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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10K



(Mark One)



[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934 (Fee Required)

For the fiscal year ended April 30, 1995

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF

THE SECURITIES EXCHANGE ACT OF 1934 (No Fee Required)    

For the transition period from         to        



Commission File No. 1-8061                       



			      FREQUENCY ELECTRONICS, INC.       

(Exact name of Registrant as specified in its charter)



	  Delaware                                11-1986657    

(State or other jurisdiction of         (I.R.S. Employer Identification

No.) incorporation or organization)





55 CHARLES LINDBERGH BLVD., MITCHEL FIELD, N.Y.      11553           



(Address of principal executive offices)           (Zip Code)                





Registrant's telephone number, including area code: 516-794-4500



Securities registered pursuant to Section 12 (b) of the Act:







					 Name of each exchange on 

Title of each class                       which registered    



Common Stock (par value                 American Stock Exchange, Inc.

$1.00 per share)



Securities registered pursuant to Section 12 (g) of the Act:



None



(Title of Class)



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 by check mark if disclosure of delinquent filers

pursuant to Item 405 of Regulation S-K is not contained herein,

and will not be contained, to the best of registrant's

knowledge, in definitive proxy or information statements

incorporated by reference in Part III of this Form 10-K or any

amendment to this Form 10-K.  [X]



 The aggregate market value of voting stock held by

non-affiliates of the Registrant as of June 30,1995 - $13,114,800.



   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)



 The number of shares outstanding of Registrant's Common

Stock, par value $1.00 as of June 30,1995 - 5,031,995.



DOCUMENTS INCORPORATED BY REFERENCE:  PART III incorporates

information by reference from the definitive proxy statement for

the Annual Meeting of Stockholders to be held on October 10,1995.







(Cover Page 1 of 71 pages)

Exhibit Index at Page 61

PART I



Item 1.  Business



GENERAL DISCUSSION



Frequency Electronics, Inc. (sometimes referred to as

"Registrant", "Frequency Electronics" or "Company") was founded

in 1961 as a research and development firm in the area of time

and frequency control. Unless the context indicates otherwise,

references to the Registrant are to Frequency Electronics, Inc.

and its subsidiaries.



Frequency Electronics was incorporated in Delaware in 1968 and

became the successor to the business of Frequency Electronics,

Inc., a New York corporation, organized in 1961. The principal

executive office of Frequency Electronics is located at 55

Charles Lindbergh Boulevard, Mitchel Field, New York 11553. Its

telephone number is 516-794-4500.



The current authorized capital of the Registrant consists of

20,000,000 shares of $1.00 par value common stock, of which

5,041,995 shares were outstanding at April 30, 1995, and 600,000

shares of $1.00 par value preferred stock, none of which have

been issued to date.



Since its inception, Registrant has been involved principally in

military defense contracting by way of the design, development,

manufacture, and marketing of precision time and frequency

control products. Its products are used in guidance and

navigation, communications, surveillance and electronic counter

measure and timing systems, and are used on many of the United

States' most sophisticated military aircraft, satellites, and

missiles.  In recent years, changing defense priorities and

severe federal government budget pressures have significantly

changed the market environment for defense related products. 

Total U.S. Government defense and space acquisitions have

declined steeply, and further cuts are projected over the coming

years.  As a consequence, many major U.S. Government contracts

have been subjected to program stretch-outs. The Registrant's

business is highly dependent upon the defense and space spending

policies of the U.S. Government. Any substantial reduction in

government spending or change in emphasis in the government's

defense and space programs would have a material adverse effect

upon the Registrant's business.  For additional factors which

may have had an adverse effect on Registrant's business with the

U.S. Government, the materiality, if any, or extent of which

effect is not readily ascertainable by Registrant at this time,

reference is made to the subtopic "Material Developments" of

this Item 1 and to Item 3.



In an effort to better serve customers on a more competitive

basis, Registrant has segmented its operations into two

principal industries:  Defense and space for United States

Government end use, and commercial communications and non-U.S.

defense and space.  The Registrant's commercial communications

and commercial space programs have been transferred to and are

now produced by its wholly owned subsidiary FEI Communications,

Inc. ("FEIC"). FEIC was incorporated in Delaware in December

1991, and was created as a separate subsidiary company to

provide ownership and management of assets and other services

appropriate for commercial clients, both domestic and foreign.

Registrant believes that as a separate entity operational

flexibility and efficiency would be enhanced.



For the years ended April 30, 1995, 1994 and 1993, approximately

75%, 69% and 76%, respectively of the Registrant's sales were

for U.S. Government end use.  During fiscal 1995, approximately

25% of the Registrant's sales were for commercial products, used

for commercial communications, commercial space applications and

foreign government end use.  Registrant believes a substantial

commercial market exists  and has developed several new product

lines:



Commercial Rubidium Atomic Standard:  An extremely small, low

cost, low phase noise, stable atomic standard ideally suited for

use in advanced cellular  communications, wireless

telecommunications and navigation applications.



Subminiature Oven Controlled Commercial Quartz Crystal

Oscillator: A low cost, small size, precision crystal oscillator

suited for high end performance required in satellite

transmissions, airborne telephony, and geophysical survey

positioning systems.



VSAT Transceivers:  Used in satellite communications for private

data and voice earth stations and are currently under test and

evaluation. The objective is to manufacture VSAT products for

both the domestic and export markets through joint venture

arrangements. Registrant is presently marketing its other

products through a representative Chinese Company engaged in the

electronics business. A family of three product lines is planned

to meet customer needs. The Registrant has received its first

contract for VSAT's in China.



MATERIAL DEVELOPMENTS



On November 17, 1993 Registrant was indicted on criminal charges

alleging conspiracy and fraud in connection with six contracts

for which Registrant was a subcontractor.  In addition, two

derivative actions have been filed against the Board of

Directors essentially seeking recovery on behalf of the Company

for any losses it incurs as a result of the indictment. On

December 14, 1993 Registrant was notified by the U.S. Department

of the Air Force that it had been suspended from contracting

with any agency of the government.  Current contracted programs

are not affected by this suspension. Certain exceptions will

apply if a compelling reason exists. The suspension is temporary

subject to the outcome of the legal proceedings in connection

with the indictment. The Company and the individual defendants

have pleaded not guilty to all criminal charges, have denied all

civil allegations, and will vigorously contest all charges and

allegations. See Item 3 - Legal Proceedings.



PRODUCTS



Since its inception, Registrant has been involved in the design,

development, manufacture and marketing of precision time and

frequency control products. Using the technology the Registrant

has developed in time and frequency products for limited

applications, the Registrant has modified a number of products

for wider application in the much broader navigation,

communications and electronic warfare markets and non-military

commercial markets.



The Registrant's products are used in guidance and navigation,

communications, surveillance and electronic countermeasure and

timing systems. These products are built in accordance with

Department of Defense or customer standards and are used on many

of the United States' most sophisticated military aircraft,

satellites and missiles. 



Registrant designs and manufactures the master clocks (quartz,

rubidium and cesium) for many satellite communication systems

for both satellite and ground applications. The Global

Positioning Satellite System, as well as the MILSTAR Satellite

System, are but two examples of the programs the Registrant

participates in. Registrant also supplies significant timing

products utilized with many satellite communications systems.



Registrant manufactures the master clock for the Trident

missile, the basic timing system for the Voyager I and Voyager

II deep space exploratory missions and the quartz timing system

for the Space Shuttle. The Registrant's cesium beam atomic clock

is presently employed in low frequency secure communications,

surveillance and positioning systems for the United States Air

Force, Navy and Army.



The Registrant's products are marketed as components, microwave

products, instruments, or complete systems and are used in

navigation, communications, radar, sonar, guidance, surveillance

and electronic countermeasure equipment and systems. Prices are

determined based upon the complexity, design requirement and

delivery schedule as determined by the project details.



The sale of each class of Registrant's products for each of the

last five years is set forth in Item 6 (Selected Financial Data).



Most of Registrant's products are manufactured from raw

materials, which when combined with conventional electronic

component parts available from multiple sources, become finished

products, subsystems and systems used for space exploration,

satellite applications, communication, navigation, position

location, radar, and electronic counter-measures. These

products, subsystems and systems are employed in domestic and

international satellites, earth stations, aircraft, missiles,

ships and submarines, and ground-based fixed, transportable,

portable and mobile installations. Registrant is the major

supplier for the AMRAAM missile system for both voltage

controlled quartz oscillators and oscillator multiplier

assemblies.



Components - The Registrant's key technologies include quartz,

rubidium and cesium from which it manufactures accurate time and

frequency standards and higher level assemblies which allow the

users to locate their position, secure a communications system,

or guide a missile with precision. The components class of

Registrant's products is rounded out with crystal filters and

discriminators, surface acoustic wave resonators, and space and

high-reliability custom thick and thin film hybrid integrated

circuits.



Quartz is the key element in making quartz resonators used for

oscillators and filters utilized in most of its products.



Precision quartz oscillators use quartz resonators in

conjunction with electronic circuitry to produce signals with

accurate and stable frequency. The Registrant's products include

several types of quartz oscillators, suited to a wide range of

applications, including: ultrastable units for critical

satellite and strategic systems, and fast warm-up, low power

consumption units for mobile and tactical applications.



The ovenized quartz oscillator is the most accurate type,

wherein the oscillator crystal is enclosed in a temperature

controlled environment called a proportional oven. The

Registrant manufactures several varieties of temperature

controlling devices and ovens.



The voltage-controlled quartz oscillator is an electronically

controlled device wherein the frequency may be stabilized or

modulated, depending upon the application.



The temperature compensated quartz oscillator is an

electronically controlled device using a temperature sensitive

device to directly compensate for the effect of temperature on

the oscillator's frequency.



The microcomputer compensated crystal oscillator, developed by

the Registrant, exhibits excellent stability and aging, coupled

with very low power consumption that makes it particularly

suitable for battery and solar-powered applications. The

Registrant's product uses a self-correcting frequency technique.

The crystal itself is both the frequency generator and the

temperature sensor.  It allows a microcomputer to detect changes

in frequency due to temperature, and correct the output

frequency by digital processing, without the encumbrances of an

oven or frequency pulling components.



The key components for the atomic instrument products are

manufactured totally from raw materials. The rubidium lamp,

filter and resonance cell provide the optical subassembly used

in the manufacture of the Registrant's optically pumped atomic

rubidium frequency standards. The cesium tube resonator is also

manufactured totally from raw materials and is used in the

manufacture of the Registrant's cesium primary standard atomic

clocks.



Efficient and reliable DC-DC power converters are manufactured

for the Registrant's own instruments, and as stand alone

products, for space and satellite applications.



The Registrant manufactures filters and discriminators using its

crystal resonators, for use in its own radio-frequency and

microwave receiver, signal conditioner and signal processor

products.



High reliability, MIL-M-38510 Class S and B, custom hybrids are

manufactured in thick and thin film technologies for

applications from DC to 44 GHz. These are used in manufacturing

the Registrant's products, and also supplied directly to

customers, for space and other high reliability systems. Hybrids

are also manufactured for higher microwave frequencies up to 100

GHz.



Microwave Products - The Registrant, under an agreement with

TRW's Electronics and Technology Division, markets their

extensive line of millimeter/microwave monolithic integrated

circuits, MIMICs, developed by TRW for the Department of

Defense, and microwave monolithic integrated circuits, MMICs,

developed at TRW's own cost, and incorporates these devices into

"supercomponents" and integrated subassemblies.



Instruments - The Registrant's instrument line consists of three

basic time and frequency generating instruments and a number of

instruments which test and distribute the time and frequency. 

The Registrant's time and frequency generating instruments are

the quartz frequency standard, rubidium atomic standard, and the

cesium beam atomic clock.



The quartz frequency standard is an electronically controlled

solid-state device which utilizes a quartz crystal oscillator to

produce a highly stable output signal at a standardized

frequency. The Registrant's frequency standard is used in

communications, guidance and navigation and time

synchronization. The Registrant's products also include a

precision frequency standard with battery back-up and memory

capability enabling it to remain in operation if a loss of power

has occurred.



The optically pumped atomic rubidium frequency standard is a

rugged, compact, militarized solid-state instrument which

provides both timing and low noise frequency references used in

communications systems.



The cesium beam atomic clock utilizes the atomic resonance

characteristics of cesium atoms to generate precise frequency,

several orders of magnitude more accurate than other types of

quartz frequency generators. The atomic clock is a compact,

militarized solid-state device which generates these precision

frequencies for use with advanced communications and navigation

equipment. A digital time-of-day clock is incorporated which

provides visual universal time display and provides digital

timing with ten-billionths of a second accuracy for systems use.

The atomic clock manufactured by Registrant is a primary

standard, capable of producing time accuracies of better than

one second in seven hundred thousand years.



As communications systems become more precise, there is an

expanding requirement for precise frequency signals to drive a

multitude of electronic equipment. To meet this requirement, the

Registrant manufactures a distribution amplifier which is an

electronically controlled solid-state device that receives

frequency from a frequency standard and provides multiple signal

outputs of the input frequency. A distribution amplifier enables

many items of electronic equipment in a single facility,

aircraft or ship to receive a standardized frequency and/or time

signal from a quartz, rubidium or cesium atomic standard.



Systems - Essentially, the Registrant's systems portion of its

business is manufactured by integrating selections of its

products into subsystems that meet customer-defined needs. This

is done by utilizing its unique knowledge of interfacing these

technologies, and experience in applying them to a wide range of

systems. In general, though not limited to, the Registrant's

systems generate electronic frequencies of predetermined value,

and then divide, multiply, mix, convert, modulate, demodulate,

filter, distribute, combine, separate, switch, measure, analyze,

and/or compare, depending on the system application.



The Systems portion of the business includes a complete line of

time and frequency control systems, capable of generating many

frequencies and time scales that may be distributed to widely

dispersed users, or within the confines of a facility or

platform, or for a single dedicated purpose.  The time and

frequency control systems combine Registrant's cesium, rubidium

and/or crystal instruments, with its other products, to provide

systems for space exploration, satellite tracking stations,

satellite-based navigation and position location, secure

communication, submarine and ship navigation calibration, and

electronic counter-measures applications. A number of these time

and frequency control systems provide up to quadruple redundancy

to assure operational longevity.



For example, the Registrant manufactured the Common Time and

Frequency System (CTFS) for the first and second Time Data Relay

Satellite System (TDRSS) Ground System.  It includes redundant

cesium standards and redundant Disciplined Standards, redundant

switches, time code generators, buffer amplifiers, and displays;

and integrates WWVB, LORAN and GPS receivers and antennas, and

various instrumentation and non-interruptible power supplies.



As a second example, the Registrant manufactured a triple-

redundant quartz crystal oscillator and frequency distribution

sub- system for MILSTAR Satellite Flight #1 and

quadruple-redundant rubidium standards and dual-redundant

frequency distribution and DC- DC power converter sub-systems

for MILSTAR Flights #2 through #5.



The Registrant also manufactures satellite communications

subsystems; such as, the up and down converters for the TDRSS

satellites and the 30 channel, triple conversion element

separator for the TDRSS earth stations, and the LNA's up/down

converters and receiver subsystems for the DSP.



The total revenue from components for the fiscal years ended

April 30, 1995, 1994 and 1993 accounts for 23%, 7%, and 12%,

respectively, of the consolidated revenue of the Registrant. 

The total revenue from microwave products for the fiscal years

ended April 30, 1995, 1994 and 1993 accounts for 1%, 10%, and

40% respectively, of the consolidated revenue of the Registrant.

 The total revenue from instruments for the fiscal years ended

April 30, 1995, 1994 and 1993 accounts for 58%, 58%, and 40%,

respectively, of the consolidated revenue of the Registrant. 

The total revenue from systems for the fiscal years ended April

30, 1995, 1994 and 1993 accounts for 18%, 25% and 8%,

respectively, of the consolidated revenue of the Registrant.



BACKLOG



As of April 30, 1995, the Registrant's backlog amounted to

approximately $15 million of which approximately $11 million is

funded as compared to approximately $18 million of funded

backlog at April 30, 1994 (see Item 7).  Backlog of commercial

and foreign customers approximates $3 million. A substantial

portion of this backlog is expected to be filled during

Registrant's fiscal year ending April 30, 1996. While the

backlog includes firm purchase orders and contracts and may be a

guideline in determining the value of orders which may be

deliverable in the period indicated, it is subject to change by

reason of several factors including possible cancellation of

orders, change orders, terms of the contracts and other factors

beyond the Registrant's control.  Accordingly, the backlog is

not necessarily indicative of the revenues or profits (losses)

which may be realized when the results of such contracts are

reported.



CUSTOMERS AND SUPPLIERS



The Registrant markets its products both directly and through 35

independent sales representative organizations located

principally in the United States. Sales to non-U.S. customers

totaled approximately 16% of net sales in 1995 and 1994 and 11%

in fiscal 1993.



The Registrant's products are sold to a variety of customers,

both governmental and private.  For the years ended April 30,

1995, 1994 and 1993, approximately 75%, 69% and 76%,

respectively of the Registrant's sales were made under contracts

to the U.S. Government or subcontracts for U.S. Government

end-use. The Registrant's business is highly dependent upon the

defense and space spending policies of the U.S. Government. Any

substantial reduction in government spending or change in

emphasis in the government's defense and space programs would

have a material adverse effect upon the Registrant's business

(see Item 3).



Aggregate sales to Hughes Aircraft Company, TRW, and Raytheon

Corp. each exceeded 10% of the Company's consolidated sales and

collectively were approximately 56% of the Company's

consolidated sales during the fiscal year ended April 30, 1995. 

Aggregate sales to Hughes Aircraft Company and Raytheon

Corporation each exceeded 10% of the Company's consolidated

sales in the fiscal years ended April 30, 1994 and 1993 and were

collectively approximately 40% and 33% of the Company's

consolidated sales in the respective years.  Substantially all

of these sales were for U.S. Government end-use.  The loss by

the Registrant of any one of these customers, or the loss by any

of such customers of its U.S. Government contracts which are

partially subcontracted to the Registrant, would have a material

adverse effect on the Registrant's business. The Registrant

believes its relationship with these companies to be mutually

satisfactory and except for the pending legal proceedings

discussed in Item 3, is not aware of any prospect for the

cancellation of or significant reduction of any of their U.S.

Government contracts in which the Registrant is involved.



The Registrant purchases a variety of components such as

transistors, resistors, capacitors, connectors and diodes for

use in the manufacture of its products.  The Registrant is not

dependent upon any one supplier or source of supply for any of

its component part purchases and maintains alternative sources

of supply for all of its purchased components. The Registrant

has found its suppliers generally to be reliable and

price-competitive.



GOVERNMENT CONTRACTS



During the fiscal years ended April 30, 1995, 1994 and 1993,

approximately 75%, 69% and 76%, respectively of the Registrant's

sales were made either directly with U.S. Government agencies or

indirectly with government agencies through subcontracts

intended for government end-use.  The majority of these

contracts are on a fixed price basis.  Under a fixed price

contract, the price paid to the Registrant is not subject to

adjustment by reason of the costs incurred by the Registrant in

the performance of the contract, except for costs incurred due

to contract changes ordered by the customer. These contracts are

on a negotiated basis under which the Registrant bears the risk

of cost overruns and derives the benefit from cost savings.



Negotiations on U.S. Government contracts are sometimes based in

part on Certificates of Current Costs. An inaccuracy in such

certificates may entitle the government to an appropriate

recovery. From time to time, the Defense Contracts Audit Agency

("DCAA") of the Department of Defense audits the Registrant's

accounts with respect to these contracts. The Registrant is not

aware of any basis for recovery with respect to past

certificates.



All government end-use contracts are subject to termination by

the purchaser for the convenience of the U.S. Government and are

subject to various other provisions for the protection of the

U.S. Government. In the event of such termination, the

Registrant is entitled to receive compensation as provided under

such contracts and in the applicable U.S. Government regulations.



COMMERCIAL MARKETS



During the fiscal year ended April 30, 1995 the Registrant

continued to focus a significant portion of its resources and

efforts on developing hardware for commercial satellite programs

and commercial ground communication systems which management

believes will result in future growth and increases in profits. 

In fiscal 1994, Registrant transferred all commercial

communications and space programs to its wholly owned

subsidiary, FEIC.  The foregoing developments have been

implemented with a view towards enabling Registrant to achieve

long-term substantial increases in sales from other than Defense

Department programs.



RESEARCH AND DEVELOPMENT



The Registrant's technological expertise has been an important

factor in its growth. Until recently, virtually all of its

research and development activities have taken place in

connection with customer-sponsored research and development

oriented products conducted under fixed price contracts. These

projects constitute a substantial portion of the Registrant's

business. Most of these contracts result in the production of

prototype hardware and systems and some of this prototype

production results in orders to the Registrant for the

production of products for customer use. It is not possible to

estimate separately the time devoted to the research and

development portions of these contracts as compared to the pre-

production and prototype development portions.



During fiscal 1995,1994, and 1993, the Registrant expended $1.9

million, $1.4 million, and $1.8 million respectively of its

resources and efforts on developing hardware for commercial

satellite programs and commercial ground communication systems

which management believes will result in future growth and

increases in profits.



PATENTS AND LICENSES



The Registrant believes that its business is not dependent on

patent or license protection.  Rather, it is primarily dependent

upon the Registrant's technical competence, the quality of its

products and its prompt and responsible contract performance. 

However, the rights to inventions of employees working for the

Registrant are assigned to the Registrant and the Registrant

presently holds such patents and licenses.  Registrant does not

believe that patents and licenses are material to its business.



COMPETITION



The Registrant experiences intense competition with respect to

all areas of its business. The Registrant competes primarily on

the basis of the accuracy, performance and reliability of its

products, the ability of its products to perform in severe

environments encountered in military and aerospace applications,

prompt and responsive contract performance, and the Registrant's

technical competence and price. The Registrant has a unique and

broad product line which includes all three frequency standards

- - quartz, rubidium, and cesium. The Registrant believes its

ability to take such raw materials, manufacture finished

products, integrate them into systems and sub-systems, and to

interface these systems with end-user applications by

determining the most appropriate type, all under one roof,

provides the Registrant with an advantage over many of its

competitors.



The Registrant believes that it is a significant supplier of

time and frequency products for the military and aerospace

markets.



Many of the Registrant's competitors are larger, have greater

financial resources and have larger research and development

staffs than the Registrant. With respect to the cesium beam

atomic clock, quartz crystal standard and rubidium frequency

standard, the Registrant competes with Hewlett-Packard Company,

Datum, Inc., Austron, Inc., Ball Corporation and E. G. and G.,

Inc.



EMPLOYEES



The Registrant employs 266 persons.



OTHER ASPECTS



The Registrant's business is not seasonal and no unusual working

capital requirements exist.



Item 2.  Properties



Registrant established its headquarters in December, 1981 in a

131,000 square foot manufacturing and office facility located in

Mitchel Field, Long Island, New York (the "Mitchel Field

Complex"). The Mitchel Field Complex was built and equipped, in

part, with the proceeds of a $5,000,000 Industrial Development

Bond financing arrangement concluded through the Nassau County

Industrial Development Agency and various lending institutions

("Financing Arrangement"). The Mitchel Field Complex is erected

on land leased from the County of Nassau ("Nassau County Lease")

dated as of February 24, 1981 for an aggregate period of 99

years (including renewal options exercisable at Registrant's

sole discretion). Registrant paid total base rentals under this

lease of approximately $167,000 during fiscal year ended April

30, 1995.  The Nassau County Lease provides for periodic

increases after 10 years.  Registrant has granted to the lending

banks a security interest in all personal property purchased

with the proceeds of this financing and a mortgage on the Nassau

County Lease.



In June, 1988, Registrant completed construction of an

additional 90,000 square feet of manufacturing and office

facility contiguous to the Mitchel Field Complex. These

additional facilities were financed with the proceeds of a

$3,500,000 Industrial Development Bond Financing arrangement

with the Nassau County Industrial Development Agency and a

lending institution, as part of its plan to finance the new

plant and equipment ("Financing Arrangement II").



Under the terms of the Financing Arrangement and Financing

Arrangement II, interest is payable at 65% and 79% respectively

of the lending banks' prime commercial lending rates. This

advantageous interest rate is made available under an exemption

from the taxation of interest payments received by the lenders

as provided by the Internal Revenue Code ("Code"). In fiscal

1995 the Financing Arrangement was fully repaid.  Registrant has

no reason to believe that the exemption with respect to

Financing Arrangement II will be challenged by the Internal

Revenue Service.



Such interest rate formula will remain in effect during the

15-year period required to amortize Financing Arrangement II. 

Registrant has the right to prepay the loan at any time. 

Financing Arrangement II contains certain restrictions with

respect to the maintenance of net  worth and encumbering the

building.



In December 1990, a subsidiary of the Registrant signed a 15

year lease with National Health Laboratories Incorporated (NHL).

 The terms require that the subsidiary of the Registrant have a

building constructed for use by NHL for which construction was

completed in November, 1992. The Registrant provided $9,000,000

of financing for the cost of the building for which a six year

term loan has been negotiated. This loan has been guaranteed and

collateralized by NHL assets. Annual rental income of $1,650,000

commenced in November, 1992 upon completion of the building. 

Minimum rentals are subject to adjustment based on the

difference between the actual rate of interest incurred on the

borrowing used to construct the facility and the targeted range

of 9.75% to 10.25%. Beginning in the fourth year of the lease

there will be annual rent escalations of 5%. This lease will be

accounted for as a direct finance lease and income is recognized

by a method which produces a constant periodic rate of return on

the outstanding investment in the lease.



Item 3.  Legal Proceedings



U.S. Government Indictment



On November 17, 1993, a Federal Grand Jury in the United States

District Court for the Eastern District of New York returned an

indictment in a criminal proceeding entitled, "United States

District Court, Eastern District of New York, United States of

America, Plaintiff, against Frequency Electronics, Inc., Martin

Bloch, Abraham Lazar, Harry Newman and Marvin Norworth,

Defendants", index number CR 93-1261 ("Indictment"). As the

caption in the proceeding indicates, the Indictment named as

defendants FEI, Martin Bloch-its then board chairman, president

and chief executive officer, Abraham Lazar-one of its directors,

Harry Newman-its secretary/treasurer, and Marvin Norworth-its

contracts manager.  The eighteen count Indictment charges

violations of Title 18, United States Code ("U.S.C.") Sections

286 and 3551 et seq., 1031(a), 2 and 3551 et seq., 1001, 2 and

3551 et seq.



The Indictment makes allegations, generally, as follows:  TRW,

Inc. ("TRW") was a prime contractor on a contract with the

United States Government ("Government") to build satellites; FEI

was a subcontractor of TRW under six contracts to manufacture

electronic devices for space satellites pursuant to TRW's

contracts with the Government. In February 1988, three of the

subcontracts were terminated by TRW and three of the

subcontracts were partially terminated by TRW and restructured.

In connection with such terminations, FEI submitted detailed

statements of information setting out its costs incurred in

connection with the subcontracts for the unpaid portion of which

it was eligible for compensation, directly or indirectly, by the

Government; among the costs for which it was eligible for

compensation were labor costs, in addition, overhead and general

and administrative costs (collectively "costs"); settlement

proposals were submitted by FEI with respect to the three

terminated subcontracts, the proposals contained, among other

things, the cost information described above and FEI was

compensated, directly or indirectly, by the Government; contract

pricing proposals were submitted by FEI with respect to the

three partially terminated and restructured subcontracts, such

proposals contained, among other things, the cost information

described above and FEI and TRW entered into an agreement

restructuring such subcontracts and FEI was paid settlement

expenses in connection with such restructured subcontracts.



The general substance of the criminal charges against FEI and

the individual defendants named in the Indictment is that FEI

and the individual defendants conspired to defraud and did

defraud the Government and that some or all of them committed,

among others, the following criminal acts:  they agreed to

defraud the Government; they submitted statements and invoices

with respect to FEI's costs incurred in connection with the

terminated and/or partially terminated and restructured

subcontracts for the purpose of FEI obtaining compensation

thereunder, which statements and invoices were intentionally

false; the statements and invoices included claims for labor

costs and other costs which were intentionally false; FEI and

the individual defendants destroyed or caused to be destroyed

important records relating to labor costs; FEI and the

individual defendants altered or caused to be altered FEI's

records and vendor invoices with respect to FEI's cost of labor,

materials and services; FEI and the individual defendants

intentionally made false statements to Government officials; and

FEI and the individual defendants intentionally submitted false

documents to Government officials. The indictment does not

specify the dollar amount as to which it is claimed the

Government was defrauded.



Subsequent to the return of the Indictment, FEI and the

individual defendants moved to dismiss the Indictment on various

grounds ("Motion(s)").  The Motions were heard on May 13, 1994

and the Court rendered its decision and denied the Motions. 

Discovery has not been completed.  FEI has determined to

vigorously defend the Indictment.



On April 6, 1994, a Federal Grand Jury in the United States

District Court for the Eastern District of New York returned a

superseding indictment in a criminal proceeding entitled,

"United States District Court, Eastern District of New York,

United States of America, Plaintiff, against Frequency

Electronics, Inc., Martin Bloch, Abraham Lazar, Harry Newman and

Marvin Norworth, Defendants", index number CR 93-0176

("Superseding Indictment").  As the caption in the proceeding

indicates, the Superseding Indictment named as defendants all of

the same parties as in the Indictment. The nineteen count

Superseding Indictment charges violations of Title 18, U.S.C.

Sections 371 and 3551 et seq., 1001, 2 and 3551 et seq. It is

believed that the Superseding Indictment primarily represents an

attempt by the Government to meet and cure certain of the

asserted deficiencies in the Indictment which were specified in

the Motions. The Superseding Indictment enlarged Count One of

the Indictment from an 18 U.S.C. Section 286 conspiracy to a

conspiracy charged under Title 18, U.S.C. Section 371. In

addition, the Superseding Indictment contained an additional

count charging a violation of section 1001 of Title 18, i.e.,

making a false statement to a Government agency. Other than the

foregoing, there are no other substantial differences between

the Indictment and the Superseding Indictment. The Superseding

Indictment does not specify the dollar amount as to which it is

claimed the Government was defrauded. The Government takes the

position that it may proceed to trial on either the Indictment

or the Superseding Indictment. The Government has not advised as

to whether it intends to proceed under the Indictment or the

Superseding Indictment and the Court has not ruled on this

subject. FEI and the other defendants moved to dismiss the

Superseding Indictment and those motions were also heard on May

13, 1994.  The court denied the motions addressed to the

Superseding Indictment.  Discovery has not been completed.  FEI

has determined to vigorously defend the Superseding Indictment.



In connection with the defense of the Indictment and the

Superseding Indictment, FEI and the other defendants have sought

the production of United States Government classified

information and documents pursuant to the provisions of the

Classified Information Procedures Act ("CIPA").  The CIPA

process is continuing and no assessment can be made as to when

it will be concluded or the outcome.



Upon a conviction of FEI, the Government may be awarded fines,

penalties, restitution, forfeitures, treble damages or other

conditional relief.



On November 17, 1993, the Government commenced a civil action

for damages in the United States District Court for the Eastern

District of New York entitled, "United States District Court,

Eastern District of New York, United States of America,

Plaintiff, against Frequency Electronics, Inc., Martin Bloch,

Abraham Lazar, Harry Newman and Marvin Norworth, Defendants",

index number CV 93-5200 ("Government Civil Action"). The

Government Civil Action sets forth four causes of action against

each of the named defendants alleging, in substance, fraud under

31 U.S.C. Section 3729, et seq, (the "False Claims Act"), fraud,

unjust enrichment and breach of contract. In the complaint,

demand is made for treble damages in an unspecified sum based

upon the alleged violations under the False Claims Act, plus

costs and attorneys fees in an unspecified amount, plus $10,000

for each false claim and for each false record and statement.

Pursuant to an order of the Court dated January 12, 1994, all

proceedings in the Government Civil Action including, without

limitation, discovery are stayed pending a jury verdict of the

Indictment. Under the False Claims Act, a recovery can be made

in favor of the Government for a civil penalty of not less than

$5,000 and not more than $10,000 as to each false claim and for

each false record and statement, plus three times the amount of

damages it is determined the Government sustained, plus legal

fees and expenses. No opinion can be offered as to the outcome

of the Government Civil Action. FEI has determined to vigorously

defend the Government Civil Action.



A qui tam action was commenced in the United States District

Court for the Eastern District of New York entitled, "The United

States of America ex rel. Ralph Muller, Plaintiff, against

Frequency Electronics, Inc., Raytheon Company, Raytheon Company

Subsidiaries #1-10, fictitious names for subsidiaries of

Raytheon Company, Hughes Aircraft Company, Hughes Aircraft

Company subsidiaries #1-20, fictitious names for subsidiaries of

Hughes Aircraft Company, and Martin Bloch, Defendants", index

number CV-92 5716 ("Muller Qui Tam Action"). The Muller Qui Tam

Action was brought pursuant to the provisions of the False

Claims Act and is an action by which an individual may, under

certain circumstances, sue one or more third persons on behalf

of the Government for damages and other relief.



The complaint was filed on or about December 3, 1992, in camera

and under seal pursuant to the provisions of the False Claims

Act.  The Court unsealed the complaint by order dated December

3, 1993, after FEI complained to the United States Attorney for

the Eastern District of New York regarding newspaper articles

that charged FEI with manufacturing defective products based

upon claims in an unspecified and undisclosed qui tam action. 

It is believed that the Government made applications to the

Court on one or more occasions after December 3, 1993 to

continue to have the file in the Muller Qui Tam Action remain

under seal.  The complaint was served on FEI and Martin Bloch on

March 28, 1994 and March 30, 1994, respectively.  Under the

provisions of the False Claims Act, the Government is permitted

to take over the prosecution of the action.  It appears that the

Government has declined to prosecute the Muller Qui Tam Action

and that the plaintiff, Ralph Muller ("Muller"), is proceeding

with the action on behalf of the Government as is permitted

under the False Claims Act. Moreover, while the action names as

parties defendant, Hughes Aircraft Company ("Hughes") and

Raytheon Company ("Raytheon"), along with several of their

subsidiaries, it appears that the Muller Qui Tam Action was

dismissed voluntarily by Muller on April 6, 1994 as to Hughes,

Raytheon and their respective subsidiaries.



The complaint, insofar as it pertains to FEI and Martin Bloch,

contains a series of allegations to the effect that Hughes and

Raytheon contracted with the Government to supply it with

Advance Medium Range Air to Air Missiles ("AMRAAMS"); Hughes and

Raytheon (collectively, the "Contractors") entered into a

subcontract with FEI pursuant to which FEI was to design,

manufacture, test, sell and deliver to the Contractors certain

oscillators which constituted components of the AMRAAMS; that

FEI improperly designed, manufactured and tested the

oscillators; that numerous faulty and defective oscillators were

delivered to the Contractors; that the oscillators did not meet

contract specifications; that FEI was aware of the defective and

faulty nature of the oscillators; that FEI attempted

unsuccessfully to correct the faults and defects and failed to

disclose the faults and defects to the Contractors or the

Government; that FEI falsified test results and FEI and Martin

Bloch directed the falsification of test results; and that FEI

sold and delivered the oscillators to the Contractors; as a

result of the faulty and defective oscillators, many of the

AMRAAMS failed to function properly; and that the Government

sustained damages. The complaint demands an unspecified amount

of damages allegedly suffered by the Government, and asks that

the Court determine the damages and assess civil penalties as

provided under the False Claims Act, and that the plaintiff

Muller be awarded a bounty.  Under the False Claims Act, a

recovery can be made in favor of the Government for a civil

penalty of not less than $5,000 and not more than $10,000 as to

each false claim and for each false record and statement, plus

three times the amount of damages it is determined the

Government sustained, plus legal fees and expenses.



FEI has determined to vigorously defend the Muller Qui Tam

Action. It has answered the complaint, denied the material

allegations, asserted seventeen affirmative defenses, and

counterclaims for: libel and product libel - demanding damages

of $3,000,000; republication of the libel and product libel -

demanding damages of $3,000,000; slander - demanding damages of

$3,000,000; tortious interference with contractual relations -

demanding damages of $1,865,010; prima facie tort-demanding

damages of $1,865,010; conversion - demanding damages of

$1,865,010; breach of contract - demanding damages of

$1,865,010; breach of fiduciary relationship - demanding damages

of $1,865,010; plus punitive damages in the amount of

$30,000,000 on each of the tort causes of action, and legal fees

and expenses.  The substance of the counterclaims alleged

against Muller are predicated upon a letter dated November 23,

1992 ("November 23 Letter") written by Muller's attorney's

Schneider, Harris, Harris and Furman ("SHHF") to the Government

which allegedly contained false and libelous statements

concerning FEI's design, manufacture and production of

components for Hughes and Raytheon in connection with the

AMRAAMS.



In addition, FEI has instituted a third party action against

SHHF, Robert Harris, Esq. and Rod Kovel, Esq., attorneys for

Muller, in connection with their alleged authoring and

publishing of the November 23 letter provided to the Government.

The third-party complaint asserts the same claims against the

attorneys as are asserted in the counterclaims against Muller,

for libel and product libel, republication of the libel and

product libel, slander, tortious interference with contractual

relations, prima facie tort and conversion. The counterclaims

and third-party complaint have been served.  Muller replied to

the counterclaims, denied the allegations and asserted various

defenses.  The third-party defendants have answered the

third-party complaint, denied the allegations and asserted

various defenses.  Discovery has not commenced.



FEI and Martin Bloch have moved to dismiss the complaint in the

Muller Qui Tam Action and the plaintiff and third-party

defendants have moved  to dismiss, respectively, the FEI

counterclaims and third-party complaint.  It is anticipated that

these motions will not be heard by the Court until the fall of

1995.



No opinion can be offered as to the outcome of the Muller Qui

Tam Action, the FEI counterclaims, third-party action or the

pending motions.



On December 1, 1993, FEI was served with a complaint in an

action entitled, "In the Court of Chancery of the State of

Delaware In and For New Castle County, Diane Solash

Derivatively, on behalf of Frequency Electronics, Inc., a

Delaware corporation, Plaintiff, vs. Martin B. Bloch, Peter O.

Clark, Joseph P. Franklin, Joel Girsky, Abraham Lazar, John C.

Ho, E. John Rosenwald, Jr., individuals, Defendants and

Frequency Electronics, Inc., a Delaware Corporation, Nominal

Defendant", Civil Action No. 13266 ("Solash Action"). All of the

individual defendants named in the complaint are or were

directors of FEI, Martin B. Bloch was president and chairman of

the board of directors, Abraham Lazar was a vice-president, and

Joseph P. Franklin is presently chairman of the board of

directors. On January 24, 1994, plaintiff served an amended

complaint adding as named defendants Harry Newman, FEI's

secretary/treasurer and Marvin Norworth, FEI's contracts

manager.  This is a derivative action which is permitted by law

to be instituted by a shareholder for the benefit of a

corporation to enforce an alleged right or claim of the

corporation where it is alleged that such corporation has either

failed and refused to do so or may not reasonably be expected to

do so. FEI is named as a nominal defendant. In the Solash

Action, the complaint alleges that the members of FEI's board of

directors may not reasonably be expected to authorize an action

against themselves.



The substance of the amended complaint contains allegations, in

general, as follows:  the Indictment was issued (reciting

certain of the allegations contained in the Indictment); the

misconduct of FEI's personnel as alleged in the Indictment is

such that FEI is exposed to material and substantial monetary

judgments and penalties as well as the loss of significant

Government business; such misconduct is likely to continue; the

individual defendants were under a fiduciary obligation to FEI

and its shareholders to supervise, manage and control with due

care and diligence the business operations of FEI and the

business conduct of its personnel; that they failed to do so and

as a direct consequence, the matters alleged in the Indictment

occurred; and that the individual defendants breached their

fiduciary duty.  The amended complaint seeks judgment against

the individual defendants in the amount of all losses and

damages suffered by FEI and indemnification, on account of the

matters alleged in the amended complaint, together with

interest, costs, legal and other experts' fees.



FEI and all of the individual defendants have moved to dismiss

the complaint in the Solash Action ("Motion(s)"). To date, the

Motions have not been heard by the Court. FEI has determined to

vigorously defend the Solash Action. Discovery has not

commenced.  No opinion can be offered as to the outcome of the

Motions or with respect to the Solash Action.



On February 4, 1994, FEI was served with a complaint in an

action entitled "Supreme Court of the State of New York, County

of New York, Moise Katz, Plaintiff, against Martin B. Bloch,

Joseph P. Franklin, Joel Girsky, John C. Ho, Abraham Lazar, E.

John Rosenwald, Jr., Defendants, and Frequency Electronics,

Inc., Nominal Defendant", Index Number 93-129450 ("Katz

Action").  This is a derivative action which is permitted by law

to be instituted by a shareholder for the benefit of a

corporation to enforce an alleged right or claim of the

corporation where it is alleged that such corporation has either

failed and refused to do so or may not reasonably be expected to

do so. FEI is named as a nominal defendant. In the Katz Action,

the complaint alleges that the members of FEI's board of

directors may not reasonably be expected to authorize an action

against themselves. All of the individual defendants named in

the complaint are directors of FEI, Martin B. Bloch was

president and chairman of the board of directors, Abraham Lazar

was a vice president, and Joseph P. Franklin is presently

chairman of the board of directors.



The substance of the complaint contains allegations, in general,

as follows: the Indictment was issued (reciting certain of the

allegations contained in the Indictment); the misconduct of

FEI's personnel as alleged in the Indictment is such that FEI is

exposed to material and substantial monetary judgments and

penalties as well as the loss of significant Government

business; such misconduct is likely to continue; the individual

defendants were under a fiduciary obligation to FEI and its

shareholders to supervise, manage and control with due care and

diligence the business operations of FEI and the business

conduct of its personnel; that they failed to do so and as a

consequence, the matters alleged in the Indictment occurred;

that the individual defendants were grossly negligent and as a

consequence the matters alleged in the Indictment occurred; that

the individual defendants voluntarily participated in such

wrongdoing and attempted to conceal it; and that the individual

defendants intentionally and negligently breached their

fiduciary duty to FEI and its shareholders. The complaint seeks

judgment against these defendants in favor of FEI in the amount

of all losses and damages suffered by FEI on account of the

facts alleged in the complaint, together with interest, costs,

legal and other experts' fees.



FEI and all of the defendants have moved to dismiss the

complaint in the Katz Action ("Motion(s)").  At the time of the

Motions, the plaintiff moved to amend the complaint by setting

forth certain additional allegations of wrongdoing including,

among others, amplifying allegations with respect to the

Indictment, setting forth allegations relating to the Muller Qui

Tam Action, and allegations attempting to clarify the

relationship of the parties to the New York forum, the latter

allegations having been attacked on the Motions. In connection

with the Motions, the defendants stipulated that they would not

object to any application by the plaintiff Katz to intervene in

the Solash action.  By order dated September 21,1994, the Court

granted the defendants' Motions, dismissed the complaint and

denied the plaintiff's cross-motions.



On or about November 17,1994, FEI was served with a complaint in

an action entitled, "In the Court of Chancery of the State of

Delaware In and For New Castle County, Moise Katz Derivatively,

on behalf of Frequency Electronics, Inc., a Delaware

corporation, Plaintiff, vs. Martin B. Bloch, Peter O. Clark,

Joseph P. Franklin, Joel Girsky, John C. Ho, Abraham Lazar, E.

John Rosenwald, Jr., Harry Newman, Marvin Norworth, individuals,

Defendants and Frequency Electronics, Inc., A Delaware

corporation, Nominal Defendant", Civil Action No. 13841 ("Katz

Delaware Action").  All of the individual defendants named in

the complaint, with the exception of Harry Newman ("Newman") and

Marvin Norworth ("Norworth"), were all directors of FEI, Martin

B. Bloch was president and chairman of the board of directors,

Abraham Lazar was a vice-president, and Joseph P. Franklin is

presently chairman of the board of directors.  Newman is  FEI's

secretary/treasurer and Norworth is FEI's contracts manager. 

This is a derivative action which is permitted by law to be

instituted by a shareholder for the benefit of a corporation to

enforce an alleged right or claim of the corporation where it is

alleged that such corporation has either failed or refused to do

so may not reasonably be expected to do so.  FEI is named as a

nominal defendant.  In the Katz Delaware Action, the complaint

alleges that the members of FEI's board of directors may not

reasonably be expected to authorize an action against themselves.



The substance of the complaint contains allegations, in general,

as follows: the Indictment was issued (reciting certain of the

allegations contained in the Indictment); the misconduct of

FEI's personnel as alleged in the Indictment is such that FEI is

exposed to material and substantial monetary judgments and

penalties as well as the loss of significant Government

business; such misconduct is likely to continue; the individual

defendants were under a fiduciary obligation to FEI and its

shareholders to supervise, manage, and control with due care and

diligence the business operations of FEI and the business

conduct of its personnel; that they failed to do so and as a

direct consequence, the matters alleged in the Indictment

occurred; and that the individual defendants breached their

fiduciary duty.  The complaint seeks judgment against the

individual defendants in the amount of all losses and damages

suffered by FEI and indemnification, on account of the matters

alleged in the complaint, together with interest, costs, legal,

and other experts' fees.



Pursuant to the order of the Court, the Solash Action and the

Katz Delaware Action have been consolidated under consolidated

Civil Action No. 13266, with the caption "In Re Frequency

Electronics Derivative Litigation" ("Derivative Litigation").



In the Derivative Litigation, FEI and all of the individual

defendants have moved to dismiss the consolidated complaint and

to stay the Derivative Litigation pending a disposition of the

Indictment and the Superseding Indictment ("Motion(s)").  To

date, the Motions have not been heard by the Court.  However, as

a result of the Motions, pursuant to a Stipulation and Order of

the Court dated May 17,1995 and a Stipulation and Order of the

Court dated June 14,1995,  the Derivative Litigation has been

dismissed as to Newman and Norworth and is otherwise stayed

pending a disposition of the Indictment, Superseding Indictment

and related investigations until the further order of the Court.

  FEI has determined to vigorously defend the Derivative

Litigation.  Discovery has not been commenced.  No opinion can

be offered as to the outcome of the Motion(s) or with respect to

the Derivative Litigation.



On December 22, 1993, February 10, 1994, February 24, 1994, May

10, 1994 and June 7, 1994, Grand Jury Subpoenas Duces Tecum were

served on FEI ("Subpoenas"), the Subpoenas were each returnable

before a Grand Jury sitting in the United States District Court

for the Eastern District of New York. The Subpoenas called for

the production of a variety of finance, accounting and other

documents, computer records and computer tapes relating to the

AMRAAMS. A number of FEI employees have been subpoenaed to

appear before the Grand Jury. The prosecutor has not advised as

to the theory of this investigation. Based upon the FEI

documents subpoenaed, it appears that the inquiry relates to

finance and/or pricing matters. We are advised the notices

provided with the Subpoenas to FEI employees indicate their

testimony is required in connection with an investigation

related to false statements (18 U.S.C. Section 1001), false

claims (18 U.S.C. Section 287), and conspiracy to present

fraudulent claims (18 U.S.C. Section 286).  FEI regards charges

or claims of violations of Government laws and regulations as

extremely serious and recognizes that such charges or claims

could have a material adverse affect on it. FEI's business is

primarily dependent upon contracts with the Government and

contracts and subcontracts with other companies as to which the

Government or its agencies are the end- user. Under the law, a

Grand Jury indictment of FEI or any of its officers, directors

or employees, can result in suspension or debarment of FEI from

receiving Government contracts for a specified period of time. 

Registrant is currently subject to such a suspension by reason

of its indictment on November 17, 1993.  Upon conviction of FEI

or in a civil proceeding, the Government may seek fines,

penalties, restitution, forfeitures, treble damages or other

conditional relief. To date, no charges have been filed, nor

claims asserted against FEI as a result of the Grand Jury

investigation related to AMRAAM.



Robert H. Harris, Esq. ("Harris"), a counsel to one of FEI's

former employees who was subpoenaed to testify before the Grand

Jury, threatened to file a claim against FEI, in the name of

such counsel, in the form of a qui tam action pursuant to the

False Claims Act. To date, FEI has not been served with any

legal process relating to the False Claims Act other than the

Government Civil Action and the Muller Qui Tam Action.



FEI has filed claims with its insurance carriers pertaining to

potential coverages for directors and officers relating to the

first Grand Jury Investigation, the Indictment and the

Superseding Indictment, the Government Civil Action, the Muller

Qui Tam Action, the Solash Action and the Katz Action.



Certain disclaimers of coverage have been made by a carrier with

respect to certain of these matters. No opinion can be offered

as to coverage or the extent of coverage under any of the

foregoing policies. At the appropriate time, FEI intends to

vigorously pursue its rights with respect to these insurance

policies.



Included in selling and administrative expenses are legal fees

incurred in connection with the above matters of approximately

$2,300,000, $1,819,000, and $547,000 for fiscal years 1995, 1994

and 1993, respectively.





Government Contract Suspension



On December 14, 1993 registrant was notified by the U.S.

Department of the Air Force that, effective December 13, 1993,

it had been suspended from contracting with, or acting as

subcontractor under any contract with, any agency of the U.S.

Government (the "Government") and that such suspension is

effective throughout the executive branch of the Government. The

suspension is also applicable to registrant's former chairman

and chief executive officer, one of registrant's directors and

former vice presidents, registrant's secretary and treasurer,

presently on leave of absence from such position, and

registrant's contract manager, presently on leave of absence

from such position. The suspension is temporary, subject to the

outcome of legal proceedings against registrant and the four

individuals named above presently pending in the United States

District Court as discussed above.



The suspension does not preclude the completion by registrant of

its performance of Government contracts or subcontracts awarded

to it and pending on the date of suspension. The Government may

also conduct business with registrant during the period of

suspension when a Government department or agency determines

that a compelling reason exists for it to do so. Examples of

compelling reasons are: (1) only registrant can provide the

supplies or services required; 2) urgency requires contracting

with registrant; and (3) the national defense requires continued

dealings with registrant. However, except for all of the

foregoing, during the period of suspension:



	(1)     Offers will not be solicited from, contracts will not be

awarded to, existing contracts will not be renewed or otherwise

extended for, and subcontracts requiring Government approval

will not be approved for registrant by any agency in the

executive branch of the Government, unless the head of the

agency taking the contracting action or a designee states in

writing the compelling reason for continued business between

registrant and the agency.



	(2)     Registrant may not conduct business with the Government as

an agent or representative of other contractors.



	(3)     No government contractor may award registrant a subcontract

equal to or in excess of $100,000 unless there is a compelling

reason to do so and the contractor first notifies the

contracting officer and further complies with certain Government

registrations.



	(4)     Registrant's affiliation with or relation with any

organization doing business with the Government will be

carefully examined to determine the impact of these ties on the

responsibility of that organization to be a government

contractor or subcontractor.





The suspension regulations allow registrant the opportunity to

contest the suspension by submitting to the suspending agency

information and argument in opposition to the suspension. Since

registrant and all of the individual defendants have pleaded not

guilty to the Indictment and denied the charges alleged in the

Government's related civil action, the registrant believes that

the suspension is unwarranted, and accordingly, registrant has

made a substantial effort to have the suspension withdrawn.

Although the suspension has not been withdrawn, Registrant has

determined to continue its efforts in this regard.



If the Indictment results in conviction, the period of

suspension could be extended by way of the debarment of

registrant from any future Government contracts or subcontracts.

Debarment is imposed for a period commensurate with the

seriousness of the causes. Generally, debarment does not exceed

three years. The duration of registrant's suspension will be

considered in determining the debarment period. The debarring

official may also extend the debarment for an additional period

if that official determines that an extension is necessary to

protect the Government's interest. A debarment may not be

extended solely on the basis of the facts and circumstances upon

which the initial debarment action was based. The debarring

official may likewise reduce the period or extent of debarment,

upon registrant's request supported by documentation for reasons

such as: 1) newly discovered material evidence; 2) reversal of

the conviction or civil judgment upon which the debarment was

based; (3) bona fide change in ownership or management; 4)

elimination of other causes for which the debarment was imposed;

or 5) other reasons the debarring official deems appropriate.



Approximately 75% of registrant's business is comprised of prime

and subcontracts in which the Government is the end-user.  The

other category of registrant's business, which it has been

expanding in recent years, is in commercial and export markets

unrelated to the Government.  In view of the extent to which

registrant is currently reliant on government contracts and

subcontracts and the effect which the suspension, unless

withdrawn will have on registrant's ability to continue to

obtain such business, registrant believes that the suspension

and possible debarment is an extremely serious matter which is

likely to have a material adverse effect on registrant's

business prospects, financial condition and results of its

operations.  However, Registrant is unable to ascertain at this

time whether or not this has been the case.



Environmental Matters



The State of California Regional Water Quality Control Board has

issued certain abatement orders relative to ground water

contaminations originating from the site of premises obtained by

the Company in connection with an acquisition. In June, 1988,

the U.S. Environmental Protection Agency proposed that such

premises be added to the National Priorities List, which would

subject the premises to the Super-fund requirements of federal

law. No estimate as to the cost to clean up the premises has

been made or provided to Registrant. Pursuant to the terms of

the Purchase Agreement, the seller, a financially capable party,

has indemnified Registrant from any damages arising from this

environmental matter. Since Registrant has only secondary

responsibility, it is of the opinion that the outcome will not

have a significant impact on operations.



Item 4.  Submission of Matters to a Vote of Security Holders



No matters were required to be submitted by Registrant to a vote

of security holders during the fourth quarter of fiscal 1995.



Item 4(a) Executive Officers of the Registrant



The executive officers hold office until the annual meeting of

the Board of Directors following the annual meeting of

stockholders, subject to earlier removal by the Board of

Directors. During fiscal 1994 certain officers have taken

voluntary leaves of absence as discussed in Registrant's Form

8-K dated November 17, 1993.



The names of all executive officers of Registrant and all

positions and offices with the Registrant which they presently

hold are as follows:



Joseph P. Franklin      -       Chairman of the Board of Directors, Chief

Executive Officer



Martin B. Bloch -       President(1), Chief Scientist



John C. Ho      -       Vice President of Research and  Development and

Director



Marvin Meirs    -       Vice President, Engineering



Alfred Vulcan   -       Vice President, Systems Engineering



Markus Hechler  -       Vice President, Manufacturing and  Acting

Secretary



Charles S. Stone        -       Vice President, Low Noise Development



Dawn R. Johnston        -       Vice President, Finance and Acting Treasurer



Leonard Martire -       Vice President, Space Systems and Business

Development



Harry Newman    -       Secretary and Treasurer(2)







None of the officers and directors are related.



(1)     In connection with the indictment as discussed under item 3

- - Legal Proceedings, Martin B. Bloch has taken a leave of

absence as president, and no one has been elected as acting

president.



(2)     In connection with the indictment as discussed under item 3

- - Legal Proceedings, Harry Newman has taken a leave of absence

as secretary and treasurer. Markus Hechler, a vice president of

Registrant, has been elected acting secretary and Dawn R.

Johnston, a vice president of Registrant, has been elected

acting treasurer.





Joseph P. Franklin, age 61 has served as a Director of the

Company since March 1990. In December 1993 he was elected

Chairman of the Board of Directors and Chief Executive Officer.

He has been the Chief Executive Officer of Franklin S.A., since

August 1987, a Spanish business consulting company located in

Madrid, Spain, specializing in joint ventures, and is a director

of several prominent Spanish companies. General Franklin was a

Major General in the United States Army until he retired in July

1987.



Martin B. Bloch, age 59 has been a Director of the Company and

of its predecessor since 1961. He recently resigned as Chairman

of the Board of Directors and Chief Executive Officer and is

currently its President and Chief Scientist. Previously, he

served as chief electronics engineer of the Electronics Division

of Bulova Watch Company.



John C. Ho, age 62 has been employed by the Company and its

predecessor since 1961 and has served as a Vice President since

1963 and as a Director since 1968.



Marvin Meirs, age 57 was employed by the Company in an

engineering capacity from 1966 to 1972 and rejoined the Company

in such capacity in 1973, serving as Vice President, Engineering

since 1978.



Alfred Vulcan, age 58 joined the Company as an engineer in 1973

and has served as its Vice President, Systems Engineering since

1978.



Markus Hechler, age 49 joined the Company in 1967, and has

served as its Vice President, Manufacturing since 1982, and as

Assistant Secretary since 1978. He was elected Acting Secretary

in December 1993 when Harry Newman took a leave of absence.



Charles S. Stone, age 64 joined the Company in 1984, and has

served as its Vice President since that time. Prior to joining

the Company, Mr. Stone served as Senior Vice President of

Austron Inc., from 1966 to 1979, and Senior Scientist of Tracor

Inc., from 1962 to 1966.



Dawn Rhodes Johnston, age 42 joined the Company in January,

1994. Until joining registrant, Mrs. Johnston was employed by

the accounting firm which serves as registrant's auditors,

Coopers & Lybrand, since November 1983 in the position of

general practice manager. She is also the Acting Treasurer. 



Leonard Martire, age 58 joined the Company in August 1987 and

served as Executive Vice President of FEI Microwave, Inc., the

Company's wholly owned subsidiary until May 1993 when he was

elected Vice President, Space Systems.



Harry Newman, age 48 has been employed by the Company as

Secretary and Treasurer since 1979, prior to which he served as

Divisional Controller of Jonathan Logan, Inc., apparel

manufacturers, from 1976 to 1979, and as supervising Senior

Accountant with Clarence Rainess and Co., Certified Public

Accountants, from 1971 to 1975.





PART II



Item 5.   Market for the Registrant's Common Equity and Related

Stockholder Matters



The Common Stock of the Registrant is listed on the American

Stock Exchange under the symbol "FEI". The following table shows

the high and low sale price for the Registrant's Common Stock

for the quarters indicated, as reported by the American Stock

Exchange.



FISCAL QUARTER  HIGH SALE       LOW SALE



1995 -



FIRST QUARTER   $4 1/4           $3 5/8



SECOND QUARTER  4                3 1/8



THIRD QUARTER   5 1/2            2 7/8



FOURTH QUARTER  5 1/8            3 13/16



1994 -



FIRST QUARTER   $4 7/8           $4 1/8



SECOND QUARTER  8                4 7/8



THIRD QUARTER   8 1/2            4 3/4



FOURTH QUARTER  5 1/2            3 5/8





As of June 30, 1995, the approximate number of holders of record

of common stock was 1037.



DIVIDEND POLICY



The Registrant has paid no cash dividends on its Common Stock

and currently intends to follow a policy of retaining earnings

for use in its business.



Item 6.  Selected Financial Data



The following table sets forth selected financial data including

net sales and operating income for the five year period ended

April 30, 1995.



			       Years Ended April 30,     

  

		 1995       1994       1993       1992        1991  

				(in thousands, except share data)



Net Sales

Components     $ 5,602    $ 1,965     $ 5,216   $ 6,998      $2,528 



Microwave

Products            93      2,687      17,335    25,432       27,692



Instruments     14,065     15,921      17,495    17,398       20,617 



Systems          4,321      6,891       3,185     3,375        5,713







Total Net 

Sales          $24,081    $27,464     $43,231   $53,203      $56,550 











Operating Profit

  (Loss)      ($ 6,025)  ($ 6,174)   ($12,279)  $ 2,952    ($ 8,450)











   Net Earnings

     (Loss)   ($ 3,843)  ($ 4,622)    ($7,966)  $   462     ($6,352)





Average Common

Shares and

Common Equiv-

alent Shares

Outstanding    4,835,367  5,410,762  5,596,788  5,751,408   5,916,814







Earnings (loss)

per Common and

Common Equiv-

alent Shares     ($ .80)    ($ .85)     ($1.42)      $.08     ($1.07)



Total Assets     $65,032    $72,655     $97,065    $99,592     $95,860







Long-Term

  Obligations   $14,959    $15,327     $24,945    $25,124      $21,492  

  



Item 7.  Management's Discussion and Analysis of Financial

Condition and Results of Operations



LIQUIDITY AND CAPITAL RESOURCES



Sufficient cash flow is generated by operations to meet the cash

requirements of the Registrant's regular business cycle. Cash

from operations was $4.3 million, $6.7 million, and $3.4 million

for the years ended April 31, 1995, 1994 and 1993, respectively.



In fiscal 1995, included in such amount is the net loss incurred

during the year of $3.8 million, reductions in trade accounts

payable and other accrued liabilities of approximately $1.2

million, offset by reductions in accounts receivable of $8.3

million and inventories of $322 thousand.  During the year ended

April 30,1995 accounts receivable balances were reduced by

approximately $8.3 million from April 30,1994.  This reduction

resulted primarily from increased collection efforts and receipt

of certain milestone payments.  



Cash was also provided as a result of the sale of marketable

securities of approximately $2.4 million and gross rents of $1.4

million generated by the Registrant's investment in a direct

finance lease.



Other uses of cash that occurred in the year ended April 30,1995

were the purchase of approximately $11 million of U.S.

government and agency securities, the repurchase of 345,000

shares of the Company's common stock,principal payments on the

Company's long-term debt, and the issuance of notes to employees

for the purchase of company stock aggregating $822,000.



The Registrant's balance sheet reflects a highly liquid position

with a current ratio of 13 to 1 at April 30, 1995, compared to

10 to 1 at April 30, 1994.  Working capital was $39 million and

$42.6 million at April 30, 1995 and 1994, respectively.



The Company's backlog at April 30, 1995 totaled $15 million (of

which $11 million is funded) as compared to $18 million of

funded backlog at April 30, 1994. During fiscal 1993, Registrant

restructured its operations which included the consolidation of

the west coast operations into the Mitchel Field facility. The

decrease in backlog is directly related to the decline in the

U.S. defense budget and the sale and disposal of certain product

lines in connection with the consolidation of the west coast

operations. At the present time the Company is suspended from

contracting with any agency of the U.S. Government. The

suspension is temporary, subject to the outcome of legal

proceedings against the Registrant as discussed in Material

Developments, Item 3 and Note 9 to the consolidated financial

statements. The suspension does not preclude the completion by

Registrant of its performance of Government contracts or

subcontracts awarded to it and pending on the date of

suspension. The Government may also conduct business with the

registrant during the period of suspension when a government

department or agency determines that a compelling reason exists

for it to do so. If the indictment results in conviction, the

period of suspension could be extended by way of debarment. In

view of the extent of which registrant is currently reliant on

government contracts, suspension, unless withdrawn, is likely to

have a material adverse effect on registrant's business

prospects, financial condition and results of its operations.



At April 30, 1995, Registrant did not have any material

commitments for capital expenditures. Fixed asset additions

approximated $168,000 in fiscal 1995.



Company funded research and development approximated $1.9

million in fiscal 1995.  These efforts focus specifically on

telecommunications as a complement to the Company's core

business in defense and space.



The Company also has available approximately $11 million of net

operating loss carryforwards which may be applied against future

taxable income.



RESULTS OF OPERATIONS



FISCAL YEAR ENDED APRIL 30, 1995 COMPARED WITH FISCAL YEAR ENDED

APRIL 30, 1994



Net sales for the year ended April 30, 1995 were $24,081,000

compared to $27,464,000 for the same period last year

representing a decrease of $3,383,000.  This reduction in sales

resulted primarily from the completion of two significant

programs in fiscal 1994 and early fiscal 1995, the production of

frequency standards for SPAWAR and the redundant frequency

generator unit for the EMS Satellite, which did not recur in

fiscal 1995, in one instance, due to lack of exercise of

contract options.  Another major contract was awarded to the

company by Hyundai in fiscal 1995.  However, efforts related to

such contract were just beginning and related revenues will be

realized in 1996.  Reductions in DOD and NASA programs also had

a negative impact on revenues.  Sales level in other product

lines were fairly consistent.



Overall gross margins were 14% and 9% for the years ended April

30, 1995 and 1994, respectively.  In 1994 gross margins were

negatively impacted by actual contract costs incurred in

connection with the company's west coast consolidation which

were greater than expected, and the higher than anticipated

technical development costs incurred during the engineering,

design, and production stages of certain projects.  In 1995, the

impact of these items were greatly reduced.  Gross margins on

the various product lines were within normal ranges as expected

and were fairly consistent throughout the year.



Selling and administrative expenses increased by $376,000 for

the year ended April 30,1995 as compared to the same period last

year.  The increase results primarily from overall increased

legal costs in connection with the U.S. government

investigation.  Other increases in costs occurred in insurance

and severance for terminated employees.  In addition, the

Company is continuing its efforts in the area of research and

development for its new commercial products which resulted in

costs of $1,940,000 for the year ended April 30,1995.



As a result of the above, the operating loss for fiscal 1995 was

$6,025,000 compared to a loss of $6,174,000 for the same period

last year.



Interest income for the year ended April 30, 1995 decreased by

approximately $111,000 from the comparable period in 1994. 

Interest income on investments was actually greater in fiscal

1995 due to higher levels of earning assets and greater interest

rates as a result of investment strategies offset by a lack of

interest earned on federal income tax refunds in 1994 which did

not recur in fiscal 1995.



Interest expense was $1,034,000 in the year ended April 30,1995

compared to 973,000 for the same period last year.  The increase

of $61,000 results primarily from higher interest rates offset

to a lesser degree by lower average borrowings.



Other income, net for the year ended April 30,1995 was

$2,325,000 compared to $1,606,000 for the same period last year.

 The increase is due primarily to a gain realized on the sale of

certain marketable securities offset by reduced rents.



FISCAL YEAR ENDED APRIL 30, 1994 COMPARED WITH FISCAL YEAR ENDED

APRIL 30, 1993



Net sales for the year ended April 30, 1994 were $27,464,000

compared to $43,321,000 for fiscal 1993 representing a decrease

of $15,767,000.  This reduction in sales resulted primarily from

the reduced business resulting from the closing of the west

coast facility and the related sale and disposal of certain

product lines and to a lesser degree, reductions in DOD and NASA

programs.



Overall gross margins were 9% for the years ended April 30, 1994

and 1993.  Gross margins on the Company's core business were

within normal ranges as expected.  However, such margins were

reduced by actual contract costs incurred in connection with the

company's west coast consolidation which were greater than

expected, and the higher than anticipated technical development

costs incurred during the engineering, design and production

stages of certain projects.



As previously stated, during fiscal 1993, Registrant

restructured its operations which included the consolidation of

the west coast operations into the Mitchel Field facility and

the sale and disposal of certain product lines which was

estimated to cost approximately $5.4 million.  In addition, 1993

results included certain inventory writedowns resulting from

manufacturing and technological improvements developed by the

Registrant.  Such events did not recur in fiscal 1994, although

the restructuring costs were greater than expected and continued

to have a negative impact on fiscal 1994.  In addition, legal

expenses of $1.8 million were incurred during 1994 in connection

with the U.S. government investigation which represented an

increase of $1.3 million over fiscal 1993.  These charges were

offset by a reduced level of selling and administrative costs of

the west coast operations due to the elimination of duplicative

functions and a continued, but reduced level of research and

development expenditures.



As a result of the above, the operating loss for fiscal 1994 was

$6,174,000 compared to a loss of $12,279,000 for fiscal 1993.



Interest income for the year ended April 30,1994 increased by

approximately $197,000 from the comparable period in 1993

principally as a result of interest earned on federal income tax

refunds offset by lower interest rates.



Interest expense for fiscal 1994 decreased by $158,000 over the

comparable period in 1993 due primarily to lower average

borrowings and lower interest rates.



Other, net increased by $264,000 in fiscal 1994 compared to

fiscal 1993 primarily as a result of increased rents.



The tax benefit in fiscal 1994 is lower than in fiscal 1993 by

approximately $3.3 million due to the full utilization of net

operating loss carrybacks and the reversal of deferred taxes as

a result of operating losses in fiscal 1993.  No federal tax

benefit could be recorded in fiscal 1994 under the provisions of

Statement of Financial Accounting Standards No. 109, "Accounting

for Income Taxes."



OTHER MATTERS



On May 1,1994 the Company adopted the provisions of Statement of

Financial Accounting Standards No. 115, "Accounting for Certain

Investments in Debt and Equity Securities" ("Statement 115"). 

Pursuant to Statement 115, investments in certain debt and

equity securities are categorized as available-for-sale and are

carried at fair value, with unrealized gains and losses excluded

from income and recorded directly to stockholders' equity.  In

accordance with Statement 115, prior period financial statements

have not been restated to reflect the change in accounting

principle.  The favorable cumulative effect of this change in

accounting principle was approximately $215,000 or $.04 per

share.



Effective May 1,1994, the company changed its method of

accounting for its Employee Stock Ownership Plan ("ESOP") in

accordance with Statement of Position ("SOP") 93-6.  In fiscal

1995, in accordance with SOP 93-6, the annual expense related to

the leveraged ESOP is determined as interest incurred on the

note plus compensation cost based on the fair value of the

shares released.  For the year ended April 30,1994 and 1993,

compensation cost was based on the cost of the shares released. 

The effect of this change on the statement of operations for the

year ended April 30,1995 was a benefit of $208,000 or $.04 per

share.  The SOP also requires that ESOP shares that are

committed to be released are considered outstanding for purposes

of calculating earnings per share.  In fiscal 1994 and 1993 all

ESOP shares were considered outstanding for purposes of

calculating earnings per share.



The Registrant continues to focus a significant portion of its

resources and efforts on developing hardware for commercial

satellite programs and commercial ground communication systems

which it anticipates will result in future growth and increases

in profits. In fiscal 1994, all of the Registrant's commercial

communications and space programs were transferred to its wholly

owned subsidiary, FEIC. In addition, Registrant is aggressively

pursuing markets for its commercial rubidium product line and

its C and KU-Band VSAT transceivers. These products have major

application in commercial satellite, ground communications

systems and telephone communications systems. The foregoing

developments have been implemented with a view towards enabling

Registrant to achieve long- term increases in sales from other

than Defense Department programs.



Over the past several years Registrant has been successful in

applying its resources to providing prototypes and preproduction

hardware for use in military navigation, communication, guidance

and electronic countermeasure programs and space applications.

Prototypes developed by Registrant are now in the production

stage and its new product line consisting of high speed

multi-mode synthesizers used in advanced radar systems is in the

preproduction stage. Management has implemented new techniques

stressing automation in crystal manufacturing, machining,

in-process and final testing, and thick and thin film hybrid

production in order to achieve production efficiencies. In

addition, the Registrant's overhead has been reduced

significantly by the elimination of duplicate functions that

existed previously along with a concentration of technical and

production expertise in a single location.



The financial information reported herein is not necessarily

indicative of future operating results or of the future

financial condition of Registrant. Except as noted, management

is unaware of any impending transactions or events that are

likely to have a material adverse effect on results from

operations.



INFLATION



During fiscal 1995, as in the two prior fiscal years, the impact

of inflation on the Registrant's business has not been

materially significant.





Item 8. Financial Statements and Supplementary Data



REPORT OF INDEPENDENT ACCOUNTANTS



To the Board of Directors and Stockholders of Frequency

Electronics, Inc.



We have audited the consolidated financial statements and the

financial statement schedule of FREQUENCY ELECTRONICS, INC. and

SUBSIDIARIES listed in Item 14(a) of this Form 10-K. These

financial statements and financial statement schedule are the

responsibility of the Company's management. Our responsibility

is to express an opinion on these financial statements and

financial statement schedule based on our audits.



We conducted our audits in accordance with generally accepted

auditing standards. Those standards require that we plan and

perform the audit to obtain reasonable assurance about whether

the financial statements are free of material misstatement. An

audit includes examining, on a test basis, evidence supporting

the amounts and disclosures in the financial statements. An

audit also includes assessing the accounting principles used and

significant estimates made by management, as well as evaluating

the overall financial statement presentation.  We believe that

our audits provide a reasonable basis for our opinion.



In our opinion, the financial statements referred to above

present fairly, in all material respects, the consolidated

financial position of Frequency Electronics, Inc. and

Subsidiaries as of April 30, 1995 and 1994, and the consolidated

results of their operations and their cash flows for each of the

three years in the period ended April 30, 1995, in conformity

with generally accepted accounting principles. In addition, in

our opinion, the financial statement schedule referred to above,

when considered in relation to the basic financial statements

taken as a whole, presents fairly, in all material respects, the

information required to be included therein.





As more fully discussed in Note 9 to the consolidated financial

statements, the Company and certain of its employees were

indicted and served with a civil suit by the United States

Government (the "Government") in November 1993 in the United

States District Court for the Eastern District of New York (the

"Eastern District").  The indictment and the civil action allege

fraud and certain criminal acts relating to certain Government

contracts.  In addition, two derivative actions have been filed

against the Company, as a nominal defendant, its board of

directors, and certain individuals essentially seeking recovery

on behalf of the Company for any losses it may incur as a result

of the Government indictment and civil action.  The Company and

its former chief executive officer have been named as defendants

in a qui tam action in the Eastern District in which claims are

made by an individual on behalf of the Government that the

Company manufactured certain defective components which were

ultimately sold to the Government.  The Company was notified by

an agency of the Government that it has been temporarily

suspended from contracting with the government pending the

outcome of the legal proceedings in the Eastern District.  The

Company and the individual defendants have pleaded not guilty to

the indictment and have denied the allegations of the

Government, derivative and qui tam actions and will vigorously

contest all such civil and criminal proceedings.  The government

civil action has been stayed pending the resolution of the

indictment. The ultimate outcome of these actions and the

government's suspension as well as their impact, if any, on the

consolidated financial statements and operations cannot

presently be determined.  Accordingly, no provision for any

liability that may result has been made in the accompanying

consolidated financial statements.



	In 1995, as discussed in Note 1 to the consolidated financial

statements, the Company changed its method of accounting for

certain investments in debt and equity securities and, as

discussed in Note 11, changed its method of accounting for

contributions to its Employee Stock Ownership Plan.  As

discussed in Note 12 to the consolidated financial statements,

the Company changed its method of accounting for income taxes in

1994.











Melville, New York



July 5, 1995.





FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES



Consolidated Balance Sheets



April 30, 1995 and 1994



		







			ASSETS:                       1995             1994



						   (In thousands)



Current assets:



	Cash and cash equivalents       $ 4,291          $11,171



	Marketable securities (Note 3)   11,387            1,293







Accounts receivable, net of allowance for

  doubtful accounts of $562 in 1995 

	   and 1994 (Note 4)             13,894           22,212



	Inventories (Note 5)             11,168           11,490



	Prepaid expenses and other        1,257              897

 

	Refundable income taxes             318              287



		 Total current assets           42,315           47,350







Property, plant and equipment, at cost,

	less accumulated depreciation 

	and amortization (Notes 6 and 7)   9,192          10,039



Investment in direct finance lease 

(Note 8)                            9,452           9,264



Other assets                        1,777           3,270



Asset held for sale (Note 2)        2,296           2,732 







             			Total assets      $65,032        $72,655







The accompanying notes are an integral part

of these financial statements.







FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

Consolidated Balance Sheets

April 30, 1995 and 1994



		







		LIABILITIES AND STOCKHOLDERS' EQUITY:                 1995     1994



						   (In thousands)







Current liabilities:



Current maturities of long-term debt (Note 7)          $   750   $ 1,085



Accounts payable - trade                                   727     1,084



Accrued liabilities                                      1,782     2,582





                    			Total current liabilities        3,259     4,751







Long-term debt, net of current maturities (Note 7)      12,187    12,938



Deferred compensation (Note 11)                          2,628     2,002



Other                                                      144       387







                                                 							18,218    20,078







Commitments and contingencies (Notes 8 and 9)







Stockholders' equity (Note 11):



	Preferred stock - authorized 600,000 shares

		of $1.00 par value; no shares issued

	Common stock - authorized 20,000,000 shares

		of $1.00 par value; issued - 

		6,006,300 shares in 1995 and 1994                   6,006     6,006



	Additional paid-in capital                          35,131    35,339



	Retained earnings                                    13,443    17,286



	                                               						54,580    58,631

 

	Common stock reacquired and held in treasury -

		at cost (964,305 shares in 1995 and

		619,305 shares in 1994)                           (4,387)   (2,975)



	Unamortized ESOP debt (Notes 7 and 11)             (2,500)   (3,000)



	Notes receivable-common stock (Note 10)             (822)



	Unearned compensation                                (18)      (79)



	Unrealized holding loss                              (39)                







			Total stockholders' equity                      46,814    52,577







	Total liabilities and stockholders'

			  equity                                      $65,032   $72,655





The accompanying notes are an integral part 

of these financial statements.





FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

Consolidated Statements of Operations        

Years ended April 30, 1995, 1994, and 1993



		







                                    					   1995     1994     1993

				                                	(In thousands, except share data)











Net sales (Note 13)                      $24,081   $27,464   $43,231



Cost of sales                            20,602     25,083    39,474



Selling and administrative expenses       7,564      7,188     8,850



Research and development expenses         1,940      1,367     1,783



Restructuring costs (Note 2)                                   5,403







               		Total operating expenses  30,106    33,638    55,510







                     			Operating loss    (6,025)   (6,174)  (12,279)







Other income (expense):



      	Interest income                     758       869         672



      	Interest expense                 (1,034)     (973)      (1,131)



      	Other, net (Notes 3 and 8)       2,325       1,606       1,342



											  



	   Loss before (provision)

      	   benefit for income taxes     (3,976)    (4,672)     (11,396)







(Provision) benefit for income



      	taxes (Note 12)                  (82)        50          3,430







Loss before cumulative effect of change

in accounting principle                (4,058)    (4,622)      (7,966)







Cumulative effect of change in                                          

accounting principle                      215                               







Net Loss                               ($3,843)    ($4,622)     ($7,966)







Loss per common share before 

cumulative effect of change in 

accounting principle (Note 1)          ($.84)      ($.85)         ($1.42)







Cumulative effect of change in                                  

accounting principle                    .04                               







Loss per common share                 ($.80)      ($.85)         ($1.42)



Weighted average common shares and

common share equivalents outstanding

(Note 1)                            4,835,367      5,410,762       5,596,788





The accompanying notes are an integral part

of these financial statements.





FREQUENCY ELECTRONICS, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity

Years ended April 30, 1995, 1994 and 1993

(In thousands, except share data)



					                                      Additional

			                         Common stock    paid-in      Retained

                    			   Shares    Amount  capital      earnings     

Balance at May 1, 1992   6,006,300   $6,006  $35,339      $29,874      



Amortization of unearned

compensation                                                           



Purchase of treasury stock                                             





Amortization of ESOP 

debt as a result of 

shares allocated         



Net loss                                                    (7,966)

							    

Balance at April 30, 1993  6,006,300   $6,006  $35,339      $21,908



Exercise of restricted

stock purchase rights                                     

									 

Amortization of unearned

compensation

Purchase of treasury stock



Amortization of ESOP debt                                        

as a result of shares

allocated                                                             



Net loss                                                   (4,622)



Balance at April 30, 1994       6,006,300  6,006  35,339    17,286



Amortization of unearned

compensation

Purchase of treasury stock



Amortization of ESOP debt as a

result of shares allocated                           (208)



Decrease in market value of                             

marketable securities                   



Advances to  officers and 

employees for the

purchase of stock 



Net loss

                                                  							      (3,843)

Balance at April 30, 1995   6,006,300      $6,006   $35,131   $13,443



							                                                   Note

							                                                   Receivable

			                         Treasury stock   Unamortized  Common      

                      			   Shares    Amount  ESOP dept    Stock

Balance at May 1, 1992     329,082  ($1,674)  ($4,000)          



Amortization of unearned

compensation                                                           



Purchase of treasury stock  167,423  (749)



Amortization of ESOP 

debt as a result of 

shares allocated                                 500      



Net loss                    



Balance at April 30, 1993   496,505   (2,423)   (3,500)  

Exercise of restricted

stock purchase rights        (4,000)      4       

Amortization of unearned

compensation 

Purchase of treasury stock  126,800     (556)



Amortization of ESOP debt                                        

as a result of shares

allocated                                          500



Net loss                                                   



Balance at April 30, 1994     619,305  (2,975)   (3,000)



Amortization of unearned compensation                                           

Purchase of treasury stock    345,000   (1,412)



Amortization of ESOP debt as a

result of shares allocated                         500



Decrease in market value of                             

marketable securities                   



Advances to  officers and 

employees for the

purchase of stock                                         ($822)

Net loss



Balance at April 30, 1995   964,305   ($4,387)   ($2500)  ($822)



				                                  Unrealized

				                                  gain or

				                                  (loss) on

				                                  noncurrent

			                       Unearned    marketable

                     			compensation  securities    Total

Balance at May 1, 1992    ($388)                   $65,157          



Amortization of unearned

compensation               173                       173   

Purchase of treasury stock                           (749)



Amortization of ESOP 

debt as a result of 

shares allocated                                      500      



Net loss                                             (7,966)



Balance at April 30, 1993    (215)                   (57,115)



Exercise of restricted

stock purchase rights        (33)                       (29)         

									 

Amortization of unearned

compensation                 169                        169                 



Purchase of treasury stock                           (556)                     



Amortization of ESOP debt                                        

as a result of shares

allocated                                               500                    



Net loss                                             (4,622)      



Balance at April 30, 1994      (79)                   52,577



Amortization of unearned

compensation                    61                      61                   



Purchase of treasury stock                            (1,412)



Amortization of ESOP debt as a

result of shares allocated                              292



Decrease in market value of                ($39)         (39)             

marketable securities                   



Advances to  officers and 

employees for the

purchase of stock                                       (822)             

							

Net loss                                  						       (3,843)

Balance at April 30, 1995         ($18)    ($39)       $46,814





The accompanying notes are an integral part of these financial

statements.





FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

Consolidated Statements of Cash Flows

Years ended April 30, 1995, 1994 and 1993







                    			     1995           1994          1993

				                                 (In thousands)



Cash flows from operating activities:



	Net loss               ($3,843)        ($4,622)       ($7,966)



Adjustments to reconcile net 

loss to net cash provided by

operating activities:

Depreciation and amortization

    	     Property         995           1,576          2,151



           		Other         20            (425)           173



Provision for losses on accounts

receivable and inventories                              4,112



(Gains) losses on marketable

securities               (1,197)            (94)           213



Restructuring costs                                      4,109



 Loss (gain) on sale or disposal of

property, plant and equipment              560            (63)



 Common stock issued for compensation

			       plans                              4        



Amortization resulting from

allocation of ESOP shares          292       500            500



Provision for deferred compensation 717       237            278

 Deferred income taxes                                     (2,242)



Changes in assets and liabilities:

Accounts receivable               8,318      10,265          4,063

Inventories                        322        1,672            407

Prepaid and other                  (360)         290            373

Other assets                        497          727           (607)

Accounts payable - trade           (357)        (111)          (966)

Accrued liabilities              (800)        (4,912)           513

Income taxes payable                            (281)           (60)

Refundable income taxes            (31)         1,335         (1,622)

Other liabilities                 (311)                              





Net cash provided by 

operating activities              4,262          6,721          3,366







Cash flows from investing activities:

Purchase of marketable 

securities                       (11,094)

Proceeds from sale of marketable                

securities                         2,440



Maturities of marketable 

securities                         1,000                          



	Capital expenditures              (168)          (404)        (5,692)



Proceeds from sale of property, 

plant and equipment                                  34             93 



Net cash used in investing

activities                         (7,822)          (370)        (5,599)



Continued







FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

Consolidated Statements of Cash Flows

Years ended April 30, 1995, 1994 and 1993



(Continued)





                            				    1995         1994           1993

					                                 	     (In thousands)



Cash flows from financing activities:

Principal payments of long-term

		debt                          (1,086)      (11,913)         (2,017)

Purchase of treasury stock      (1,412)         (556)           (749)

Notes receivable from employees   (822)

Proceeds from long-term borrowings                800            4,447



Net cash (used in) provided by 

financing activities             (3,320)      (11,669)          1,681



Net decrease in cash    

and cash equivalents              (6,880)       (5,318)           (552)



Cash and cash equivalents at

 beginning of year                11,171        16,489          17,041



Cash and cash equivalents at

end of year                        $4,291       $11,171         $16,489







Supplemental disclosures of cash flow

information (Note 15):



Cash paid during the year for:



Interest                            $1,017          $833           $918

Income taxes                          $151          $383            $608





The accompanying notes are an integral part

of these financial statements.











1.      Summary of Accounting Policies



	Principles of Consolidation:



The consolidated financial statements include the accounts of

Frequency Electronics, Inc. and its wholly-owned subsidiaries

(the "Company" or "Registrant"). The Company is principally

engaged in the design, development and manufacture of precision

time and frequency control products and components for microwave

integrated circuit applications. Intercompany accounts and

significant intercompany transactions are eliminated in

consolidation.



	Inventories:



Inventories, which consist of work-in-process and raw materials,

are accounted for at the lower of cost (specific and average) or

market.



	Property, Plant and Equipment:



Property, plant and equipment is recorded at cost and includes

interest on funds borrowed to finance construction. 

Expenditures for renewals and betterments are capitalized;

maintenance and repairs are charged to income when incurred.

When fixed assets are sold or retired, the cost and related

accumulated depreciation and amortization are eliminated from

the respective accounts and any gain or loss is credited or

charged to income.



	Depreciation and Amortization:



Depreciation of fixed assets is computed on the straight-line

method based upon the estimated useful lives of the assets (40

years for buildings and 3 to 10 years for other depreciable

assets). Leasehold improvements are amortized on the

straight-line method over the shorter of the term of the lease

or the useful life of the related improvement.



	Revenue and Cost Recognition:



Sales of products and services to customers are generally

reported in operating results based upon shipment of the product

or the performance of services pursuant to contractual terms.



Revenue under contracts for which shipments are an inappropriate

measurement of performance are reported in operating results

using the percentage of completion method based upon the ratio

that incurred costs bear to total estimated costs.  Provisions

for anticipated losses are made in the period in which they

become determinable.  Changes in job performance may result in

revisions to costs and income and are recognized in the period

in which revisions are determined to be required.



Contract costs include all direct material and labor costs and

those indirect costs related to contract performance, such as

depreciation, indirect labor and supplies. Selling, general and

administrative costs are charged to expense as incurred.



In accordance with industry practice, inventoried costs contain

amounts relating to contracts and programs with long production

cycles, a portion of which will not be realized within one

year.Income Taxes:



Effective May 1,1993, the Company changed its method of

accounting for income taxes by adopting the provisions of

Statement of Financial Accounting Standards No. 109, "Accounting

for Income Taxes" (Statement 109). Statement 109 requires

recognition of deferred tax liabilities and assets for the

expected future tax consequences of events that have been

included in the financial statements or tax returns. Under this

method, deferred tax liabilities and assets are determined based

on the difference between the financial statement and tax bases

of assets and liabilities using enacted tax rates in effect for

the year in which the differences are expected to reverse.

Valuation allowances are established when necessary to reduce

deferred tax assets to the amount expected to be realized.  The

cumulative effect of this change in accounting principle on

prior years is insignificant to the Company's statement of

operations.



	Earnings per Share:



Primary earnings per share are computed by dividing net earnings

by the weighted average number of shares of common stock and,

when dilutive, common stock equivalents outstanding.



The weighted average number of shares used in determining

earnings per share has been determined as follows:



                          				1995               1994           1993 



Weighted Average number of 

common shares outstanding     4,835,367         5,410,762       5,590,910 



Weighted average common 

equivalent shares arising from

outstanding options and rights                                   5,878 



	                           			4,835,367       5,410,762       5,596,788 

 



Fully diluted earnings per share are not presented since they do

not materially vary from primary earnings per share.

















               Marketable Securities:



Marketable securities consist of investments in common stocks,

mutual funds, and debt securities of U.S. government agencies. 

At April 30,1993 and 1994, these investments were recorded at

the lower of aggregate cost or market.  Substantially all of the

marketable securities at April 30,1995 were held in the custody

of one financial institution.



On May 1,1994 the Company adopted the provisions of Statement of

Financial Accounting Standards No. 115, "Accounting for Certain

Investments in Debt and Equity Securities" ("Statement 115"). 

Pursuant to Statement 115, investments in certain debt and

equity securities are categorized as available for sale and are

carried at fair value, with unrealized gains and losses excluded

from income and recorded directly to stockholders' equity.  In

accordance with Statement 115, prior period financial statements

have not been restated to reflect the change in accounting

principle.  The favorable cumulative effect of this change in

accounting principle was approximately $215,000 or $.04 per

share.



	Cash Equivalents:



The Company considers certificates of deposit and other highly

liquid investments with original maturities of three months or

less to be cash equivalents. The Company places its temporary

cash investments with high credit quality financial

institutions. Such investments may be in excess of the FDIC

insurance limit. No losses have been experienced on such

investments.



Other:



Prior years financial statements have been reclassified to

conform to the 1995 presentation.



2.      Restructuring



In the fourth quarter of fiscal 1993, the Company recorded a

$5.4 million charge relating to the consolidation of the

Company's west coast operations with its east coast headquarters

facility. The restructuring, which consolidated the

manufacturing, engineering and marketing functions and resulted

in the sale or disposal of certain unprofitable product lines,

is substantially complete. At April 30, 1995, the only remaining

asset is a building which has been written down to its estimated

realizable value of 2.3 million.  In June 1995, the building was

sold for such amount.  The Company received $500 thousand in

cash and a promissory note for $1.8 million.  Such note bears

interest at 10% and requires monthly installments of principal

and interest of $19,343 until July 31,2000 when the entire

remaining principal balance shall be due and payable.







3.  Marketable Securities



Marketable securities at April 30,1995 and 1994 are summarized

as follows (in thousands):



                                  							 April 30,1995           

							                                                    Unrealized

                                                            Holding

			                        	  Cost        Market Value   Gain (Loss) 



Fixed income securities        $ 9,965        $10,019         $54  



Equity Securities               1,461          1,368         (93) 



                          				 $11,426         $11,387       ($39) 











                                   					 April 30,1994 (1)               



                          				      Cost       Market Value   



Fixed income securities             $  628          $  655      



Equity Securities                     2,587           2,345      



                             				     $3,215          $3,000      



			



(1) Includes amounts classified in other assets.                        







As of April 30,1995, gross unrealized gains and losses on fixed

income securities were $123 and $69, respectively.  Gross losses

on equity securities were $93.



Maturities of fixed income securities classified as available

for sale at April 30,1995 are as follows (in thousands):



Current                                          $4,236  



Due after one year through five years             4,903  



Due after five years through ten years            728  



After ten years                                    98  





The proceeds from sales of available-for-sale securities and the

gross realized gains (based on specific identification) were

$2.4 million and $1.2 million, respectively for the year ended

April 30,1995.





4.     Accounts Receivable



Accounts receivable include costs and estimated earnings in

excess of billings on uncompleted contracts accounted for on the

percentage of completion basis of approximately $5,456,000 at

April 30, 1995 and $9,290,000 at April 30, 1994. Such amounts

represent revenue recognized on long-term contracts that has not

been billed, pursuant to contract terms, and was not billable at

the balance sheet date.







5.      Inventories



Inventories consisted of the following (in thousands):



                    			  1995            1994  



Raw Materials            $1,569            $714 



Work in Progress           9,599           10,776  



                       			 $11,168         $11,490 







Title to all inventories related to United States Government

contracts that provide for progress billings vests in the U.S.

Government.



6.      Property, Plant and Equipment



Property, plant and equipment consists of the following (in

thousands):



                                   					 1995             1994 



Buildings and building improvements     $ 8,753         $ 8,753 



Machinery, equipment and furniture      15,079           21,881 



Capitalized leases                          152            152 



                                    					23,984          30,786 



Less, accumulated depreciation 

and amortization                          14,792         20,747 



                                  					  $ 9,192         $10,039 







Depreciation and amortization expense for the years ended April

30, 1995, 1994 and 1993 was $995,000, $1,576,000, and

$2,151,000, respectively.



Maintenance and repairs charged to operations for the years

ended April 30, 1995, 1994 and 1993 was approximately $562,000,

$880,000, and $1,137,000, respectively.



Portions of a building owned by the Company are leased to

outside parties. Related cost and accumulated depreciation at

April 30, 1995 are approximately $564,000 and $145,000,

respectively.





7.        Long-Term Debt



Long-term debt consists of the following (in thousands):



                                          						  1995      1994 



		 



Unsecured note payable in forty equal 

quarterly installments of $125,000 

through April 1, 2000 with interest at 

adjusted LIBOR plus 1.00% (7.0625% at 

April 30, 1995) (1)                              $ 2,500     $3,000  



Nassau County Industrial Development Bonds  

Payable in quarterly installments of $62,500 

through September 30, 2000 at 79% of

prime (7.11% at April 30, 1995) (2)             1,437           1,687  



Real Estate Construction Loan in the amount 

of $9,000,000, maturity date July 31, 1997 

with interest at LIBOR plus 1.375%

(7.4375% at April 30, 1995) or prime plus 

0.25% (3)                                       9,000          9,000  



Nassau County Industrial Development Bonds 

Payable in quarterly installments of $83,333 

through 1995 at 65% of prime (5.85% at

April 30, 1995)                                                  336  



                                        						 12,937          14,023  



Less, current maturities                           750           1,085  



                                          						 $12,187         $12,938  







(1)     This note, originally in the amount of $5,000,000, was used

to fund the purchase of 714,286 shares of the Company's common

stock for the Employee Stock Ownership Plan (see Note 11). 

Under the terms of this loan the Company has the right to borrow

either at the bank's stipulated prime rate, at LIBOR plus 1.0%

or at a designated fixed rate to be determined.



(2)     This obligation is collateralized by certain property, plant

and equipment having a net book value of approximately

$6,452,000 at April 30, 1995.



(3)     This obligation is collateralized by the tenant's assets for

which a building was constructed (see Note 8).





Aggregate amounts of long-term debt scheduled to mature in each

of the subsequent years ending April 30, are as follows (in

thousands):



 1996           $   750 



1997               9,750 



1998               750 



1999              750 



2000              750 



2001 and 

thereafter        187 



             		 $12,937 







8.      Leases



Operating Leases:



The Company leases land, on which its plant is located, under an

operating lease expiring in 2080. The lease provides for

payments of real estate taxes, insurance and other charges by

the lessee. The lease agreement provides for rental escalations

ranging from three to ten percent at varying periods of from

four to ten years. The Company also has sublease rentals

providing for annual rental income. These sublease agreements

provide for escalations which are substantially the same as

those in the company's lease.



Lease commitments and related sublease rental income for real

property at April 30, 1995 are as follows (in thousands):



	Aggregate Lease Commitments     Sublease Rental Income 



1996              $   276                 $ 66 



1997                  238                   66 



1998                  218                    66 



1999                  182                    66 



2000                  167                    66 



2001 and thereafter  18,797                 462  



                		   $19,878                  $792 







Lease rental expenses, including real estate taxes, charged to

operations for the years ended April 30, 1995, 1994 and 1993

were approximately $1,158,000, $910,000, and $704,000,

respectively.



Sublease rental income for the years ended April 30, 1995, 1994

and 1993 was approximately $66,000 in each year.



Direct Finance Lease:



During 1993, construction was completed on a building which is

being leased to National Health Laboratories, Inc. ("NHL") under

a fifteen year direct finance lease.





Income on this direct finance lease is recognized by a method

which produces a constant periodic rate of return on the

outstanding investment in the lease. Minimum rentals are based

on the specified rental rate in the agreement and are subject to

adjustment based on the difference between the actual rate of

interest incurred on the borrowing used to construct the

facility and the targeted range of 9.75% to 10.25%.  During

fiscal 1995,1994 and 1993, rental reductions, representing

actual interest savings, of approximately $286,000, $437,000,

and $203,000, respectively were passed through to NHL.  The

Company's net investment in the direct finance lease is as

follows (in thousands):



Minimum lease payments receivable       $27,851  



Unearned Income                          (18,399) 



Net Investment                           $ 9,452  











The scheduled maturities for the direct financing lease

receivable at April 30, 1995 are as follows (in thousands):







1996                     $ 1,719 



1997                     1,804 



1998                     1,895 



1999                      1,989 



2000                     2,089 



2001 and thereafter      18,355 



                    			 $27,851 



	







9.      Commitments and Contingencies



U.S. Government Indictment:



On November 17, 1993, a Federal Grand Jury (the "Grand Jury") in

the United States District Court for the Eastern District of New

York indicted the Company and certain individuals (including

certain officers) alleging that they conspired to and did

defraud the U.S. Government ("the Government") and committed

certain criminal acts in connection with six contracts (which

were terminated for the convenience of the Government) under

which the Company was a subcontractor and the Government was the

end-user. Such alleged criminal acts included submitting false

documents, intentionally making false statements and destroying

or causing to be destroyed, records relating to labor and other

costs. On April 6, 1994 the Grand Jury returned a superseding

indictment for the purpose, it is believed, of curing certain

asserted deficiencies in the original indictment. Upon a

conviction under the original or superseding indictment

(collectively the "Indictment") the Government may seek fines,

penalties, forfeitures, restitution, treble damages and other

conditional relief. The Company and the other defendants have

pleaded not guilty to and intend to vigorously defend the

Indictment.





    U.S. Government Civil Action:



Contemporaneously with the issuance of the original indictment,

the Government commenced a civil action for damages naming the

same parties and alleging essentially the identical facts and

charges set forth in the Indictment. The complaint seeks to

recover treble damages in an unspecified amount, $10,000 for

each false claim, record and statement, certain costs and

attorney's fees, and such other relief the court deems proper.

Neither the Indictment nor the civil action alleges the dollar

amounts as to which the Government claims it was defrauded. The

Company was reimbursed for costs incurred for contract

performance and for settlement costs in connection with the six

terminated contracts. The civil action has been stayed pending

the disposition of the Indictment. The Company and the other

defendants have denied the allegations of and intend vigorously

to contest the civil action.



	Private Civil Derivative Actions:



On December 1, 1993 and February 4, 1994 two separate derivative

shareholder actions (pursuant to a court order, are now

consolidated under one civil action) were served in state court

actions against the Company as a nominal defendant and the

entire board of directors and certain individuals.  A derivative

action is one permitted by law to be instituted by a shareholder

for the benefit of a corporation to enforce an alleged right or

claim of the corporation where it is alleged that such

corporation has either failed and refused to do so or may not

reasonably be expected to do so. The substance of the complaint

in each action is similar and comprises a series of allegations

that the misconduct of Company personnel, involved in the

aforementioned Indictment, is such that it exposes the company

to material and substantial monetary judgments and penalties and

the loss of significant business, and the directors were under a

fiduciary obligation to manage and control the business

operations of the Company and the conduct of its personnel. The

complaint seeks judgment against the directors in the amount of

all losses and damages suffered by the Company on account of the

facts alleged in the complaint, together with interest costs,

legal and other professional fees. The Company and the other

defendants have denied the allegations of and intend vigorously

to contest the derivative actions.  The derivative shareholder

actions have been stayed pending the disposition of the

Indictment, and related investigations.



Qui Tam Action:



In March 1994, a qui tam action was served upon the Company and

Martin Bloch, its former chief executive officer. A qui tam

action is a form of derivative action wherein an individual may,

under certain circumstances, bring a legal action against one or

more third persons on behalf of the Government for damages and

other relief by reason of one or more alleged wrongs perpetrated

against the Government by such third persons. The complaint

alleges that the Company, in connection with its subcontract to

design and manufacture certain oscillators which are components

of the Government's Advance Medium Range Air to Air Missiles

("AMRAAMS"), improperly designed, manufactured and tested the

oscillators and as a result the Government sustained damages.

The complaint demands an unspecified amount of damages allegedly

suffered by the Government, and asks that the Court determine

the damages and assess civil penalties as provided under the

False Claims Act. Under the False Claims Act, a recovery can be

made in favor of the Government for a civil penalty of not less

than $5,000 and not more than $10,000 as to each false claim and

for each false record and statement, plus three times the amount

of damages it is determined the Government sustained, plus legal

fees and expenses. The Company and Mr. Bloch have denied the

allegations of and intend to vigorously defend the qui tam

action.





Company Position and Legal Fees:



The Company and the individual defendants in each of the legal

matters described above consider the allegations and the charges

asserted to be unjustified. They further consider the actions of

the Company and the individual defendants with respect to the

subject matter of these charges to have been taken in good faith

and without wrongful intent, criminal or otherwise. Because of

the uncertainty associated with the foregoing matters, the

Company is unable to estimate the potential liability or loss

that may result, if any, and accordingly, no provision has been

made in the accompanying consolidated financial statements.

Included in selling and administrative expenses are legal fees

incurred in connection with the above matters of approximately

$2,300,000, $1,819,000, and $547,000 for fiscal years ended

1995, 1994 and 1993, respectively.



Government Contract Suspension:



On December 14, 1993 the Company was notified by the U.S.

Department of the Air Force that, effective December 13, 1993,

it had been suspended from contracting with, or acting as

subcontractor under any contract with, any agency of the

Government and that such suspension is effective throughout the

executive branch of the Government. The suspension is temporary,

subject to the outcome of legal proceedings against the Company

and the four individuals presently pending in the Eastern

District as discussed above. The suspension does not preclude

the completion by the Company of its performance of Government

contracts or subcontracts awarded to it and pending on the date

of suspension. The Government may also conduct business with the

Company during the period of suspension when a Government

department or agency determines that a compelling reason exists

for it to do so. The suspension allows the Company the

opportunity to contest the suspension by submitting information

and argument in opposition to the suspension.  Since the Company

and all the individual defendants have pleaded not guilty to the

Indictment and denied the charges alleged in the Government's

related civil action, the Company believes that the suspension

is unwarranted, and accordingly, is vigorously contesting the

suspension. However, to date, the suspension has not been

withdrawn and no assurance can be given as to removing the

suspension pending a favorable disposition of the aforementioned

legal proceedings. If the Indictment results in conviction, the

period of suspension could be extended by way of the debarment

of the Company from any future Government contracts or

subcontracts.  Debarment is imposed for a period commensurate

with the seriousness of the causes. Generally, debarment does

not exceed three years. The duration of the Company's suspension

will be considered in determining the debarment period.



Approximately 75% of the Company's revenue for fiscal 1995 is

comprised of prime and subcontracts in which the Government is

the end-user. The other category of the Company's business is in

commercial and export markets unrelated to the Government. In

view of the extent to which the Company is currently reliant on

government contracts and subcontracts and the effect which the

suspension, unless withdrawn, will have on the Company's ability

to continue to obtain such business, the Company believes that

the suspension and possible debarment is an extremely serious

matter which is likely to have a material adverse effect on the

Company's business prospects, financial condition and results of

its operations.





Unasserted Claims:



By reason of a separate Grand Jury investigation, the Company

was served at various times with a series of Grand Jury

subpoenas commencing in late December 1993. The subpoenas, with

which the Company complied, called for the production of a

variety of finance, accounting and other documents relating to

AMRAAMS.  The prosecutor has not advised as to the theory of

this investigation. Based upon the documents subpoenaed, it

appears that the inquiry relates to finance and/or pricing

matters. The Company regards charges or claims of violations of

Government laws and regulations as extremely serious and

recognizes that such charges or claims could have a material

adverse affect on it. In the event of an indictment and

conviction against the Company in this matter, the Government

may seek fines, penalties, restitution, forfeitures, treble

damages or other conditional relief. The Company would also be

subject to the suspension and debarment regulations of the

Department of Defense described above. To date, no charges have

been filed, nor claims asserted against the Company as a result

of this Grand Jury investigation.



Environmental Matters:



In connection with an acquisition in 1988, the Company obtained

certain real estate which the U.S. Environmental Protection

Agency proposed be added to the National Priorities List, which

would subject the premises to the Superfund requirements of the

law. No estimate as to the cost to clean up the premises has

been made or provided to the Company. Pursuant to the terms of

the purchase agreement, the seller, a financially capable party,

indemnified the Company from any liabilities arising from this

environmental matter, and accordingly it is management's opinion

that the outcome will not have a significant impact on the

Company's financial position or results of operations.



Other:



The Company is subject to various other legal proceedings and

claims which arise in the ordinary course of business. In the

opinion of management, the amount of ultimate liability with

respect to these actions will not materially affect the

financial position of the Company.



10.     Notes Receivable-Common Stock



In October 1994, certain officers and employees acquired an

aggregate of 250,000 shares of the Company's common stock in the

open market.  The purchase price of these shares of

approximately $822,000 was financed by advances from the Company

to such officers and employees.  The notes, collateralized by

the shares of common stock purchased, accrue interest at 1/2%

above prime (8.25% at date of issuance) which is payable and

adjusted annually.  The principal is due in its entirety at the

earlier of termination of employment or October 1999.



11.     Employee Benefit Plans



Stock Options:



The Company has various Incentive Stock Option Plans ("ISOP's")

for key management employees (including officers and directors

who are employees). The ISOP's provide that eligible employees

may be granted options to purchase an aggregate of 900,000

shares of the Company's common stock. Under one Plan the options

are exercisable one year after the date of grant. Under the

remaining plans the options are exercisable over a four-year

period beginning one year after the date of grant.  The options

expire ten years after the date of grant and are subject to

certain restrictions on transferability of the shares obtained

on exercise. The options are granted at the discretion of the

Stock Option committee at an exercise price not less than the

fair market value of the Company's common stock on the date of

grant.



Transactions under these plans are as follows:



                                  					 1995      1994          1993 



Outstanding at beginning of year        591,446   560,846      594,846  



Granted                                           113,000          



Expired or canceled                     (48,375)  (82,400)    (34,000) 



Outstanding at end of year               543,071  591,446     560,846  



Options exercisable at end of year       380,428  478,446     560,846  



Options available for grant 

at end of year                           327,198   296,548      55,500  







At April 30, 1995 and 1994 option prices per share were $5.00 -

$6.875



The excess of the consideration received over the par value of

the common stock or cost of treasury stock issued under these

option plans has been recognized as an increase in additional

paid-in capital. No charges are made to income with respect to

stock options.



Restricted Stock Plan:



During fiscal 1990, the Company adopted a Restricted Stock Plan

which provides that key management employees may be granted

rights to purchase an aggregate of 250,000 shares of the

Company's common stock. The grants, transferability restrictions

and purchase price are determined at the discretion of a special

committee of the board of directors. The purchase price may not

be less than the par value of the common stock.



                                    					 1995              1994        1993 



Exercisable at beginning of year         25,000          7,500          7,500 



Granted (purchase price - 

$1.00 per share)                                        25,000            

Exercised and expired                                   (7,500)                



Exercisable at end of year                25,000          25,000        7,500 



Balance of shares available for 

grant at end of year                      152,500       152,500       178,000 







Transferability of shares is restricted for a four year period,

except in the event of a change in control as defined. Amounts

shown as unearned compensation in stockholders' equity represent

the excess of the fair market value of the shares over the

purchase price at the date of grant which is being amortized as

compensation expense over the period in which the restrictions

lapse.





 Employee Stock Ownership Plan/Stock Bonus Plan:



During 1990 the Company amended its Stock Bonus Plan to become

an Employee Stock Ownership Plan (ESOP). This amendment became

effective January 1, 1990. A loan in the amount of $5,000,000

was negotiated with a bank on May 22, 1990 to fund the Trust.

The loan is for a ten year period with forty equal quarterly

installments of $125,000, plus interest at various rates at the

Company's option. The Company reacquired 374,435 shares of its

common stock during fiscal 1990. These shares plus approximately

340,000 additional shares issued by the Company from its

authorized, unissued shares were sold to the ESOP in May 1990.



Shares are released for allocation to participants based on the

ratio of the current year's debt service to the sum of the

current year's debt service plus the principal to be paid for

all future years.  At April 30,1995, 405,260 shares were

allocated to participant accounts.



Effective May 1,1994, the company changed its method of

accounting for its ESOP in accordance with Statement of Position

("SOP") 93-6.  In accordance with SOP 93-6 the annual expense

related to the leveraged ESOP, determined as interest incurred

on the note plus compensation cost based on the fair value of

the shares released was approximately $479,000 for the year

ended April 30,1995.  For the year ended April 30,1994 and 1993,

compensation cost was based on the cost of the shares released

and the annual expense (including interest) was $610,000 and

$711,000, respectively.  The effect of this change on the

statement of operations for the year ended April 30,1995 was a

benefit of $208,000 or $.04 per share.



The SOP also requires that ESOP shares that are committed to be

released are considered outstanding for purposes of calculating

earnings per share.  In fiscal 1994 and 1993 all ESOP shares

were considered outstanding for purposes of calculating earnings

per share.  The fair value of unallocated shares approximates

$1.7 million at April 30,1995.



Deferred Compensation Plan:



The Company has instituted a program for key employees providing

for the payment of benefits upon retirement or death. Under the

plan, these employees receive specified retirement payments for

the remainder of the employees' life with a minimum payment of

ten years' benefits to either the employee or their

beneficiaries. The plan also provides for reduced benefits upon

early retirement or termination of employment. The Company has

purchased whole life insurance policies on each of the

participant's lives which it intends to use to fund the

liabilities under the plan.



Deferred compensation expense charged to operations during the

years ended April 30, 1995, 1994, and 1993 was approximately

$717,000, $598,000, and $324,000, respectively.



Profit Sharing Plan:



The Company adopted a profit sharing plan and trust under

section 401(k) of the Internal Revenue Code.  This plan allows

all eligible employees to defer a portion of their income

through voluntary contributions to the plan. In accordance with

the provisions of the plan, the Company can make discretionary

matching contributions in the form of cash or common stock.

There were no such contributions in fiscal 1995, 1994 or 1993.





12.      Income Taxes



The provision (benefit) for income taxes consists of the

following (in thousands):



                           				 1995    1994      1993 



Current Federal                          ($92)   ($1,492)  



Current State and Local          $82       42      304   



Deferred                                         (2,242)  



                            				 $82     ($50)    ($3,430)  











The components of deferred taxes are as follows (in thousands):



                     			1995    1994    



Deferred tax assets:                    



  Accounts receivable   $372    $87     



  Employee benefits     1,350   1,163         



  Inventory              353     494     



  Asset writedowns      719     1,346   



Net operating loss 

carryforwards          4,456   3,387   



 Total deferred tax 

   asset                7,250   6,477   



			



Deferred tax liabilities:                       



Property, plant and 

equipment               2,220   2,145   



  Miscellaneous                    39   



Total deferred 

tax liability           2,220   2,184   



Net deferred tax asset  5,030   4,293   



Valuation allowance     (5,030) (4,293)         



                     			$       $               





The following table reconciles the reported income tax expense

(benefit) with the amount computed using the federal statutory

income tax rate.



                               					  1995           1994         1993 



	(In thousands)           



Computed "expected" tax benefit     ($1,352)        ($1,588)    ($3,875) 



State and local tax, net of 

federal benefit                          55                 89       168 



Dividend received deduction              (22)            (22)         (22) 



Loss carryforward for which no 

tax benefit was recorded                1,372           1,454    



Other items, net, none of which 

individually exceeds 5% of

federal taxes at statutory rates          29             17              299  



                                  					$82             ($50)         ($3,430) 







Tax benefits were provided on pre-tax losses for financial

reporting purposes in 1993 by reversing previously established

deferred tax credits. At April 30, 1995, the Company has net

operating loss carryforwards of approximately $11 million which

may be applied against future taxable income and which expire

beginning in 2008.





13.  Industry and Operations



The Company is engaged in the manufacture and sale of precision

time and frequency control products for defense and space for

U.S. Government end use and commercial communication and

non-U.S. defense and space. As a result, the Company's

operations have been classified into two business segments as

follows (in thousands):



                     			  1995           1994            1993 



Net sales:                       



  Commercial             $ 6,103         $ 8,597         $10,509  



  U.S. Government       17,978           18,867          32,722  



Operating income (loss):                         



  Commercial            (2,088)         (1,982)         (1,730) 



  U.S. Government        281            (513)           (2,837) 



  Corporate             (4,218)         (3,679)         (7,712) 



Identifiable assets:                     



  Commercial             6,348          10,677          14,067 



  U.S. Government       27,606          37,838          48,872 



  Corporate             31,078          24,140          34,126 



Depreciation:                    



  Commercial            351             275             562 



  U.S. Government       615             1,202           1,508 



  Corporate             29              99              81 



Capital expenditures:                    



  Commercial            40              124             254 



  U.S. Government       128             277             1,156 



  Corporate                              3              4,282 







Aggregate sales to Hughes Aircraft Company, TRW, and Raytheon

Corp. each exceeded 10% of the Company's consolidated sales and

collectively were approximately 56% of the Company's

consolidated sales during the fiscal year ended April 30, 1995.

Aggregate sales to Hughes Aircraft Company and Raytheon Corp.

each exceeded 10% of the Company's consolidated sales and

collectively were approximately 40% and 33% of the Company's

consolidated sales during the fiscal years ended April 30,1994

and 1993, respectively.  Substantially all of these sales were

for U.S. Government end use. The loss by the Company of any one

of these customers, or the loss by any of such customers of its

U.S. Government contracts which are partially subcontracted to

the Company, would have a material adverse effect on the

Company's business. The Company believes its relationship with

these companies to be mutually satisfactory and is not aware of

any prospect for the cancellation of any of their U.S.

Government contracts in which the Company is involved, except

for the possible effect of the pending U.S. Government

investigation discussed in Note 9.





















Export sales were as follows (in thousands):



      	 1995    1994     1993 



Canada  $1,071          $1,079 



Italy     663   $2,032   287 



United 

Kingdom   671     903     1,637 



Taiwan   164     886     



Japan    291     602     1,120 



Israel   426             



Brazil   372             



Other    254     30      686 



      	$3,912  $4,453  $4,809 



			







14.     Interim Results (Unaudited)



Quarterly results for fiscal years 1995 and 1994 are as follows

(in thousands, except per share data):      

                                 1995 Quarter

	              	 1st             2nd             3rd             4th 



Net sales       $6,616          $5,958          $5,479          $6,028  



Gross profit    1,375            698             613             793  



Loss before 

cumulative 

effect of 

accounting 

change        (613)          (1,713)           (470)            (1,262) 



Net loss      (398)          (1,713)           (470)            (1,262) 



*Loss per 

share         (0.07)            (0.32)          (0.09)         (0.31) 



Loss per 

share before 

cumulative 

effect of 

accounting 

change        (0.11)          (0.32)            (0.09)         (0.31) 











                           				  1994 Quarter                            



                    			1st      2nd            3rd             4th 



Net sales               $5,458    $4,362      $6,319          $11,325  



Gross profit            1,565    844            (1,140)          1,112  



Net Earnings (loss)      43      (285)          (3,032)         (1,348) 



Earnings (loss) 

per share                0.01   (0.05)          (0.56)          (0.25) 



				







*Quarterly earnings per share data does not equal the annual

amount due to changes in the average common equivalent shares

outstanding.





15.    Other Information



The following provides information about investing and financing

activities of the Company that affect assets or liabilities but

do not result in cash flow for the three years ended April 30,

1995, 1994 and 1993 and, therefore, are excluded from the

Consolidated Statements of Cash Flows (in thousands):



                     		  1995        1994         1993 



Reclassification 

of a building to 

investment in direct 

finance

lease (see Note 8)                               $9,000 



Reclassification of a 

building to asset 

held for sale (see Note

2)                                   $2,700         



Write-off of fully 

depreciated fixed asset   $6,634                 











16.     Related Party Transactions



On January 31,1995 the Company purchased 225,000 shares of its

common stock from an affiliate of Richard C. Blum & Associates

L.P. (collectively, with its affiliates, "Blum") at the then

quoted bid price of $4.25 per share or $956,250.  Blum's

ownership of the Company's outstanding common stock was thereby

reduced from 16.64% (876,350 shares) to 12.92% (651,350).







FREQUENCY ELECTRONICS, INC. and SUBSIDIARIES

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

(In thousands)



Column A      Column B          Column C             Column D        Column E 



                          	      Additions                        



Description    Balance at  Charged to  Charged to      Deductions   Balance at

	               beginning   costs and   other accounts   -describe   end of

	               of period   expenses    - describe                   of period

		



Year ended April 

30, 1995 

Allowance 

for doubtful 

accounts       $562                                                   $562 



Year ended April 

30, 1994 

Allowance 

for doubtful 

accounts        $562                                                  $562 



Year ended April 

30, 1993 

Allowance 

for doubtful 

accounts        $850                                     $288(a)      $562 







(a)     Accounts written off



Item 9.  Changes in and Disagreements with Accountants on

Accounting and Financial Disclosure



NONE



PART III



Item 10.  Directors and Executive Officers of the Registrant



This item is incorporated herein by reference from the

Registrant's definitive proxy statement for the annual meeting

of stockholders to be held on October 10,1995.



Item 11.  Executive Compensation



This item is incorporated herein by reference from the

Registrant's definitive proxy statement for the annual meeting

of stockholders to be held on October 10,1995.



Item 12.  Security Ownership of Certain Beneficial Owners and

Management



This item is incorporated herein by reference from the

Registrant's definitive proxy statement for the annual meeting

of stockholders to be held on October 10,1995.



Item 13.  Certain Relationships and Related Transactions



This item is incorporated herein by reference from the

Registrant's definitive proxy statement for the annual meeting

of stockholders to be held on October 10,1995.





PART IV



Item 14.  Exhibits, Financial Statement Schedules, and Reports

on Form 8-K



(a)     (1) FINANCIAL STATEMENTS



The financial statements and financial statement schedules are

listed below and are filed as part of this report.



Index to Financial Statements and Financial Statement Schedules



Included in Part II of this report:



						Page(s)



Report of Independent Accountants                32-33



Consolidated Balance Sheets                      34-35 

April 30, 1995 and 1994



Consolidated Statements of Operations - 

years ended April 30,

1995, 1994 and 1993                               36



Consolidated Statements of 

Changes in Stockholders' Equity -

years ended April 30, 1995, 1994 and 1993         37



Consolidated Statements of      

Cash Flows - years ended        

April 30, 1995, 1994 and 1993                     38-39



Notes to Consolidated Financial Statements      40-57







(2) Financial Statement Schedules



Included in Part II of this report:



Schedule II - Valuation and     Qualifying Accounts     58



Other financial statement schedules are omitted because they are

not required, or the information is presented in the

consolidated financial statements or notes thereto.



(3) EXHIBITS



The exhibits listed on the accompanying index to exhibits on

page 61 are filed as part of this annual report.



(b)     REPORTS ON FORM 8-K



Registrant's Form 8-K, dated January 27,1995, containing

disclosure under Items 5 and 7 thereof, was filed with the

Securities and Exchange Commission during the quarter ended

April 30, 1995.



INDEX TO EXHIBITS



ITEM 14(a)3



Certain of the following exhibits were filed with the Securities

and Exchange Commission as exhibits, numbered as indicated

below, to the Registration Statement or report specified below,

which exhibits are incorporated herein by reference:







                                                						 	Exhibit No.

						                                                 	as filed with 

						                                                 	Registration

Exhibit No.     Identifica-                             Statement or

in this         tion per Reg.   Description             report specified

Form 10-K        229.601(b)     of Exhibit              below          



1               (3)             Copy of Certificate of

                            				Incorporation of the

			                            	Registrant filed with

			                            	the Secretary of State

				                            of Delaware (1)                 3.1





2                (3)            Amendment to Certificate

                            				of Incorporation of the

			                            	Registrant filed with

                            				the Secretary of State

			                            	of Delaware on March 27,

			                            	1981 (2)                       3.2





3                (3)            Copy of By-Laws of the 

                            				Registrant, as amended

			                            	to date (3)                     3.3







4               (4)             Specimen of Common Stock               4.1

                            				certificate (1)







5               (10)            Lease agreement as amended,

                            				between Registrant and Hyde

			                            	Park Associates (predecessor

			                            	in interest to We're 

	                            			Associates Company) (4)              10.1







6               (10)            Stock Bonus Plan of Registrant

                            				and Trust Agreement

			                            	thereunder (4)                       10.2















                                                 							Exhibit No.

					                                                 		as filed with

					                                                 		Registration

Exhibit No.     Identifica-                             Statement or

in this         tion per Reg.   Description             report specified

Form 10-K        229.601(b)     of Exhibit              below          





7               (10)            Employment agreement            

                            				between Registrant and          

			                            	Martin B. Bloch (4)             10.3



8               (10)            Employment agreement            

                            				between Registrant and          

		                            		Abraham Lazar (4)               10.4



9               (10)            Employment agreement            

                            				between Registrant and          

		                            		John C. Ho    (4)               10.5



10              (10)            Employment agreement            

                            				between Registrant and          

			                            	Marvin Meirs (4)                 10.6



11              (10)            Employment agreement            

                            				between Registrant and          

		                            		Alfred Vulcan (4)                10.7



12              (10)            Employment agreement            

                            				between Registrant and          

		                            		Harry Newman (4)                10.8



13              (10)            Employment agreement            

                            				between Registrant and          

			                            	Marcus Hechler (4)              10.9





14              (10)            Form of stock escrow            

                            				agreement between Vincenti

			                            	& Schickler as escrow agent               

			                            	and certain officers

		                            		of Registrant (4)                10.10



15              (10)            Form of Agreement concerning            

                            				Executive Compensation (2)       10.11



16              (10)            Bond Purchase Agreement         

                            				between Nassau County

	                            			Industrial Development          

	                            			Agency, Long Island Trust               

			                            	Company,The Bank of New         

		                            		York, Bank Leumi Trust          

		                            		Company of New York

			                            	and Registrant (5)              16



                                                    							Exhibit No.

						                                                   	as filed with

						                                                  	Registration

Exhibit No.     Identifica-                             Statement or

in this         tion per Reg.   Description             report specified

Form 10-K        229.601(b)     of Exhibit              below          



17              (10)            Five Million dollar             

                            				Industrial Development          

			                            	Bonds of

		                            		Registrant              

			                            	with Nassau County              

			                            	Industrial Development          

			                            	Agency    (5)                   17



18              (10)            Lease Agreement between         

                            				Registrant and the County               

			                            	of Nassau (5)                   18



19              (10)            Assignment of Lease             

                            				between Registrant and          

		                            		the County of Nassau by             

	                            			Registrant to the Nassau                

	                            			County Industrial              

                            				Development Agency and the              

		                            		Acknowledgment and

	                            			Consent of the County 

			                            	of Nassau (5)                    19



20              (10)            Installment Sale Agreement              

                            				between the Nassau County

			                            	Industrial Development          

	                            			Agency and Registrant, and              

			                            	the promissory notes                

			                            	of Registrant to the Nassau             

			                            	County Industrial

		                            		Development Agency and 

			                            	Long Island Trust Company, 

			                            	The Bank of New York                

			                            	and Bank Leumi Trust Company            

			                            	of New York (5)                 20



21        (10)                  Assignment of Installment Sale          

                            				Agreement between the

			                            	Nassau County Industrial 

	                            			Development Agency and 

			                            	Registrant,from the                

				                            Nassau County Industrial                

		                            		Development Agency to

			                            	Long Island Trust Company, 

			                            	The Bank of New York, Bank 

			                            	Leumi Trust Company of New York, 

			                            	and the Acknowledgment and

		                            		Consent of Registrant (5)        21



                                                 							Exhibit No.

							                                                 as filed with

				                                                 			Registration

Exhibit No.     Identifica-                             Statement or

in this         tion per Reg.   Description             report specified

Form 10-K        229.601(b)     of Exhibit              below          







22              (10)            Guaranty Agreement from         

                            				Registrant, Marlboro            

			                            	Research Corporation,            

			                            	Tek-Wave, Inc., Atomichron,             

			                            	Frequency Electronics             

			                            	International Corp. to Long             

			                            	Island Trust Company,

		                            		The Bank of New York and Bank               

			                            	Leumi Trust Company of          

			                            	New York (5)                     22



23              (10)            Bill of Sale from Registrant            

                            				Conveying personal property                

	                            			to the Nassau County            

			                            	Industrial Development          

	                            			Agency  (5)                      23



24              (10)            Leasehold Mortgage between              

                            				the Nassau County

			                            	Industrial Development Agency 

			                            	and Long Island Trust Company,

		                            		The Bank of New York and Bank               

			                            	Leumi Trust Company of New             

			                            	York, and the Acknowledgment            

                            				and Consent of the             

			                            	Registrant (5)                  24



25              (10)            Registrant's 1982 Incentive             

                            				Stock Option Plan (5)           25



26              (10)            Amendment dated April 19,               

                            				1981 to Stock Bonus Plan                

		                            		of Registrant and Trust            

			                            	Agreement (3)                    20.1



27              (3)             Amendment to Certificate                

                            				of Incorporation of

			                            	the Registrant filed with           

			                            	Secretary of State of           

	                            			Delaware on October 26,             

			                            	1984 (6)                        27



28              (10)            Registrant's 1984 Incentive             

                            				Stock Option Plan (6)           28



                                                     							Exhibit No.

						                                                   	as filed with

						                                                  	Registration

Exhibit No.     Identifica-                             Statement or

in this         tion per Reg.   Description             report specified

Form 10-K        229.601(b)     of Exhibit              below          





29              (10)            Pledge and Assignment           

                            				dated December 1, 1985          

			                            	between Registrant,             

			                            	Nassau County Industrial                

			                            	Development Agency

			                            	and National Westminster            

			                            	Bank USA (7)                    29



30              (10)            Bond Purchase Agreement         

                            				dated December 1, 1985          

		                            		between Registrant, Nassau              

			                            	County Industrial               

	                            			Development Agency

	                            			and National Westminster            

			                            	Bank USA (7)                    30



31              (10)            Three Million Five Hundred              

                            				Thousand Dollar 1985            

				                            Industrial Development          

			                            	Revenue Bond of Registrant              

			                            	with Nassau County Industrial        

		                            		Development Agency (7)          31



32              (10)            Mortgage and Security                   

                            				Agreement dated December

			                            	1, 1985 between Nassau County              

	                            			Industrial Development Agency             

			                            	and National Westminster                      

			                            	Bank USA (7)                     32



33              (10)            Sales Agreement dated           

                            				December 1, 1985 between                

		                            		Nassau County Industrial                  

			                            	Development Agency and  

	                            			Registrant (7)                  33



34              (10)            Three Million Five Hundred              

                            				Thousand Dollar Promissory              

				                            Note dated December l,                  

				                            1985 between Registrant,             

			                            	Nassau County Industrial                

		                            		Development Agency

		                            		and National Westminster            

			                            	Bank USA (7)                    34

				

                                                  							Exhibit No.

					                                                 		as filed with

				                                                 			Registration

Exhibit No.     Identifica-                             Statement or

in this         tion per Reg.   Description             report specified

Form 10-K        229.601(b)     of Exhibit              below          





35              (10)            Guaranty dated          

                            				December 1, 1985, between               

	                            			Registrant, Marlboro                

			                            	Research Corporation,           

			                            	Tek-Wave, Inc.,

				                            Atomichron, Inc., 

	                            			Frequency Electronics             

			                            	International Corp.and             

		                            		Brightline Corporation          

		                            		to National Westminster         

		                            		Bank USA (7)                     35



36              (10)            Registrant's Cash or Deferral           

                            				Profit Sharing Plan

	                            			and Trust under Section 401                 

	                            			Internal Revenue Code,          

		                             	dated April 1, 1985 (7)         36



37              (22)            List of subsidiaries of         

                             			Registrant (7)                  37



38              (11)            Computation of Earnings                 

                            				Included in the Financial                       

			                            	Statement per Share of                  

		                            		Common Stock    



39              (10)            Amendment Restated Effective            

                            				as of May 1, 1984 of

		                           		the Stock Bonus Plan and Trust

		                            		Agreement of Registrant (7)        39



40              (28)            Form 8-K dated January 20,              

                           				1987 and filed January

		                           		21, 1987 (File No. 1-8061) (8)    No Number



41              (28)            Form 8-K dated June 25,         

                            				1987 and filed June 26,

			                            	1987 (File No. 1-8061) (9)         No Number



42              (3)             Amendment to Certificate                

                            				of Incorporation of

		                            		the Registrant filed with 

			                            	the Secretary of State of

                            				Delaware on October 22, 1986 (11)      42



43              (10)            Amendment Restated Effective            

                            				as of May 1, 1984 of the

			                            	Stock Bonus Plan and Trust 

                            				Agreement of Registrant (11)            43

			



                                                 							Exhibit No.

				                                                 			as filed with

						                                                 	Registration

Exhibit No.     Identifica-                             Statement or

in this         tion per Reg.   Description             report specified

Form 10-K        229.601(b)     of Exhibit              below          







44              (2)             Agreement of Purchase           

                            				and Sale between FEI    

		                            		Microwave,Inc. and TRW                    

			                            	Microwave, Inc. dated as             

		                            		of August 12, 1987 (10)          44



45              (3)             Amended and Restated            

                            				Certificate of          

		                            		Incorporation of

			                            	the Registrant filed with           

				                            the Secretary of State          

			                            	of Delaware on                      

		                            		October 26, 1987 (13)            45



46              (22)            List of Subsidiaries                    

                            				of Registrant (13)              46



47              (10)            Employment agreement            

                            				between Registrant and          

			                            	Charles Stone (12)              47



48              (10)            Employment agreement            

                               	between Registrant and          

				                        				Jerry Bloch (12)                48



       

49              (10)            Employment agreement            

			                            	between Registrant and          

				                        				Joseph Kastenholz (12)          49



     

50              (10)            Registrant's 1987               

                            				Incentive Stock Option          

			                         				Plan (12)                       50



      

51              (10)            Registrant Senior               

                            				Executive Stock Option          

				                        				Plan (12)                       51



52              (10)            Amendment dated Jan. 1, 1988            

                            				to Registrant's Cash or              

			                            	Deferred Profit Sharing Plan            

			                            	and Trust under Section

                            				401 of Internal Revenue 

	                            			Code (12)                        52



                                                 							Exhibit No.

				                                                 			as filed with

					                                                 		Registration

Exhibit No.     Identifica-                             Statement or

in this         tion per Reg.   Description             report specified

Form 10-K        229.601(b)     of Exhibit              below          



53              (10)            Amendment to Guarantee          

                            				dated as of Dec. 1, 1985                

			                            	made by Registrant to                

			                            	National Westminster Bank               

			                            	USA ("Nat West") dated as                

		                            		of Jan. 18, 1989 (12)           53



54              (10)            Loan Agreement between          

                            				FEIM and Nat West dated as              

 		                           		of Jan. 18, 1989 (12)            54



55              (10)            Note by FEIM in favor of                

                            				Nat West dated as of            

			                            	Jan. 18,1989 (12)               55



56              (10)            Loan Agreement between          

                            				Tech 1 and Nat West dated               

	                            			as of Jan. 18, 1989 (12)        56



57              (10)            Note by Tech 1 in favor         

                            				of Nat West dated as of         

	                            			Jan.18, 1989 (12)               57



58              (10)            Executive Incentive             

                            				Compensation Plan

	                            			between Registrant and 

			                            	various employees (12)          58



59              (3)             Amended Certificate of In-              

                            				corporation of the

			                            	Registrant filed with the 

			                            	Secretary of State of Delaware 

	                            			on November 2, 1989 (13)        59



60              (10)            Registrant's Employee Stock 

                            				Option Plan (13)                 60



61              (10)            Loan Agreement between           

                            				Registrant and Nat West                 

			                            	dated May 22, 1990 (13)         61



62              (10)            Loan Agreement between  

                            				Registrant's Employee           

		                            		Stock Ownership Plan and      

			                            	Registrant dated                

				                            May 22, 1990 (13)               62





NOTES:







(1)     Filed with the SEC as an exhibit, numbered as indicated

above, to the registration statement of Registrant on Form S-1,

File No. 2-29609, which exhibit is incorporated herein by

reference.







(2)     Filed with the SEC as an exhibit, numbered as indicated

above, to the registration statement of Registrant on Form S-1,

File No. 2-71727, which exhibit is incorporated herein by

reference.







(3)     Filed with the SEC as an exhibit, numbered as indicated

above, to the annual report of Registrant on Form 10-K, File No.

1-8061 for the year ended April 30, 1981, which exhibit is

incorporated herein by reference.







(4)     Filed with the SEC as an exhibit, numbered as indicated

above, to the registration statement of Registrant on Form S-1,

File No. 2-69527, which exhibit is incorporated herein by

reference.







(5)     Filed with the SEC as an exhibit, numbered as indicated

above, to the annual report of Registrant on Form 10-K, File No.

 1-8061, for the year ended April 30, 1982, which exhibit is

incorporated herein by reference.







(6)     Filed with the SEC as an exhibit, numbered as indicated

above, to the annual report of Registrant on Form 10-K, File No.

1-8061, for the year ended April 30, 1985, which exhibit is

incorporated herein by reference.







(7)     Filed with the SEC as exhibit, numbered as indicated above,

to the annual report of Registrant on Form 10-K, File No.

1-8061, for the year ended April 30, 1986, which exhibit is

incorporated herein by reference.







(8)     Filed with the SEC as an exhibit, numbered as indicated

above, to the annual report of Registrant on Form 8-K, dated

January 15, 1987, which exhibit is incorporated herein by

reference.







(9)     Filed with the SEC as an exhibit, numbered as indicated

above, to the annual report of Registrant on Form 8-K, dated

June 25, 1987, which exhibit is incorporated herein by reference.





(10)  Filed with the SEC as an exhibit, numbered as indicated

above, to the annual report of Registrant on Form 8-K, dated

August 12, 1987, which exhibit is incorporated herein by

reference.







(11)    Filed with the SEC as an exhibit, numbered as indicated

above, to the annual report of Registrant on Form 10-K, File No.

1-8061, for the year ended April 30, 1987, which exhibit is

incorporated herein by reference.







(12)    Filed with the SEC as an exhibit, numbered as indicated

above, to the annual report of Registrant on Form 10-K, File No.

1-8061, for the year ended April 30, 1989, which exhibit is

incorporated herein by reference.







(13)    Filed with the SEC as an exhibit, numbered as indicated

above, to the annual report of Registrant on Form 10-K, File No.

1-8061, for the year ended April 30, 1990, which exhibit is

incorporated herein by reference.









SIGNATURES







	Pursuant to the requirements of Section 13 or 15 (d) 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.







FREQUENCY ELECTRONICS, INC.



Registrant







By:   /s/ Dawn R. Johnston       



		  Dawn R. Johnston                       Vice President Finance        







Dated:  July 26, 1995







	Pursuant to the requirements of the Securities Exchange Act of

1934, this report has been signed below by the following persons

on behalf of the Registrant and in the capacities and on the

dates indicated:







Signature                   Title                        Date







 /s/ Joseph P. Franklin       Chairman of the Board;    7/26/95

    (Joseph P. Franklin)      Chief Executive Officer            

                       			    and Director







 /s/ John Ho                  Director and Vice President    7/26/95

    (John Ho)







 /s/ Joel Girsky              Director                       7/26/95

    (Joel Girsky)







 /s/ Martin B. Bloch       President and Director            7/26/95

    (Martin B. Bloch)