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, 1997

      Transition report pursuant to Section 13 or 15(d) of the Exchange Act
   
For the transition period from             to       

Commission file number  1 - 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.)
                     1016 Grand Boulevard, Deer Park, NY 11729

                     (Address of principal executive offices)
                            (516) 595 - 1818 

              (Issuers telephone number, including area code)


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

   Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the 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 

APPLICABLE ONLY TO ISSUERS  INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

   Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court.

Yes           No 

APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuers classes of 
common equity, as of the latest practicable date:  As of June 30, 1997: 
4,823,958 shares of common stock, par value $.001 per share. 

   Transitional Small Business Disclosure Format (check one):

Yes          No     X


             SURGE COMPONENTS, INC. AND SUBSIDIARY

                    Index to Form 10-QSB

               for the Period Ended  May 31, 1997





      PART I .  FINANCIAL INFORMATION
      
      Item 1.  Financial Statements:

       Consolidated Balance Sheets                                     3 - 4
       
       Consolidated Statements of Income                               5
       
       Consolidated Statements of Cash Flows                           6
       
       Notes to Consolidated Financial Statements                      7 - 8
       
       
       Item 2.  Managements Discussion and Analysis 
        or Plan of Operation                                           9 -11
       
       
       PART II.  OTHER INFORMATION
       
       Item 6.  Exhibits and Reports on Form 8-K                       12 
       
       Signatures                                                      12
       








                                       2




                               SURGE COMPONENTS, INC. AND SUBSIDIARY

                                    CONSOLIDATED BALANCE SHEETS

                                                 




                    ASSETS 
                          
                                                      May 31,     November 30,
                                                      1 9 9 7        1 9 9 6
    Current assets:

      Cash                                           $2,773,574    $3,241,360
      Marketable securities                           2,105,014     2,042,681
      Accounts receivable (net of allowance for 
      doubtful accounts of $9,206)                    1,093,572       899,851
      Inventory                                       1,306,261     1,332,644
      Prepaid expenses and taxes                         74,902        21,827
      Cash surrender value                               16,473        16,472
    
             Total current assets                     7,369,796     7,554,835
    
    Fixed assets - net of accumulated depreciation
      of $133,424 and $107,114, respectively            148,872       169,777
    
    Other assets:
      Security deposits                                   2,985         2,985
    
             Total assets                            $7,521,653    $7,727,597
    
    
    
    
    See accompanying notes to consolidated financial statements.
    
                                            3

                                SURGE COMPONENTS, INC. AND SUBSIDIARY

                                     CONSOLIDATED BALANCE SHEETS
                                                  
                                                  

                   LIABILITIES AND STOCKHOLDERS' EQUITY

                                                          May 31,  November 30,
                                                          1 9 9 7     1 9 9 6
   
   Current liabilities:
      Loan payable - bank                             $   355,012  $   164,232
      Accounts payable                                    768,775      969,954
      Accrued expenses                                     90,374      220,792
      Corporation taxes payable                             1,050       61,762
   
          Total current liabilities                     1,215,211    1,416,740
   
   Long term debt:
      Deferred income tax                                   3,593        4,488
   
          Total liabilities                             1,218,804    1,421,228
   
   Stockholders' equity:
       Preferred stock - $.001 par value stock,
             1,000,000 shares authorized, none issued
             and outstanding                                   --           --
       Common stock - $.001 par value stock,
             25,000,000 shares authorized, 4,823,958 
             shares issued and outstanding respectively     4,824        4,824
      Additional paid-in capital                        6,335,862    6,335,862
      Unrealized holding gain                              30,894       35,751
      Retained deficit                                    (68,731)     (70,068)
          
          Total stockholders' equity                    6,302,849    6,306,369
   
          Total liabilities and stockholders' equity   $7,521,653   $7,727,597
   
   
   See accompanying notes to consolidated financial statements.

                                   4

                        SURGE COMPONENTS INC. AND SUBSIDIARY

                          CONSOLIDATED STATEMENTS OF INCOME





                              Six Months Ended          Three Months Ended   
                             May 31,      May 31,      May 31,       May 31,
                             1 9 9 7      1 9 9 6      1 9 9 7       1 9 9 6

 Sales                     $4,618,856  $4,285,646    $2,481,477    $2,271,170
   Less returns and 
     allowances                17,513      14,599         9,746         6,013
 
 Net sales                  4,601,343   4,271,047     2,471,731     2,265,157
 
 Cost of goods sold         3,420,436   3,219,088     1,855,164     1,687,190
 
 Gross profit               1,180,907   1,051,959       616,567       577,967
 
 Operating expenses:
   General and administrative 
    expenses                  908,042     647,643       455,884       347,902 
   Selling and 
     shipping expenses        351,788     272,112       204,843       154,977
   Interest expense            22,579      22,658        11,093        10,497
   Depreciation                27,259      10,510        13,493         6,085
 
 Total operating expenses   1,309,668     952,923       685,313       519,461
 
 Income (loss) 
   from operations           (128,761)      99,036      (68,746)       58,506
 
 Interest income              130,255      18,192        59,154         9,416
 
 Income (loss) 
   before income taxes          1,494     117,228        (9,592)       67,922
 
 Income taxes                     155      45,573        (2,698)       32,830

 Net income (loss)         $    1,339  $   71,655     $  (6,894)   $   35,092
 
 Weighted average shares 
   outstanding              4,861,978   3,036,731     4,823,958     3,061,458
 
 Earnings per share        $       --  $      .02    $       --    $      .01
 
 
 
 See accompanying notes to consolidated financial statements.

                                    5

                 SURGE COMPONENTS INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                   Six Months Ended
                                                  May 31,        May 31,
                                                 1 9 9 7         1 9 9 6     
  OPERATING ACTIVITIES:
    Net income                                $    1,339      $   71,655
    Adjustments to reconcile net 
     income to net cash provided 
     by operating activities:
        Depreciation                              27,259          10,510        
        Deferred income taxes                       (895)            838
  
  CHANGES IN OPERATING ASSETS AND LIABILITIES:
    Accounts receivable                         (193,721)        (60,894)       
    Inventory                                     26,383           2,174       
    Prepaid expenses and taxes                   (53,078)         (1,167)
    Accounts payable                            (201,179)        114,412       
    Accrued expenses and taxes                  (191,130)       (254,140)      
    Customer deposit                                  --          (5,593)       
  
  NET CASH USED IN OPERATING ACTIVITIES         (585,022)       (122,205)       
  
  INVESTING ACTIVITIES
    Purchase of marketable debt securities       (67,190)             --
    Acquisition of fixed assets                   (6,354)        (27,224)     
    
  NET CASH USED IN INVESTING ACTIVITIES          (73,544)        (27,224)
  
  FINANCING ACTIVITIES
    Deferred offering costs                           --        (141,446)
    Net borrowings under 
     letter-of-credit agreement                  190,780         214,606    
    Proceeds from issuance of stock                   --         325,000
  
  NET CASH PROVIDED BY  FINANCING ACTIVITIES     190,780         398,160
    
  NET CHANGE IN CASH                            (467,786)        248,731
  
  CASH AT BEGINNING OF PERIOD                  3,241,360         679,995
  
  CASH AT END OF PERIOD                       $2,773,574       $ 928,726
  
  SUPPLEMENTAL CASH FLOW INFORMATION:
    Income taxes paid                         $  120,407       $  17,700
    Interest paid                             $   22,579       $  22,658
  
  Payment of legal services 
    through issuance of stock                 $       --       $  25,000     
  
  
  
  See accompanying notes to consolidated financial statements.

                                   6

                SURGE COMPONENTS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                            May 31, 1997



NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

In the opinion of management, the accompanying financial statements of Surge 
Components Inc. and Subsidiary contain all adjustments necessary to present 
fairly the Companys financial position as of May 31, 1997 and November 30, 
1996 and the results of operations and cash flows for the six and three 
months ended May 31, 1997 and 1996.

The accounting policies followed by the Company are set forth in Note 2 to the 
Companys financial statements included in its Annual Report on Form 10-KSB, 
for the year ended November 30, 1996.

The results of operations for the six and three months ended May 31, 1997 and 
1996 are not necessarily indicative of the results to be expected for the 
full year.


NOTE 2 - EARNINGS PER SHARE

In February 1997, the Financial Accounting Standards Board issued SFAS No. 
128 - Earnings Per Share which changes the method for calculating earnings 
per share.  SFAS No. 128 requires presentation of basic and diluted earnings
per share, as opposed to primary and fully diluted earnings per share and is 
effective for periods ending after December 15, 1997.  Early adoption is not 
permitted.  Management does not believe that earnings per share reported in 
accordance with SFAS No. 128 will materially differ from earnings per share 
as currently reported.


NOTE  3 - SUBSEQUENT EVENTS

RETIREMENT PLAN

In June 1997, the Company adopted a qualified 401(k) plan for all  full-time 
employees who are twenty-one years of age and have completed twelve months 
of service.  The Plan allows total employee contributions of up to fifteen 
percent (15%) of the eligible employees salary through a salary reduction 
mechanism. The Company will contribute an amount equal to  twenty percent (20%)
of each employees contribution. 

                                   7

                  SURGE COMPONENTS, INC. AND SUBSIDIARY

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           May 31, 1997




NOTE  3 - SUBSEQUENT EVENTS (CONTINUED)

PROPOSED STOCK REPURCHASE

In June 1997, the Company offered to repurchase up to $500,000 worth of the 
Companys issued and outstanding common shares and warrants on the open market
subject to the rules and regulations of the Securities and Exchange Commission.

STOCK OPTONS

In June 1997, 126,000 of the stock options previously issued to certain 
employees and directors were forfeited. 

On June 30, 1997, the Company granted five year incentive stock options, 
pursuant to its 1995 Stock Option Plan, to thirteen employees or directors to
purchase an aggregate of 176,000 common shares including 126,000 options for
the above ones forfeited. The options are exercisable at  $1.25 and vest 
ratably over a one to three year period.


SHAREHOLDER PROTECTION RIGHTS PLAN

The Company has adopted a Shareholder Protection Rights Plan (the Rights Plan)
whereby each shareholder of record on June 30, 1997 receives two rights to 
purchase common shares at  $.01 a share for a five year period.  The Rights 
Plan provides that if a person acquires more than twenty percent (20%) of the
issued and outstanding common shares of the Company, all shareholders of 
record, except someone who becomes a 20% shareholder, shall be entitled to 
exercise the rights.

                                   8

Item 2. Managements Discussion and Analysis or Plan of Operation

Results of Operations

      Net sales for Surge Components, Inc. and Subsidiary (the Company) for 
the six months ended May 31, 1997 increased by  $330,296 or 8%, to $4,601,343 
as compared to net sales of $4,271,047 for the six months ended May 31, 1996. 
The Companys net sales for the three months ended May 31, 1997 increased by 
$206,574, or 9%, to $2,471,731 as compared to net sales of $2,265,157 for the 
three months ended May 31, 1996. These increases were attributable primarily
to increased sales volumes with existing customers who purchased newly 
introduced products, as well as existing Surge products which they had not 
previously purchased. The Company introduced various new product lines in the
fourth quarter Fiscal 1996 which increased sales during the fiscal year 
ending November 30, 1997 (Fiscal 1997).  The Company negotiated with a new 
Asian manufacturer to market a new product line, which had patent protection 
until recently.  This new line protects the components from high intensity heat
found in products such as, ballast lighting fixtures and automotive products.

      
      The Companys gross profit for the six months ended May 31, 1997 
increased by $128,948, or 12%, as compared to the six months ended May 31, 
1996. The Companys gross profit for the three months ended May 31, 1997 
increased by $38,600, or 7%, as compared to the three months ended May 31, 
1996. These increases were due primarily to lower purchasing costs and 
increased sales volume. The Company is expected to make its operations more 
efficient and further reduce inventory acquisition costs, including air 
shipment costs, by purchasing inventory in larger quantities, at more 
opportune times and at more favorable prices.  The Company has used 
inventory warehousing and  shipping services from a California firm.  The 
Company plans to open additional warehousing facilities in the latter part 
of 1997. 

      General and administrative expenses for the six months ended May 31, 1997
increased by  $260,399, or 40%, as compared to the six months ended May 31, 
1996. For the three months ended May 31, 1997, general and administrative 
expenses increased by $107,982, or 31%, as compared to the three months ended
May 31, 1996. These increases were primarily due to the hiring of additional 
staff such as an engineer, national sales manager, public relations firm, 
investment banking consulting fees and the general costs incurred by a public
reporting company. In addition, the Companys investment in personnel is expected
to significantly increase costs prior to the generation of increased sales 
attributable from such additional employees during Fiscal 1997 or later.

      Selling and shipping expenses for the six months ended May 31, 1997  
increased by $79,676, or 29%, as compared to the six months ended May 31, 
1996. For the three months ended May 31, 1997, selling and shipping expenses
increased by $49,866, or 32%, as compared to the three months ended May 31, 
1996.  These increases were primarily due to the Companys commitment to sales
promotion and literature.  The Company began to more actively promote itself 
and its products through attendance at various trade shows and through 
increased activity with a marketing/public relations firm. The increase in 
selling and shipping expenses is also due to the increased internal 
commissions resulting from the increase in sales volume and increased 
participation of independent sales representatives which received commissions
typically at a rate of 5% of net sales. The Company is committed to 
increasing sales through authorized distributors, sales representatives, an 
internet website, literature, participation in trade shows and utilization 
of a marketing/public relations firm.   

                                   9

      Interest expense remained relatively unchanged for the six months and 
three months ended May 31, 1997 and 1996.  The Company intends to continue 
utilizing letters of credit and bankers acceptances on an as needed basis 
based on its cash needs. 

      Investment income increased by $ 112,063 for the six months ended May 31,
1997 as compared to the six months ended May 31,1996. Investment income 
increased by $49,738  for the three months ended May 31, 1997, as compared to 
the three months ended May 31, 1996.  This resulted from the income derived
from the investment of any unused funds from the public offering or excess 
operation funds.

      As result of the foregoing, the Company had net income of $1,339 for the 
six months ended May 31, 1997 as compared to a net income of $71,655 for the 
six months ended May 31, 1996. The Company had net loss of $6,894 for the 
three months ended May 31, 1997, as compared to a net income of $35,092 for the
three months ended May 31, 1996.

Liquidity and Capital Resources

      Working capital increased by $16,490 during the six months ended May 31, 
1997 from $6,138,095 at November 30, 1996, to $6,154,585 at May 31, 1997. This 
increase resulted primarily from the increase in accounts receivable netted 
against additional spending related to the Companys expansion plans. The
Companys Current Ratio improved to 6.1:1 at May 31, 1997, as compared to 
5.3:1 at November 30, 1996.  Inventory turned more in the six months ended 
May 31, 1997 as a result of the Companys increased sales.  The average number 
of days to collect receivables decreased to 39 days.  Working capital levels 
are adequate to meet the current operating requirements of the Company.
      
      In May 1996, the Company renewed the letter of credit agreement with a 
bank allowing the Company to obtain up to $800,000 in outstanding letters of 
credit and $200,000 in direct borrowings.  The direct borrowings incur 
interest at a prime rate plus one percent per annum.  The agreement also 
provides for the creation of banker's acceptance (a draft drawn on and 
accepted by a bank).  Direct borrowings are limited to advances based on 80% 
of eligible receivables and 25% of eligible inventory capped at $100,000.  
The Company is charged one-half percent (1/2%) upon opening of the letter of 
credit, one-half percent (1/2%) on negotiation and two percent (2%) per annum
over the banker's acceptance rate over the borrowed term.  The agreement 
requires the Company to be in compliance with certain financial ratios 
including a debt to equity ratio and a minimum amount of tangible net worth.
The Company was in compliance with the required financial ratios as of May 31,
1997.  As of May 31, 1997, there were no outstanding direct borrowings, 
although outstanding banker's acceptances and letters of credit totaled 
approximately $510,000.  Borrowings are collateralized by the assets of the 
Company and guaranteed by officers of the Company. Currently the Company is 
in the process of renewing its agreement with the bank.

The Company intends to expand its facilities over the next several years in 
order to achieve and maintain the growth expected primarily through the 
increased penetration  of  the OEM and distribution market, the introduction 
of new products and the upgrade of existing product lines.  In order to effect
this expansion, the Company has allocated a portion of the net proceeds of the 
Public Offering toward the significant up-front expenditures associated with 
the expansion of office and warehouse space at its current facilities in 
addition to potentially establishing additional sales/stocking facilities in
other strategic locations. The renovation of its current facilities is 
expected to commence in late 1997.  Additionally, the renovation plans 
contain provisions for additional space for test labs, which will allow the 
Company to provide customers with prompt information regarding the 
specifications and quality aspects of its products. 

                                    10

      In addition to the costs associated with the expansion of the Companys 
facilities, the Company expects to continue to incur significant operating 
costs.  These costs consist principally of payroll and facilities related 
charges, as well as professional fees associated with being a public reporting
company.  Upon the updating of its current facilities and the potential 
opening of new facilities, facilities related charges are expected to rise 
dramatically.  Staffing requirements for any new facilities may substantially 
increase payroll related costs.  The future profitability of the Company will 
therefore depend on increased future sales levels.  In that regard the 
Company does not plan on opening new facilities unless market potential 
and/or demand warrants such opening.

      Effective January 1, 1996, Challenge entered into an agreement to 
supply audible transducers for computer motherboards to Intel Corporation.  
The agreement is for one year with a one-year renewal option; however, it is 
terminable at will by Intel Corporation.

      The Company is in the process of upgrading its equipment, procedures 
and personnel that it hopes will better enable it to attract new customers as
well as increase the sales volume with its existing customers. The Company 
hopes to expand  sales to its existing customer base by offering a broad range
of complementary products. The Company has initiated a public relations program
to promote these products through various trade journals.

      During the six months ended May 31, 1997, the Company had net cash used 
in operating activities of $585,022, as compared to $122,205 used in operating 
activities in the six months ended May 31, 1996.  The increase in cash used 
in operating activities resulted from an increase in accounts receivable and
prepaid expenses and taxes and decreased accounts payable and accrued 
expenses and taxes.

      During the six months ended May 31, 1997, the Company had net cash 
provided by financing activities of $190,780 as compared with $398,160 in the
six months ended May 31, 1996.  The decrease in the cash provided by 
financing activities was the result of the proceeds from the issuance of stock
and net borrowings under the letter-of-credit agreement during the first 
quarter of 1996.  As a result of the forgoing, the Company had a net decrease
in cash of $467,786 during the six months ended May 31, 1997, as compared to
an increase in cash of $248,731 during the six months ended May 31, 1996.

                                   11

PART II


Item 6.      Exhibits and Reports on Form 8-K

             (a)    Exhibits.

Exhibit No.         Description

11.1         Statement re:  Computation of per share earnings.

27.          Statement re:  Financial Data Schedule

             (b)    No Reports on Form 8-K were filed during the quarter for 
which this report is filed.


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/ Steven J Lubman       
                                              Steven J. Lubman
                                              Vice President, Principal
                                              Financial Officer, Secretary and
                                              Director
   
   
   
   Dated:  July 14, 1997
   
   

                                   12

                  SURGE COMPONENTS, INC. AND SUBSIDIARY

                             EXHIBIT 11.1

                 COMPUTATION OF EARNINGS PER COMMON SHARE


                                        Six Months Ended  Three Months Ended
                                     May 31,     May 31,     May 31,     May 31,
                                     1 9 9 7     1 9 9 6     1 9 9 7     1 9 9 6

 Net income                       $    1,339  $   71,655  $   (6,894)  $  35,092
 
 Shares:
 Weighted common shares outstanding4,823,958   2,074,231   4,823,958   2,098,958
 Employees stock options              38,020          --          --          --
 Options to The Harriman Group            --     962,500          --     962,500
 A warrants                               --          --          --          --
 Underwriter options                      --          --          --          --
 
 Total weighted shares outstanding 4,861,978   3,036,731   4,823,958   3,061,458
 
Earnings per share                $       --  $      .02  $       --  $      .01
  

 
                                     13

Exhibit 27
ARTICLE 5

This schedule contains summary financial information extracted from the
Balance Sheet and Statements of Income filed as part of the report on Form
10QSB and is qualified in its entirety by reference to such report on Form
10QSB.

PERIOD-TYPE                                         6-MOS
FISCAL-YEAR-END                                     NOV-30-1997
PERIOD-END                                          MAY-31-1997
CASH                                                    2,773,574
SECURITIES                                              2,105,014
RECEIVABLES                                             1,102,778
ALLOWANCES                                                  9,206
INVENTORY                                               1,306,261
CURRENT-ASSETS                                          7,369,796
PP&E                                                      282,296
DEPRECIATION                                              133,424
TOTAL-ASSETS                                            7,521,653
CURRENT-LIABILITIES                                     1,215,211
BONDS                                                           0
PREFERRED-MANDATORY                                             0
PREFERRED                                                       0
COMMON                                                      4,824
OTHER-SE                                                6,298,025
TOTAL-LIABILITY-AND-EQUITY                              7,521,653
SALES                                                   4,601,343
TOTAL-REVENUES                                          4,731,598
CGS                                                     3,420,436
TOTAL-COSTS                                             1,309,668
OTHER-EXPENSES                                                  0
LOSS-PROVISION                                                  0
INTEREST-EXPENSE                                           22,579
INCOME-PRETAX                                               1,494
INCOME-TAX                                                    155
INCOME-CONTINUING                                           1,339
DISCONTINUED                                                    0
EXTRAORDINARY                                                   0
CHANGES                                                         0
NET-INCOME                                                  1,339
EPS-PRIMARY                                                   .00
EPS-DILUTED                                                   .00
                                                              
                                    14