Re:
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Tel-Instrument Electronics Corp
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Form 10-K for the fiscal year ended March 31, 2011
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Filed June 29, 2011
File Ni. 001-031990
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1.
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We note your response to prior comment 5 that you believe use of the most recent 12 months volatility (i.e., for the period April 1, 2010 through March 31, 2011) to be most representative of your future performance due to the major program wins over the last few years and also that “over the last year [your] stock activity has been relatively stable.” We note from your response to prior comment 5 in your letter dated June 28, 2011 that you provided the same rationale in explaining your use of the volatility for the 12 month period from January 1, 2010 through December 31, 2010 for purposes of your December 31, 2010 valuation. It remains unclear to us how your current volatility assumptions are consistent with the guidance in paragraphs 718-10-55-36 through 41 of the FASB Accounting Standards Codification.. Please explain to us why you no longer believe your volatility during the period from January 1, 2010 through March 31, 2010 is representative of your future performance. Explain why your assessment of this period has changed from your December 31, 2010 valuation. Further to the above, please explain why you believe the most recent 12 months will be most representative of your performance over the expected term of the related instrument (8.45 years).
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2.
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We note your response to prior comment 3. Please revise future filings to quantify the effect of volatility assumptions on your warrant liability and change in fair value of common stock warrants. In this regard, provide appropriate disclosures so as to not make such information confusing.
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