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 December 30, 1995

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

                   Commission File No. 33-18978


                     TEL-INSTRUMENT ELECTRONICS CORPORATION
             (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 each of the  issuer's  classes of
common stock, as of the latest practical date:

    1,603,806 shares of Common stock, $.10 par value as of January 30, 1996.


<PAGE>

                  TEL-INSTRUMENT ELECTRONICS CORPORATION

                                TABLE OF CONTENTS

                                                                         PAGE
                                                                         ----


       Financial Statements (Unaudited)


Condensed Comparative Balance Sheets
  December 30, 1995 and March 31, 1995                                     1


Condensed Comparative Statements of Operations -
  Three and Nine Months Ended - December 30, 1995 and 1994                 2


Condensed Comparative Statements of Cash Flows -
  Nine Months Ended December 30, 1995 and 1994                           3 - 4


Notes to Condensed Financial Statements                                    5


Management's Discussion and Analysis of Financial
  Condition and Results of Operations                                    6 - 7


Signature                                                                  7


<PAGE>

                     TEL-INSTRUMENT ELECTRONICS CORPORATION

                      CONDENSED COMPARATIVE BALANCE SHEETS
                                   (Unaudited)

                      December 30, 1995 and March 31, 1995

                                                   December 30,       March 31,
                                                           1995            1995
                                                    -----------     -----------
                  ASSETS

Current assets:
  Cash                                              $    66,208          38,768
  Accounts receivable, net                              218,782         239,479
  Inventories                                           455,592         482,273
  Other current assets                                   34,464          35,103
                                                    -----------     -----------

      Total current assets                              775,046         795,623

Office and manufacturing equipment, net                  37,522          40,218
Other assets, net                                        37,727          36,601
                                                    -----------     -----------
      Total assets                                      850,295         872,442
                                                    ===========     ===========

      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Notes payable                                               0          16,667
  Accrued payroll, deferred wages
    and vacation pay                                    574,471         560,870
  Accounts payable and accrued expenses                 585,116         737,305
                                                    -----------     -----------

      Total current liabilities                       1,159,587       1,314,842

Note payable - related party                            100,000         100,000
Convertible subordinated notes                           65,000          65,000
Redeemable preferred stock                              599,143         576,643
                                                    -----------     -----------

      Total liabilities                               1,923,730       2,056,485
                                                    -----------     -----------

Stockholders' deficiency:
  Common stock                                          160,383         160,383
  Additional paid-in capital                          3,158,932       3,181,432
  Accumulated deficit                                (4,392,750)     (4,525,858)
                                                    -----------     -----------

  Total stockholders' deficiency                     (1,073,435)     (1,184,043)
                                                    -----------     -----------
  Total liabilities and stockholders'
    deficiency                                      $   850,295         872,442
                                                    ===========     ===========

See accompanying notes to condensed financial statements.


                                     -1-

<PAGE>

                     TEL-INSTRUMENT ELECTRONICS CORPORATION

                 CONDENSED COMPARATIVE STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                               Three Months Ended            Nine Months Ended
                                                   December 30,                 December 30,

                                                 1995           1994           1995           1994
                                          -----------    -----------    -----------    -----------
<S>                                       <C>                <C>            <C>            <C>    
Sales:
  Government, net                         $   216,700        127,411        818,441        243,219
  Commercial, net                             290,765        399,486        909,540      1,024,801
                                          -----------    -----------    -----------    -----------
Total sales                                   507,465        526,897      1,727,981      1,268,020

Cost of sales                                 190,690        247,341        690,598        591,572
                                          -----------    -----------    -----------    -----------
   Gross margin                               316,775        279,556      1,037,383        676,448

Operating expenses:
   Selling, general and administrative        188,755        150,336        564,553        450,662
   Engineering,research and development       107,909         74,407        287,202        221,006
                                          -----------    -----------    -----------    -----------
Total operating expenses                      296,664        224,743        851,755        671,668
                                          -----------    -----------    -----------    -----------
   Profit (loss) from operations               20,111         54,813        185,628          4,780

Other income (expenses):
   Interest income                                329              0            512              0
   Interest expense                           (17,556)       (20,858)       (53,032)       (63,480)
                                          -----------    -----------    -----------    -----------

     Net profit (loss) before
       extraordinary item                       2,882         33,955        133,108        (58,700)

     Extraordinary item                          --           18,942           --           18,942
                                          -----------    -----------    -----------    -----------

     Net profit (loss)                    $     2,882         52,897        133,108        (39,758)
                                          ===========    ===========    ===========    ===========

Net profit (loss) per common share
  before extraordinary item               $      0.00           0.02           0.08          (0.04)
                                          ===========    ===========    ===========    ===========
Net profit (loss) per common share        $      0.00           0.03           0.08          (0.02)
                                          ===========    ===========    ===========    ===========
Dividends per share                              None           None

Weighted average shares outstanding         1,603,806      1,603,806      1,603,806      1,603,806

</TABLE>

See accompanying notes to condensed financial statements.

                                       -2-


<PAGE>

                     TEL-INSTRUMENT ELECTRONICS CORPORATION

                 CONDENSED COMPARATIVE STATEMENTS OF CASH FLOWS
                                   (Unaudited)




                                                          Nine Months Ended
                                                              Dec. 30,

                                                           1995            1994
                                                    -----------     -----------
Increase (decrease) in cash:
Cash flows from operating activities:
  Cash received from customers                      $ 1,748,678       1,499,254
  Cash paid to vendors and employees                 (1,684,567)     (1,354,101)
  Interest received                                         512            --
  Interest paid                                         (10,313)        (18,063)
                                                    -----------     -----------

  Net cash provided by
   operating activities                                  54,310         127,090

Cash flows from investing activities:
  Cash purchases of property, plant and
   equipment                                            (10,203)         (7,810)
                                                    -----------     -----------

  Net cash used in investing activities                 (10,203)         (7,810)
                                                    -----------     -----------

Cash flows from financing activities:
  Repurchase of shares                                     --               (12)
  Repayment of debt                                     (16,667)        (48,000)
                                                    -----------     -----------

  Net cash used in financing activities                 (16,667)        (48,012)
                                                    -----------     -----------

Net increase (decrease) in cash                          27,440          71,268
Cash at beginning of period                              38,768          15,970
                                                    -----------     -----------

Cash at end of period                               $    66,208          87,238
                                                    ===========     ===========


See accompanying notes to condensed financial statements.


                                       -3-

<PAGE>

                     TEL-INSTRUMENT ELECTRONICS CORPORATION

            CONDENSED COMPARATIVE STATEMENTS OF CASH FLOWS, continued
                                   (Unaudited)


                                                         Nine Months Ended
                                                              Dec. 30,

                                                           1995            1994
                                                    -----------     -----------
Net profit (loss)                                   $   133,108         (39,758)
  Adjustments:
    Depreciation                                         12,899           7,403
    Gain on Extinguishment of debt                                      (18,942)

  Changes in assets and liabilities:
    Decrease in accounts receivable                      20,697          40,441
    Decrease (increase) in inventories                   26,681         (77,036)
    Decrease (increase) in other
      current assets                                        639            (367)
   (Increase) decrease in other assets                   (1,126)         30,491
   Increase in progress billings                                        167,698
   Increase in accrued payroll,
     deferred wages and vacation pay                     13,601          14,341
   (Decrease) increase in accounts payable
     and accrued expenses                              (152,189)          2,819
                                                    -----------     -----------

Net cash provided by
  operating activities                              $    54,310         129,090
                                                    ===========     ===========


Non-cash investing and financing activities:
  Redeemable preferred stock dividends
    accrued                                              22,500          22,500


See accompanying notes to condensed financial statements.


                                       -4-

<PAGE>

                     TEL-INSTRUMENT ELECTRONICS CORPORATION

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 1

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 December 30,  1995,  the results of  operations  for the
three  and nine  months  ended  December  30,  1995 and  December  30,  1994 and
statements  of cash  flows  for the nine  months  ended  December  30,  1995 and
December 30, 1994.  These results are not necessarily  indicative of the results
to be expected for the full year.

These statements  should be read in conjunction with the Company's Annual Report
to the Securities and Exchange  Commission on Form 10-K for the year ended March
31, 1995.


Note 2

Certain  reclassifications have been made to the 1995 financial statements to be
consistent with the fiscal year 1996 presentation.









                                -5-


<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION
RESULTS OF OPERATIONS


Sales

Net sales decreased $19,432 (3.7%) and increased  $459,961 (36.3%) for the three
and nine months ended December 30, 1995,  respectively,  as compared to the same
periods in the prior  fiscal  year.  The  increase  in sales for the nine months
period  is  primarily   attributed  to  the  government  segment  for  shipments
associated with contracts with the Canadian Defense Forces and the United States
Air Force.  The decrease in sales for the three month period is primarily due to
the  suspension of shipments to the United States Air Force in that period and a
weakening  in  commercial  sales.  The  uncertainty  of the  commercial  segment
continues  and  resulted  in a decline  in  commercial  sales  which  offset the
increase in government  sales.  While sales increased,  the stagnant  conditions
experienced in both the commercial airline and government segments continue.  In
fiscal year 1995 the Company was awarded an open  quantity  contract by the U.S.
Air Force in the amount of $1,679,265 of which firm orders have been received in
the amount of $1,436,260.  Shipments against this contract began in May 1995. In
July 1995, the U.S. Air Force placed a hold on further  shipments  until certain
design  specifications  have been clarified and incorporated.  An agreement with
the U.S Air Force  has been  signed  and  shipments  should  resume in the final
quarter of fiscal year 1996. A small  contract  for  $183,000 has been  received
from the U.S. Army and was shipped in the third quarter of fiscal year 1996. The
future growth and profitability  continue to be dependent on a turnaround of the
commercial  airline industry,  introduction and acceptance of new products,  and
the award of additional government contracts.


Gross Margin

Gross margin  increased  $37,219 (13.3%) and $360,935  (53.4%) for the three and
nine  months  ended  December  30,  1995,  respectively,   as  compared  to  the
corresponding  periods in the prior fiscal year.  This increase is attributed to
the higher volume, sale of higher margin products, and the additional absorption
of overhead expenses.  The gross margin percentage was 60.0% for the nine months
ended  December 30, 1995 as compared to 53.3% for the same period last year. The
higher  percentage  gross  margin is not  expected to  continue  once Tel starts
shipping the lower margin products for the Air Force contract.


Operating Expenses

Total selling, general and administrative expenses increased $38,419 (25.6%) and
$113,891  (25.3%)  for the  three  and nine  months  ended  December  30,  1995,
respectively,  as compared to the same  periods in the prior  fiscal  year.  The
increase is attributed to an increase in selling  expenses  associated  with the
addition to staff of a Director of Marketing  and  commissions  associated  with
government sales.  Engineering,  research and development expenditures increased
$33,502 (45.0%) and $66,196 (30.0%),  respectively,  for the same periods due to
increased development efforts.

The net income for the three months ended  December 30, 1995 was $2,883 or $0.00
per share as  compared  to a net  income of  $52,897  or $0.03 per share for the
three months ended December 30, 1994.

The net income for the nine months ended December 30, 1995 was $133,107 or $0.08
per share as  compared  to a net loss of $39,758 or $0.02 per share for the nine
months ended December 30, 1994.


                                -6-


<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

The working capital  deficiency  decreased $134,678 for the first nine months of
fiscal year 1996 to $384,541.  The  improvement in working  capital is primarily
due to the  improvement in operations.  The Company has been able to satisfy its
cash needs as a result of the recent  improvements in operations.  The Company's
ability to continue is dependent  upon its ability to generate  sufficient  cash
flow from operations or to obtain additional financing. Since securing financing
from traditional sources is difficult,  short term liquidity must continue to be
provided by cash generated from operations.

Management's  plans to  improve  profitability  and cash  flow are based on cost
reduction measures,  continued sales efforts,  and incremental  revenues derived
from new product developments.

Management continues to evaluate various means of restructuring and/or extending
the payment terms of the redeemable preferred stock.

There was no  significant  impact  on the  Company's  operations  as a result of
inflation for the nine months ended December 30, 1995.

These statements  should be read in conjunction with the Company's annual report
to the  Securities  and Exchange  Commission on Form 10-K for fiscal year ending
March 31, 1995.


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____________________                        Harold K. Fletcher
                                                Chairman and President






                                       -7-