UNITED STATES
                SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549

                            FORM 10-QSB


(Mark One)

[ X ]      Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

     For the quarterly period ended May 31, 2003
                                    -------------

[    ]      Transition report pursuant to Section 13 or 15(d) of
the Exchange Act

     For the transition period from               to
                                   ---------------  ---------------


Commission file number  0 - 14188
                       --------------


                  Surge Components, Inc.
-------------------------------------------------------------------
  (Exact name of small business issuer as specified in its charter)


New York                                     11-2602030
-------------------------------------------------------------------
(State or other jurisdiction of            (I.R.S.Employer
incorporation or organization)             Identification No.)


             95 Jefryn Boulevard, Deer Park, NY 11729
-------------------------------------------------------------------
             (Address of principal executive offices)


                          (631) 595-1818
-------------------------------------------------------------------
                    (Issuer's telephone number)


-------------------------------------------------------------------
                      (Former name, former address and former
fiscal year, if changed since last report)


State  the  number of shares outstanding of each  of  the  issuer's
classes of common equity, as of the latest practicable date:  As of
June  30,  2003,  8,743,326 shares  of common stock, par value $.001
per share were outstanding.


Transitional Small Business Disclosure Format (check one):
Yes   [      ]         No   [  X   ]




                SURGE COMPONENTS, INC. AND SUBSIDIARIES

  <TABLE> <CAPTION>    Index to Form 10-QSB

           for the Period Ended May 31, 2003


                                                                    Page
     <S>                                                            <C>
     PART I.  FINANCIAL INFORMATION

      Item 1.  Financial Statements:

       Consolidated Balance Sheets                                    3-4

       Consolidated Statements of Income Operations and Comprehensive
        IncomeLoss                                                    5

       Consolidated Statements of Cash Flows                          6

       Notes to Consolidated Financial Statements                     7-9

     Item 2.  Management's Discussion and Analysis or Plan of
      Operation.                                                      10-17

     Item 3. Controls and Procedures                                  17

    PART II.  OTHER INFORMATION

     Item 1. Legal Proceedings.                                       18

     Item 6.  Exhibits and Reports on Form 8-K.                       18


     Signatures                                                      19

     Certifications                                                 20-22
</TABLE>




                   PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

              SURGE COMPONENTS, INC. AND SUBSIDIARIES

 <TABLE> <CAPTION>  CONSOLIDATED BALANCE SHEETS





                                           May 31,      November 30,
                                            2003            2002
                                         -------------   --------
                                           (Unaudited)
                  ASSETS
               -----------
<S>                                       <C>          <C>
Current assets:
 Cash                                     $  878,360   $1,494,441
Marketable securities - available for sale   275,587      270,145
Accounts receivable (net of allowance for
 doubtful accounts of $40,335)             1,864,822    1,557,947
Inventory, net                             1,887,374    2,121,198
Prepaid expenses and income taxes             98,435      116,946
                                           ---------    ---------
  Total current assets                     5,004,578    5,560,677

Fixed assets - net of accumulated
 depreciation and amortization of
 $946,750 and $814,505                     1,068,407    1,173,585

Other assets                                   3,511        4,054
                                           ---------    ---------

   Total assets                           $6,076,496   $6,738,316
                                           =========    =========

See notes to consolidated financial statements.
</TABLE>



              SURGE COMPONENTS, INC. AND SUBSIDIARIES

 <TABLE> <CAPTION>  CONSOLIDATED BALANCE SHEETS

                                             May 31,     November 30,
                                              2003          2002
                                            ----------  -------------
                                           (Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
<S>                                      <C>           <C>

Current liabilities:
  Debt not in compliance with terms      $   193,238   $   467,071
  Accounts payable                         1,985,604     1,774,738
  Accrued expenses                           743,420       859,320
                                          ----------    ----------
     Total current liabilities             2,922,262     3,101,129

Deferred rent                                 55,760        48,306
                                          ----------    ----------
     Total liabilities                     2,978,022     3,149,435
                                          ----------    ----------
Minority  interest                             3,024        25,328
                                          ----------    ----------
Commitments and contingencies

Shareholders' equity
  Preferred stock - $.001 par
   value stock, 1,000,000 shares
   authorized: Series A - 260,000
   shares authorized, none
   outstanding. Series B -
   200,000 shares authorized,
   none outstanding, non-
   voting, convertible,
   redeemable.  Series C -
   100,000 shares authorized,
   42,700 shares issued
   and outstanding, redeemable,
   convertible, and a
   liquidation preference of
   $5 per share                                    43            43
  Common stock - $.001 par value stock,
    25,000,000 shares authorized,
    8,743,326 shares issued and outstanding     8,744         8,744
  Additional paid-in capital               22,970,280    22,980,955
  Stock subscriptions receivable               (1,000)       (3,500)
  Accumulated other comprehensive loss -
    unrealized loss on marketable securities -
    available for sale                        (17,154)      (17,439)
  Accumulated deficit                     (19,865,463)  (19,405,250)
                                           ----------    ----------
     Total shareholders' equity             3,095,450     3,563,553
                                           ----------    ----------
     Total  liabilities and
      shareholders' equity              $  6,076,496    $ 6,738,316
                                          ==========     ==========


See notes to consolidated financial statements.
</TABLE>





              SURGE COMPONENTS, INC. AND SUBSIDIARIES
 <TABLE> <CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                            (UNAUDITED)

                             Six Months Ended       Three Months Ended
                                   May 31,                  May 31,
                               2003     2002            2003      2002
                             ------    -------         ------    ------
<S>                       <C>         <C>            <C>         <C>

Net sales                 $5,719,444  $5,362,399     $2,679,109  $2,568,322

Cost of goods sold         4,224,764   3,881,906      1,992,114   1,870,050
                          ----------   ---------    -----------   ---------
Gross profit               1,494,680   1,480,493        686,995     698,272
                          ---------- -----------    -----------   ---------
Operating expenses:
 Selling and shipping
  expenses                   547,894     484,305        293,278     250,146
 General and administrative
  expenses                 1,364,861   1,823,505        642,206     985,151
 Financial consulting
  services                       --      268,850             --     193,850
                           ---------   ---------      ----------  ---------
   Total operating
    expenses              1,912,755    2,576,660        935,484   1,429,147
                         ----------    ---------      ---------   ---------

Loss before other
 income (expense)
 and income taxes          (418,075)  (1,096,167)      (248,489)   (730,875)
                         ----------   ----------      ---------   ---------
Other income (expense):
  Investment  income         11,927       35,376          5,449     20,947
  Interest expense          (64,296)      (9,601)        (5,597)    (5,466)
  Loss on sale
   of securities                 --      (81,282)            --     (72,975)
                         ----------   ----------      ---------   ---------

     Other  income
      (expense)             (52,369)     (55,507)          (148)    (57,494)

                         -----------  -----------     ----------  ---------
                           (470,444)  (1,151,674)      (248,637)   (788,369)

Minority interest            22,303           --         10,850          --
                         ----------    ---------        -------   ---------

Loss before income taxes   (448,141)  (1,151,674)      (237,787)   (788,369)

Income  taxes                12,072        8,536          1,830       3,493
                         ----------    ----------      ---------  ---------

Net   loss                 (460,213)  (1,160,210)      (239,617)   (791,862)
Dividends on preferred
 stock                       36,850       15,500             --          --
                         ----------   ----------       ---------   ---------

Net loss available
 to  common shareholders $ (497,063) $(1,175,710)     $ (239,617)  $(791,862)
                           ========    =========       =========   =========
Other comprehensive loss
 Net loss                  (460,213)  (1,160,210)       (239,617)   (791,862)
 Unrealized holding
  (loss) gain on
  investment securities        (285)     (49,282)            290     (34,374)
 Reclassification adjustment-
  loss on sale  of  securities   --       81,282              --      72,975
                           ---------  ----------       ---------   ---------

      Total comprehensive
       loss              $ (460,498) $(1,128,210)     $ (239,327)  $(753,261)

                         ==========  ===========      ==========   =========
Weighted average shares
 outstanding
  Basic                   8,743,326   8,946,189        8,743,326  8,871,588
  Diluted                 8,743,326   8,946,189        8,743,326  8,871,588


(Loss) available to
  common shareholders,
  per share
   Basic                 $    (.06)  $    (.13)       $    (.03) $    (.09)
  Diluted                $    (.06)  $    (.13)       $    (.03) $    (.09)


See accompanying notes to consolidated financial statements.
</TABLE>




                SURGE COMPONENTS, INC. AND SUBSIDIARIES
<TABLE> <CAPTION>

                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (UNAUDITED)

                                                      Six Months Ended
                                                           May 31,
                                                      2003       2002
                                                    --------   ---------
<S>                                             <C>           <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
 Net   loss                                     $  (460,213)  $(1,160,210)
 Adjustments to reconcile net income loss
  to net cash used by operating activities:
    Depreciation and amortization                    132,245      167,594
    Minority interest                                (22,303)          --
    Loss on sale of securities                            --       81,282
CHANGES IN OPERATING ASSETS AND LIABILITIES:
 Accounts receivable                                 (306,875)    305,959
 Inventory                                            233,824     202,495
 Prepaid  expenses and income taxes                    19,053     (59,678)
 Accounts   payable                                   210,865    (237,184)
 Accrued   expenses  and  taxes                      (126,575)   (222,185)
 Deferred rent                                          7,454      10,146
                                                    ---------  ----------
NET CASH FLOWS FROM OPERATING ACTIVITIES             (312,525)   (911,781)
                                                    ---------  ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchase of marketable securities                     (5,156)    (25,233)
 Proceeds from sale of marketable securities               --     900,590
 Collections of  amounts  due  under  repurchase
  agreement                                                --     583,639
 Acquisition  of  fixed  assets                       (27,067)    (15,157)
                                                    ---------  ----------
NET  CASH  FLOWS  FROM INVESTING ACTIVITIES           (32,223)  1,443,839                                (102103,695000)
                                                    ---------  ----------
CASH FLOWS FROM PROVIDED BY INVESTING ACTIVITIES
 Proceeds Proceeds from stock subscriptions receivable  2,500       2,900
 Net borrowings on loan payable                      (273,833)         --
 Repurchase of shares                                      --     (31,170)
                                                    ---------   ---------

NET CASH  FLOWS FROM FINANCING ACTIVITIES            (271,333)    (28,270)
                                                    ----------  ---------

NET  CHANGE  IN  CASH AND EQUIVALENTS                (616,081)    503,788

CASH  AND  EQUIVALENTS  AT BEGINNING OF PERIOD       1,494,441  1,030,181

                                                   ----------- ----------
CASH  AND  EQUIVALENTS  AT END OF PERIOD           $   878,360 $1,533,969
                                                   =========== ==========
SUPPLEMENTAL DISCLOSURE CASH FLOW INFORMATION:
 Income  taxes  paid                               $     8,329 $    8,371
                                                   =========== ==========
 Interest  paid                                    $    64,296 $    9,601
                                                   =========== ==========
 Accrued  Dividends on Preferred Stock             $    10,675 $   15,500
                                                   =========== ==========


See notes to consolidated financial statements.
</TABLE>





              SURGE COMPONENTS, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                         MAY 31, 2003


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------------------------

In   the  opinion  of  management,  the  accompanying  consolidated
financial  statements  of Surge Components  Inc.,  Challenge/Surge,
Inc.,  Superus Holdings, Inc. ("Superus"), Surge/Lelon, LLC,  Surge
Acquisition  Corporation and Surge Components, Limited contain  all
adjustments  necessary  to present fairly the  Company's  financial
position  as of May 31, 2003 and the  related statements of operations
and comprehensive loss for the  six  and  three months ended May 31,
2003 and 2002,and cash flows for the six months ended May 31, 2003
and 2002.

The consolidated results of operations for the six and three months
ended  May 31, 2003 and 2002 are not necessarily indicative of  the
results to be expected for the full year.

The accounting policies followed by the Company are  set  forth  in
Note B to the Company's  financial  statements included  in its Annual
Report on Form 10-KSB, for the  year  ended November 30, 2002.

NOTE 2 - SUPERUS BANKRUPTCY
--------------------------------------------------

In March 2002, Superus filed for bankruptcy protection under
Chapter 7 of the United States Bankruptcy code. The Court is
currently reviewing the bankruptcy petition.

NOTE 3 - SETTLEMENT AGREEMENT
------------------------------------------------------

In  April  2002, in connection with a Mutual Release,  Settlement,
Standstill  and  Non-Disparagement  Agreement  by  and  among  the
Company and Equilink Capital Partners, LLC, Robert DePalo, Old Oak
Fund  Inc.  and  Kenneth Orr (collectively, the "Investors"),  the
Investors   transferred back to  the  Company  252,000 shares  of
common stock,  and 19,300 shares of Series C preferred stock,  and
certain warrants,  representing all of the  Company's securities
held  by  the Investors, and agreed  to,  among  other things, not
to purchase any securities of the Company and  not  to disparage
the Company in any manner, in  exchange  for $225,000 in settlement
of potential  claims relating  to services provided by the Investors.
The shares  were held in escrow until the final payment was made.
In addition, the Company  and the Investors mutually agreed to
release  each  other from  all  claims each party had, now has,
or in the future  might have  against  the  other.  The  Company
recorded  a  charge  of approximately $193,850 to income during
the quarter ending May 31, 2002, in connection with the settlement.




           SURGE COMPONENTS, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 20023


NOTE 4 - PREFERRED DIVIDENDS
--------------------------------------------------

Dividends  on  the  Non-Voting  Redeemable  Convertible  Series   C
Preferred  Stock  aggregating $36,850 for  the  semiannual  periods
ended December 31, 2001, June 30, 2002, and December 31, 2002, have
not been paid.  The Company has accrued these dividends.

NOTE 5 - SEC INVESTIGATION
------------------------------------------------------

During  the  year  ended November 30, 2000 and the  quarter  ended
February  28, 2001, the Company made certain potentially
questionable payments of  approximately  $2,137,000 and $774,000,
respectively.   These payments  are  currently the subject of an
investigation  by  the Securities  and  Exchange  Commission.
The  recipient  of  these payments  repaid $1 million to the
Company in the  quarter  ending May 31, 2001, which was included
in other income.

In  May  2001,  the law firm Mintz Levin Cohn Ferris  Glovsky  and
Popeo,  P.C., was engaged to assist in an investigation concerning
the  payments  and  to recommend policies to prevent  any  similar
future   payments.  Due,  in  part  to  the  previously  disclosed
resignation of our outside counsel and such counsel's  refusal  to
be  interviewed  as  part of the investigation,  the  Company  was
unable  to confirm what legal advice was rendered as to the making
of such payments. The investigation did not uncover any additional
payments   similar   to  the  previously  disclosed   "potentially
questionable payments". The Company has taken steps to ensure that
such payments are not made in the future, including requiring that
payments above $5,000 not be made to any party except a party on a
list  approved by our audit committee, requiring co-signatures  on
each  check for more than $10,000 and adopting a Code of  Conduct.
Except  for  proceedings relating to the SEC inquiry commenced  in
October  2001, the Company is not aware of any pending proceedings
relating to the potentially questionable payments. The Company has
not  been contacted by the SEC regarding its investigations  since
March  2002.   There  can be no assurance that  these  potentially
questionable payments and related investigation will not  lead  to
other proceedings.

NOTE 6 - DEBT NOT IN COMPLIANCE WITH TERMS
------------------------------------------


In  July 2002, the Company entered into a financing agreement  (the
"Financing  Agreement") with an asset-based lender  (the  "Lender")
providing  for  borrowings up to $1,000,000  (the  "Credit  Line").
Borrowings under the Credit Line accrue interest at the greater  of
the  prime rate plus two percent (2.0%) or 6.75% (6.75% at May  31,
2003).  The  Company pays one-quarter of one percent  (1/4  of  1%)
annually  as  an  unused  line  fee  for  the  difference   between
$1,000,000 and the average daily balance




              SURGE COMPONENTS, INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           MAY 31, 20023


NOTE 6 - DEBT NOT IN COMPLIANCE WITH TERMS (continued)
------------------------------------------------------


of   the  Credit  Line.  The  Credit  Line  is  collateralized   by
substantially  all  the  Company's  assets  and  contains   various
financial  covenants  pertaining  to  the  maintenance  of  working
capital  and  tangible net worth. On May 31, 2003, we were  not  in
compliance  with  the tangible net worth covenant.   We  anticipate
continuing to not be in compliance with such covenant during Fiscal
2003.   As  such, the Lender may declare the Company in default  at
anytime  and has the following rights, among others: (1) to  demand
immediate  repayment of borrowings under the Credit  Line;  (2)  to
receive  a  charge at the rate of two percent per  month  upon  the
unpaid  balance  of  the obligations under the Financing  Agreement
(the "Obligations") from the date of default until the date of  our
full  payment  of  the  Obligations, which charge  is  in  lieu  of
interest;  (3)  to  receive all costs, disbursements,  charges  and
expenses  that it incurs in the collection and enforcement  of  the
Obligations,  including attorneys fees; and (4) to enforce  payment
of or settle any of our receivables and apply the net cash proceeds
resulting  from  such payment or settlement to the payment  of  the
Obligations.  While we do not believe that the Lender will elect to
exercise  any  of such rights, if it did so during  an  inopportune
time  for the Company, it could result in a severe liquidity crisis
for  the  Company.   As of May 31, 2003, the Company  has  $193,238
outstanding under the Credit Line.


NOTE 7 - AUTHORIZED REPURCHASE
--------------------------------------------------------

In  November 2002, the Board of Directors authorized the repurchase
of up to 1,000,000 Common Shares at a price between $.04 and $.045.
The Company has not repurchased any shares to date pursuant to such
authority.




 Item 2. Management's Discussion and Analysis or Plan of Operation

     Statements  contained in this report include  "forward-looking
statements" within the meaning of such term in Section 27A  of  the
Securities  Act of 1933 and Section 21E of the Securities  Exchange
Act  of  1934. Forward-looking statements involve known and unknown
risks,  uncertainties and other factors which  could  cause  actual
financial   or  operating  results,  performances  or  achievements
expressed  or  implied by such forward-looking  statements  not  to
occur or be realized. Such forward-looking statements generally are
based  on  our  best estimates of future results,  performances  or
achievements,  based upon current conditions and  the  most  recent
results  of the companies involved and their respective industries.
Forward-looking statements may be identified by the use of forward-
looking  terminology  such as "may," "will,"  "project,"  "expect,"
"believe,"   "estimate,"   "anticipate,"   "intends,"   "continue,"
"potential,"  "opportunity" or similar terms, variations  of  those
terms  or the negative of those terms or other variations of  those
terms  or  comparable  words or expressions.  Potential  risks  and
uncertainties include, among other things, such factors as:

       -    our business strategies and future plans of operations,

       -     general  economic conditions in the United States  and
          elsewhere, as well as the economic conditions affecting the
          industries in which we operate,

       -     political and regulatory matters affecting the foreign
          countries in which we operate or purchase goods and materials
          including the current war with Iraq  and the health crisis in the
          Far East,

       -    the market acceptance and amount of sales of our products and
          services,

       -     the extent that our distribution network and marketing
          programs achieve satisfactory response rates,

       -    the effect of the current surplus of electronic component
          parts in the broker distributor market on sales by our Challenge
          subsidiary,

       -    our historical losses,

       -    the competitive environment within the electronic components
          industry,

       -    our ability to raise additional capital, if and as needed,

       -    the cost-effectiveness of our product development activities,

       -    the effect of our non compliance with the tangible net worth
          covenant of our loan agreement with our principal lender,

       -    the effect of the delisting of our common stock, par value
          $.001 per share (the "Common Shares") from the NASDAQ Stock Market
          and the delisting of our Common Shares from The Boston Stock
          Exchange,


       -    the extent of any further investigations or proceedings with
          respect to certain potentially questionable payments made by Surge
          during its fiscal year ended November 30, 2000 and its quarter
          ended February 28, 2001 and

       -    the other factors and information discussed in other sections
          of this report.


     Shareholders and others reading this report should  carefully
consider   such   risks,  uncertainties  and  other   information,
disclosures  and  discussions which contain cautionary  statements
identifying important factors that could cause actual  results  to
differ  materially  from  those provided  in  the  forward-looking
statements.  We  undertake no obligation  to  publicly  update  or
revise any forward-looking statements, whether as a result of  new
information,  future  events or otherwise. Readers  are  urged  to
carefully review and consider the various disclosures made by  the
Company in this Report and the Company's Annual Report on Form 10-
KSB  for the year ended November 30, 2002, both of which have been
filed  with  the  Commission.  These  reports  attempt  to  advise
interested  parties of the risks and factors that may  affect  the
Company's  business, financial condition and results of operations
and prospects.

Critical Accounting Policies and Estimates

       The   preparation  of  financial  statements  and   related
disclosures  in  conformity with accounting  principles  generally
accepted  in  the  United  States  requires  management  to   make
estimates and assumptions that affect the amounts reported in  the
unaudited   Consolidated  Financial  Statements  and  accompanying
notes.  Estimates are used for, but not limited to, the accounting
for the allowance for doubtful accounts, inventories, income taxes
and   loss  contingencies.  Management  bases  its  estimates   on
historical  experience and on various other assumptions  that  are
believed to be reasonable under the circumstances. Actual  results
could  differ from these estimates under different assumptions  or
conditions.

      The  Company  believes  the  following  critical  accounting
policies, among others, may be impacted significantly by judgment,
assumptions and estimates used in the preparation of the unaudited
Consolidated Financial Statements:

      The allowance for doubtful accounts is maintained to provide
for  losses  arising from customers' inability  to  make  required
payments.  If  there  is  deterioration of our  customers'  credit
worthiness and/or there is an increase in the length of time  that
the   receivables  are  past  due  greater  than  the   historical
assumptions  used, additional allowances may be  required.  During
February 2002, the Company obtained $1,500,000 of credit insurance
covering  most  of  its  customers.  In March  2003,  the  Company
increased its coverage to $2,000,000 of credit insurance.

      Inventories,  which  consist solely  of  products  held  for
resale,  are  stated  at  the lower of cost  (first-in,  first-out
method) or market. Products are included in inventory when shipped
from  the  supplier. The Company, at May 31, 2003, has  a  reserve
against  slow  moving  and  obsolete  inventory  of  approximately
$1,051,000.

      The Company's deferred income taxes arise primarily from the
differences  in the recording of net operating losses,  allowances
for  bad  debts, inventory reserves and depreciation  expense  for
financial  reporting  and income tax purposes.  Income  taxes  are
reported  under  the liability method pursuant  to  SFAS  No.  109
"accounting  for income taxes". A valuation allowance is  provided
when  the likelihood of realization of deferred tax assets is  not
assured.    The  Company  has provided for a  valuation  allowance
totaling approximately $7,442,000.

     Current accounting guidance allows for several options in the
reporting  of  stock options granted to employees or directors  as
compensation.   The  Company  has  adopted  the  disclosure   only
provisions   of  SFAS  Number  123,  "Accounting  for  Stock-Based
Compensation."   Under  these  provisions,  the  Company  has  not
provided  for  a  charge for compensation  in  its  statements  of
operations related to the granting of options to its employees and
directors.    No such options were granted during the fiscal  year
ended November 30, 2002 or for the six months ended May 31, 2003.


Results of Operations

     Consolidated net sales for the six months ended May 31,  2003
increased by $357,045, or 7%, to $5,719,444 as compared to  net
sales  of  $5,362,399  for  the six months  ended  May  31,  2002.
Consolidated  net sales for the three months ended  May  31,  2003
increased by $110,787, or 4%, to $2,679,109 as compared to  net
sales of $2,568,322 for the three months ended May 31, 2002.

     The net sales for the six months ended May 31, 2003 for Surge
without  Challenge/Surge, Inc. ("Challenge"), one of the Company's
subsidiaries, increased by $276,645, or 8% when compared to  the
six  months ended May 31, 2002. The net sales for the three months
ended  May  31, 2003 for Surge decreased by $59,920, or 4%  when
compared  to the three months ended May 31, 2002. The Company  had
higher sales during the first half of the current year as a result
of obtaining new customers. The decrease in sales for the three
months ended  May 31, 2003 reflects the significant price competition
in the  semiconductor industry and decreased demand  of  certain  key
customers' products.

     The  net  sales  for the six months ended  May  31,  2003  for
Challenge  increased  by $52,533, or 3% when compared  to  the  six
months ended May 31, 2002. The net sales for the three months ended
May  31,  2003  for Challenge increased by $148,357,  or  17%  when
compared to the three months ended May 31, 2002.  Challenge continues
to experience depressed  sales in  their broker division due to a
slowdown in manufacturing  among computer, telecommunications and
phone manufacturers. This slowdown is  expected to adversely affect
Challenge's sales for 2003.   Any future  improvements  in  sales
(and  possible  profitability)  are expected  to  be based on future
demand and supply for  Challenge's product  mix.   However,  Challenge
started  an  audible  products division  in  1999.  Sales of speakers,
fans and  buzzers  by  this division  increased steadily since their
introduction  through  the addition  of sales representatives and
promotions.  Currently,  the majority of Challenge's sales are
comprised from audible products.

      The  semiconductor industry has historically experienced wide
fluctuations  in  the  supply and demand of  semiconductors.  These
fluctuations  have helped produce many occasions  when  supply  and
demand  for  semiconductors have not been in  balance.  The  supply
currently  far  exceeds  the demand and has resulted  in  declining
average  selling prices for our products as companies seek to  sell
their  inventories. Accordingly, the Company's ability to  maintain
or  increase  revenues will be highly dependent on its  ability  to
increase  sales  volume of existing products  and  to  successfully
introduce and sell new products.

     Surge Limited, Ltd and Surge/Lelon, LLC comprise the remainder
of  the  six  and three months sales totaling $27,867 and  $22,350,
respectively.

     While   we  cannot  predict  future  performance,  we  believe
opportunities exist for growth in the United States  and  Asia.  We
are  continually  looking  into new  product  lines  and  strategic
partnerships, which could assist in the Company's growth.

      Our  gross  profit  for the six months  ended  May  31,  2003
increased by $14,187 or 1%, as compared to the six months ended May
31,  2002. Our gross profit for the three months ended May 31, 2003
decreased  by  $11,277 or 2%, as compared to  the  three  months
ended  May  31,  2002. Gross margin as a percentage of  net  sales,
however, decreased from 27.6% for the six months ended May 31, 2002
to  26.1% for the six months ended May 31, 2003.  The increase  in
our gross profit was a result of increased sales from new customers
during the first half of the year. The decrease in the gross margin
as  a  percentage of net sales is a result of the economic slowdown
of  electronic components and industry pricing pressures  requiring
us to lower our prices.


     Selling and shipping expenses for the six months ended May 31,
2003  increased by $63,589, or 13%, as compared to the  six  months
ended  May  31, 2002. Selling and shipping expenses for  the  three
months ended May 31, 2003 increased by $43,132, or 17%, as compared
to the three months ended May 31, 2002.  This increase is primarily
due  to  the  increased sales commissions and  related  promotional
expenses  resulting  from  higher sales in  the  current  six-month
period.

      General and administrative expenses for the six months  ended
May  31, 2003 decreased by $458,644, or 25%, as compared  to  the
six months ended May 31, 2002.  General and administrative expenses
for  the three months ended May 31, 2003 decreased by $342,945,  or
35%,  as  compared to the three months ended May 31,  2002.   The
decrease  is  primarily  due  to decreased  professional  fees  and
through the Company's efforts to reduce overhead.

     No financial consulting fees and expenses were incurred during
the  six  months ended May 31, 2003. Financial consulting fees  and
expenses  for  the  six months ended May 31,  2002  were  $268,850,
representing the cost of the securities issued in payment  of  such
fees.  These fees and expenses were incurred in connection with  an
agreement with our investment banker regarding services through May
2001  and  reimbursement of expenses.  In April 2002,  the  Company
entered  into a settlement agreement with an investment banker,  as
more  fully  explained below in the liquidity and capital  resource
section.

      Interest  expense increased $54,695 for the six months  ended
May  31,  2003, as compared to the six months ended May  31,  2002.
Interest expense remained relatively the same for the three  months
ended  May 31, 2003, as compared to the three months ended May  31,
2002.  This increase is attributable to the Company borrowing funds
from an asset-based lender starting in July 2002.

     Investment  income  for  the six months  ended  May  31,  2003
decreased by  $23,449, or 66%, as compared to the six months  ended
May  31, 2002. Investment income for the three months ended May 31,
2003 decreased by  $15,498, or 74%, as compared to the three months
ended  May  31,  2002. This decrease is primarily  related  to  our
reliance onuse of cash and cash equivalents to fund losses and  the
reduction of interest rates on our invested funds.

     During the year ended November 30, 2000 and the quarter  ended
February  28, 2001, we made certain potentially questionable payments
totaling approximately   $2,137,000   and  $774,000,   respectively.
Such payments  were  made  to  the wife of an employee of one of  our
suppliers  in  return  for  help  obtaining  components  from  that
supplier   and   another  distributor.   According  to   management
personnel responsible for making the payments, prior to making  any
payment,  the  transaction was disclosed to our  legal  counsel  to
determine  whether payments to an employee of a supplier  would  be
legal.   Management personnel believed they had received reasonable
assurances  at  the time, and thereafter, that such  payments  were
not  illegal, so long as the recipient of the payments received  an
IRS  Form 1099, and all payments were made by check.  The costs  of
such  payments were recorded in our books and records and financial
statements.   We  duly issued a Form 1099 to the recipient  of  the
payments.   According  to Steven Lubman, Vice  President,  in  mid-
March  2001  he became aware of a document in a criminal proceeding
unrelated to us in which similar payments were described as kickbacks.
This caused  management  to seek the affirmation  of  the  legal  advice
previously given.  Legal counsel advised us by letter on  or  about
March  22, 2001, that, since the payments had been described  in  a
document  in the unrelated criminal action as kickbacks, disclosure
of  the  document should be made to our auditors, which  was  done.
Such  counsel  stated  in the letter that no  conclusion  had  been
reached  that such payments were kickbacks.  On April 17, 2001,  we
disclosed  in  our  Form 10-QSB Quarterly Report  filing  that  the
potentially questionable payments had been made.

     After  receipt of the March 22, 2001 letter referred to above,
the  Board determined to investigate the payments and ask  for  the
return  of the payments.  The Company requested that the $3 million
be  repaid.   $1 million was repaid to the Company.  In  May  2001,
the  law  firm of Mintz Levin Cohn Ferris Glovsky and  Popeo,  P.C.
was  formally  engaged by the Company to assist in an investigation
concerning  the payments and to recommend policies to  prevent  any
similar  future payments.  Due, in part to the previously disclosed
resignation  of our outside counsel and such counsel's  refusal  to
be  interviewed  as part of the investigation, we  were  unable  to
confirm  what  legal advice was rendered as to the making  of  such
payments.    The  investigation  did  not  uncover  any  additional
payments similar to the previously disclosed "potentially questionable
payments".    We have taken steps to ensure that such payments  are
not  made  in  the  future, including requiring that  all  payments
above  $5,000  be made to a party on a list approved by  our  audit
committee,  requiring co-signatures on each  check  for  more  than
$10,000,  adopting a Code of Conduct, and seeking to add additional
Board  and  Audit  Committee  members,  as  well  as, as  soon  as
economically  feasible, a controller and chief  financial  officer.
The  Company  has  not  been contacted by  the  SEC  regarding  its
investigation  since  March  2002.   Except  for  the  SEC  inquiry
referred  to  above,  we are not aware of any  pending  proceedings
relating to the potentially questionable payments.

     The  Company received a letter from a lawyer from a collection
agency  dated February 13, 2003 on behalf of Snow Becker  &  Krauss
P.C.,  our former legal counsel ("SBK") asserting a claim for legal
fees of approximately $665,000.  These charges are included in  our
liabilities  on  our  Balance Sheet at May 31,  2003.   These  fees
relate  to services rendered by SBK between one and two years  ago.
We  responded  to  this letter by disputing that the  Company  owes
these  fees  and  asserting  that we believe  we  have  substantial
additional  claims  against SBK.  The Company is presently  engaged
in  evaluating how it intends to proceed with these claims.   While
we  believe  we have good claims against SBK, we have no  assurance
that  we will be successful in asserting these claims against  SBK,
or  whether  SBK  will  be  successful in its  claims  against  the
Company.

      As  result  of  the foregoing, the Company on a  consolidated
basis  had  a net loss of $460,213 for the six months ended  May
31,  2003,  as compared to $1,160,210 for the six months ended  May
31,  2002.  The Company on a consolidated basis had a net  loss  of
$239,617 for the three months ended May 31, 2003, as compared to
$791,862 for the three months ended May 31, 2002.




Liquidity and Capital Resources

     Working capital decreased by $377,232 during the six months
ended  May  31,  2003  from $2,459,548 at  November  30,  2002,  to
$2,082,316, at May 31, 2003. This decrease resulted primarily  from
the  decrease  in inventory and accrued expenses, the repayment  of
debt and as partially offset by an increase in accounts payable and
accounts  receivable.  Our current ratio decreased  from  1.8:1  at
November  30,  2002,  to  1.7:1 at May 31, 2003.  Inventory  turned
2.1 times during the six months ended May 31, 2003 as compared to
1.8 times during the six months ended May 31, 2002. The average
number of days to collect receivables increased to 54  days
from  52  days.  We  believe that working  capital  levels  and
available  financing  are adequate to meet  the  current  operating
requirements during the next twelve months.

         In  July  2002,  the  Company  entered  into  a  financing
agreement  (the  "Financing Agreement") with an asset-based  lender
(the  "Lender")  providing for borrowings  up  to  $1,000,000  (the
"Credit Line"). Borrowings under the Credit Line accrue interest at
the  greater of the prime rate plus two percent (2.0%) or 6.75% per
annum (6.75% at May 31, 2003). The Company pays one-quarter of  one
percent  (1/4  of  1%)  annually as an  unused  line  fee  for  the
difference  between  $1,000,000 and the average  daily  outstanding
balance under the Credit Line. The Credit Line is collateralized by
substantially  all  the  Company's  assets  and  contains   various
financial  covenants  pertaining  to  the  maintenance  of  working
capital  and tangible net worth.  At May 31, 2003, we were  not  in
compliance  with  the tangible net worth covenant.   We  anticipate
continuing to be not in compliance with such covenant during Fiscal
2003.   As  such, the Lender may declare the Company in default  at
any  time and has the following rights, among others: (1) to demand
immediate  repayment of borrowings under the Credit  Line;  (2)  to
receive  a  charge at the rate of two percent per  month  upon  the
unpaid  balance  of  the obligations under the Financing  Agreement
(the "Obligations") from the date of default until the date of  our
full  payment  of  the  Obligations, which charge  is  in  lieu  of
interest;  (3)  to  receive all costs, disbursements,  charges  and
expenses  that it incurs in the collection and enforcement  of  the
Obligations,  including attorneys fees; and (4) to enforce  payment
of or settle any of our receivables and apply the net cash proceeds
resulting  from  such payment or settlement to the payment  of  the
Obligations.  While we do not believe that the Lender will elect to
exercise such rights, if it did so at an inopportune time  for  the
Company,  it  could  result in a severe liquidity  crisis  for  the
Company, forcing us to use our available cash, which may or may not
be  sufficient,  and obtain alternative financing  at  a  difficult
time.

  We  incur  substantial operating costs. These  costs  principally
consist of rent, payroll, professional fees, insurance premiums and
marketing related charges. Our ability to operate profitably in the
future  depends  on  increasing sales  levels  and  decreasing  our
expenses.  To accomplish this goal, we are attempting to streamline
our   operations  and  reviewing  other  possible  areas  of   cost
reductions.

     Our headquarters are leased from a company owned by certain of
our  officers,  directors and shareholders. Rental  costs  for  the
premises  were approximately $100,000 for the six months ended  May
31,  2003.  The  lease  agreement calls for a  three  percent  (3%)
increase  each year and terminates September 30, 2010. Amortization
of  the leasehold improvements is made ratably over the shorter  of
the ten-year term of the lease or the life of the improvements.

      In  November  2002,  the  Board of Directors  authorized  the
repurchase of up to 1,000,000 shares of the Company's common  stock
at  a price between $.04 and $.045. No action has been taken on the
above  authorization,  since the stock is currently  trading  at  a
higher amount.

     During the six months ended May 31, 2003, we had net cash used
in operating activities of $312,525, as compared to $911,781 in the
six  months ended May 31, 2002.  The decrease  in cash used
in operating activities resulted from the decrease in Company's net
loss,  a decrease in accrued expenses and an increase in  prepaid
expenses and income taxes, partially  offset  by  a increase in
accounts receivable.

     We had net cash used in investing activities of $(32,223) for
the six months ended May 31, 2003, as compared to net cash provided
by  investing activities of $1,443,839 for the six months ended May
31,  2002. The net cash used in investing activities during the six
months  ended May 31, 2003 resulted primarily from the purchase  of
marketable securities and fixed assets.

     We   had  net  cash used  in  financing activities  of $271,333
 for the six months ended May  31,  2003,  as compared   to   net
cash  provided  by  financing   activities   of approximately  $28,270
for the six months ended May  31,  2002.  The cash  used in financing
activities during the six months ended  May 31, 2003 was a result of
the payments to the credit line.

     As a result of the foregoing, the Company had a net decrease in
cash and equivalents of $616,081 during the six months ended May 31,
2003,  as  compared  to a net increase in cash  and  equivalents  of
$503,788 for the six months ended May 31, 2002.

      In  April  2002, in connection with a Mutual Release,  Settle
ment,  Standstill and Non-Disparagement Agreement by and among  the
Company and Equilink Capital Partners, LLC, Robert DePalo, Old  Oak
Fund  Inc.  and  Kenneth Orr (collectively, the  "Investors"),  the
Investors  released the Company from potential claims  relating  to
services provided by the Investors, transferred back to the Company
252,000  Common Shares, 19,300 shares of Series C preferred  stock,
and  certain warrants, representing all of the Company's securities
held  by  the  Investors, and agreed, among other  things,  not  to
purchase  any  securities of the Company and not to  disparage  the
Company in any manner, in exchange for $225,000.  In addition,  the
Company  and  the Investors mutually agreed to release  each  other
from  all  claims each party had, now has, or in the  future  might
have  against  the other.  The Company recorded a $194,000  expense
during Fiscal 2002 in connection with this settlement.

     In   March  2002,  we  entered  into  an  agreement  with  two
shareholders  to  settle a dispute as to the  form  of  payment  of
interest on certain 12% Convertible Promissory Notes. We agreed  to
pay  these  shareholders an aggregate of $32,854, in  exchange  for
17,522 Common Shares issued to them for converted interest.

     In  July  2000,  Surge entered into a joint venture  agreement
with  Lelon  (a  supplier  of component parts  to  Surge)  to  form
Surge/Lelon  LLP,  a Delaware limited liability  partnership.   The
Company has membership interests in the joint venture totaling 55%.
Operations  commenced in August 2002.  These operations  have  been
consolidated with those  of  the  Company.   The ownership of  Lelon
in  this  joint venture,  totaling  45%, has been reported as a
minority  interest. This  joint venture was started in order to more
effectively market the  products  of the Lelon name brand.  To date,
these  operations have been relatively small.

     In  May  2002, Surge and an officer of Surge became  the  sole
owners of Surge Components, Limited, a Hong Kong corporation. Under
current  Hong  Kong law, Surge Components, Limited is  required  to
have  at  least  two  shareholders. Surge owns 999  shares  of  the
outstanding common stock and an officer of Surge owns one share  of
the outstanding common stock. The officer of Surge has assigned his
rights  regarding his one share to Surge. Operations  commenced  in
July  2002.  These operations have been consolidated with those  of
the  Company.  Surge  Components, Limited  was  created  to  better
position the Company in the Asian markets.

     We  purchase  a  significant amount of our products  from  the
Asian  market  and  in  addition a number  of  our  customers  have
factories  located in Asia. Surge Components Limited will  help  us
service these clients more effectively and in addition will  assist
in the obtaining of new opportunities.

Inflation And Increasing Interest Rates

     In  the  past  two  fiscal  years, inflation  has  not  had  a
significant  impact  on  our business.   However,  any  significant
increase  in  inflation and interest rates could have a significant
effect  on  the economy in general and, thereby, could  affect  our
future  operating  results.   In  addition,  the  interest  on  the
Company's  line  of  credit  is based upon  the  prime  rate.   Any
significant  increase in the prime rate could significantly  impact
our future operating results.

                                 1
Item 3.      Controls and Procedures.

      Within  the  90  days prior to the date of this  report,  the
Company  carried out an evaluation, under the supervision and  with
the  participation  of  the  Company's  management,  including  the
Company's  Chief Executive Officer and Chief Financial Officer,  of
the  effectiveness  of the design and operation  of  the  Company's
disclosure  controls and procedures pursuant to Exchange  Act  Rule
13a-14. Based upon the evaluation, the Chief Executive Officer  and
Chief  Financial  Officer concluded that the  Company's  disclosure
controls  and  procedures are effective. There were no  significant
changes in the Company's internal controls or in other factors that
could significantly affect these controls subsequent to the date of
their evaluation.






                    PART II   OTHER INFORMATION


Item 1.   Legal Proceedings.

     By letters dated October 9, 2001 and January 17, 2002, we were
contacted   by  the  SEC  regarding  the  potentially  questionable
payments  previously  disclosed, in  which  we  were  requested  to
voluntarily  furnish various documents.  By letters  dated  October
23,  2001  and  November  28,  2001, we voluntarily  responded  and
provided  the  SEC  with  such documents. On  March  13,  2002,  we
provided a supplemental response to the SEC.  We have not  had  any
contact with, or received any letters from, the SEC concerning this
matter since March 2002.

      On or about March 8, 2002, Superus filed a voluntary petition
seeking relief under Chapter 7 of the United States Bankruptcy Code
(the  "Code") (Title 11) in the United States Bankruptcy Court  for
the  District of Delaware.  A trustee was appointed in the case and
he  held  a meeting of creditors as required by the Code.  On  June
18,  2002, the trustee filed his report with the Court stating that
the  case was a no asset case that had been fully administered  and
requesting  that it be discharged.  The Court has not yet  approved
the  trustee's  report  or closed the case.   There  have  been  no
objections filed to the report.


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

     (a)  Exhibits.

               3.1 Certificate of Incorporation of the Company,  as
               amended.  (1)

               3.2  By-Laws of the Company. (1)

               99.1 Certification Pursuant to 18 U.S.C. Section
               1350, as Adopted Pursuant to Section 906 of
               the Sarbanes-Oxley Act of 2002.

               (1)  Incorporated  by reference from  the  Company's
               Registration Statement on Form SB-2 (No 333-630  NY)
               declared  effective by the Securities  and  Exchange
               Commission on July 31, 1996.


     (b)  Reports on Form 8-K.

               None.





                           SIGNATURES

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



                              SURGE COMPONENTS, INC.



                              By: /s/ Ira Levy
                                 ----------------------
                                 Ira Levy
                                 Chief  Executive  Officer
                                 and President
                                 (Principal Executive  and
                                   Financial
                                     Officer)


  Dated:  July 14, 2003




           CERTIFICATION PURSUANT TO
    SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002




     I, Ira Levy, certify that:

          1.   I have reviewed this quarterly report on Form 10-QSB
of Surge Components, Inc.;

           2.    Based on my knowledge, this quarterly report  does
not  contain  any untrue statement of a material fact  or  omit  to
state  a  material fact necessary to make the statements  made,  in
light  of the circumstances under which such statements were  made,
not misleading with respect to the period covered by this quarterly
report;

          3.   Based on my knowledge, the financial statements, and
other  financial  information included in  this  quarterly  report,
fairly  present  in all material respects the financial  condition,
results  of operations and cash flows of the registrant as of,  and
for, the periods presented in this quarterly report;

           4.   The registrant's other certifying officers and I am
responsible  for  establishing and maintaining disclosure  controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
for the registrant and have:

                 (a)    designed  such  disclosure   controls   and
procedures  to  ensure that material information  relating  to  the
registrant, including its consolidated subsidiaries, is made  known
to  us  by  others within those entities, particularly  during  the
period in which this quarterly report is being prepared;

                 (b)  evaluated the effectiveness of the registrant's
disclosure  controls  and procedures as of a date  within  90  days
prior to the filling date of this quarterly report (the "Evaluation
Date"); and

                 (c)   presented  in  this  quarterly  report   our
conclusions about the effectiveness of the disclosure controls  and
procedures based on our evaluation as of the Evaluation Date.

           5.    The registrant's other certifying officers  and  I
have  disclosed,  based  on  our most  recent  evaluation,  to  the
registrant's auditors and the audit committee of registrant's board
of directors (or persons performing the equivalent functions):

                (a)  all significant deficiencies in the design  or
operation  of  internal controls which could adversely  affect  the
registrant's  ability  to  record, process,  summarize  and  report
financial  data  and have identified for the registrant's  auditors
any material weaknesses in internal controls; and

                (b)   any  fraud,  whether or  not  material,  that
involves management or other employees who have a significant  role
in the registrant's internal controls.

           6.    The registrant's other certifying officers  and  I
have  indicated in this quarterly report whether or not there  were
significant  changes in internal controls or in other factors  that
could significantly affect internal controls subsequent to the date
of  our  most  recent evaluation, including any corrective  actions
with regard to significant deficiencies and material weaknesses.


Date: July 14, 2003


                                     /s/Ira Levy
                                     -----------
                                     Name:  Ira Levy
                                     Title: Chief Executive Officer
                                            and Chief Financial Officer
                                           (Principal Executive
                                            Officer and Principal
                                            Financial Officer)