

Net income per common share                        $      0.04           0.01 
                                                   ===========    =========== 
Dividends per share                                       None           None 
                                                                  
Weighted average shares outstanding                  2,091,071      1,603,806 
                                                                  
See accompanying notes to condensed financial statements


                                        2
<PAGE>

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

<TABLE>
<CAPTION>
                                                                    Three Months Ended
                                                                         June 30,
                                                                    1997         1996
                                                                  ---------    ---------
<S>                                                               <C>             <C>   
Increase (decrease) in cash:
Cash flows from operating activities
Net income                                                        $  87,728       10,736
Adjustments to reconcile net income to cash
    provided by operating activities:
     Deferred income taxes                                           58,339         --
     Depreciation                                                     6,614        5,461
                               
Changes in assets and liabilities:
   (Increase) decrease in accounts receivable                      (203,569)       8,249
   (Increase) decrease in inventories                              (101,031)      10,766
   Decrease in other current assets                                     423        2,081
   (Increase) decrease in other assets                                 --           --
   (Increase (decrease) in accrued payroll, deferred wages
       and vacation pay                                               5,314         (279)
   (Decrease) increase in accounts payable and accrued expenses     (50,331)      62,358
                                                                  ---------    ---------
Net cash (used in) provided by operations                          (196,513)      99,372
                                                                  ---------    ---------
Cash flows from investing activities:
   Cash purchases of property, plant and equipment                   (3,643)      (5,619)
                                                                  ---------    ---------

Net cash used in investing activities                                (3,643)      (5,619)
                                                                  ---------    ---------
Cash flows from financing activities:
   Repayment of debt                                                   --           --
                                                                  ---------    ---------
   Net cash used in financing activities                               --           --
                                                                  ---------    ---------

Net (decrease) increase in cash                                    (200,156)      93,753
Cash at beginning of period                                         528,636       22,625
                                                                  ---------    ---------

Cash at end of period                                             $ 328,480      116,378
                                                                  =========    =========
</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, 1997,  the results of operations for the three
months ended June 30, 1997 and June 30, 1996,  and  statements of cash flows for
the three months ended June 30, 1997 and June 30,  1996.  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, 1997 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, 1997.

Note 2  Inventories
                              
Inventories consist of:
                                                       June 30,        March 31,
                                                          1997             1997
                                                    ----------------------------
             Purchased parts                          $230,915       $  213,842
             Work-in-process                           290,594          206,750
             Less: Reserve for obsolescence            (68,305)         (68,419)
                                                    ----------------------------
                                                      $453,204       $  352,173
                                                    ============================

Note 3    Reclassifications

Certain  reclassifications  have been  made to the  fiscal  year 1997  financial
statements to be consistent with the fiscal year 1998 presentation.

Note 4    Income Taxes

At March 31,  1997,  the  Company,  in  accordance  with FASB 109,  reduced  the
valuation  allowance and  recognized a deferred  income tax benefit of $340,200.
The  recognized   deferred  income  tax  benefit  is  based  upon  the  expected
utilization of net operating loss  carryforwards  as the Company  believes it is
more likely than not that it will realize a portion of its net operating  losses
before  they  expire.  For the three  months  ended June 30,  1997,  the Company
recorded a provision for income taxes of $58,339, which represents the effective
federal and state tax rate on the Company's net income before taxes of $146,067.
The Company has no tax  liability.  The $58,339  reduced the Company's  deferred
income tax  benefit  at June 30,  1997 and such  amounts  are  reflected  in the
accompanying  balance  sheet.  This  amount  represents  a  portion  of the  net
operating loss tax benefit that the Company previously  recognized for financial
statement reporting purposes and expects to utilize for tax reporting purposes.


                                       4
<PAGE>

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

Results of Operations

Sales

For the three months ended June 30, 1997 net sales increased $237,216 (37.4%) as
compared to the three months ended June 30, 1996.  Sales  increased for both the
government and commercial segments.  Government sales increased $126,475 (29.3%)
related  to a  contract  with the  USAF.  Although  commercial  sales  increased
$110,741  (54.7%),  the Company  does not expect  this to  continue  because the
commercial market remains uncertain.  The Company continues to focus its efforts
in the government market and has been very active in responding to requests from
the U.S.  Government  and has been  adapting  its product  designs to respond to
these requests.

During the first quarter of Fiscal 1998, the Company identified technical issues
with one of its products  scheduled to be delivered during the second quarter of
Fiscal 1998. The Company has corrected such technical  issues,  however,  second
quarter  production  and resulting  shipments may be delayed.  Accordingly,  the
Company believes that its second quarter results may be adversely affected.

On August 12, 1997 the Company also  received  notice that it had been awarded a
major  contract from the U.S. Navy. The initial order is for $949,324 to provide
5 T-47M IFF test sets for Navy evaluation and for associated documentation. This
work, to be completed  within the next 12 months,  represents a major  milestone
for the Company since it could be a source of significant  future revenues.  The
contract  includes  options for up to 1,300  units  which the Navy can  exercise
through  the year 2001.  There is no  assurance  that they will  exercise  these
options.

The  Company  continues  to explore  expanding  into  other  markets in order to
capitalize on its test equipment technology.  However, there can be no assurance
that the Company will be successful in its efforts.

Gross Margin

Gross margin increased  $180,590 (51.0%),  as compared to the same period in the
prior  fiscal  year.  Gross margin as a percent of sales was 61.4% for the three
months ended June 30, 1997, as compared to 55.9% for the three months ended June
30, 1996.  The higher gross  margin is primarily  attributed  to the increase in
sales  volume  and a shift in  product  mix which  included  a higher  volume of
commercial sales.  There were no significant price increases for the first three
months of fiscal year 1998.  The Company does not expect to maintain this higher
gross margin  percentage due to the higher mix of lower margin  government sales
expected to be shipped during the remainder of the current fiscal year.

Operating Expenses

Selling,  general and  administrative  expenses  increased $3,565 (1.7%) for the
three  months  ended June 30 , 1997 as  compared  to the same  period last year.
Increases in  commissions  associated  with the higher  government  sales and in
expenses incurred related to the Company's efforts to explore additional markets
were  partially  offset by lower  selling  expenses.  Engineering,  research and
development   expenses   increased  $46,694  (42.0%)  reflecting  the  Company's
commitment and efforts to develop new products.


                                       5
<PAGE>

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

Results of Operations (continued)

Interest

Interest income increased as a result of the Company's higher cash balances..

Income Before Taxes

Income  before  taxes  increased to $146,067 for the three months ended June 30,
1997, as compared to $10,736 for the three months ended June 30, 1996.

Provision for Income Taxes

A provision  for income taxes was not  recognized in the prior fiscal year first
quarter  because the Company  applied a full valuation  allowance.  At March 31,
1997, the Company reduced the valuation allowance and recognized deferred income
taxes.  For the three  months  ended June 30, 1997 the  Company  has  recorded a
provision for income taxes utilizing the estimated  effective  Federal and State
income tax rates for fiscal 1998.

Net Income

Net income for the three  months  ended June 30,  1997 was  $87,728 or $0.04 per
share, as compared to $10,736 or $0.01 per share for the three months ended June
30, 1996. The improvement in net income per common share was partially offset by
the increase in the number of shares outstanding.

Liquidity and Capital Resources

At June 30,  1997 the  Company  had  positive  working  capital of  $590,016  as
compared to $440,978 at March 31, 1997. As such the Company's liquidity position
continues to improve.  The Company's net worth increased to $542,982 at June 30,
1997,  as compared  to  $455,254 at March 31, 1997 as a result of the  Company's
continued profitability.  For the three months ended June 30, 1997, cash used in
operations  was $196,513 as compared to cash  provided by  operations of $99,372
for the three  months  ended June 30, 1997.  This  decrease in cash  provided by
operations is primarily a result of an increase in accounts receivable for items
shipped late in the quarter,  an increase in inventories  associated with orders
to be shipped in the current fiscal year, and a decrease in accounts payable and
accrued expenses.

The Company continues to explore  opportunities to improve its profitability and
cash flow. Based upon the current backlog and cash on hand, the Company believes
that it should have  sufficient  working  capital to fund its plans for the next
year.  At present,  the Company does not expect to incur  significant  long-term
needs for capital outside of its normal operating activities.

There was no  significant  impact  on the  Company's  operations  as a result of
inflation for the three months ended June 30, 1997.

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, 1997.


                                       6
<PAGE>

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

Recent Pronouncements

In June 1997 the  Financial  Accounting  Standards  Board  issued  SFAS No. 130,
"Reporting  Comprehensive  Income".  SFAS No. 130  establishes the standards for
reporting and  displaying  comprehensive  income and its  components  (revenues,
expenses, gains, and losses) as part of a full set of financial statements. This
statement  requires that all elements of  comprehensive  income be reported in a
financial  statement  that is  displayed  with  the  same  prominence  as  other
financial  statements.  The  statement is effective  for fiscal years  beginning
after December 15, 1997. For this company,  this means the standard is effective
April  1,  1998.  Since  this  standard  applies  only  to the  presentation  of
comprehensive  income,  it will not have any impact on the Company's  results of
operations, financial position or cash flows.

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:    9 August 1997                By: /s/ Harold K. Fletcher
         -------------                   -----------------------------
                                         /s/ Harold K. Fletcher
                                         Chairman and President