SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB

(Mark One)

  Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
  Act of 1934 For the quarterly period ended  August 31, 1996


   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
________________________________________________________________________________
(Issuers telephone number, including area code)
               (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.  (The
 registrant has been subject to the filing requirements since July 31, 1996.)

Yes _______ No ___X____

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 October 8, 1996:  4,823,958
shares of common stock, par value $.001 per share. 

   Transitional Small Business Disclosure Format (check one):

Yes _______ No __X______
<PAGE>

SURGE COMPONENTS INC. AND SUBSIDIARY

Index to Financial Statements
for the Period Ended August 31, 1996



      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 - 12
      
      
      PART II.  OTHER INFORMATION
      
      Item 6.  Exhibits and Reports on Form 8-K                           12
      
      Signatures                                                          13  
      


<PAGE>
<TABLE>

                               SURGE COMPONENTS INC. AND SUBSIDIARY

                                    CONSOLIDATED BALANCE SHEETS



<CAPTION>

                                                 August 31,      November 30,
                                                   1 9 9 6          1 9 9 5
<S>                                               <C>             <C>
                    ASSETS  
                                                           

Current assets:
   Cash                                          $5,450,638       $  679,995
   Accounts receivable (net of allowance 
    for doubtful accounts of $7,018)              1,154,969        1,027,417
   Inventory                                        808,541          736,356
   Prepaid expenses and taxes                        24,454            7,611
   Cash surrender value                               6,914            6,914
   Deposits on merchandise                               --            1,150
       
       Total current assets                       7,445,516        2,459,443

Fixed assets - net of accumulated depreciation
   of $95,334 and $77,921, respectively              93,302           73,455

Other assets:
   Deferred offering costs                               --           87,691
   Security deposits                                  2,985            2,985

       Total assets                              $7,541,803       $2,623,574




<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
                           SURGE COMPONENTS INC. AND SUBSIDIARY
                                 CONSOLIDATED BALANCE SHEETS


                                              August 31,      November 30,
                                                1 9 9 6          1 9 9 5
<S>                                         <C>                <C>
             LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Loan payable - bank                      $   378,611        $  129,843
   Accounts payable                             776,902           735,971
   Accrued expenses                             143,115           404,530
   Corporation taxes payable                     25,387             1,733
   Customer deposit                              25,855            24,837

       Total current liabilities              1,349,870         1,296,914

Long term debt:
   Deferred income tax                            5,986             4,288

       Total liabilities                      1,355,856         1,301,202

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 
    and 1,748,958 shares issued and
    outstanding respectively                     4,824             1,749
   Additional paid-in capital                6,299,206         1,529,829
   Retained deficit                           (118,083)         (209,206)

       Total stockholders' equity            6,185,947         1,322,372

Total liabilities and stockholders' equity  $7,541,803        $2,623,574








<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
                              SURGE COMPONENTS INC. AND SUBSIDIARY

                                 CONSOLIDATED STATEMENTS OF INCOME




                                           Nine Months Ended            Three Months Ended  
                                               August 31,                    August 31,
                                         1 9 9 6         1 9 9 5       1 9 9 6         1 9 9 5
<S>                                   <C>              <C>           <C>            <C> 
Sales                                 $6,331,125       $6,682,933    $2,045,479     $2,772,307
  Less returns and allowances             21,034           29,934         6,435         14,257    
  
Net sales                              6,310,091        6,652,999     2,039,044      2,758,050

Cost of goods sold                     4,813,015        5,197,323     1,593,927      2,151,473

Gross profit                           1,497,076        1,455,676       445,117        606,577

Operating expenses:
  General and administrative 
   expenses                              972,049          992,717       324,406        467,167
  Selling and shipping expenses          354,279          317,674        82,167        118,326
  Interest expense                        35,563           33,744        12,905          9,924
  Depreciation                            17,413           11,639         6,903          5,295

Total operating expenses               1,379,304        1,355,774       426,381        600,712

Income from operations                   117,772           99,902        18,736          5,865

Interest income                           27,560            9,779         9,368          3,357

Income before income taxes               145,332          109,681        28,104          9,222

Income taxes                              54,209           38,849         8,636          1,246

Net income                           $    91,123       $   70,832    $   19,468     $    7,976

Weighted average shares outstanding    3,258,102        2,711,458     3,561,534      2,711,458

Earnings per share                   $       .03       $      .03    $      .01     $       --
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
                                SURGE COMPONENTS INC. AND SUBSIDIARY

                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                            Nine Months Ended
                                                                                August 31,
                                                                          1 9 9 6         1 9 9 5
<CAPTION>
<S>                                                                  <C>            <C>          
OPERATING ACTIVITIES:
Net income                                                           $     91,123   $     70,832
  Adjustments to reconcile net 
   income to net cash provided 
   by operating activities:
       Depreciation                                                        17,413         11,639
       Deferred income taxes                                                1,698         (1,125)
CHANGES IN OPERATING ASSETS AND LIABILITIES:
  Accounts receivable                                                    (126,402)      (404,943)
  Inventory                                                               (72,185)       (55,269)
  Prepaid expenses and taxes                                              (16,843)         5,901
  Accounts payable                                                          40,931        (7,186)
  Accrued expenses and taxes                                              (237,761)      209,729
  Customer deposit                                                           1,018        (4,864)

NET CASH USED IN OPERATING ACTIVITIES                                     (301,008)     (175,286)

INVESTING ACTIVITIES
  Acquisition of fixed assets                                              (37,260)      (37,777)

FINANCING ACTIVITIES
  Deferred offering costs                                               (1,104,857)      (42,500)
  Net borrowings under 
   letter-of-credit agreement                                              248,768        76,289
  Receipt of subscription                                                       --         1,200
  Advances to employees                                                         --         2,500
  Advances to officers                                                          --        (2,231)
  Proceeds from exercise of warrant                                        120,000            --
  Proceeds from private offering                                           325,000            --
  Proceeds from public offering                                          5,520,000            --

NET CASH PROVIDED BY 
 FINANCING ACTIVITIES                                                    5,108,911        35,258
  
NET CHANGE IN CASH                                                       4,770,643      (177,805)

CASH AT BEGINNING OF PERIOD                                                679,995       573,560

CASH AT END OF PERIOD                                                   $5,450,638   $   395,755

SUPPLEMENTAL CASH FLOW INFORMATION:
  Income taxes paid                                                     $  26,399    $    56,077 
  Interest paid                                                         $  35,563    $    33,744

Payment of legal services through issuance 
  of stock                                                              $  25,000    $        --

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

                           SURGE COMPONENTS INC. AND SUBSIDIARY
       
                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
       
                                  AUGUST 31, 1996
       
       

       
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 August 31, 1996 and November 30,
1995 and the results of operations for the nine and three months ended August
31, 1996 and 1995 and cash flows for the nine months ended August 31, 1996 and 
1995.
       
The accounting policies followed by the Company for the year ended November 30, 
1995 are set forth in Note 2 to the Companys financial statements included in 
its Registration Statement on Form SB-2 declared effective by the Securities
and Exchange Commission on July 31, 1996.
       
The results of operations for the nine and three months ended August 31, 1996 
and 1995 are not necessarily indicative of the results to be expected for the
full year.
      
NOTE 2 - LETTERS OF CREDIT TO BANK 
      
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
rate of prime plus one percent per annum.  All other terms and conditions are
identical to the prior agreement.
      
NOTE 3 - STOCKHOLDERS' EQUITY
      
Warrant Agreement
      
In April 1994, the Company entered into a warrant agreement with The Harriman 
Group, Inc. in consideration for the services rendered under the above-
described financial advisory and investment banking agreement.  In exchange 
for $1,200, the investment banker received 1,000,000 warrants which were 
exercisable for 1,000,000 shares of the Company's common stock at $.12 per 
share for a one-year period commencing on the date the Company's common stock
became listed on any stock exchange, or sooner, upon mutual agreement of the 
Company and The Harriman Group, Inc.  In July 1996,  the warrants were 
exercised. 
<PAGE>
                           SURGE COMPONENTS INC. AND SUBSIDIARY
      
                         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      
                                       AUGUST 31, 1996
      
      
NOTE 3 - STOCKHOLDERS' EQUITY (Continued)
      
Public Offering
      
On August 8, 1996, the Company grossed $5,520,000 and netted approximately 
$4,807,000 from the completion of a public offering under the Securities Act
of 1933 as amended.  The offering consisted of 1,725,000 units, at a selling
price of $3.20 per unit.  Each unit consisted of one Common Share (the Common 
Shares) and one redeemable Class A Common Share Purchase Warrant (the 
Warrants).  Each Warrant entitles the holder to purchase one Common Share for
a period of five years commencing two years after the effective date of the
offering at a price of $5.00.
      
<PAGE>      

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
nine months ended August 31, 1996 decreased by  $342,908 or 5%, to $6,310,091
as compared to net sales of $6,652,999 for the nine months ended August 31, 
1995.  The Companys net sales for the three months ended August 31, 1996 
decreased by $719,006, or 26%, to $2,039,044 as compared to net sales of 
$2,758,050 for the three months ended August 31, 1995.  This decrease was 
primarily attributable to the economic effect of the broker distributor market 
in which the Companys subsidiary, Challenge Surge Inc. (Challenge), operated.  
This market currently has an over abundance of electronic components causing 
Challenges customers to purchase more of their component needs from authorized 
distributors.  This condition may continue into 1997.   The net sales for the
Company without Challenges sales increased by 14% for the nine months ended 
August 31, 1996. This increase was attributable primarily to increased sales
volumes with existing customers who purchased items from new product lines,
as well as items previously sold by the Company.
      
      The Companys gross profit for the nine months ended August 31, 1996 
increased by $41,400, or 3%, as compared to the nine months ended August 31,
1995.  This increase was due primarily to lower purchasing costs. The 
increased inventory, related to the Company expansion plans, is expected to 
make 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 
Companys gross profit for the three months ended August 31, 1996 decreased 
by $161,460, or 27%, as compared to the nine months ended August 31, 1995.  
The decrease was due primarily to the above market conditions related to 
Challenges products.

      General and administrative expenses for the nine months ended 
August 31, 1996 decreased by  $20,668, or 2%, as compared to the nine months
ended August 31, 1995. For the three months ended August 31, 1996, general 
and administrative expenses decreased by $142,760, or 31%, as compared to the
three months ended August 31, 1995. The difference is primarily the result of
bonus declared for certain employees during the third quarter of fiscal 1995,
partially offset by an increase in payroll due to the hiring of an engineer 
and an outside salesman during fiscal 1996.


<PAGE>
      Selling and shipping expenses for the nine months ended August 31, 1996  
increased by $36,605, or 12%, as compared to the nine months ended August 31, 
1995. For the three months ended August 31, 1996, selling and shipping 
expenses decreased by $36,159, or 31%, as compared to the three months ended
August 31, 1995. The increase for the nine months ended August 31, 1996 is 
primarily due to the Companys commitment to sales promotion and literature. 
The Company began to more actively promote itself and its products in fiscal 
1996 through attendance at various trade shows and through association with 
a marketing/public relations firm. The decrease in selling and shipping 
expense for the three months ended August 31, 1996 is primarily due to 
reduced commissions resulting from the decrease in sales volume experienced 
by Challenge.  

      Interest expense remained relatively unchanged for the nine months and 
three months ended August 31, 1996 and 1995.  The Company intends to decrease 
costs associated with the current letter of credit agreement by lowering its 
borrowing levels with the bank. 

      As result of the foregoing, the Company had net income of $91,123 for 
the nine months ended August 31, 1996, as compared to a net income of $70,832
for the nine months ended August 31, 1995. The Company had net income of 
$19,468 for the three months ended August 31, 1996, as compared to a net 
income of $7,976 for the three months ended August 31, 1995.
   
Liquidity and Capital Resources

Working capital increased by $4,933,117 during the nine months ended August 31,
1996 from $1,162,529 at November 30, 1995, to $6,095,646 at August 31, 1996. 
This increase resulted primarily from the receipt of the proceeds received 
from the August 1996 public  offering under the Securities Act of 1933. The 
Companys Current Ratio improved to 5.5:1 at August 31, 1996, as compared to 
1.9:1 at November 30, 1995. Inventory turned less in the nine months ended
August 31, 1996 as a result of the Companys commitment to increase stock 
inventory levels.  The average number of days to collect receivables 
increased from 38 days to 44 days returning to the levels of fiscal 1994.  
Working capital levels are adequate to meet the current operating 
requirements of the Company.


<PAGE>
      In May 1996, the Company renewed its 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. All other terms and 
conditions are identical to the prior agreement. As of August 31, 1996, there
was no outstanding direct borrowings, although outstanding bankers 
acceptances and letters of credit totaled approximately $543,000. The Company 
was in compliance with the required financial ratios.

      On August 8, 1996, the Company completed a public offering under the 
Securities Act of 1933, as amended, for which it grossed $5,520,000 and 
netted $4,807,027. The offering consisted of 1,725,000 units, at a selling 
price of $3.20 per unit. Each unit consisted of one Common Share and one 
redeemable Class A Common Share Purchase Warrant. Each Warrant entitles the 
holder to purchase one Common Share for a period of five years commencing two
years after the effective date of the offering at a price of $5.00. 

      In June 1996, warrants purchased by The Harriman Group, Inc. in 1994 
were exercised into 1,000,000 shares of the Companys common stock for which 
the Company received $120,000.

      Although the Company has yet to obtain warehouse space as part of its 
expansion plans, the Company plans to open a warehouse facility during the 
early part of 1997.

      The Company is in the process of updating its equipment, procedures and 
personnel which it hopes will better enable itself to increase and expand the 
sales volume to the existing customer base, as well as attracting new 
customers, by offering a broad range of complementary products and to 
introduce new product lines.  The Company has initiated a formal marketing 
program to promote these products through a marketing organization.  The 
Company has hired a national sales manager, who was previously employed by a
competitor, to assist in achieving these goals.

      The Company plans to introduce a new product line in the fourth quarter 
of fiscal 1996.  The patent on a competitors product expired and the Company 
has completed negotiations with an Asian manufacturer to produce this new 
line which handles high intensity heat used in lighting fixtures and 
automobiles more efficiently.
 
<PAGE>
       During the nine months ended August 31, 1996, the Company had net cash 
used in operating activities of $301,008, as compared to $175,286 used in 
operating activities in the nine months ended August 31, 1995.  The increase
in cash used in operating activities resulted from an increase in accounts
receivable and inventory and decreased accrued expenses and taxes, partially
offset by income from operations and increased accounts payable.

       The Company had net cash provided by financing activities of $5,108,911 
in the nine months ended August 31, 1996, as compared to $35,258 in the nine 
months ended August 31, 1995. This increase resulted primarily from the net 
receipt of proceeds from the stock offerings and the exercise of warrants as 
well as through additional borrowings under the letter of credit agreement 
for the nine months ended August 31, 1996. As a result of the foregoing, the
Company had a net increase in cash of $4,770,643 during the nine months ended
August 31, 1996, as compared to a net decrease of $177,805 in the nine months 
ended August 31, 1995.


PART II


Item 6.Exhibits and Reports on Form 8-K

             (a)    Exhibits.

Exhibit No.         Description

     Statement re:  Computation of per share earnings.
 
     Statement re:  Financial Data Schedule

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

<PAGE>
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:  October 14 , 1996
   
<TABLE>
<CAPTION>
<PAGE>
                           SURGE COMPONENTS INC. AND SUBSIDIARY
                                         EXHIBIT 11

                          COMPUTATION OF EARNINGS PER COMMON SHARE
<CAPTION>
                                              Nine Months Ended        Three Months Ended
                                                   August 31,               August 31
                                             1 9 9 6       1 9 9 5    1 9 9 6        1 9 9 5
<S>                                       <C>          <C>         <C>            <C>          
Primary earnings:

Net income                                $    91,123  $   70,832  $   19,468  $        7,976

Shares:
Weighted average number of common shares 
  and common share equivalents outstanding  3,258,102   2,711,458   3,561,534       2,711,458

Primary earnings per common share         $       .03  $      .03  $      .01  $           --

Fully diluted earnings:

Net income                                $    91,123  $   70,832  $   19,468  $        7,976

Net (after tax) interest expense related 
  to convertible debt                              --          --          --              --

Net income as adjusted                    $    91,123  $   70,832  $   19,468  $        7,976

Shares:
Weighted average number of common shares
  and common share equivalents outstanding  3,258,102   2,711,458   3,561,534       2,711,458

Fully diluted earnings per common share   $       .03  $      .03  $      .01  $           --


</TABLE>
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