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 December 31, 2002

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

      Commission File No. 33-18978

                         TEL-INSTRUMENT ELECTRONICS CORP
             (Exact name of the Registrant as specified in Charter)

          New Jersey                                      22-1441806
   (State of Incorporation)                        (I.R.S. Employer ID Number)

728 Garden Street, Carlstadt, New Jersey                    07072
(Address of Principal Executive Offices)                  (Zip Code)

          Registrant's Telephone No. including Area Code: 201-933-1600

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                             Yes [X]     No [ ]

Indicate the number of shares  outstanding of the issuer's  common stock,  as of
the latest practical date:

2,135,801 shares of Common stock, $.10 par value as of February 7, 2003.


<PAGE>

                     TEL-INSTRUMENT ELECTRONICS CORPORATION

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

Item 1. Financial Statements (Unaudited):

        Condensed  Comparative Balance Sheets
          December 31, 2002 and March 31, 2002                                1

        Condensed Comparative Statements of Operations -
          Three and Nine Months Ended December 31, 2002 and 2001              2

        Condensed Comparative Statements of Cash Flows -
          Nine Months Ended December 31, 2002 and 2001                        3

        Notes to Condensed Financial Statements                             4-5

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

Item 4. Controls and Procedures                                              10

        Part II Other Information

Item 4. Submission of matters to a Vote of Security Holders                  11

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

        Signatures                                                           12

        Certifications                                                     13-14


<PAGE>

Item 1 - Financial Statements

                     TEL-INSTRUMENT ELECTRONICS CORPORATION
                      CONDENSED COMPARATIVE BALANCE SHEETS
                      December 31, 2002 and March 31, 2002

<TABLE>
<CAPTION>
ASSETS                                                            (Unaudited)
                                                               December 31, 2002      March 31, 2002
                                                               -----------------      --------------
Current assets:
<S>                                                                <C>                  <C>
  Cash                                                             $2,448,086           $1,198,191
  Accounts receivable, net of allowance for doubtful
    accounts of $36,598 at December 31, 2002 and
    March 31, 2002                                                  1,879,409              937,849
  Inventories                                                       1,809,884            2,481,680
  Prepaid expenses and other current assets                            56,200               47,956
  Deferred income tax benefit - current                               561,629              669,000
                                                                   ----------           ----------

Total current assets                                                6,755,208            5,334,676

Property, plant, and equipment, net                                   724,412              822,010
Other assets                                                           82,461               76,886
                                                                   ----------           ----------

Total assets                                                       $7,562,081           $6,233,572
                                                                   ==========           ==========

LIABILITIES & STOCKHOLDERS EQUITY

Current liabilities:
  Note payable - related party - current portion                   $  150,000           $  250,000
  Convertible subordinated notes - related party                        7,500                7,500
  Capitalized lease obligations - current portion                      63,692              108,845
  Deferred revenues                                                   592,232              518,103
  Accrued payroll, vacation pay, deferred wages,
     payroll taxes and interest on deferred wages                     463,739              399,437
  Accounts payable and accrued expenses                             1,532,484              896,710
                                                                   ----------           ----------

Total current liabilities                                           2,809,647            2,180,595

Notes payable - related party - non-current portion                   100,000              100,000
Capitalized lease obligations - excluding current portion                 --                52,183
                                                                   ----------           ----------

Total liabilities                                                   2,909,647            2,332,778

Stockholders' equity:
  Common stock                                                        213,583              213,338
  Additional paid-in capital                                        3,944,812            3,941,967
  Retained earnings (accumulated deficit)                             494,039            (254,511)
                                                                   ----------           ----------

Total stockholders' equity                                          4,652,434            3,900,794
                                                                   ----------           ----------
Total liabilities and stockholders' equity                         $7,562,081           $6,233,572
                                                                   ==========           ==========
</TABLE>

See accompanying notes to condensed financial statement.


                                       1
<PAGE>

                     TEL-INSTRUMENT ELECTRONICS CORPORATION
                 CONDENSED COMPARATIVE STATEMENTS OF OPERATIONS

                                   (Unaudited)

<TABLE>
<CAPTION>
                                               Three Months Ended               Nine Months Ended
                                         Dec. 31, 2002   Dec. 31, 2001    Dec. 31, 2002    Dec. 31, 2001
                                         -------------   -------------    -------------    -------------
Sales
<S>                                       <C>              <C>              <C>              <C>
  Government, net                         $ 2,435,114      $ 1,601,158      $7,448,690       $5,061,879
  Commercial, net                             631,689          438,195       1,450,748        1,725,645
                                          -----------      -----------      ----------       ----------
Total Sales                                 3,066,803        2,039,353       8,899,438        6,787,524

Cost of sales                               1,437,563        1,009,736       4,209,428        3,436,913
                                          -----------      -----------      ----------       ----------

Gross margin                                1,629,240        1,029,617       4,690,010        3,350,611

Operating expenses:
  Selling, general & administrative           803,872          399,761       2,167,533        1,249,656
  Engineering, research, & development        391,690          318,867       1,260,736        1,113,417
                                          -----------      -----------      ----------       ----------

Total operating expenses                    1,195,562          718,628       3,428,269        2,363,073

     Income from operations                   433,678          310,989       1,261,741          987,538

Other income (expense):
  Interest income                              17,954              968          33,743           10,296
  Interest expense                            (15,653)         (19,580)        (48,941)         (63,155)
                                          -----------      -----------      ----------       ----------

Income before taxes                           435,979          292,377       1,246,543          934,679

Provision for income taxes, net               174,173          116,806         497,993          373,405
                                          -----------      -----------      ----------       ----------

Net income                                $   261,806      $   175,571      $  748,550       $  561,274
                                          ===========      ===========      ==========       ==========

Basic and diluted income
     per common share                     $      0.12      $      0.08      $     0.35       $     0.26

Dividends per share                              None             None            None             None

Weighted average shares outstanding
     Basic                                  2,135,801        2,128,351       2,135,536        2,127,111
     Diluted                                2,159,985        2,158,264       2,158,985        2,157,024
</TABLE>

See accompanying notes to condensed financial statements.


                                       2
<PAGE>

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

<TABLE>
<CAPTION>
                                                        Nine Months Ended    Nine Months Ended
                                                        December 31, 2002    December 31,2001
                                                        -----------------    -----------------

Cash flows from operating activities
<S>                                                         <C>                  <C>
Net income                                                  $  748,550           $  561,274
Adjustments to reconcile net income to cash used
    In operating activities:
     Deferred income taxes                                     107,371              272,179
     Depreciation                                              188,135              155,335
     Reserve for obsolescence                                   45,000                  --

Changes in assets or liabilities:
   Increase in accounts receivable, net                       (941,560)            (126,550)
   Decrease (increase)  in inventories, net                    626,796             (204,154)
   (Increase) decrease in prepaid expenses
     and other current assets                                   (8,244)              19,239
   Increase in other assets                                     (5,575)             (17,447)
   Increase in deferred revenues                                74,129              821,181
   Increase (decrease) in accrued payroll,
     vacation pay, deferred wages,
     Payroll taxes and interest on deferred wages               64,302              (60,226)
   Increase (decrease) in accounts payable and
     accrued expenses                                          635,774             (573,076)
                                                            ----------           ----------
Net cash provided by operations                              1,534,678              847,755
                                                            ----------           ----------

Cash flows from investing activities:
  Cash purchases of property, plant and equipment              (90,537)            (210,660)
                                                            ----------           ----------
Net cash used in investing activities                          (90,537)            (210,660)
                                                            ----------           ----------

Cash flows from financing activities:
Proceeds from exercise of stock options                          3,090                3,256
Repayment of note payable - related party                     (100,000)                 --
Repayment of notes payable to bank                                 --              (150,000)
Repayment of capitalized lease obligations                     (97,336)             (65,683)
                                                            ----------           ----------
Net cash used in financing activities                         (194,246)            (212,427)
                                                            ----------           ----------

Net increase in cash                                         1,249,895              424,668
Cash at beginning of period                                  1,198,191              433,438
                                                            ----------           ----------
Cash at end of period                                       $2,448,086           $  858,106
                                                            ==========           ==========

Interest paid                                               $   77,243           $   43,772
                                                            ==========           ==========
Taxes paid                                                  $  428,029           $  121,676
                                                            ==========           ==========
Assets acquired through capital leases                      $      --            $   61,857
                                                            ==========           ==========
</TABLE>

See accompanying notes to condensed financial statements.


                                       3
<PAGE>

                         TEL-INSTRUMENT ELECTRONICS CORP
                     NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 1 Basis of Presentation

In the opinion of management,  the accompanying  unaudited  condensed  financial
statements  contain  all  adjustments   (consisting  only  of  normal  recurring
accruals)  necessary to present fairly the financial  position of Tel-Instrument
Electronics  Corp as of December 31,  2002,  the results of  operations  for the
three and nine  months  ended  December  31, 2002 and  December  31,  2001,  and
statements  of cash  flows  for the nine  months  ended  December  31,  2002 and
December 31, 2001.  These results are not necessarily  indicative of the results
to be expected for the full year.

The financial  statements have been prepared in accordance with the requirements
of Form 10-Q and  consequently  do not include  disclosures  normally made in an
Annual Report on Form 10-K. The March 31, 2002 results included herein have been
derived from the audited financial  statements  included in the Company's annual
report on Form 10-K.  Accordingly,  the  financial  statements  included  herein
should be  reviewed  in  conjunction  with the  financial  statements  and notes
thereto included in the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 2002.

Note 2 Accounts Receivable

The following table sets forth the components of accounts receivable:

                                      December 31, 2002      March 31, 2002
                                      -----------------      --------------

     Commercial                          $   385,263           $  238,690
     Government                            1,530,744              735,757
     Allowance for Bad Debts                 (36,598)             (36,598)
                                         -----------           ----------

     Total                               $ 1,879,409           $  937,849
                                         ===========           ==========

Note 3 Inventories

Inventories consist of:
                                      December 31, 2002      March 31, 2002
                                      -----------------      --------------

     Purchased Parts                     $  655,114            $   913,917
     Work-in-Process                      1,225,997              1,584,701
     Finished Goods                          59,086                 68,375
     Less: Reserve for Obsolescence        (130,313)               (85,313)
                                          ---------            -----------

     Total                               $1,809,884            $ 2,481,680
                                         ==========            ===========


                                       4
<PAGE>

                         TEL-INSTRUMENT ELECTRONICS CORP
                     NOTES TO CONDENSED FINANCIAL STATEMENTS

Note 4 Earnings Per Share

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

Note 5 Government and Commercial Sales

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

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

                           Three Months Ended          Three Months Ended
                           December 31, 2002            December 31, 2001
                        Government   Commercial      Government     Commercial
                        ----------   ----------      -----------   -----------
     Sales              $2,435,114   $  631,689      $ 1,601,158    $  438,195
     Cost of Sales       1,126,062      311,501          819,142       190,594
                        ----------   ----------      -----------    ----------
     Gross Margin       $1,309,052   $  320,188      $   782,016    $  247,601
                        ==========   ==========      ===========    ==========

                           Nine Months Ended            Nine Months Ended
                           December 31, 2002            December 31, 2001
                       Government    Commercial      Government    Commercial
                       ----------    ----------      ----------    ----------
     Sales              $7,448,690   $1,450,748      $ 5,061,879    $1,725,645
     Cost of Sales       3,436,478      772,950        2,648,907       788,006
                        ----------   ----------      -----------    ----------
     Gross Margin       $4,012,212   $  677,798      $ 2,412,972    $  937,639
                        ==========   ==========      ===========    ==========


                                       5
<PAGE>

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

A number of the statements made by the Company in this report may be regarded as
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation Reform Act of 1995.

Forward-looking  statements  include,  among others,  statements  concerning the
Company's outlook, pricing trends and forces within the industry, the completion
dates of capital projects,  expected sales growth, cost reduction strategies and
their  results,   long-term  goals  of  the  Company  and  other  statements  of
expectations, beliefs, future plans and strategies, anticipated events or trends
and similar expressions concerning matters that are not historical facts.

All  predictions  as to future  results  contain a measure  of  uncertainty  and
accordingly,  actual  results  could differ  materially.  Among the factors that
could cause a difference are: changes in the general economy;  changes in demand
for the Company's products or in the cost and availability of its raw materials;
the  actions of its  competitors;  the success of our  customers;  technological
change;  changes in  employee  relations;  government  regulations;  litigation,
including  its  inherent  uncertainty;  difficulties  in  plant  operations  and
materials;   transportation,   environmental   matters;   and  other  unforeseen
circumstances. A number of these factors are discussed in the Company's previous
filings with the Securities and Exchange Commission.

Critical Accounting Policies

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

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

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

Inventory reserves - inventory reserves or write-downs 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  reserves  are  adjusted  from time to time  when  actual
warranty claim experience differs from estimates.


                                       6
<PAGE>

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

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.  These  amounts  are  periodically
evaluated.  The  deferred  tax asset 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.

Overview

For the nine months ended December 31, 2002,  sales  increased 31% to $8,899,438
and net income  before taxes  increased 33% to  $1,246,543.  In the prior fiscal
year  and  in  accordance  with  Staff  Accounting  Bulletin  No.101,   "Revenue
Recognition  in  Financial  Statements"   ("SAB101"),   government  revenues  of
approximately  $578,000,  for  units  requiring  a  software  upgrade  prior  to
shipment, were deferred until the fourth quarter when the upgrade was completed.
Deliveries  of the AN/APM 480 IFF  (Identification,  Friend or Foe)  Transponder
Test Set to the U.S.  Navy  continue and  accounted for 56.3% of total sales for
the nine months  ended  December  31,  2002.  In February  2003,  the U.S.  Navy
exercised the remaining  options for approximately  $1,450,000.  The Company now
has  received  orders for all 1,300  units under the  contract.  The Company has
shipped 863 units  through  December 31, 2002 and expects  shipments  under this
contract to continue until sometime in the fourth quarter of calendar year 2003.
Government  sales remain strong  primarily as a result of the  deliveries of the
AN/APM 480 to the U.S. Navy. This program firmly  established the Company as one
of the leading suppliers in the avionics test equipment  industry,  and improved
its market position.

The current  backlog is  approximately  $7,500,000 and is expected to be shipped
within the next twelve months.

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


                                       7
<PAGE>

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

Overview (continued)

As previously  announced,  the Company strengthened its management team with the
addition  of  a  new  Chief  Operating   Officer  and  a  Director  of  Business
Development.  The Company has been active in responding to customer requests for
quotation,  in  addition to  adapting  its  product  designs to respond to these
requests.  The Company  continues  actively to pursue  opportunities in both the
commercial and government markets, both domestically and internationally.

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

Results of Operations

Sales

For the three months ended  December 31, 2002,  net sales  increased  $1,027,450
(50.4%) as compared to the three months ended December 31, 2001. In the December
31, 2001  fiscal  period and in  accordance  with of Staff  Accounting  Bulletin
No.101,  "Revenue Recognition in Financial  Statements"  ("SAB101"),  government
revenues of approximately $578,000, for units requiring a software upgrade prior
to  shipment,  were  deferred  until the fourth  quarter  when the  upgrade  was
completed. Government sales increased $833,956 (52.1%) to $2,435,114 as compared
to  $1,601,158  for the three  months ended  December 31, 2001.  The increase in
government  sales is mainly  attributed to the shipment of the AN/APM 480 to the
U.S. Navy, which accounted for 50.7% of the total sales for the current quarter.
Government sales in the third quarter also increased as a result of shipments of
the T-30D to the U.S.  Government.  Commercial sales increased  $193,494 (44.2%)
for the third quarter  ended  December 31, 2002 as compared to the third quarter
of the  previous  fiscal  year.  This  increase  is  primarily  the result of an
increase in sales of the Company's  T-49C  Transponder/TCAS  ramp test set, as a
result of a sales promotion,  and the introduction of the TR-220  Multi-Function
test set.

For the nine months  ended  December 31, 2002,  net sales  increased  $2,111,914
(31.1%) as compared to the nine months ended  December  31,  2001.  In the prior
fiscal year and in accordance with Staff Accounting  Bulletin  No.101,  "Revenue
Recognition  in  Financial  Statements"   ("SAB101"),   government  revenues  of
approximately  $578,000,  for  units  requiring  a  software  upgrade  prior  to
shipment, were deferred until the fourth quarter when the upgrade was completed.
Government  sales  increased  $2,286,811  (47.2%) to  $7,448,690  as compared to
$5,061,879  for the nine  months  ended  December  31,  2001.  The  increase  in
government  sales is mainly  attributed to the shipment of the AN/APM 480 to the
U.S.  Navy,  which  accounted  for 56.3% of the total  sales for the nine months
ended December 31, 2002.  Government sales for the nine months also increased as
a result of shipments  of the T-36M and the AN/APM 480 to  customers  other than
the U.S. Navy.  However,  these increases were partially  offset by a decline in
other government  products.  Commercial sales decreased $274,897 (15.9%) for the
nine months ended  December 31, 2002 as compared to the first nine months of the
previous fiscal year. This decrease is primarily the result of the completion of
a contract to a major freight carrier,  and the inability as yet to replace this
contract  with a new  contract  due to the  financial  difficulties  encountered
within the commercial airline industry. This decrease was partially offset by an
increase in sales of the Company's  Transponder/TCAS  ramp test set, as a result
of a sales promotion, and the introduction of the TR-220 Multi-Function test set
during the  current  quarter.  However,  the  commercial  market  remains  weak,
primarily  as a result  of the  financial  condition  of most of the  commercial
airlines.


                                       8
<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  $599,623  (58.2%) for the three  months ended
December 31, 2002 as compared to the same period last year.  This increase,  for
the most part,  is  attributed  to the increase in sales volume and, to a lesser
extent,  to production  efficiencies  obtained as a result of the higher volume.
The gross margin  percentage  for the three  months ended  December 31, 2002 was
53.1% as compared to 50.5% for the three months ended December 31, 2001.

Gross  margin  dollars  increased  $1,339,399  (40%) for the nine  months  ended
December 31, 2002 as compared to the same period last year.  This increase,  for
the most part, is attributed to the increase in sales volume,  higher prices for
limited  units of the  AN/APM  480,  and,  to a  lesser  extent,  to  production
efficiencies  obtained  as a result  of the  higher  volume.  The  gross  margin
percentage  for the nine months ended December 31, 2002 was 52.7% as compared to
49.4% for the nine months ended December 31, 2001.

Operating Expenses

Selling,  general and  administrative  expenses  increased $404,111 (101.l%) and
$917,877 (73.5%), respectively, for the three and nine months ended December 31,
2002 as compared to the three and nine months ended  December  31,  2001.  These
increases  are  attributed  to added  sales  and  marketing  activities,  higher
commission  expenses,  the addition of a Customer Support  Manager,  a new sales
representative,  and a Director of Business  Development,  including  relocation
expenses  for  the  Director  of  Business  Development.  Selling,  general  and
administrative  expenses  also  increased  as a result of higher legal and audit
fees and  investment-banking  services.  The Company also strengthened its staff
with the  addition  of a new Chief  Operating  Officer  (COO).  Fiscal year 2003
expenses  include  recruitment and relocation costs for the COO. The addition of
these  personnel will add to the Company's  expenses,  but  management  believes
these  additions  are  necessary  for the  Company  to  continue  its growth and
diversification and to provide for an orderly succession of key personnel.

Engineering,  research and development  expenses  increased  $72,823 (22.8%) and
$147,317  (13.2%) for the same  periods.  The higher  level of  expenditures  is
associated  with an increase in research and development  activities,  including
the TR-220  Multi-Function  ramp test set,  enhancements  of existing  products,
including  the T-36C,  T-47G and the T-49C,  as well as continued  effort on the
next generation of IFF test sets.

Income Taxes

Income taxes  increased  $57,367 and $124,588,  respectively,  for the three and
nine months  ended  December 31, 2002 as compared to the same periods last year.
These  increases are a result of an  improvement  in the Company's  income.  The
provision for income taxes  represents the effective  federal and state tax rate
on the  Company's  income  before  taxes.  The  Company  has used up all its net
operating loss  carryforwards and the Company will pay federal taxes this fiscal
year.


                                       9
<PAGE>

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

Liquidity and Capital Resources

At December 31, 2002 the Company had positive  working  capital of $3,945,561 as
compared to $3,154,081 at March 31, 2002. For the nine months ended December 31,
2002, cash provided by operations was $1,534,678 as compared to $847,755 for the
nine months ended  December 31, 2001.  This increase in cash from  operations is
primarily  attributable to an increase in the Company's net income,  a reduction
in inventories  resulting from an increase in sales, and an increase in accounts
payable  and  accrued  expenses  offset  partially  by an  increase  in accounts
receivable.

The  Company  increased  its line of credit to  $1,750,000  from  Fleet  Bank in
November  2002.  The line of credit  bears an  interest  rate of 0.5%  above the
lender's  prevailing  base  rate,  which  is  payable  monthly,  based  upon the
outstanding  balance.  At December  31,  2002,  the  Company had no  outstanding
balance. The line of credit is collateralized by substantially all of the assets
of the company.  The credit  facility  requires the Company to maintain  certain
financial covenants. As of December 31, 2002, the Company was in compliance with
all financial covenants. The line of credit expires at September 30, 2003.

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

There was no  significant  impact  on the  Company's  operations  as a result of
inflation for the nine months ended December 31, 2002.

These  financial  statements  should be read in  conjunction  with the Company's
Annual Report on Form 10-K to the  Securities  and Exchange  Commission  for the
fiscal year ended March 31, 2002.

Item 4. Controls and Procedures

The Company adopted  disclosure  controls and  procedures,  as called for by the
recently   adopted   legislation  and  rules  of  the  Securities  and  Exchange
Commission.  Under rules  promulgated  by the S.E.C.,  disclosure  controls  and
procedures are defined as "those controls or other procedures of the issuer that
are designed to ensure that  information  required to be disclosed by the issuer
in the reports  filed or  submitted  by it under the  Exchange  Act is recorded,
processed,  summarized  and reported,  within the time periods  specified in the
Commission's  rules and forms." The Chief  Executive  Officer and the  Principal
Accounting  Officer of the Company evaluated the Company's  disclosure  controls
and procedures at January 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  January  31,  2003,  the date of the  evaluation  by the Chief  Executive
Officer and the Principal Accounting Officer.


                                       10
<PAGE>

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

Part II Other Information

Item 4 Submission of Matters to a Vote of Security Holders

(a)   The Annual  Meeting of  Shareholders  was held on  December  12, 2002 (the
      "Annual Meeting").
(b)   Not  applicable  because  (i)  proxies  for the  Annual  Meeting  were not
      solicited pursuant to Regulation 14A under the Securities  Exchange Act of
      1934;  (ii)  there  was no  solicitation  in  opposition  to  management's
      nominees as listed in the Company's proxy statement; and (iii) all of such
      nominees were elected.
(c)   At the  Annual  Meeting,  the  Company's  shareholders  voted  in favor of
      re-electing management's nominees for election as directors of the Company
      as follows:

                                              For                 Against
                                              ---                 -------
            Harold K. Fletcher             1,513,534                 0
            George J. Leon                 1,513,534                 0
            Robert J. Melnick              1,513,534                 0
            Jeff C. O'Hara                 1,513,534                 0
            Robert H. Walker               1,513,534                 0

The shareholders also voted all 1,513,534 shares in favor of ratifying the audit
committee's  appointment  of  BDO  Seidman  LLP,  as the  Company's  independent
auditors for the fiscal year ending March 31, 2003.

(d) Not applicable

Item 6. Exhibits and Reports on Form 8-K

        a. Exhibits

           None.

        b. Reports on Form 8-K.

           Report on Form 8-KA  regarding  changes in  certifying  auditors  was
            submitted on November 20, 2002 under Item 4.

           Report on Form 8-K  regarding  changes  in  certifying  auditors  was
            submitted on November 20, 2002 under Item 4.

           Report on Form 8-K  regarding  changes  in  certifying  auditors  was
            submitted on December 11, 2002 under Item 4.


                                       11
<PAGE>

SIGNATURES
----------

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                              TEL-INSTRUMENT ELECTRONICS CORP.

Date: February 14, 2002                       By: /s/ Harold K. Fletcher
                                                  ----------------------
                                                  /s/ Harold K. Fletcher
                                                  Chairman and President


Date: February 14, 2002                       By: /s/ Joseph P. Macaluso
                                                  ----------------------
                                                  /s/ 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: February 11, 2003                               /s/ Harold K. Fletcher
                                                      ----------------------
                                                      /s/ 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: February 11, 2003                             /s/ Joseph P. Macaluso
                                                    ----------------------
                                                    /s/ Joseph P. Macaluso
                                                    Principal Accounting Officer

                                       14