UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 WASHINGTON,
DC 20549

 FORM

 (Mark
One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the fiscal year ended November 30, 2024

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For
the transition period from _______ to _______

 Commission
File No. 000-27688

 SURGE
COMPONENTS, INC.

 (Exact
name of registrant as specified in its charter)

 Nevada

 11-2602030

 (State or Other Jurisdiction of
 Incorporation or Organization)

 (I.R.S. Employer
 Identification No.)

 95 East Jefryn Boulevard
 Deer Park, New York

 11729

 (Address of principal executive offices)

 (Zip Code)

 (631) 595-1818

 (Registrant's telephone number, including area code)

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

 Title
 of Each Class to be so Registered:

 Name
 of each exchange on which registered

 None

 None

 Securities
registered under Section 12(g) of the Act:

 Common
Stock, Par Value $0.001

 Preferred
Stock Purchase Rights

 (Title
of Class)

by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes No

by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
 Yes No

by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company
or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller
reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large Accelerated Filer

 Accelerated Filer

 Non-accelerated Filer

 Smaller reporting company

 Emerging growth company

 If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.

 If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements.

by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 As
of May 31, 2024, the aggregate market value of the issued and outstanding common stock held by non-affiliates of the registrant, based
upon the closing price of the common stock, was approximately $ 8.1 million.

 The
registrant's common stock outstanding as of February 24, 2025, was 5,582,783 shares of common stock.

 SURGE
COMPONENTS, INC.

 TABLE
OF CONTENTS

 Item 1.

 Business

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item 1C.

 Cybersecurity

 Item 2.

 Properties.

 Item 3.

 Legal Proceedings.

 Item 4.

 Mine Safety Disclosures.

 Item 5.

 Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 Item 6.

 [Reserved]

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations.

 Item 7A.

 Quantitative and Qualitative Disclosures About Market Risk.

 Item 8.

 Financial Statements and Supplementary Data.

 Item 9.

 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

 Item 9A.

 Controls and Procedures.

 Item 9B.

 Other Information.

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

 Item 10.

 Directors, Executive Officers, and Corporate Governance.

 Item 11.

 Executive Compensation.

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 Item 13.

 Certain Relationships and Related Transactions, and Director Independence.

 Item 14.

 Principal Accounting Fees and Services.

 Item 15.

 Exhibits and Financial Statement Schedules.

 Item 16.

 Form 10-K Summary.

 SIGNATURES

 Consolidated Financial Statements

 i

 FORWARD-LOOKING
STATEMENTS

 This
report contains forward-looking statements. All statements other than statements of historical facts contained in this report, including
statements regarding our future results of operations and financial position, business strategy and plans and objectives of management
for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors
that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements.

 In
some cases, forward-looking statements can be identified by terms such as "may," "will," "should,"
"expects," "plans," "anticipates," "could," "intends," "target,"
"projects," "contemplates," "believes," "estimates," "predicts," "potential"
or "continue" or the negative of these terms or other similar words. These statements are only predictions. We have based
these forward-looking statements largely on our current expectations and projections about future events and financial trends that we
believe may affect our business, financial condition and results of operations. We discuss many of the risks in greater detail under
the heading "Risk Factors." Also, these forward-looking statements represent our estimates and assumptions only as of the
date of the filing of this report. Except as required by law, we assume no obligation to update any forward-looking statements after
the date of the filing of this report.

 This
report also contains estimates. These estimates involve a number of assumptions and limitations, and investors are cautioned not to give
undue weight to such estimates. In addition, projections, assumptions and estimates of our future performance and the future performance
of the industries in which we operate are subject to a high degree of uncertainty and risk due to a variety of factors, including those
described in "Risk Factors" and elsewhere in this report. These and other factors could cause results to differ materially
from those expressed in the estimates made by the independent parties and by us.

 ii

 PART
I

 Item 1.
Business.

 References
to "we," "us," "our", "our company" and "the company" refer to Surge Components,
Inc. ("Surge" or the "Company") and, unless the context indicates otherwise, includes Surge's wholly-owned
subsidiaries, Challenge/Surge, Inc. ("Challenge"), and Surge Components, Limited ("Surge Limited").

 We
were incorporated under the laws of the State of New York on November 24, 1981, and re-incorporated in Nevada on August 26, 2010. We
completed an initial public offering of our securities in 1984 and a second offering in August 1996. Our principal executive offices
are located at 95 East Jefryn Boulevard, Deer Park, New York 11729 and our telephone number is (631) 595-1818.

 We
are a supplier of electronic products and components. These products include capacitors, which are electrical energy storage devices,
and discrete components, such as semiconductor rectifiers, transistors and diodes, which are single function low power semiconductor
products that are packaged alone as compared to integrated circuits such as microprocessors. The products that we sell are typically
utilized in the electronic circuitry of diverse products, including, but not limited to, automobiles, telecomm, audio, cellular telephones,
computers, consumer electronics, garage door openers, household appliances, power supplies and security equipment. The products that
we sell are sold to both original equipment manufacturers, commonly referred to as OEMs, who incorporate them into their products, and
to distributors of the lines of products we sell, who resell these products within their customer base. Surge sells its products through
three of the top four distributors for electronic components in the world and also supplies its products to subcontractors who manufacture
for their customers. These channels open doors to Surge at customers which Surge may not have access to otherwise. The products that
we sell are manufactured predominantly in Asia by approximately sixteen independent manufacturers. We only have one binding long-term
supply agreement with one of our manufacturers, Lelon Electronics. We have an agreement to act as the exclusive sales agent utilizing
independent sales representative organizations in North America to sell and market the products for one of such manufacturers, Lelon
Electronics. When we act as a sales agent, we receive a commission from our supplier who sold the product to the customer that we introduced
to our supplier. The amount of the commission is determined on a sale by sale basis depending on the profit margin of the product. Commission
revenue totaled $95,584 and $106,885 for the fiscal years ended November 30, 2024 ("Fiscal 2024") and November 30, 2023 ("Fiscal
2023"), respectively.

 Challenge
is engaged in the sale of electronic components. In 1999, Challenge began as a division to sell audible components. We have been
able to increase the types of products that we sell because some of our suppliers introduced new products, and we also located other
products from new suppliers. Our core products include buzzers, speakers, microphones, resonators, alarms, chimes, filters, and discriminators.
We now also work with our suppliers to have our suppliers customize many of the products we sell for many customers through the customers'
own designs and those that we work with our suppliers to have our suppliers redesign for them at our suppliers' factories. We have
engineers on our staff who work with our suppliers on such redesigns and assists with the introduction of new product lines. We
are continually looking to expand the line of products that we sell. We sell these products through independent representatives that
earn a commission on the products we sell. We are also working with local, regional, and national distributors to sell these products
to local accounts in every state Challenge also at times handles the brokering of certain products, helping their customers find parts
that regular suppliers can't deliver.

 In
order for us to grow, we will depend on, among other things, the continued growth of the electronics and semiconductor industries,
our ability to withstand intense price competition, our ability to obtain new clients, our ability to retain and attract sales and
other personnel in order to expand our marketing capabilities, our ability to secure adequate sources of products, which are in
demand on commercially reasonable terms, our success in managing growth, including monitoring an expanded level of
operations.

 Industry
Background

 The
United States electronics distribution industry is composed of manufacturers, national and international distributors, as well as regional
and local distributors. Electronics distributors market numerous products, including active components (such as transistors, microprocessors,
integrated circuits and semiconductors), passive components (such as capacitors and audibles), and electro mechanical, interconnect (such
as connectors and wire) and computer products. Surge focuses its efforts on the sale of capacitors, discrete components, and audible
products.

 The
electronics industry has been characterized by intense price cutting and rapid technological changes and development, which could materially
adversely affect our future operating results. In addition, the industry has been affected historically by periodic economic downturns,
which have had an adverse economic effect upon manufacturers and end-users of the products that we sell, as well as distributors.
Furthermore, the life-cycle of existing electronic products and the timing of new product development and introduction can affect the
demand for electronic components, including the products that we sell. Accordingly, any downturn in the electronics industry in general
could adversely affect our business and results of operations. Due to rising transportation and employment costs in Asia, we have seen
some U.S. manufacturers start moving their manufacturing facilities to Mexico to reduce transportation costs and bring manufacturing
much closer to home. At this time, however, none of our customers has moved its manufacturing facilities to Mexico.

 Products

 Surge
supplies a wide variety of electronic components (some of which bear our private "Surge" label) which can be broadly divided
into two categories—capacitors and discrete components. For Fiscal 2024 and Fiscal 2023, capacitors accounted for approximately
28% and 31% of Surge's sales, respectively, of which approximately 75% for each year was Lelon capacitors (discussed below). Discrete
components accounted for Surge's remaining sales in Fiscal 2024 and Fiscal 2023. Capacitors and discrete components can be categorized
based on various factors, including function, construction, fabrication and capacity.

 We
sell, under the name of the manufacturer, Lelon Electronics, aluminum electrolytic capacitors, which are capacitors that store and release
energy into a circuit incrementally and are used in various applications, including but not limited to, computers, appliances, automotive,
lighting, telecommunications devices and various consumer products. Our sales of products under the Lelon Electronics name accounted
for approximately 28% of our total sales (and approximately 75% of our capacitor sales as noted above) in Fiscal 2024.

 The
principal products sold by Surge are sold under the Surge name (except with respect to capacitors, which the Company also sells under
the Lelon Electronics name as noted above) or by Challenge are set forth below.

 Capacitors

 A
capacitor is an electrical energy storage device used in the electronics industry for varied applications, principally as elements of
resonant circuits, coupling and bypass applications, blockage of DC current, frequency determining and timing elements, filters and delay-line
components. All products are available in traditional leaded as well as surface mount (chip) packages. The product line of capacitors
we sell includes:

 Aluminum
Electrolytic Capacitors- These capacitors, which are Surge's principal product, are storage devices used in power applications
to store and release energy as the electronic circuitry demands. They are commonly used in power supplies and can be found in a wide
range of consumer electronics products. Our supplier has one of the largest facilities for these products in Taiwan and China. These
facilities are fully certified for the International Quality Standard ISO 9001 and QS9000, and TS16949, which means that they meet the
strictest requirements established by the automotive industry and adopted throughout the world to ensure that the facility's manufacturing
processes, equipment and associated quality control systems will satisfy specific customer requirements. This system is also intended
and designed to facilitate clear and thorough record keeping of all quality control and testing information and to ensure clear communication
from one department to another about the information (i.e., quality control, production or engineering). This certification permits us
to monitor quality control/manufacturing process information and to respond to any customer questions.

 Ceramic
Capacitors- These capacitors are the least expensive, and are widely used in the electronics industry. They are commonly used to bypass
or filter semiconductors in resonant circuits and are found predominantly in a wide range of low cost products including computer, telecom,
appliances, games and toys.

 Mylar
Film Capacitors- These capacitors are frequently used for noise suppression and filtering. They are commonly used in telecommunication
and computer products. Surge's suppliers in China have facilities fully certified for all of the above mentioned quality certifications.

 Discrete
Components

 Discrete
components, such as semiconductor rectifiers, transistors and diodes, are packaged individually to perform a single or limited function,
in contrast to integrated circuits, such as microprocessors and other "chips", which contain from only a few diodes to as
many as several million diodes and other elements in a single package, and are usually designed to perform complex tasks. Surge almost
exclusively distributes discrete, low power semiconductor components rather than integrated circuits.

 The
product line of discrete components we sell includes:

 Rectifiers-
Low power semiconductor rectifiers are devices that convert alternating current, or AC power, into one directional current, or DC power,
by permitting current to flow in one direction only. They tend to be found in most electrical apparatuses, especially those drawing power
from an AC wall outlet. All products are available in traditional leaded as well as surface mount (chip) packages. Surge's rectifier
suppliers all have the aforementioned certifications, giving us an opportunity to market the products that we sell to the automotive
industry.

 Transistors-
These products send a signal to the circuit for transmission of waves. They are commonly used in applications involving the processing
or amplification of electric current and electric signals, including data, television, sound and power. All products are available in
traditional leaded as well as surface mount (chip) packages. Surge sells many types of ISO 9002 transistors, including power transistors,
designed for large currents to safely dissipate large amounts of power.

 Diodes-
Diodes are two-lead or surface mount components that allow electric current to flow in only one direction. They are used in a variety
of electronic applications, including signal processing and direction of current. All products are available in traditional leaded as
well as surface mount (chip) packages. Diodes sold include:

 Circuit
Protection Devices- Our circuit protection devices include transient voltage suppressors and metal oxide varistors, which protect circuits
against switching, lightening surges and other uncontrolled power surges and/or interruptions in circuits. Transient voltage suppressors,
which offer a higher level of protection for the circuit, are required in telecommunication products and are typically higher priced
products than the metal oxide varistors, which are more economically priced and are used in consumer products. All products are available
in traditional leaded as well as surface mount (chip) packages.

 Audible
Components- These include audible transducers, Piezo buzzers, speakers, and microphones, which produce an audible sound for, and are
used in back-up power supplies for computers, alarms, appliances, smoke detectors, automobiles, telephones and other products which produce
sounds. Challenge has initiated marketing relationships with certain Asian manufacturers of audible components to sell these products
worldwide. All products are available in traditional leaded as well as surface mount (chip) packages.

 New
Products- We periodically introduce new products, which are intended to complement our existing product lines. These products are
ones that are commonly used in the same circuit designs as other of the products that we sell and will further provide a one-
stop-shop for the customer. Some of these products are common items used in all applications and others are niche items with a focus
towards a particular application. These new products include fuses, printed circuit boards and switches. All products are available
in traditional leaded as well as surface mount (chip) versions. In 2019 we were issued a patent on a new pinpoint alarm designed to
improve an individual's ability to determine the location of the alarm. The improved alarm can be used in a wide variety of
applications including reversing vehicles, medical emergency notification and hardware devices that use Bluetooth or other wireless
communication protocols in combination with mobile software applications to locate lost items.

 Inventory

 In
order to adequately service our customers' needs, we believe that it is necessary to maintain large inventories, which makes us
more susceptible to price and technology changes. At any given time, we attempt to maintain a one-to-two month inventory on certain products
in high demand for customers and at least one month for other products. Our inventory currently contains more than 100 million component
units consisting of more than 3,000 different part numbers. The products that we sell range in sales price from less than one cent for
a commercial diode to more than $2.00 for high power capacitors and semiconductors. As of November 30, 2024, we maintained inventory
valued at $5,000,707.

 Because
of the experience of our management, including Ira Levy and Steven Lubman, we believe that we know the best prices to buy the products
we sell and as a result we generally waive rights to manufacturers' inventory protection agreements (including price protection
and inventory return rights), and thereby bear the risk of increases in the prices charged by our manufacturers and decreases in the
prices of products held in our inventory or covered by purchase commitments. If prices of components, which we hold in inventory decline,
or if new technology is developed that displaces products that we sell, our business could be materially adversely affected. The Company
has experienced very little impact from customer design changes and slowdown but this can potentially increase due to economic conditions
and customer-specific business conditions. If our customers experience these changes, our business could be adversely affected.

 Product
Availability

 Surge
and Challenge obtain a significant amount of their products from manufacturers in Asia. Of the total goods purchased by Surge and
Challenge in Fiscal 2024, those foreign manufactured products were supplied from manufacturers in Taiwan (31%), Hong Kong (15%),
elsewhere in Asia including China, South Korea and Singapore (49%) and overseas outside of Asia (less than 1%). The Company
purchases the balance of its products from the United States. The Company purchases its products from approximately sixteen
different manufacturers.

 Most
of the facilities that manufacture products for Surge have obtained International Quality Standard ISO 9002 and other certifications.
We typically purchase the products that we sell in United States currency in order to minimize the risk of currency fluctuations.
In most cases, Surge utilizes two or more alternative sources of supply for each of its products with one primary and one complementary
supplier for each product. Surge's relationships with many of its suppliers date back to the commencement of our import operations
in 1983. We have established payment terms with our manufacturers of between 30 and 60 day open account terms.

 We
only have one agreement with a supplier, Lelon Electronics, which is terminable by either party upon six months'
notice to the other party. We have an agreement to act as the sales agent in North America for one of our manufacturers, Lelon Electronics.
While we believe that we have established close working relationships with our principal manufacturers, our success depends, in large
part, on maintaining these relationships and developing new supplier relationships for our existing and future product lines. Because
of the lack of long- term contracts, we may not be able to maintain these relationships.

 For
Fiscal 2024 and Fiscal 2023, one of Surge's vendors, Lelon Electronics, accounted for approximately 28% and 31% of Surge's
consolidated purchases, respectively. The loss of or a significant disruption in the relationship with Lelon Electronics, which is our
major supplier, could have a material adverse effect on our business and results of operations until a suitable replacement could be
obtained.

 The
Company has a written agreement with Lelon Electronics regarding the supply of inventory for the Company's customers. The
Company purchases products under both the Company's name and Lelon's brand name for the Company's inventory in
order to supply the Company's customers. For the majority of purchases from Lelon Electronics, the Company takes title to the
products, houses them in the Company's warehouse and sells directly to the Company's customers. There is no right of
return on the products purchased from Lelon and the Company accepts all credit risk with regards to sales of these
products.

 The
components business has, from time to time, experienced periods of shortages in product supply, usually as the result of demand exceeding
available supply. When these shortages occur, suppliers tend to either increase prices and or reduce the number of units sold to given
customers. Should there be shortages in the future, such shortages may benefit our business if we get preferential supply from our manufacturers.
It could also have an adverse effect upon our business, in the case that our manufacturers don't have enough capacity to provide
enough components. Conversely, due to poor market demand, there could be an excess of components in the market, causing stronger competition
and an erosion of prices. In cases of shortages, customers may purchase more than they need and thus reducing future demand for their
products while they use up their excess inventory. What is the status now?

 Marketing
and Sales

 Surge's
sales efforts are directed towards Original Equipment Manufacturer (OEM) customers in numerous industries where the products that we
sell have wide application. Surge currently employs nine sales and marketing personnel, not including two of its executive officers,
who are responsible for certain key customer relationships. In addition, Surge has expanded its sales team, hiring a Europe manager based
in London as well as one based in China.

 We
also use independent sales representatives or organizations, which often specialize in specific products and areas and have specific
knowledge of and contacts in particular markets. We currently have representation agreements with approximately 30 sales representative
organizations. Sales representative organizations, which are generally paid a 5% commission on net sales, are generally responsible in
their respective geographic markets for identifying customers and soliciting customer orders. Pursuant to arrangements with our independent
sales representatives, they are permitted to represent other electronics manufacturers, but are generally prohibited from carrying a
line of products competitive with the products that we sell. These arrangements can be terminated on written notice by either party or
if breached by either party. These organizations normally employ between one and twelve sales representatives. The individual sales representatives
employed by the sales organizations generally possess an expertise which enhances the scope of our marketing and sales efforts. This
permits us to avoid the significant costs associated with creating a direct marketing network. We have had relationships with certain
sales organizations since 1988 and continue to engage new sales organizations as needed. We believe that additional sales organizations
and representatives are available to us, if required.

 We
have initiated a formal national distribution program to attract more distributors to promote the products that we sell. We expect this
market segment to contribute significantly to our sales growth over time.

 Many
customers require their suppliers to have a local presence and Surge's network of independent sales representatives are responsive
to these needs. Surge formed a Hong Kong corporation, Surge Components, Limited and hired a regional sales manager to service the Hong
Kong/Greater China region customers.

 Other
marketing efforts include generation and distribution of catalogs and brochures of the products we sell and attendance at trade shows.
We have produced an exhibit for display at electronics trade shows throughout the year. The products that we sell have been exhibited
at the electronic distribution show in Las Vegas, and we intend to continue our commitment and focus on the distribution segment of the
industry by our visibility at the Electronic Distributor Trade Show. In addition, we have updated our website to make it more informative
and user friendly. Our search engines have been improved so that customers can find us more easily and we have developed a new portal
system to help with lead management and disbursement.

 Customers

 The
products that we sell are sold to distributors and OEMs in such diverse industries as the automotive, computer, communications, cellular
telephones, consumer electronics, garage door openers, security equipment, audio equipment, telecomm products, computer related products,
power supply products, utility meters and household appliances industries. We request our distributors to provide point of sales reporting,
which enables us to gain knowledge of the breakdown of industries into which the products that we sell are sold. Two of our customers
accounted for 19% and 15% of net sales for Fiscal 2024, and 20% and 18% of net sales for Fiscal 2023. Our discrete components are
often sold to the same clients as our capacitors. These OEM customers typically accept samples for evaluation and, if approved, we work
towards procuring the next orders for these items.

 Typically,
we do not maintain contracts with our customers and generally sell products pursuant to customer purchase orders. Although our customer
base has increased, the loss of our largest customers as well as, to a lesser extent, the loss of any other material customer, could
have a materially adverse effect on our operations during the short-term until we are able to generate replacement business, although
we may not be able to obtain such replacement business. Because of our contracts and good working relationships with our distributors,
we offer the OEMs, when purchasing through distributors, extended payment terms, just-in- time deliveries and one-stop shopping for many
types of electronic products.

 Competition

 We
conduct business in the highly competitive electronic components industry. We expect this industry to remain competitive. We face intense
competition in both our selling efforts and purchasing efforts from the many companies that manufacture or distribute electronic components.
Our principal competitors in the sale of capacitors include Nichicon, Panasonic, Illinois Capacitor, NIC, AVX, Murata, Epcos, United
Chemicon, Rubycon, Vishay and Kemet. Our principal competitors in the sale of discrete components include Vishay, General Semiconductor
Division, General Instrument Corp., OnSemi, Inc., Microsemi Corp., Diodes, Inc. and Littlefuse, and Copper Bussman Division. Our principal
competition in the audible business include AVX, Murata, Panasonic, Projects Unlimited, International Components Corp. and Star Micronics.
Many of these companies are well established with substantial expertise, and have much greater assets and greater financial, marketing,
personnel, and other resources than we do. Many larger competing suppliers also carry product lines which we do not carry. Generally,
large semiconductor manufacturers and distributors do not focus their direct selling efforts on small to medium sized OEMs and distributors,
which constitute many of our customers. As our customers become larger, and as the market becomes more competitive, our competitors may
find it beneficial to focus direct selling efforts on those customers, which could result in our facing increased competition, the loss
of customers or pressure on our profit margins. We are finding increased competition from manufacturers located in Asia due to the increased
globalization nature of the business. There can be no assurance that we will be able to continue to compete effectively with existing
or potential competitors. Other factors that will affect our success in these markets include our continued ability to attract additional
experienced marketing, sales and management talent, and our ability to expand our support, training and field service capabilities. Additionally,
since the tsunami and earthquake in Japan in 2012, our competitors have established manufacturing facilities in China enabling them to
be more competitive by lowering their labor rates and manufacturing costs. Also, as the world continues to become global and customers
have easier access to suppliers in Asia, our business could be adversely affected since the internet enables customers to meet and
interact with suppliers through Google and other search engines which customers had not previously done.

 Customer
Service

 We
have customer service employees whose time is dedicated largely to responding to customer inquiries such as price quote requests, delivery
status of new or existing purchase orders, changes of existing order dates, quantities, dates, etc. We intend to increase our customer
service capabilities, as necessary.

 Foreign
Trade Regulation

 Most
products sold by Surge are manufactured in Asia, including such countries as Taiwan, South Korea, Hong Kong, India, Japan and China.
The purchase of goods manufactured in foreign countries is subject to a number of risks, including economic disruptions, transportation
delays and interruptions, foreign exchange rate fluctuations, impositions of tariffs and import and export controls, and changes in governmental
policies, any of which could have a material adverse effect on our business and results of operations. Potential concerns may include
drastic devaluation of currencies, loss of supplies and increased competition within the region.

 From
time to time, protectionist pressures have influenced United States trade policy concerning the imposition of significant duties or other
trade restrictions upon foreign products. We cannot predict whether additional United States customs quotas, duties, taxes or other charges
or restrictions will be imposed upon the importation of foreign components in the future or what effect such actions could have on our
business, financial condition or results of operations.

 Our
ability to remain competitive with respect to the pricing of imported components could be adversely affected by increases in tariffs
or duties, changes in trade treaties, strikes in air or sea transportation, and possible future United States legislation with
respect to pricing and import quotas on products from foreign countries. Our ability to remain competitive could also be affected by
other governmental actions related to, among other things, anti-dumping legislation and international currency
fluctuations. While we do not believe that any of these factors adversely impact our business at the present time, there can be no
assurance that these factors will not materially adversely affect us in the future. Since July 2018, when tariffs started to impact
some of the Company's sales, the Company has been able to pass on the tariffs to its U.S. and Canadian customers. We have also
changed our shipping terms with our Mexico customers to Free Carrier, which means we deliver the goods to the customers' Hong
Kong freight forwarder, who then becomes responsible for the transportation and tariff costs. Any significant disruption in the
delivery of merchandise from our suppliers, substantially all of whom are foreign, could have a materially adverse impact on our
business and results of operations.

 Government
Regulation

 Various
laws and regulations relating to safe working conditions, including the Occupational Safety and Health Act, are applicable to our Company.
We believe we are in substantial compliance with all material federal, state and local laws and regulations regarding safe working conditions.
We believe that the cost of compliance with such governmental regulations is not material.

 We
are subject to the United States Foreign Corrupt Practices Act, which generally prohibits United States companies from engaging in bribery
or other prohibited payments to foreign officials for the purpose of obtaining or retaining business. Foreign companies, including some
that may compete with us, are not subject to these prohibitions. If our employees or other agents are found to have engaged in such practices,
we could suffer severe penalties and other consequences that may have a material adverse effect on our business, financial condition
and results of operations. To the Company's knowledge, none of our employees or other agents have engaged in such practices.

 The
Company has been impacted by the tariffs in effect or being considered by the United States to impose on Chinese goods being imported
into the United States, which includes the Company's products. The imposition of such tariffs will likely cause our costs, as well
as the prices we charge customers, to increase.

 Environmental
and Regulatory Compliance

 We
are subject to various environmental laws and regulations relating to the protection of the environment, including those governing the
handling and management of certain chemicals used in electronic components.

 We
do not believe that compliance with these laws and regulations will have a material adverse effect on our capital expenditures, earnings,
or competitive position.

 Patents,
Trademarks and Proprietary Information

 In
September 2018, we were issued a U.S. patent application with the United States Patent and Trademark Office for an improved pinpoint
alarm designed to improve an individual's ability to determine the location of an alarm versus standard single, multi-frequency,
or broadband alarms. The improved alarm can be used in a wide variety of applications, including reversing vehicles, medical emergency
notification, and hardware devices that use Bluetooth or other wireless communications protocols in combination with mobile software
applications to locate lost items, including phones, wallets, and keys. Our patent issued on December 31, 2019, as United States Patent
No. 10,522,008. With regard to our other products, although we have no knowledge that such products infringe patents or trademarks, or
violate proprietary rights of others, it is possible that alleged infringement of existing or future patents, trademarks or proprietary
rights of others may occur. In the event that the products that we sell are alleged to infringe proprietary rights of others, these products
may have to be modified or redesigned. However, there can be no assurance that any infringing products will be able to be modified or
redesigned in a way that does not infringe on the proprietary rights of others, which could have a material adverse effect upon our operations.
In addition, there can be no assurance that we will have the financial or other resources necessary to enforce or defend a patent infringement
or proprietary rights violation action. Moreover, if the products we sell infringe patents, trademarks or proprietary rights of others,
we could, under certain circumstances, become liable for damages, which also could have a material adverse effect on our business.

 With
respect to the other products that we sell, we have no patents, trademarks or copyrights registered in the United States Patent and Trademark
Office or in any state. Additionally, to the best of our knowledge the manufacturers of the products that we sell do not have patents,
trademarks or copyrights registered in the United States Patent and Trademark Officer or in any state. We rely on the know-how, experience
and capabilities of our management personnel.

 Backlog

 As
of November 30, 2024, our backlog was approximately $9,432,962, as compared with $11,427,000 at November 30, 2023. Substantially all
backlog is expected to be shipped by us within 365 days of booking date. Due to the economic downturn, some of the Company's customers
have cancelled orders while others are not placing as many new orders. Year to year comparisons of backlog are not necessarily indicative
of future operating results.

 Employees

 As
of November 30, 2024, Surge and Challenge employed 42 persons, two of whom are employed in executive capacities, nine are engaged in
sales, four in engineering, four in purchasing, five in administrative capacities, twelve in customer service, two in accounting
and four in warehousing. None of our employees are covered by a collective bargaining agreement, and we consider our relationship with
our employees to be good.

 Competitive
pay and benefits. The Company's compensation programs are designed to provide the proper incentives to attract, retain and motivate
employees to achieve superior results. We provide employee wages that are competitive and consistent with employee positions, skill levels,
experience, knowledge and geographic location. Annual increases and incentive compensation are based on merit, which is communicated
to the employees at the time of hiring. Employees are eligible for paid and unpaid leaves, a retirement plan, and disability/accident
coverage.

 Health
and safety. The health and safety of our employees is our highest priority. Our safety focus is also evident in our response to the COVID-19
pandemic.

 Adding
 work from home flexibility.

 Adjusting
 attendance policies to encourage those who are sick to stay home.

 Increasing
 cleaning protocols across all locations.

 Providing
 additional personal protective equipment and cleaning supplies.

 Item 1A.
Risk Factors

 An
investment in our common stock involves a high degree of risk. An investor should carefully consider the risks described below as well
as other information contained in this annual report on Form 10-K. If any of the following risks actually occur, our business, financial
condition or results of operations could be materially adversely affected, the value of our common stock could decline, and an investor
may lose all or part of his or her investment.

 Risks
Related to our Business

 We
have an agreement with only one of our suppliers and we depend on a limited number of suppliers

 We
have an agreement with only one of our suppliers (Lelon Electronics), which agreement is terminable by either party upon notice to the
other party. Lelon Electronics accounted for approximately 28% and 31% of the Company's consolidated purchases in the years ending
November 30, 2024 and November 30, 2023. We also act as the exclusive sales agent in North America for Lelon Electronics. While we believe
that we have established close working relationships with our principal suppliers, our success depends, in large part, on maintaining
these relationships and developing new supplier relationships for our existing and future product lines. There is no assurance that we
will be able to maintain these relationships. While we believe that there are alternative semiconductor and capacitor suppliers whose
replacement products may be acceptable to our customers, the loss of, or a significant disruption in the relationship with, one or more
of our major suppliers would likely have a material adverse effect on our business and results of operations.

 We
need to maintain large inventories in order to succeed and as a result, price fluctuations could harm us.

 In
order to adequately service our customers, we believe that it is necessary to maintain a large inventory of products. Accordingly,
we attempt to maintain a one-to-two month inventory of those products which we supply to our customers. As a result of our strategic
inventory purchasing policies, under which we order products to obtain preferential pricing, we generally waive the right to manufacturers'
inventory protection agreements (including price protection and inventory return rights). As a result, we bear the risk of increases
in the prices charged by our manufacturers to the Company and decreases in the prices we are able to charge our customers. If prices
of components which we hold in inventory decline or if new technology is developed that displaces products which we sell, our business
could be materially adversely affected. Typically the Company has experienced very little impact from customer design changes and slowdown
but this can potentially increase due to economic conditions and specific customers business conditions. If our customers experience
these changes, our business could be adversely affected... There can be no assurances that we will be required to take additional reserves
in the future.

 Our
operations would be adversely effected if we lose certain of our customers.

 For
Fiscal 2024, approximately 19% and 15% of our net sales were derived from sales to two customers. Although our customer base has
increased, the loss of our largest customers as well as, to a lesser extent, the loss of any other material customer, would be expected
to have a materially adverse effect on our operations until we are able to generate replacement business, although we may not be able
to obtain such replacement business.

 We
may not be able to compete against large competitors who have better resources.

 We
face intense competition, in both our selling efforts and purchasing efforts, from the many companies that manufacture or distribute
electronic components and semiconductors. Our principal competitors in the sale of capacitors include Nichicon, Panasonic, Illinois Capacitor,
NIC, AVX, Murata, Epcos, United Chemicon, Rubycon, Vishay and Kemet, General Semiconductor Division, General Instrument Corp., OnSemi,
Inc., Microsemi Corp., Diodes, Inc. and Littlefuse, and Copper Bussman Division. Many of these companies are well established with substantial
expertise, and have much greater assets and greater financial, marketing, personnel, and other resources than we do. Many larger competing
suppliers also carry product lines which we do not carry. Generally, large semiconductor manufacturers and distributors do not focus
their direct selling efforts on small to medium sized OEMs and distributors, which constitute most of our customers. As our customers
become larger, however, our competitors may find it beneficial to focus direct selling efforts on those customers, which could result
in our facing increased competition, the loss of customers or pressure on our profit margins. There can be no assurance that we will
be able to continue to compete effectively with existing or potential competitors. The Company periodically introduces new products to
the market.

 System
failure or cybersecurity breaches of our network security could subject us to increased operating costs, as well as litigation and other
potential losses.

 The
computer systems and network infrastructure that we use could be vulnerable to unforeseen hardware and cybersecurity issues, including
"hacking" and "identity theft." Our operations are dependent upon our ability to protect our computer equipment
against damage from fire, power loss, telecommunications failure or a similar catastrophic event. Any damage or failure that causes an
interruption in our operations could have an adverse effect on our financial condition and results of operations. In addition, our operations
are dependent upon our ability to protect our computer systems and network infrastructure against damage from physical break-ins, cybersecurity breaches
and other disruptive problems caused by the Internet or other users. Such computer break-ins and other disruptions would jeopardize the
security of information stored in and transmitted through our computer systems and network infrastructure, which may result in significant
liability to us and damage our reputation.

 Despite
efforts to ensure the integrity of our systems, we will not be able to anticipate all security breaches of these types, nor will we be
able to implement guaranteed preventive measures against such security breaches. Persistent attackers may succeed in penetrating defenses
given enough resources, time and motive. The techniques used by cyber criminals change frequently, may not be recognized until launched
and can originate from a wide variety of sources, including outside groups such as external service providers, organized crime affiliates,
terrorist organizations or hostile foreign governments.

 A
successful attack to our system security could cause us serious negative consequences, including significant disruption of operations,
misappropriation of confidential information, or damage to our computers or systems or those of our customers. A successful security
breach could result in violations of applicable privacy and other laws, financial loss to us or to our customers, loss of confidences
in our security measures, significant litigation exposure, and harm to our reputation, all of which could have a material adverse effect
on our business and results of operations.

 In
April 2021, the Company launched an investigation into a ransomware attack on the Company's systems. Based on the review of the
forensic files, it was determined that the threat actor used ransomware to access Company files. No ransom was paid to the threat actors
and all parties associated with the compromised files were notified.

 Our
business will be adversely affected if there is a shortage of components.

 The
components business has, from time to time, experienced periods of extreme shortages in product supply, generally as the result of demand
exceeding available supply. When these shortages occur, suppliers tend to either increase prices or reduce the number of units sold to
customers. We believe that because of our large inventory and our relationships with our manufacturers, we have not been adversely affected
by shortages in certain discrete semiconductor components. However, future shortages may have an adverse effect upon our business especially
if we were to reduce inventory to cut costs and reduce risks of obsolescence. Currently, the Company believes that its lead time
is better than their competitors and we have been able to maintain the customers we have as well as in some instances acquire new customers
. However, our business could be affected if the Company is unable to maintain the levels of inventory needed to keep our customers lines
running. In addition, customers could order extra inventory of products from several suppliers when they are concerned about a possible
shortage and then not reorder such products in the future for such time as they work off their excess inventory purchased.

 Our
success depends on key personnel whose continued service is not guaranteed.

 Our
continued success and our ability to manage anticipated future growth depend, in large part, upon the efforts of key personnel, particularly
Ira Levy and Steven Lubman, our chief executive officer and vice president, respectively, who have extensive industry knowledge and relationships
and exercise substantial influence over our operations. The loss of services of one or both of these individuals, or our inability to
attract and retain highly qualified personnel, could adversely affect our business, and weaken our relationships with suppliers, business
partners, and industry personnel, which could adversely affect our financial condition, results of operations, cash flow and trading
price of our common stock.

 Our
business is subject to risks from trade regulation and foreign economic conditions.

 Approximately
95% of the total goods which we purchased in Fiscal 2024 were manufactured in foreign countries, with the majority purchased from
Taiwan (31%), Hong Kong (15%), elsewhere in Asia (49%) and outside of Asia (less than 1%). These purchases subject us to a number of
risks, including economic disruptions, transportation delays and interruptions, foreign exchange rate fluctuations, imposition of tariffs
and import and export controls and changes in governmental policies, any of which could have a materially adverse effect on our business
and results of operations. Potential concerns may include drastic devaluation of currencies, loss of supplies and increased competition
within the region.

 The
ability to remain competitive with respect to the pricing of imported components could be adversely affected by increases in tariffs
or duties, changes in trade treaties, strikes in air or sea transportation, and possible future United States legislation with
respect to pricing and import quotas on products from foreign countries. For example, it is possible that political or economic
developments in China, or with respect to the United States' relationship with China, could have an adverse effect on our
business. Our ability to remain competitive could also be affected by other governmental actions related to, among other things,
tariffs, anti-dumping legislation and international currency fluctuations. While we do not believe that any of these factors have
adversely impacted our business in the past, there can be no assurance that these factors will not materially adversely affect us in
the future. Because the China internal consumption market is depressed, this will increase competition, as there is now a smaller
market potential target. Therefore, we believe certain of our competitors will reduce their pricing to capture more market
share.

 Electronics
industry cyclicality may adversely affect our operations.

 The
electronics industry has been affected historically by general economic downturns, which have had an adverse economic effect upon manufacturers
and end-users of capacitors and semiconductors. In addition, the life-cycle of existing electronic products and the timing of new product
developments and introductions can affect demand for semiconductor components. Any downturns in the electronics distribution industry
could adversely affect our business and results of operations.

 Most
of our products are not protected by patents, trademarks and proprietary information.

 On
December 31, 2019, a U.S. patent which was issued by the United States Patent and Trademark Office for an improved pinpoint alarm designed
to improve an individual's ability to determine the location of an alarm versus standard single, multi-frequency, or broadband
alarms, which can be used in a wide variety of applications, including reversing vehicles, medical emergency notification, and hardware
devices that use Bluetooth or other wireless communications protocols in combination with mobile software applications to locate lost
items, including phones, wallets, and keys. We have no other patents, trademarks or copyrights registered with the United States Patent
and Trademark Office.

 Although
we have no knowledge that our products infringe patents or trademarks, or violate proprietary rights of others, it is possible that alleged infringement
of existing or future patents, trademarks or proprietary rights of others may occur. In the event that the products that we sell are
alleged to infringe proprietary rights of others, these products may have to be modified or redesigned. However, there can be no assurance
that any infringing products will be able to be modified or redesigned in a way that does not infringe on the proprietary rights of others,
which could have a material adverse effect upon our operations. In addition, there can be no assurance that we will have the financial
or other resources necessary to enforce or defend a patent infringement or proprietary rights violation action. Moreover, if the products
we sell infringe patents, trademarks or proprietary rights of others, we could, under certain circumstances, become liable for damages,
which also could have a material adverse effect on our business.

 Additionally
to the best of our knowledge the manufacturers of the products that we sell do not have patents, trademarks or copyrights registered
in the United States Patent and Trademark Officer or in any state.

 Risks
Related to our Common Stock

 Our
common stock is quoted on the OTC Market, which may limit the liquidity and price of our common stock more than if our common stock were
listed on the Nasdaq Stock Market or another national exchange.

 Our
securities are currently quoted on the OTC Market, an inter-dealer electronic quotation and trading system or equity securities.
Quotation of our securities on the OTC Market may limit the liquidity and price of our securities more than if our securities were listed
on The Nasdaq Stock Market or another national exchange. Some investors may perceive our securities to be less attractive because they
are traded in the over-the-counter market. In addition, as an OTC quoted company, we do not attract the extensive analyst coverage that
accompanies companies listed on national exchanges. Further, institutional and other investors may have investment guidelines that restrict
or prohibit investing in securities traded on the OTC Market. These factors may have an adverse impact on the trading and price of our
common stock.

 The
market price of our common stock may fluctuate significantly in response to the following factors, most of which are beyond our control:

 variations
 in our quarterly operating results;

 changes
 in general economic conditions;

 changes
 in market valuations of similar companies;

 announcements
 by us or our competitors of significant new contracts, acquisitions, strategic partnerships or joint ventures, or capital commitments;

 loss
 of a major supplier or customer; and

 the
 addition or loss of key managerial and collaborative personnel.

 Any
such fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. As a result,
stockholders may be unable to sell their shares, or may be forced to sell them at a loss.

 The
application of the "penny stock" rules could adversely affect the market price of our common stock and increase an investor's
transaction costs to sell those shares.

 Rule
3a51-1 of the Exchange Act defines "penny stock," in part, as any equity security that has a market price of less than $5.00
per share or an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock,
unless exempt, Rule 15g-9 of the Exchange Act requires that a broker or dealer:

 approve
 a person's account for transactions in penny stocks; and

 receive
 from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

 In
order to approve a person's account for transactions in penny stocks, the broker or dealer must:

 obtain
 financial information and investment experience and objectives of the person; and

 make
 a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge
 and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

 The
broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to
the penny stock market, which:

 sets
 forth the basis on which the broker or dealer made the suitability determination; and

 that
 the broker or dealer received a signed, written agreement from the investor prior to the transaction.

 Generally,
brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more
difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

 Anti-takeover
provisions in our organizational documents and the shareholder rights plan that we have adopted may discourage or prevent a change of
control, even if an acquisition would be beneficial to our stockholders, which could affect our stock price adversely and prevent attempts
by our stockholders to replace or remove our current management.

 Our
articles of incorporation and bylaws currently contain provisions that could delay or prevent a change of control of our company or changes
in our Board of Directors that our stockholders might consider favorable. Some of these provisions:

 authorize
 the issuance of preferred stock which can be created and issued by the Board of Directors without prior stockholder approval, with
 rights senior to those of our common stock;

 prohibit
 our stockholders from calling special stockholder meetings or taking action by written consent; and

 require
 advance written notice of stockholder proposals and director nominations.

 We
have also adopted a shareholder rights plan that could make it more difficult for a third party to acquire, or could discourage a third
party from acquiring, us or a large block of our common stock. A third party that acquires 5% or more of our common stock could suffer
substantial dilution of its ownership interest under the terms of the shareholder rights plan through the issuance of our shares to all
stockholders other than the acquiring person. These and other provisions in our articles of incorporation and bylaws could make it more
difficult for stockholders or potential acquirers to obtain control of our Board of Directors or initiate actions that are opposed by
our then-current Board of Directors, including a merger, tender offer, or proxy contest involving our company. Any delay or prevention
of a change of control transaction or changes in our Board of Directors could cause the market price of our common stock to decline.

 Item
1B. Unresolved Staff Comments

 Not
applicable.

 Item
1C. Cybersecurity

 We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability
of our critical systems and information. Our cybersecurity risk management program is integrated into our overall enterprise risk management
program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management
program to other legal, compliance, strategic, operational, and financial risk areas.

 Key elements of our
cybersecurity risk management program include but are not limited to,

 risk assessments designed to help identify material risks
from cybersecurity threats to our critical systems, information, services, and our broader enterprise IT environment;

 individuals, including employees and external third party
service providers, who are responsible for managing our cybersecurity risk assessment processes, our security controls, and our response
to cybersecurity incidents; cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents;
and

 a cybersecurity insurance policy in place to help mitigate monetary losses of a potential cybersecurity attack.

 Our management team is responsible
for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity
risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
Members of our management team have prior work experience in supervising and implementing cybersecurity risk mitigation efforts in highly-regulated
industries. Our internal cybersecurity personnel and retained external cybersecurity consultants also have a breadth of expertise across
core cybersecurity disciplines including governance, risk, compliance, and security architecture.

 Our management team takes steps to stay
informed and monitors efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which
may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or
private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment

 Our Board considers cybersecurity risk as part of its risk oversight function and receives regular updates from the management team on
our cybersecurity risks and in addition, management updates the Board where it deems appropriate, regarding any cybersecurity incidents
it considers to be significant or potentially significant.

 Item
2. Properties.

 Our
executive offices and warehouse facilities are located at 95 East Jefryn Boulevard, Deer Park, New York, 11729. We lease our facilities
from Great American Realty of Jefryn Blvd., LLC ("Great American"), an entity that is 50% owned by Ira Levy, Surge's
president and Steven Lubman, Surge's vice president. Our lease is through September 30, 2030 and our monthly rent for the
year ended November 30, 2024 was $17,187 We occupy approximately 23,250 square feet of office space and warehouse space. The rental
rate is typical for the type and location of Surge's and Challenge's facilities.

 The
Company has a lease to rent office space and a warehouse in Hong Kong Through June 2025. Annual minimum rental payments for this space
are approximately $73,580.

 The
Company has a lease to rent additional warehouse space in Hong Kong through November 30, 2025. Annual minimum rental payments for this
space are approximately $76,170.

 Item
3. Legal Proceedings.

 None.

 Item
4. Mine Safety Disclosures.

 Not
applicable.

 PART
II

 Item
5. Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Shares
of our common stock are quoted on the OTC Pink Market maintained by OTC Markets Group under the symbol "SPRS". Trading in
our common stock is limited. Quotations represent inter-dealer prices without retail mark-up, mark-down, or commission and may not necessarily
represent actual transactions.

 As
of the date of the filing of this report, there are 5,582,783 shares of common stock issued and outstanding.

 As
of the date of the filing of this report, there are approximately 176 holders of record of our common stock.

 Purchases
of Equity Securities by the Issuer and Affiliated Purchasers

 None.

 Equity
Compensation Plan Information

 The
following table provides information as of November 30, 2024 with respect to the shares of common stock that may be issued under our
existing equity compensation plans:

 Plan Category

 Number of
 securities to be
 issued upon
 exercise of
 outstanding
 options,
 warrants
 and rights
 (a)

 Weighted-
 average
 exercise
 price of
 outstanding
 options,
 warrants
 and
 rights
 (b)

 Number of
 securities
 remaining
 available for
 future
 issuance under
 equity
 compensation
 plans
 (excluding
 securities
 reflected in
 column a
 (c)

 Equity compensation plan approved by security holders (1)

 $
 2.59

 1,855,177

 Equity compensation plan not yet approved by security holders

 -

 -

 -

 Total

 $
 2.59

 1,855,177

 (1)

 Represents
 the Company's 2015 Incentive Stock Plan and the 2024 Equity Incentive Stock Plan.

 Recent
Sales of Unregistered Securities.

 None.

 Dividend
Policy

 We
have never declared or paid cash dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable
future for our common stock. Any future determination to declare cash dividends will be made at the discretion of our board of directors,
subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business
conditions and other factors that our board of directors may deem relevant.

 Item
6. [Reserved]

 We
are a smaller reporting company and therefore, we are not required to provide information required by this Item of Form 10-K.

 Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations

 This
report contains forward-looking statements. All statements other than statements of historical facts contained herein, including statements
regarding our future results of operations and financial position, business strategy and plans and objectives of management for future
operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may
cause our actual results, performance or achievements to be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements.

 In
some cases, forward-looking statements can be identified by terms such as "may," "will," "should,"
"expects," "plans," "anticipates," "could," "intends," "target,"
"projects," "contemplates," "believes," "estimates," "predicts," "potential"
or "continue" or the negative of these terms or other similar words. These statements are only predictions. We have based
these forward-looking statements largely on our current expectations and projections about future events and financial trends that we
believe may affect our business, financial condition and results of operations. We discuss many of the risks in greater detail under
the heading "Risk Factors." Also, these forward-looking statements represent our estimates and assumptions only as of the
date of the filing of this report. Except as required by law, we assume no obligation to update any forward-looking statements after
the date of the filing of this report.

 Overview

 The
Company operates with two sales groups, Surge Components ("Surge") and Challenge Electronics ("Challenge"). Surge
is a supplier of electronic products and components. These products include capacitors, which are electrical energy storage devices,
and discrete semiconductor components, such as rectifiers, transistors and diodes, which are single function low power semiconductor
products that are packaged alone as compared to integrated circuits such as microprocessors. The products sold by Surge are typically
utilized in the electronic circuitry of diverse products, including, but not limited to, automobiles, audio products, temperature control
products, lighting products, energy related products, computer related products, various types of consumer products, garage door openers,
household appliances, power supplies and security equipment. These products are sold to both original equipment manufacturers, commonly
referred to as OEMs, who incorporate them into their products, and to distributors of the lines of products we sell, who resell these
products within their customer base. These products are manufactured predominantly in Asia by approximately sixteen independent manufacturers.
We act as the master distribution agent utilizing independent sales representative organizations in North America to sell and market
the products for one such manufacturer pursuant to a written agreement. When we act as a sales agent, our supplier who sold the product
to the customer that we introduced to our supplier pays us a commission. The amount of the commission is determined on a sale by sale
basis depending on the profit margin of the product. Commission revenue totaled $95,584 and $106,885 for the fiscal year ended November
30, 2024 and November 30, 2023 respectively.

 Challenge
is engaged in the sale of electronic components. In 1999, Challenge began as a division to sell audible components. We have
been able to increase the types of products that we sell because some of our suppliers introduced new products, and we also located
other products from new suppliers. Our core products include buzzers, speakers, microphones, resonators, alarms, chimes, filters,
and discriminators. We now also work with our suppliers to have our suppliers customize many of the products we sell for many
customers through the customers' own designs and those that we work with our suppliers to have our suppliers redesign for them
at our suppliers' factories. We have engineers on our staff who work with our suppliers on such redesigns and assists
with the introduction of new product lines. We are continually looking to expand the line of products that we sell. We sell these
products through independent representatives that earn a commission on the products we sell. We are also working with local,
regional, and national distributors to sell these products to local accounts in every state. Challenge also at times handles the
brokering of certain products, helping their customers find parts that that regular suppliers can't deliver.

 The
Company has a Hong Kong office to effectively handle the transfer business from United States customers purchasing and manufacturing
in Asia after designing the products in the United States. This office has strengthened the Company's global position, improving
our capabilities and service to our customer base.

 The
world of business continues to change because of "disruptors," which are significant changes in traditional business practices
that did not previously exist. For example, customers continue to centralize purchasing from regional purchasing and are stretching their
payment terms. These changes also include customers moving their manufacturing operations from North America to Asia, and the trend of
globalization. Some of our customers have been involved in mergers and acquisitions, causing consolidation. This trend makes business
more complicated and costly for the Company. The Company must have a presence in Asia to service and further develop the business. For
these reasons, we established Surge Ltd., our Hong Kong subsidiary. Currency fluctuations may also have an effect on doing business outside
of North America. Customers have moved to reduce their supply chain, which could adversely affect the Company. In some market segments,
demand for electronic components has decreased, and in other segments, the demand is still strong. Some technologies have become obsolete,
while customers develop new products using different kinds of components. One division in the Company has had success in designing new
products for customers to better their products performance capabilities. This proactive approach separates the Company from selling
commodity products to also selling more customized products. Management expects 2025, to be a period of continued challenge, in regard
to inflation and general economic conditions, in maintaining consistent flow of products during shortages of certain products, and growth
as we see our customers slowly return to full production pace. These challenges could affect the Company in negative ways, possibly reducing
sales and or profitability. Because of a labor shortage, our customers engineering staff has been challenged, so getting our products
approved has been and will continue to take longer to achieve. Additionally, the cost of some raw materials has continued to increase,
therefore our costs have increased. In order for the Company to continue to grow, we will depend on, among other things, the continued
growth of the electronics and semiconductor industries, our ability to withstand intense price competition, our ability to obtain new
customers, our ability to retain and attract high performing sales and other key personnel in order to expand our marketing capabilities,
our ability to secure adequate sources of products, which are in demand on commercially reasonable terms, our success in executing and
managing growth, including monitoring an expanded level of operations and systems, controlling costs, the availability of adequate cash
flow, the continued supply of products from our factories, the ability to withstand higher transportation costs, tariffs, and longer
travel times and our ability to deal successfully, with new and future disruptors. The tariffs continue to impact the Company, although
less now then previously. The general supply chain challenges present both a challenge and opportunity to the Company. The Company is
cautiously optimistic about its ability to meet these challenges with continued growth unless the general global or electronics industry
economic conditions deteriorate. Financial news has been talking about the decreases in consumer demand which may impact negatively the
demand for the Company's products, as the customers are producing less of their products. These economic conditions could have
a negative impact on sales into 2025. The combination of possible disruptors such as increased costs and longer lead times from factories
to the Company could also have negative impacts on the business in the future. The tense relations between America and China could also
impact the Company's business. China could impose rules and laws that make it more difficult to do business in Hong Kong and China.
The Company is taking steps to be well prepared in case of any actions from China that would cause us business disruption. For example,
many of the Company's factory partners have opened production facilities outside of China. As economic conditions have deteriorated,
it has impacted the Company's business. Customers have pushed back delivery dates, and in some cases required cancellations because
they over ordered in 2022 creating a significant excess inventory. We are watching closely as customers consume their excess inventory
levels to reflect this new business demand, and the Company will respond accordingly. We expect that it could continue through 2025 as
the customers continue to consume this excess inventory and start ordering products again more and more which will reflect in the Company's
sales.

 Critical
Accounting Policies

 Accounts
Receivable

 The
allowance for doubtful accounts is based on the Company's assessment of the collectability of specific customer accounts and an
assessment of international, political and economic risk as well as the aging of the accounts receivable. If there is a change in actual
defaults from the Company's historical experience, the Company's estimates of recoverability of amounts due could be affected
and the Company would adjust the allowance accordingly.

 Revenue Recognition

 Revenue
is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed and determinable, collectability
is reasonably assured and title and risk of loss have been transferred to the customer. This occurs when product is shipped from the
Company's warehouse. For direct shipments from our suppliers to our customer, revenue is recognized when product is shipped from
the Company's supplier. The Company acts as a sales agent for certain customers buying direct from one of its suppliers. The Company
reports these commissions as revenues in the period earned.

 The
Company performs ongoing credit evaluations of its customers and maintains reserves for potential credit losses.

 Inventory
Valuation

 Inventories
are recorded at the lower of cost or net realizable value. Write-downs of inventories to net realizable value are based on stock rotation,
historical sales requirements and obsolescence as well as in the changes in the backlog. Reserves required for obsolescence were not
material in any of the periods in the financial statements presented. Reserves related to stock rotation and future sales requirements
for specific inventory parts involve subjective estimates to be made by management based on current and expected market conditions. If
market conditions are less favorable than those projected by management, additional write-downs of inventories could be required. For
example, each additional 1% of obsolete inventory would reduce operating income by approximately $54,000.

 The
Company does not have price protection agreements with any of its vendors and assumes the risk of changes in the prices of its products.
The Company does not believe there to be a significant risk with regards to the lack of price protection agreements as many of its inventory
items are purchased to fulfill purchase orders received.

 Income
Taxes

 We
have made a number of estimates and assumptions relating to the reporting of a deferred income tax asset to prepare our financial statements
in accordance with generally accepted accounting principles. These estimates may have a significant impact on our valuation allowance
relating to deferred income taxes. Our estimates could materially impact the financial statements.

 Results
of Operations

net sales for the fiscal year ended November 30, 2024 decreased by $5,065,403 or 14.0%, to $31,211,139 as compared to net sales of $36,276,542
for the fiscal year ended November 30, 2023. We attribute the decrease to a decrease in business with new customers as well as a decrease
in business with existing customers. We can also attribute the decrease to customers pushing out orders due to them over ordering in
2022 in response to the supply chain constraints. The customers have excess inventory that they need to consume before re-ordering those
products. Additionally, many customers, because of having this excess inventory have not launched new product development as their cash
is tied up in the inventory. Net sales for the fiscal years ended November 30, 2024 and November 30, 2023 reflect $549,564 and $1,032,198,
respectively of tariff costs that the Company was able to pass on to its customers.

 Our
gross profit for the fiscal year ended November 30, 2024 decreased by $1,024,994 to $8,903,694 or 10.3%, as compared to $9,928,688
for the fiscal year ended November 30, 2023. Gross margin as a percentage of net sales increased to 28.5% for the fiscal year
ended November 30, 2024 compared to 27.4% for the fiscal year ended November 30, 2023. The increase can be attributed to the
increase in sales to certain customers whose sales are at a higher gross profit margin. Our industry will continue to receive
pressure from customers for price reductions. Some of them further demand periodic price reductions on a quarterly or semi-annual
basis, as opposed to annual fixed pricing. We work with electronic manufacturing service subcontractor customers who manufacture
products for other customers who do not have their own manufacturing operations. At times we are not able to recover these price
reductions from our suppliers. The Company has agreements with these subcontractor customers to provide periodic cost reductions
through rebates in the amount of 5%. These reductions only affect future shipments of our products, and do not affect existing
orders. These reductions can have a negative impact on our profit margins since they reduce the amount of commissions we can earn.
Even though this rebate can impact the Company's gross profit margin, these subcontractor customers represent very significant
potential growth for the Company, because they can help the Company become an approved supplier at the customers they manufacture
for, and they purchase our components for these customers. We believe it would be very difficult for the Company to achieve business
at these customers without the help of these subcontractor customers. During Fiscal 2024, the Company was impacted by tariff costs
on certain products imported from China, which went into effect as of July 6, 2018. The Company has been able to pass along a
portion of these costs to its customers and will do so under potential tariffs imposed upon us. The Company is also moving some customer deliveries directly to Hong Kong in order to
mitigate some of these costs.

 Selling
and shipping expenses for the fiscal year ended November 30, 2024 was $2,739,994, a decrease of $270,515, or 9.0%, as compared to
$3,010,509 for the fiscal year ended November 30, 2023. We attribute the decrease to decreases in sales and the resulting selling
expenses such as commission expenses, travel and trade show expenses, offset by the hiring of new salespeople which increased sales payroll,
freight out and entertainment expenses.

 General
and administrative expenses for the fiscal year ended November 30, 2024 was $5,189,369, a decrease of $148,026, or 2.8%, as compared
to $5,337,395 for the fiscal year ended November 30, 2023. The decrease is due primarily to decreases in officer salaries and general
insurance expenses as well as health insurance expenses and temporary help expenses and directors fees, computer expenses and consulting
expenses and pension expenses offset by increases in salaries and related payroll tax expenses, professional fees, telephone, bank charges
and public company expenses.

 Depreciation
expense for the fiscal year ended November 30, 2024 was $70,384, an increase of $137, or less than 1%, as compared to $70,247 for the
fiscal year ended November 30, 2023.

 Other
income for the fiscal year ended November 30, 2024 was $331,703, an increase of $216,733 as compared to $114,970 for the fiscal year
ended November 30, 2023. We attribute the increase to income from investment in the acquisition of Treasury Bonds and notes issued by
the United States Treasury.

 Tax
expense for the fiscal year ended November 30, 2024 was $409,973, a decrease of $243,424 as compared to a tax expense of $653,397
for the fiscal year ended November 30, 2023. The changes result from our decrease in net income for the 2024 period.

 As
a result of the foregoing, net income for the fiscal year ended November 30, 2024 was $825,677, compared to a net income of $972,110
for the fiscal year ended November 30, 2023.

 Liquidity
and Capital Resources

 As
of November 30, 2024 we had cash of $5,627,693, marketable securities in the amount of approximately $7.1 million, and working capital
of $18,909,561. We believe that our working capital levels are adequate to meet our operating requirements during the next twelve months. The
Company is exploring and evaluating opportunities for growth and expansion using the Company's cash resources.

the fiscal year ended November 30, 2024, we had net cash flow provided by operating activities of $1,812,399, as compared to net
cash flow provided by operating activities of $2,192,899 for the fiscal year ended November 30, 2023. The decrease in cash flow
from operating activities was primarily the result of lower net income and related noncash items of deferred taxes, stock based compensation
and depreciation as well as accounts receivable as offset by increases in accounts payable and prepaid expense levels in 2024.

 We
had net cash flow used in investing activities of $(3,830,496) for the fiscal year ended November 30, 2024, as compared to net cash flow
used in investing activities of $(3,248,140) for the fiscal year ended November 30, 2023. We attribute the change to acquisition
of approximately $5.9 million of marketable debt securities in the form of Treasury bills and notes issued by the United States Treasury.

 We
had net cash flow used in financing activities of $0 during the fiscal year ended November 30, 2024 as compared to $0 provided by financing
activities for the fiscal year ended November 30, 2023.

 As a result of the foregoing,
the Company had a net decrease in cash of $2,007,106 for the fiscal year ended November 30, 2024, as compared to a net decrease in cash
of $1,055,241 for the fiscal year ended November 30, 2023. The net decrease in cash is mainly as compared to the prior fiscal year
ended November 30, 2023 is due to an increase in purchases of marketable debt securities as detailed above.

 The
table below sets forth our contractual obligations, including long-term debt, operating leases and other long-term obligations, as of
November 30, 2024:

 Payments due

 0 – 12

 13 – 36

 37 – 60

 More than

 Contractual Obligations

 Total

 Months

 Months

 Months

 60 Months

 Financing Lease Obligations

 $
 -

 $
 -

 $
 -

 $
 -

 $
 -

 Operating leases

 $
 1,386,372

 330,166

 424,952

 442,122

 189,132

 Total obligations

 $
 1,386,372

 $
 330,166

 $
 424,952

 $
 442,122

 $
 189,132

 Inflation

 In
the past two fiscal years, inflation has not had a significant impact on our business. The Company has been able to pass along increases
in purchasing costs to their Customers. However, some logistics costs such as ocean and air freight are not passed along to customers.
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.

 Off
Balance Sheet Arrangements

 We
do not have any off balance sheet arrangements.

 Item 7A.
Quantitative and Qualitative Disclosures About Market Risk.

 We
are a smaller reporting company and therefore, we are not required to provide information required by this Item of Form 10-K.

 Item 8.
Financial Statements and Supplementary Information

 Our
financial statements, together with the independent registered public accounting firm's report of Seligson & Giannattasio,
CPAs PC, begin on page F-1, immediately after the signature page.

 Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 None.

 Item
9A. Controls and Procedures.

 Evaluation
of Disclosure Controls and Procedures.

 We
maintain "disclosure controls and procedures," as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in
reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified
in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including
our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In
designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter
how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls
and procedures are met. Additionally, in designing disclosure controls and procedures, our management was required to apply its judgment
in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and
procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future conditions.

 As
of November 30, 2024 we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and
Chief Financial Officer, of the effectiveness of our disclosure controls and procedures. Based on this evaluation, our Chief Executive
Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective.

 Management's
Report of Internal Control over Financial Reporting.

 We
are responsible for establishing and maintaining adequate internal control over financial reporting in accordance with Exchange Act Rule
13a-15. With the participation of our Chief Executive Officer and Chief Financial Officer, our management conducted an evaluation of
the effectiveness of our internal control over financial reporting as of November 30, 2024 based on the criteria established in Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation,
management concluded that our internal control over financial reporting was effective as of November 30, 2024. A control system, no matter
how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, within the Company have been detected.

 Changes
in Internal Controls.

the quarter ended November 30, 2024, there were no changes in our internal control over financial reporting identified in connection
with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.

 Item
9B. Other Information

 None.

 Item
9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

 None.

 PART
III

 Item
10. Directors, Executive Officers, and Corporate Governance.

 Our
board of directors have a term of office of one year and were all reelected at the 2024 annual meeting of stockholders. In 2024, each
director will be up for reelection for a term of one year to end at the next annual meeting of shareholders.

 Our
executive officers and directors, and their ages, positions and offices with us are as follows:

 Name

 Age

 Position

 Ira
 Levy

 Chief
 Executive Officer, Chief Financial Officer, President and Director

 Steven
 J. Lubman

 Vice
 President, Secretary, Treasurer and Director

 Alan
 Plafker* (2)(3)

 Lawrence
 Chariton* (2)(3)

 Gary
 Jacobs* (1)(2)(3)

 Peter
 Levy* (1)(2)(3)

 *
 Independent
director

 (1)
 Member
of Compensation Committee.

 (2)
 Member
of Audit Committee

 (3)
 Member
of Nominating and Corporate Governance Committee

 Directors

 Ira
Levy has served as our President, Chief Executive Officer and director since our inception in November 1981, and as our
Chief Financial Officer since March 2010. From 1976 to 1981, Mr. Levy was employed by Capar Components Corp., an importer and supplier
of capacitor and resistor products. Mr. Levy has served on the board of trustees of the Bellmore Jewish Center since 2002 and served
as its president from 2006 to 2008. From 2000 to 2004, he served as a member of the board of trustees of METNY, the governing body of
the Conservative movement of Judaism for New York, New Jersey, and Connecticut. Mr. Levy studied Business Management at Hofstra University.
Mr. Levy's experience in, and knowledge of, the electronics components business led to the conclusion that he should serve on our
board.

 Steven
J. Lubman has served as our Vice President, Secretary and a director since our inception in November 1981. In June 1988,
Mr. Lubman founded Challenge Electronics, a division of the Company. From 1980 through 1981, he served as the sales manager for NIC Components
Corp., a division of Nu Horizons Electronics Corp., a distributor of electronic components which was acquired by Arrow Electronics, Inc.
(NYSE: ARW) in January 2011. From 1976 through 1980, Mr. Lubman served as both an inside and then outside salesperson for Capar Components
Corp., a division of Diplomat Electronics Inc., a broad line distributor of electronic components including integrated circuits, diodes,
transistors, and capacitor products. Mr. Lubman's more than 35 years of experience in, and knowledge of the electronics components
business, led to the conclusion that he should serve on our board.

 Alan
Plafker has served as a director since June 2001. Since November 2016, he has served as Vice President of Garber Atlas Fries
& Associates, Inc., an insurance agency providing commercial and personal insurance coverage. From July 2000 to November 2016, Mr.
Plafker served as President and Chief Executive Officer of Member Brokerage Service LLC, a credit union service organization, and also
served as director of business services for the Credit Union. From January 1993 to July 2000, he served as a member of the credit union's
board of directors and supervisory committee. Mr. Plafker has more than 35 years of executive and management experience in the insurance
and credit union industries. He is a New York State licensed insurance agent and broker. Mr. Plafker has earned certification as a Certified
Professional Insurance Agent from the AIMS Society and earned the CIC designation from the Society of Certified Insurance Counsellors.
He has also earned the CUBLP (Credit Union Business Lending Professional) designation from the CUNA Business Lending Certification Institute.
In addition, he is a past President of the Professional Insurance Agents Association of New York State. He currently serves as Treasurer
and as a member of the Board of Directors for the New York Independent Livery Drivers Benefit Fund, a New York State benefit fund providing
injury benefits for livery drivers, to comply with the Workers' Compensation Board regulations. Mr. Plafker received a Bachelor's
degree in business administration from Adelphi University. Mr. Plafker's experience in the insurance industry, knowledge of financial
matters, and Board Member experience led to the conclusion that he should serve on our board.

 Lawrence
Chariton has served as a director since 2001. He worked for 50 years in the retail jewelry industry at Linda Shop Jewelry
and Great American Jewelry as Chief Operating Officer. Since February 2018 Mr. Chariton has served as a member of the Board of Trustees
of the State University of Old Westbury in New York. Mr. Chariton has served previously from 1998 as a member of the Board of Directors
of New Island Hospital in Bethpage, N.Y. Subsequently he remained after the merger as a member of the Board of Directors with St. Joseph's
Hospital until December 2010. Mr. Chariton served as a member of The Board of Directors of the Jewish National Fund of Long Island. Mr.
Chariton has a Bachelor's Degree in Accounting from Hofstra University. He is a graduate of The Gemological Institute of America
in Diamonds and Color Stones. Mr. Chariton's experience on several Boards of Directors as well as running a small business led
to the conclusion that he should serve on our board.

 Gary
M. Jacobs has served as a director since July 2003. Mr. Jacobs is currently serving as Chief Commercial Officer of AOG,
LLC d/b/a Tandem Foods, the acquirer of Bar Bakers, LLC effective May 2, 2024. Previously, since October 2014, he served as President
of Bar Bakers, LLC, a commercial food manufacturer of nutritional bars, cookies and other baked goods. From March 2011 to October 2014,
he served as a consultant to several companies, providing advisory services in the areas of turn-around and financial and operational
efficiencies. Mr. Jacobs served as the Chief Financial Officer of Chem Rx from June 2008 until March 2011. From May 2005 to June 2008,
Mr. Jacobs was the Chief Financial Officer and Chief Operating Officer of Gold Force International, Ltd., a supplier of gold, silver
and pearl jewelry to U.S. retail chains, and Karat Platinum LLC, a developer of an alternative to platinum. From July 2003 to April 2005,
Mr. Jacobs served as President of The Innovative Companies, LLC, a supplier of natural stone. From October 2001 to February 2003, Mr.
Jacobs served as Executive Vice President of Operations and Corporate Secretary of The Hain Celestial Group, Inc., a food and personal
care products company. Mr. Jacobs also served as Executive Vice President of Finance, Chief Financial Officer and Treasurer of The Hain
Celestial Group, Inc. from September 1998 to October 2001. Prior to that, Mr. Jacobs was the Chief Financial Officer of Graham Field
Health Products, Inc., a manufacturing and distribution company. Mr. Jacobs served for 13 years as a member of the audit staff of Ernst
& Young LLP, where he attained the position of senior manager. He is a certified public accountant and holds a Bachelor's of
Business Administration in Accounting from Adelphi University. Mr. Jacobs's experience as a certified public accountant and as
a chief financial officer led to the conclusion that he should serve on our board.

 Peter
A. Levy has been a director of the Company since April 2017. He is an equity shareholder at the law firm of Mandelbaum Barrett,
one of the region's oldest and most renowned law firms. He joined Mandelbaum as a member in September of 2015, and now serves on
the firm's Executive Committee with the responsibility for all department practices within the firm. In addition to practicing
law for 15 years, Mr. Levy spent 12 years as a partner at a regional accounting firm, Sobel & Company, and has served as the chief
operating officer of two different public companies, The Empire Sports & Entertainment and MYOS Corporation. As the president of
MYOS Corporation, he successfully positioned the company on the NASDAQ stock exchange. Mr. Levy has significant experience in mergers
and acquisitions, joint venture partnering, corporate governance, business processes, and strategic planning. Community service is an
important aspect of Mr. Levy's life. For over 20 years he has been on the Board and also served as the Corporate Liaison
to Easter Seals – Camp ASCCA, America's flagship camp for People with Disabilities, and he is the co-builder of the
Roswal-Levy Tower, the world's largest wheelchair-accessible interactive climbing tower for the disabled. For over a
decade, Mr. Levy has been on the Board of Hamp's Camp, a charity founded by former N.Y. Giants running back Rodney Hampton, which
is dedicated to providing leadership tools to underprivileged children in Atlanta, Newark, and Houston. Mr. Levy's financial experience
led to the conclusion that he should serve on our board.

 The
Board has determined that each of Messrs. Chariton, Jacobs, Plafker, and Peter Levy qualify as "independent" under the Nasdaq
Stock Market Rules as well as Rule 10A-3 promulgated under the Exchange Act.

 Board
and Committee Meetings

the fiscal year ended November 30, 2024, the Board held five meetings. Each of the directors attended at least 75% of the aggregate of
(i) the total number of meetings of the Board (held during the period for which he served as a director), and (ii) the total number of
meetings held by all committees of the Board on which he served (during the periods that he served on such committees). We have no written
policy regarding director attendance at annual meetings of stockholders. Our last annual meeting of stockholders was held on November
26, 2024 and all of our directors attended such meeting.

 Board
Committees

 The
composition and responsibilities of each of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance
Committee are described below. Members will serve on these committees until their resignation or until otherwise determined by the Board.
Each committee operates under a charter that has been approved by the Board, and which is available on our website at

 Audit
Committee

 Our
Audit Committee is comprised of Messrs. Chariton, Plafker, Jacobs and Peter Levy, each of whom is an independent director of the Board.
Mr. Jacobs serves as chairman of the Audit Committee. Our Board has determined that Mr. Jacobs is an "audit committee financial
expert" as defined in Item 407(d)(5)(ii) of Regulation S-K. The audit committee members are "independent" as that term
is defined under the Nasdaq Stock Market Rules. During the fiscal year ended November 30, 2024, the Audit Committee held four meetings.

 The
Audit Committee is authorized to:

 approve
 and retain the independent auditors to conduct the annual audit of our books and records;

 the proposed scope and results of the audit;

 and pre-approve the independent auditor's audit and non-audit services rendered;

 approve
 the audit fees to be paid;

 accounting and financial controls with the independent auditors and our financial and accounting staff;

 and approve transactions between us and our directors, officers and affiliates;

 recognize
 and prevent prohibited non-audit services;

 establish
 procedures for complaints received by us regarding accounting matters;

 oversee
 internal audit functions; and

 prepare
 the report of the Audit Committee that SEC rules require to be included in our annual meeting proxy statement.

 Compensation
Committee

 Our
Compensation Committee is comprised of Peter Levy and Gary Jacobs, each of whom is an independent director. Mr. Levy serves as chairman
of the Compensation Committee. During the fiscal year ended November 30, 2024, the Compensation Committee held two meetings.

 The
Compensation Committee is authorized to:

 and recommend the compensation arrangements for management, including the compensation for our chief executive officer;

 establish
 and review general compensation policies with the objective of attracting and retaining superior talent, rewarding individual performance
 and achieving our financial goals;

 administer
 our stock incentive plans; and

 prepare
 the report of the Compensation Committee that SEC rules require to be included in our annual meeting proxy statement.

 Nominating
and Corporate Governance Committee

 Our
Nominating and Corporate Governance Committee is comprised of Messrs. Chariton, Plafker, Peter Levy and Jacobs, each of whom is an independent
director. Mr. Jacobs serves as chairman of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance
Committee held one meeting during the fiscal year ended November 30, 2024.

 The
Nominating and Corporate Governance Committee is authorized to:

 identify
 and nominate members of the board of directors;

 oversee
 the evaluation of the board of directors and management;

 develop
 and recommend corporate governance guidelines to the board of directors;

 evaluate
 the performance of the members of the board of directors; and

 make
 recommendations to the board of directors as to the structure, composition and functioning of the board of directors and its committees.

Nominations

 In
evaluating and determining whether to nominate a candidate for a position on the Board, the Nominating and Corporate Governance Committee
utilizes a variety of methods and considers criteria such as high professional ethics and values, experience on the policy-making level
in business or experience relevant to our product candidates and a commitment to enhancing stockholder value. Candidates may be brought
to the attention of the Nominating and Corporate Governance Committee by current Board members, stockholders, officers or other persons.
The Nominating and Corporate Governance Committee will review all candidates in the same manner regardless of the source of the recommendation.

 We
have no formal policy regarding board diversity. Our Nominating and Corporate Governance Committee and Board may therefore consider a
broad range of factors relating to the qualifications and background of nominees, which may include diversity, which is not only limited
to race, gender or national origin. Our Nominating and Corporate Governance Committee's and Board's priority in selecting
board members is identification of persons who will further the interests of our stockholders through his or her established record of
professional accomplishment, the ability to contribute positively to the collaborative culture among board members and professional and
personal experiences and expertise relevant to our growth strategy.

 The
Nominating and Corporate Governance Committee also considers stockholder recommendations for director nominees that are properly received
in accordance with our Bylaws and applicable rules and regulations of the SEC. In order to validly nominate a candidate for election
or reelection as a director, stockholders must give timely notice of such nomination in writing to our Corporate Secretary and include,
as to each person whom the stockholder proposes to nominate, all information relating to such person that is required to be disclosed
in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation
14A under the Exchange Act, and the rules and regulations thereunder (including such person's written consent to being named in
the proxy statement as a nominee and to serving as a director if elected). For more information on director candidate nominations by
stockholders, see "Procedures for Nominating Directors".

 Procedures
for Nominating Directors

 Effective
December 30, 2021, the Company began to be governed by newly adopted bylaws (the "Bylaws").The Bylaws provide, among other
things, for advance notice of director nominations.

 The
exclusive means by which a stockholder may nominate a director is as follows: (1) was a stockholder of record at the time of the
giving of the notice required by Section 2.4(ii) of the Bylaws and on the record date for the determination of stockholders
entitled to vote at the annual meeting and (2) has complied with the notice procedures set forth in this Section 2.4(ii) of
the Bylaws. In addition to any other applicable requirements, for a nomination to be made by a stockholder, the stockholder must have
given timely notice thereof in proper written form to the secretary of the corporation. To comply with clause (B) of Section 2.4(ii) of
the Bylaws, a nomination to be made by a stockholder must set forth all information required under Section 2.4(ii) of the Bylaws and
must be received by the secretary of the corporation at the principal executive offices of the corporation at the time set forth in,
and in accordance with, the final three sentences of Section 2.4(i)(a) of the Bylaws. This includes how a stockholder's
notice a stockholder's notice must set forth all information required under this Section 2.4(i) and must be timely received
by the secretary of the corporation. To be timely, a stockholder's notice must be received by the secretary at the principal executive
offices of the corporation not later than the 45 th day nor earlier than the 75 th day before the one-year
anniversary of the date on which the corporation first mailed its proxy materials or a notice of availability of proxy materials (whichever
is earlier) for the preceding year's annual meeting; provided, however, that in the event that no annual
meeting was held in the previous year or if the date of the annual meeting is advanced by more than 30 days prior to or delayed by more
than 60 days after the one-year anniversary of the date of the previous year's annual meeting, then, for notice by the stockholder
to be timely, it must be so received by the secretary not earlier than the close of business on the 120th day prior to such annual meeting
and not later than the close of business on the later of (i) the 90th day prior to such annual meeting, or (ii) the tenth day
following the day on which Public Announcement (as defined below) of the date of such annual meeting is first made. In no event shall
any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period for the giving of a stockholder's
notice as described in this Section 2.4(i)(a). " Public Announcement " shall mean disclosure in a press release
reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document publicly filed by the
corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the 1934 Act.

 Additionally,
to be in proper written form, such stockholder's notice to the secretary must set forth: (1) as to each person (a " nominee ")
whom the stockholder proposes to nominate for election or re-election as a director: (A) the name, age, business address and residence
address of the nominee, (B) the principal occupation or employment of the nominee, (C) the class and number of shares of the
corporation that are held of record or are beneficially owned by the nominee and any derivative positions held or beneficially held by
the nominee, (D) whether and the extent to which any hedging or other transaction or series of transactions has been entered into
by or on behalf of the nominee with respect to any securities of the corporation, and a description of any other agreement, arrangement
or understanding (including any short position or any borrowing or lending of shares), the effect or intent of which is to mitigate loss
to, or to manage the risk or benefit of share price changes for, or to increase or decrease the voting power of the nominee, (E) a
description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such
person or persons) pursuant to which the nominations are to be made by the stockholder, (F) a written statement executed by the
nominee acknowledging that as a director of the corporation, the nominee will owe a fiduciary duty under Nevada law with respect to the
corporation and its stockholders, and (G) any other information relating to the nominee that would be required to be disclosed about
such nominee if proxies were being solicited for the election or re-election of the nominee as a director, or that is otherwise required,
in each case pursuant to Regulation 14A under the 1934 Act (including without limitation the nominee's written consent to being
named in the proxy statement, if any, as a nominee and to serving as a director if elected or re-elected, as the case may be); and (2)
as to such stockholder giving notice, (A) the information required to be provided pursuant to clauses (2) through (5) of
Section 2.4(i)(b) above, and the supplement referenced in the second sentence of Section 2.4(i)(b) above (except
that the references to "business" in such clauses shall instead refer to nominations of directors for purposes of this paragraph),
and (B) a statement whether either such stockholder or Stockholder Associated Person will deliver a proxy statement and form of
proxy to holders of a number of the corporation's voting shares reasonably believed by such stockholder or Stockholder Associated
Person to be necessary to elect or re-elect such nominee(s) (such information provided and statements made as required by clauses
(A) and (B) above, a " Nominee Solicitation Statement ").

 In
addition to all other requirements set forth in the Bylaws, a nominating stockholder (including its affiliates) and each director nominee
must also comply with all applicable requirements of state law and of the Exchange Act and the rules and regulations thereunder with
respect to the matters set forth in the Bylaws.

 Board
Leadership Structure and Role in Risk Oversight

 Although
we have not adopted a formal policy on whether the Chairman and Chief Executive Officer positions should be separate or combined, we
have traditionally determined that it is in our best interests and in the best interests of our stockholders to combine these roles.
Mr. Levy has served as our Chairman since November 1981. Due to our small size, we believe it is currently most effective to have the
Chairman and Chief Executive Officer positions combined.

 Our
board of directors is primarily responsible for overseeing our risk management processes. The Board receives and reviews periodic reports
from management, auditors, legal counsel, and others, as considered appropriate regarding our assessment of risks. The Board focuses
on the most significant risks facing us and our general risk management strategy, and also ensures that risks undertaken by management
are consistent with the board's appetite for risk. While the Board oversees our risk management, management is responsible for
day-to-day risk management processes. We believe this division of responsibilities is the most effective approach for addressing the
risks facing us and that our board leadership structure supports this approach.

 Code
of Ethics

 We
have adopted a code of ethics that applies to our officers, directors and employees. A copy of the code of ethics is accessible on our
website at  Additional copies of the code of ethics may be obtained without
charge, from us by writing or calling: 95 East Jefryn Blvd., Deer Park, New York 11729, Attention: Corporate Secretary, Telephone: (631)
595-1818.

 Stockholder
Communications with the Board

 Stockholders
who wish to do so may communicate directly with the Board or specified individual directors by writing to:

 Board
of Directors (or name of individual director)

 c/o
Corporate Secretary

 Surge
Components, Inc.

East Jefryn Blvd.

 Deer
Park, New York 11729

 The
Board of Directors maintains a process for stockholders or other interested parties to communicate with the Board or any Board member.
Stockholders or interested parties who desire to communicate with the Board should send any communication to the Company's Corporate
Secretary, Surge Components, Inc., 95 East Jefryn Blvd., Deer Park, New York 11729. We will forward all communications from security
holders and interested parties to the full Board, to non-management directors, to an individual director or to the chairperson of the
Board committee that is most closely related to the subject matter of the communication, except for the following types of communications:
(i) communications that advocate that we engage in illegal activity; (ii) communications that, under community standards, contain offensive
or abusive content; (iii) communications that have no relevance to our business or operations; and (iv) mass mailings, solicitations
and advertisements. The Corporate Secretary will determine when a communication is not to be forwarded. Our acceptance and forwarding
of communications to directors does not imply that directors owe or assume any fiduciary duties to persons submitting the communications.

 Additionally,
the Audit Committee has established procedures for the receipt, retention and confidential treatment of complaints received by Surge
regarding accounting, internal accounting controls or auditing matters, including procedures for confidential, anonymous submissions
by employees with respect to such matters. Employees and stockholders may raise a question or concern to the Audit Committee regarding
accounting, internal accounting controls or auditing matters by writing to:

 Chairman,
Audit Committee

 c/o
Corporate Secretary

 Surge
Components, Inc.

East Jefryn Blvd.

 Deer
Park, New York 11729

 Section
16(a) Beneficial Ownership Reporting Compliance

 Section
16(a) of the Securities Exchange Act of 1934 requires that our officers and directors, and persons who own more than ten percent of a
registered class of our equity securities, file reports of ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and persons owning more than ten percent of such securities are required by Commission regulation to file with the
Commission and furnish the Company with copies of all reports required under Section 16(a) of the Exchange Act. To our knowledge, based
solely upon our review of the copies of such reports furnished to us, during the fiscal year ended November 30, 2024, all Section 16(a)
filing requirements applicable to our officers, directors and greater than 10% beneficial owners were complied with.

 Item
11. Executive Compensation.

 Summary
Compensation Table

 The
following table sets forth information regarding compensation paid to our executive officers for the years ended November 30, 2024 and
November 30, 2023:

 Name and Position

 Fiscal
 Year

 Salary
 ($)

 Bonus
 ($)

 Stock
 Awards
 ($)

 Option
 Awards
 ($)

 All Other
 Compensation
 ($)(1)

 Total
 ($)

 2024

 320,000

 150,000

 -

 -

 65,890

 535,890

 President CEO and CFO

 2023

 300,000

 37,500

 15,000

 -

 64,957

 417,457

 Steven J. Lubman

 2024

 266,667

 123,752

 -

 -

 49,545

 439,964

 Vice President and Secretary

 2023

 250,000

 110,624

 -

 -

 48,331

 408,955

 (1)
 Amounts
in this column include payments for medical insurance, automobile allowance and life and personal insurance. With respect to
Fiscal 2024, the amounts were comprised of the following items:

 Medical
 Insurance

 Automobile
 Allowances

 Life and
 Personal
 Insurance

 $
 37,323

 $
 18,756

 $
 9,811

 Steven J. Lubman

 $
 28,216

 $
 12,300

 $
 9,029

 2024
Base Salary and Bonus

 In
February 2016, the Company entered into revised employment agreements with two officers of the Company. Pursuant to these agreements,
the base salary for Ira Levy is $275,000 and the base salary for Steven Lubman is $225,000. The agreements continue until terminated
by either party. In April 2021, the employment agreements for Ira Levy and Steven Lubman were amended to increase the base salary
to $300,000 and $250,000, respectively. In April 2024, the employment agreements for Ira Levy and Steven Lubman were amended to increase
the base salary to $330,000 and $275,000, respectively.

 The
Company's compensation committee may award these officers with bonuses and will review the base salary amounts for each of the
officers on an annual basis to determine if any changes to the base salary amounts need to be made. Pursuant to the employment agreements,
the officers are prohibited from engaging in activities which are competitive with those of the Company during their employment with
the Company and for one year following termination. If the agreement is terminated other than for cause, the officer would be entitled
to all base salary earned through the date of termination, accrued but unused vacation, all vested equity, and bonus amounts payable
to the officer through the date of termination. The officers would also be entitled to receive an additional thirty-six months of annual
compensation equal to the average of his base salary and bonus for the three calendar years prior to the date of termination, payable
in accordance with the Company's regular payroll practice over a 52-week period.

 The
bonus granted to the named executive officers for 2023, paid in 2024was based on certain performance goals that were set prior to the
year by the Compensation Committee and the executive, but ultimately the bonus is discretionary, as the Compensation Committee has the
authority to make all final decisions regarding the amount and form of bonuses provided to the executive officers. For Mr. Levy, his
target bonus amount is equal to fifty percent (50%) of his base salary, and Mr. Lubman's target is equal to forty-five percent
(45%) of his base salary.

 In
2024 the Compensation Committee used four performance markers to guide their decisions regarding bonus amounts. The performance guidelines
that were applicable to Messrs. Levy and Lubman's bonuses for the 2023 year included individual performance goals, revenue growth,
achieving the operating plan goals for specific divisions of the company, and achieving the operating plan for the company as a whole.
Each performance guideline was generally intended to make up twenty-five percent of the potential bonus amount for each executive. Based
upon the Company's and the executives' performance during the 2023 year, the Compensation Committee granted awards in 2024
that were approximately one hundred percent (100%) of the executives' target award amount.

 2024
Equity Compensation Awards

 We
have historically granted fully vested stock awards and stock option awards. The amount of awards granted in any given year is determined
based on the performance of the company and the executive in the previous year. Performance is generally based upon the same performance
guidelines that are used for the annual cash bonus award for that year. The Compensation Committee sets a target award amount based upon
a percentage of the executive's base salary. At the end of the year, the Compensation Committee determines the cash amount that
resulted from the previous year's performance, with any discretionary adjustments that the Compensation Committee deems to be appropriate,
and converts that cash amount into a number of shares of stock awards or stock option awards, as applicable.

the 2023 year, the Compensation Committee set a target amount of twenty percent (20%) of base salary for Mr. Levy and a target of fifteen
percent (15%) of base salary for Mr. Lubman. Following the end of the 2023 year, the Compensation Committee determined that Messrs. Levy
and Lubman should receive equity awards equal in value to twenty five percent (25%) and fifty percent (50%), respectively, of their target
award amount. The Compensation Committee used the Company's stock price of $2.95 on April 10, 2024 to convert the resulting cash
award into 5,085 stock awards for Mr. Levy. The equity awards, if any, that will be granted to the named executive officers with respect
to 2024 year performance will not be granted until the 2025 year, therefore they will be included in the compensation disclosures that
we file for the 2025 year.

 Generally,
meetings of the Compensation Committee are scheduled far in advance and generally occur after earnings are announced and do not time
the disclosure of material non public information for the purpose of affecting the value of executive compensation.

 Employment
Agreements

 In
February 2016, the Company entered into revised employment agreements (the "Levy Agreement" and the "Lubman Agreement",
individually, and collectively, the "Employment Agreements") with Ira Levy and Steven Lubman, respectively, which provides
the executives with a base salary of $275,000 and $225,000, respectively ("Base Salary"). In April 2021, the employment agreements
for Ira Levy and Steven Lubman were amended to increase their base salaries to $300,000 and $250,000, respectively. In April 2024, the
employment agreements for Ira Levy and Steven Lubman were amended to increase the base salary to $330,000 and $275,000, respectively.

 The
executives shall receive an annual bonus as shall be determined by the Board or the Compensation Committee, as applicable, in its sole
discretion, based upon criteria to be established in its sole discretion. The executives shall also be entitled to receive additional
cash, equity or other compensation or benefits in consideration for their services to the Company, at such times and in such amounts
as shall be determined in the sole discretion of the Board or the Compensation Committee. In addition, the executives shall be entitled
to receive grants of stock options, stock and/or any other equity incentive awards available to senior executives, under the Company's
equity incentive plans, at such times and in such amounts as shall be determined in the sole discretion of the Board or the Compensation
Committee.

 The
Employment Agreements will remain in effect until terminated by either the Company or the executive. In the event an executive's
employment is terminated by the Company for Cause (as defined in the Employment Agreements), or if an executive resigns other than for
Good Reason (as defined in the Employment Agreements), he shall be entitled to receive (i) any earned but unpaid salary, all vested equity,
and any earned but unpaid bonus awards through the date of termination, and (ii) reimbursement for any unreimbursed business expenses
incurred by him in accordance with the Company's policy prior to the date of termination.

 In
the event an executive's employment is terminated by the Company other than for Cause or if an executive resigns for Good
Reason, including a Change of Control (as defined in the Employment Agreements) that is accompanied by the executive's
resignation within a twelve month period following that Change of Control, such executive shall be entitled to any earned but unpaid
salary, all vested equity, and any earned but unpaid bonus awards through the date of termination. Such executive will also be paid
an additional thirty-six months of annual compensation equal to the average of his base salary and bonus for the three calendar
years prior to the date of termination, payable in accordance with the Company's regular payroll practice over a 52-week
period. The Company shall also (i) accelerate the vesting on any of the executive's unvested stock options, restricted stock
grants or other equity incentive awards; and (ii) reimburse the executive for any unreimbursed business expenses incurred by him in
accordance with the Company's policy prior to the date of termination. In the event that the executive is terminated without
Cause due to our inability to pay our debts when they generally become due, we will not be liable for the cash severance payments or
the payment of annual bonuses due to the executive. The severance benefits potentially payable upon a termination other than for
Cause or for Good Reason will be provided subject to the executive signing a general release of claims in our favor prior to
payment.

 In
the event an executive's employment is terminated by the Company upon death or disability, the executive or his estate shall be
entitled to receive his salary then in effect along with all other fringe benefits (including, without limitation, family medical benefits)
for a period of one year following the date of such termination. In addition, the executive or his estate shall have the right to exercise
any unexercised and vested options for a period of ninety days following the date of termination and to receive payment for any accrued
but unpaid vacation time.

 The
Employment Agreements contain customary non-competition and non-solicitation provisions that extend to one year after the date of termination
of the executives' employment with the Company. The executives also agreed to customary terms regarding confidentiality and ownership
of product ideas.

 Outstanding
Equity Awards at November 30, 2024

 Name

 Number of
 securities
 underlying
 options,
 Unexercisable
 (#)

 Number of
 Securities
 Underlying
 Unexercised
 Options,
 Exercisable
 (#)

 Option
 Exercise
 Price
 ($)

 Option
 Expiration
 Date

 50,000

 50,000

 1.41

 04/23/2025

 Steven Lubman

 50,000

 50,000

 1.41

 04/23/2025

 40,000

 40,000

 3.55

 03/15/2027

 Steven Lubman

 40,000

 40,000

 3.55

 03/15/2027

Compensation for Year Ending November 30, 2024

 The
following table summarizes the compensation for our non-employee board of directors for the fiscal year ended November 30, 2024. All
compensation paid to our employee directors is included under the summary compensation table above. With respect to the 2024 fiscal year,
the director compensation program consisted of a monthly cash fee of $3,000 per month, and $4,000 per month for a non-employee director
that serves as the chairman of more than two committees on the Board of Directors. The non-employee directors are also eligible to receive
equity awards, although there is no annual target amount set for the non-employee directors.

 Name

 Fees
 Earned or
 Paid in
 Cash
 ($)

 Total
 ($)

 Alan Plafker

 Peter Levy

 Lawrence Chariton

 Gary Jacobs

 48,000

 48,000

 Item
12. Security Ownership of Certain Beneficial Owners and Management.

 Under
Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding,
relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and
(ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially
owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition,
shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise
of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person,
the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by
reason of these acquisition rights.

 The
following table sets forth as of February 21, 2025, information regarding the beneficial ownership of our common stock by: (i) each person
known by the Company to be the beneficial owner of than five percent of the outstanding shares of common stock, (ii) each of our directors
and officers and (iii) all officers and directors, as a group:

 Amount and
 Nature of

 Percentage of

 Common
 Stock

 Common
 Stock

 Beneficially

 Beneficially

 Name and address of Beneficial Owner (1)

 Owned

 Owned (2)

 1,370,287
 (3)

 24.5
 %

 Steven J. Lubman

 1,111,952
 (3)

 19.9
 %

 Lawrence Chariton

 192,573
 (5)

 3.4
 %

 Alan Plafker

 46,334
 (6)

 -

 Peter Levy

 35,000
 (5)

 -

 Gary Jacobs

 182,000
 (4)

 3.3
 %

 All directors and executive officers as a group (6 persons)

 2,938,146

 52.6
 %

 *
 Less
than 1%

 (1)
 Except
as otherwise indicated, the address of each beneficial owner is c/o Surge Components, Inc., 95 East Jefryn Boulevard, Deer Park, NY 11729.

 (2)
 Applicable
percentage ownership is based on 5,582,783 shares of common stock outstanding as of February 21, 2025.

 (3)
 Includes
50,000 shares issuable upon exercise of options with an exercise price of $1.41, which are exercisable within 60 days. Also includes
40,000 shares issuable upon exercise of options with an exercise price of $3.55, which are exercisable within 60 days.

 (4)
 Includes
25,000 shares issuable upon exercise of options with an exercise price of $1.41, which are exercisable within 60 days. Also includes
30,000 shares issuable upon exercise of options with an exercise price of $3.55, which are exercisable within 60 days.

 (5)
 Includes
15,000 shares issuable upon exercise of options with an exercise price of $1.41, which are exercisable within 60 days. Also includes
20,000 shares issuable upon exercise of options with an exercise price of $3.55, which are exercisable within 60 days.

 (6)
 Includes
20,000 shares issuable upon exercise of options with an exercise price of $3.55, which are exercisable within 60 days.

 Item
13. Certain Relationships And Related Transactions, and Director Independence.

 Certain
Relationships and Related Transactions

 Surge
and Challenge each lease their current executive offices from Great American Realty of Jefryn Blvd., LLC, an entity owned 50% by Ira
Levy, our Chief Executive Officer, and President and Steven Lubman, our Vice President, Secretary and Treasurer. Our lease is through
September 2030 and our annual rent payments were approximately $282,900 and $278,600 for Fiscal 2024 and Fiscal 2023, respectively.

 Item
14. Principal Accounting Fees And Services

 Fees
Billed by Our Independent Registered Public Accounting Firm During Fiscal 2023 and 2024

 The
following table sets forth the aggregate fees billed to us for the fiscal years ended November 30, 2023 and 2024 by Seligson & Giannattasio,
CPAs PC (PCAOB ID 759)

 2023

 2024

 Audit Fees (1)

 $
 171,650

 $
 171,650

 Tax Fees (2)

 $
 12,600

 $
 12,600

 (1)
 Audit
Fees represent the aggregate fees for professional services for the audit of our annual financial statements and review of financial
statements included in our quarterly reports on Form 10-Q or services that are normally provided in connection with statutory and regulatory
filings or engagements for those fiscal years.

 (2)
 Tax
fees represent the aggregate fees billed for tax compliance, tax advice, and tax planning.

 Audit
Committee Pre-Approval Policies and Procedures

 Pursuant
to its charter, the Audit Committee is responsible for the pre-approval of all audit and permissible non-audit services provided by our
principal independent accountants on a case-by-case basis. Our Audit Committee has established a policy regarding approval of all audit
and permissible non-audit services provided by our principal independent accountants. Our Audit Committee pre-approves these services
by category and service. Our Audit Committee has preapproved all of the services provided by our principal independent accountants in
the fiscal year ending November 30, 2024.

 PART
IV

 Item
15. Exhibits and Financial Statement Schedules.

 The
following documents are filed as a part of this report or incorporated herein by reference:

 1.

 Our
 Consolidated Financial Statements commencing on page F-1 of this Annual Report.

 2.

 Exhibits:

 The
following documents are included as exhibits to this Annual Report:

 Exhibit

 Number

 Description

 3.1

 Articles
 of Incorporation of Surge Components, Inc. (filed as exhibit 3.3 to Form 8-K filed on January 24, 2022 and incorporated herein by
 reference).

 3.2

 Bylaws
 of Surge Components, Inc. (filed as exhibit 3.4 to Form 8-K filed on January 24, 2022 and incorporated herein by reference).

 4.1

 Rights
 Agreement dated as of October 7, 2016 between Surge Components, Inc., as the Company, and Continental Stock Transfer & Trust
 Company, as Rights Agent (filed as exhibit to Form 8-K filed on October 7, 2016 and incorporated herein by reference).

 10.1

 Lease
 between Surge Components and Great American Realty of 95 Jefryn Blvd., LLC (filed as exhibit to Amendment No. 1 to Form 10 filed
 on August 20, 2010 and incorporated herein by reference)

 10.2

 Lease
 between Challenge Electronics and Great American Realty of 95 Jefryn Blvd., LLC (filed as exhibit to Amendment No. 1 to Form 10 filed
 on August 20, 2010 and incorporated herein by reference)

 10.3

 Employment
 Agreement between Surge Components, Inc. and Ira Levy (filed as exhibit to Form 8-K filed on February 24, 2016 and incorporated herein
 by reference)

 10.4

 Employment
 Agreement between Surge Components Inc. and Steven Lubman (filed as exhibit to Form 8-K filed on February 24, 2016 and incorporated
 herein by reference)

 10.5

 Declaration
 of Trust (filed as exhibit to Amendment No. 1 to Form 10 filed on August 20, 2010 and incorporated herein by reference)

 10.6

 2010
 Incentive Stock Plan (filed as exhibit to Amendment No. 2 to Form 10 filed on November 4, 2010 and incorporated herein by reference)

 10.7

 2015
 Incentive Stock Plan (filed as exhibit to Form 10-K filed on February 26, 2016 and incorporated herein by reference)

 10.8

 Lease
 Agreement, dated October 1, 2010, between Great American Realty of Jefryn Boulevard, LLC and Surge Components, Inc. (filed as exhibit
 to Amendment No. 2 to Form 10 filed on November 4, 2010 and incorporated herein by reference)

 10.9

 Lease
 Agreement, dated October 1, 2010, between Great American Realty of Jefryn Boulevard, LLC and Challenge Electronics, Inc. (filed as
 exhibit to Amendment No. 2 to Form 10 filed on November 4, 2010 and incorporated herein by reference)

 10.10

 dated March 18, 1999 between Surge Components, Inc. and Future Electronics Incorporated (filed as exhibit to Amendment No. 3 to Form
 10 filed on January 11, 2011 and incorporated herein by reference)

 10.11

 Addendum
 A, dated March 18, 1999, between Surge Components, Inc. and Future Electronics (filed as exhibit to Amendment No. 3 to Form 10 filed
 on January 11, 2011 and incorporated herein by reference)

 10.12

 dated October 21, 2009, between Challenge Electronics, Inc. and Cam RPC Electronics (filed as exhibit to Amendment No. 3 to Form
 10 filed on January 11, 2011 and incorporated herein by reference)

 Exhibit

 Number

 Description

 10.13

 dated October 21, 2009, between Challenge Electronics, Inc. and Nu-Way Electronics (filed as exhibit to Amendment No. 3 to Form 10
 filed on January 11, 2011 and incorporated herein by reference)

 10.14

 dated October 19, 2009 between Challenge Electronics, Inc. and Aesco Electronics (filed as exhibit to Amendment No. 3 to Form 10
 filed on January 11, 2011 and incorporated herein by reference)

 10.15

 dated May 5, 2009, between Challenge Electronics, Inc. and TLC Electronics, Inc. (filed as exhibit to Amendment No. 3 to Form 10
 filed on January 11, 2011 and incorporated herein by reference)

 10.16

 Distributor
 Agreement, dated August 14, 2012, between Surge Components, Inc. and TTI, Inc. (filed as exhibit to Form 10-K filed on February 28,
 2013 and incorporated herein by reference)

 10.17

 Sole
 Agent Agreement, dated January 1, 2007, between Surge Components, Inc. and Lelon Electronics (filed as exhibit to Form 10-K
 filed on February 28, 2012 and incorporated herein by reference)

 10.18

 Master
 Distributor Agreement, dated February 7, 2011, between Surge Components, Inc. and Avnet, Inc. (filed as exhibit to Form 10-K filed
 on February 28, 2012 and incorporated herein by reference)

 10.19

 First
 Amendment to Master Distributor Agreement, dated February 17, 2011, between Surge Components, Inc. and Avnet, Inc. (filed as exhibit
 to Form 10-K filed on February 28, 2012 and incorporated herein by reference)

 10.20

 Rental
 Agreement with Adcock Investment Company Limited dated May 5, 2013 (filed as exhibit to Form 10-Q filed on July 15, 2013
 and incorporated herein by reference)

 10.21

 Settlement
 Agreement, dated as of December 22, 2016, by and among Surge Components, Inc., Ira Levy, Steven
 J. Lubman, Alan Plafker, Lawrence Chariton, Gary Jacobs and Martin Novick, and Messrs. Michael D. Tofias and Bradley P. Rexroad (filed
 as exhibit to Form 8-K filed on December 23, 2016 and incorporated herein by reference).

 10.22

 Amendment
 to Settlement Agreement, dated as of August 16, 2018, by and among Surge Components, Inc., Ira
 Levy, Steven J. Lubman, Alan Plafker, Lawrence Chariton, Gary Jacobs and Martin Novick, and Messrs. Michael D. Tofias and Bradley
 P. Rexroad (filed as exhibit 10.1 to Form 8-K filed on August 22, 2018 and incorporated herein by reference).

 21.1

 Subsidiaries
 (filed as exhibit to Amendment No. 1 to Form 10 filed on August 20, 2010 and incorporated herein by reference)

 23.1

 Consent of Seligson & Giannattasio, Independent Registered Public Accounting Firm

 Certification of principal executive officer and principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 Certification of principal executive officer and principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 Cover

 Item
16. Form 10-K Summary.

 None.

 SIGNATURES

 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

 SURGE
 COMPONENTS, INC.

 Date:
 February 28, 2025

 By:

 /s/

 Ira
 Levy

 Chief
 Executive Officer and Chief Financial Officer

 Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

 /s/

 Ira
 Levy

 Chief
 Executive Officer, Chief Financial Officer and

 Chairman of the Board (Principal Executive Officer,

 Principal Financial Officer and Principal Accounting Officer)

 /s/
 Steven J. Lubman

 Steven
 J. Lubman

 Vice
 President, Secretary, Treasurer and

 /s/
 Alan Plafker

 Alan
 Plafker

 /s/
 Lawrence Chariton

 Lawrence
 Chariton

 /s/
 Peter A. Levy

 Peter
 A. Levy

 /s/
 Gary M. Jacobs

 Gary
 M. Jacobs

 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To
the Board of Directors and

Stockholders of Surge Components, Inc.

 Opinion
on the Financial Statements

 We
have audited the accompanying consolidated balance sheets of Surge Components, Inc. and subsidiaries (the "Company") as of
November 30, 2024 and 2023, and the related consolidated statements of operations, comprehensive income, changes in shareholders'
equity, and cash flows for each of the years in the two-year period ended November 30, 2024, and the related notes (collectively referred
to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the
financial position of the Company as of November 30, 2024 and 2023, and the results of its operations and its cash flows for each of
the years in the two-year period ended November 30, 2024, in conformity with accounting principles generally accepted in the United States
of America.

 Basis
for Opinion

 These
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,
we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.

 Critical
Audit Matters

 The
critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated
or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

 We
identified the determination of the valuation of the inventory reserves as a critical audit matter because of the subjectivity in the
estimates related to the creation of the inventory reserves.

 The
primary procedures performed to address this critical audit matter included the following: We identified inventory parts for reserve
through the inspection of parts and packaging during the observation of the Company inventory counts to identify potential inventory
that may be old. We performed significant testing for parts that were slow moving by obtaining schedules for inventory by part number
and the number of sales for each part for the past year. Inventory parts were tested for slow moving reserves by testing all parts with
inventory in excess of one year and were tested further to determine if there were sales orders for the part that would cover the excess
amount.

 A
calculated reserve was prepared from those parts where the inventory in excess of one year and that did not have sales orders for all
or any part of that excess. The calculated amount was compared with the reserve as recorded by the Company. We proposed an adjustment
totaling $26,210 for this difference in the reserves.

 /s/
 Seligson & Giannattasio, CPAs PC

 We
have served as the Company's auditor since 2002.

 White
Plains, New York

 F- 1

 SURGE

Balance Sheets

 2024

 2023

 ASSETS

 Current assets:

 Cash

 $
 5,627,693

 $
 7,634,799

 Marketable Securities

 7,108,979

 3,204,772

 Accounts receivable - net of allowance for credit losses of $ 80,297 and $ 79,341

 5,960,418

 6,097,411

 Inventory, net

 5,000,707

 5,422,824

 Prepaid expenses and income taxes

 290,401

 520,104

 Total current assets

 23,988,198

 22,879,910

 Fixed assets – net of accumulated depreciation and amortization of $ 1,828,156 and $ 1,757,772

 110,727

 170,120

 Operating lease right of use asset

 1,050,445

 1,350,998

 Deferred income taxes

 260,856

 241,328

 Other assets

 34,299

 34,299

 Total assets

 $
 25,444,525

 $
 24,676,655

 F- 2

 SURGE

Balance Sheets

 (Continued)

 2024

 2023

 LIABILITIES AND SHAREHOLDERS' EQUITY

 Current liabilities:

 Accounts payable

 $
 3,344,952

 $
 3,216,590

 Operating lease liabilities, current maturities

 330,166

 351,957

 Accrued expenses and taxes

 688,640

 735,383

 Accrued salaries

 714,879

 667,058

 Total current liabilities

 5,078,637

 4,970,988

 Operating lease liabilities net of current maturities

 876,808

 1,136,766

 Total liabilities

 5,955,445

 6,107,754

 Commitments and contingencies

 Shareholders' equity:

 Preferred stock - $.001 par value, 5,000,000 shares authorized:

 Series C– 100,000 shares authorized, 10,000 and 10,000 shares issued and outstanding, redeemable, convertible, and a liquidation preference of $ 5 per share

 Series D – 75,000 shares authorized, none issued or outstanding, voting, convertible, redeemable.

 Common stock - $.001 par value, 50,000,000 shares authorized, 5,582,783 and 5,577,698 shares issued and outstanding

 5,581

 5,576

 Additional paid-in capital

 17,725,520

 17,710,525

 Accumulated other comprehensive income – unrealized gain on marketable debt securities

 85,330

 Accumulated equity

 1,672,639

 851,962

 Total shareholders' equity

 19,489,080

 18,568,901

 Total liabilities and shareholders' equity

 $
 25,444,525

 $
 24,676,655

 F- 3

 SURGE

Statements of Operations

 Year Ended

 2024

 2023

 Net sales

 $
 31,211,139

 $
 36,276,542

 Cost of goods sold

 22,307,445

 26,347,854

 Gross profit

 8,903,694

 9,928,688

 Operating expenses:

 Selling and shipping expenses

 2,739,994

 3,010,509

 General and administrative expenses

 5,189,369

 5,337,395

 Depreciation and amortization

 70,384

 70,247

 Total operating expenses

 7,999,747

 8,418,151

 Income before other income and income taxes

 903,947

 1,510,537

 Other income (expense):

 Interest expense

 -

 -

 Investment income

 331,703

 114,970

 Other income (expense):

 331,703

 114,970

 Income before income taxes

 1,235,650

 1,625,507

 Income taxes

 409,973

 653,397

 Net income

 $

 $

 Dividends on preferred stock

 5,000

 5,000

 Net income available to common shareholders

 $
 820,677

 $
 967,110

 Net income per share available to common shareholders:

 Basic

 $
.15

 $
.17

 Diluted

 $
.14

 $
.17

 Weighted Shares Outstanding:

 Basic

 5,580,949

 5,559,609

 Diluted

 5,757,987

 5,745,058

 See
notes to consolidated financial statements.

 F- 4

 SURGE

Statements of Comprehensive Income

 Year Ended

 2024

 2023

 Net income

 $

 $

 Other comprehensive income:

 Reclassification of realized gain on investment securities

 ( 200
)

 -

 Unrealized gain on marketable debt securities,net of tax

 84,502

 Net comprehensive income

 $
 909,979

 $
 972,938

 See
notes to Consolidated financial statements

 F- 5

 SURGE

Statements of Changes in Shareholders' Equity

 Years
ended November 30, 2023 and November 30, 2024

 Series C

 Preferred

 Common

 Additional Paid-In

 Other Comprehensive

 Accumulated

 Shares

 Amount

 Shares

 Amount

 Capital

 Income

 Equity (Deficit)

 Total

 Balance – December 1, 2022

 10,000

 $

 5,541,342

 $
 5,541

 $
 17,613,060

 $
 -

 $
 ( 115,148
)

 $
 17,503,463

 Preferred stock dividends

 -

 -

 -

 -

 -

 -

 ( 5,000
)

 ( 5,000
)

 Issuance of shares as compensation

 -

 -

 28,179

 97,473

 -

 -

 97,500

 Stock option exercise

 -

 -

 8,177

 ( 8
)

 -

 -

 -

 Charge in unrealized gain in available for sale debt securities

 -

 -

 -

 -

 -

 -

 Net Income

 -

 -

 -

 -

 -

 -

 Balance – November 30, 2023

 10,000

 5,577,698

 5,576

 17,710,525

 851,962

 18,568,901

 Preferred stock dividends

 -

 -

 -

 -

 -

 -

 ( 5,000
)

 ( 5,000
)

 Issuance of shares as compensation

 -

 -

 5,085

 14,995

 -

 -

 15,000

 Change in unrealized gain in available for sale debt securities

 -

 -

 -

 -

 -

 84,502

 -

 84,502

 Stock option exercise

 -

 -

 -

 -

 -

 -

 -

 -

 Net Income

 -

 -

 -

 -

 -

 -

 Balance – November 30, 2024

 10,000

 $

 5,582,783

 $
 5,581

 $
 17,725,520

 $
 85,330

 $
 1,672,639

 $
 19,489,080

 F- 6

 SURGE

Statements of Cash Flows

 Year Ended

 2024

 2023

 CASH FLOWS FROM OPERATING ACTIVITIES:

 Net Income

 $

 $

 Adjustments to reconcile net income to net cash provided by operating activities:

 Depreciation and amortization

 70,384

 70,247

 Gain on marketable securities

 ( 200
)

 Deferred income taxes

 ( 19,528
)

 ( 12,230
)

 Allowance for credit losses

 ( 94,224
)

 Stock Compensation Expense

 15,000

 97,500

 CHANGES IN OPERATING ASSETS AND LIABILITIES:

 Accounts receivable

 136,037

 1,227,448

 Inventory

 422,117

 985,727

 Prepaid expenses and income taxes

 229,703

 ( 49,257
)

 Other assets

 18,804

 26,092

 Accounts payable

 128,362

 ( 931,005
)

 Accrued expenses

 ( 3,922
)

 ( 99,509
)

 NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES

 1,823,390

 2,192,899

 CASH FLOWS FROM INVESTING ACTIVITIES:

 Acquisition of fixed assets

 $
 ( 10,991
)

 $
 ( 43,368
)

 Acquisition of marketable securities

 ( 5,949,505
)

 ( 3,204,772
)

 Proceeds from the sale of marketable securities

 2,130,000

 -

 NET CASH FLOWS USED IN INVESTING ACTIVITIES

 $
 ( 3,830,496
)

 $
 ( 3,248,140
)

 F- 7

 SURGE

Statements of Cash Flows

 (Continued)

 Year Ended

 2024

 2023

 CASH FLOWS FROM FINANCING ACTIVITIES:

 Repayment of financing lease obligations

 $
 -

 $
 -

 NET CASH FLOWS USED IN FINANCING ACTIVITIES

 -

 -

 NET CHANGE IN CASH

 ( 2,007,106
)

 ( 1,055,241
)

 CASH AT BEGINNING OF PERIOD

 7,634,799

 8,690,040

 CASH AT END OF PERIOD

 $
 5,627,693

 $
 7,634,799

 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 Income taxes paid

 $
 353,806

 $
 797,378

 Interest paid

 $
 -

 $
 -

 NONCASH INVESTING AND FINANCING ACTIVITIES:

 Accrued dividends on preferred stock

 $
 5,000

 $
 5,000

 See
notes to consolidated financial statements.

 F- 8

 SURGE

 Notes

 NOTE
A – ORGANIZATION, DESCRIPTION OF COMPANY'S BUSINESS AND BASIS OF PRESENTATION

 Surge
Components, Inc. ("Surge") was incorporated in the State of New York and commenced operations on November 24, 1981 as an
importer of electronic products, primarily capacitors and discrete semi-conductors selling to customers located principally throughout
North America. On June 24, 1988, Surge formed Challenge/Surge Inc. ("Challenge"), a wholly-owned subsidiary to engage in
the sale of electronic component products and sounding devices from established brand manufacturers to customers located principally
throughout North America.

 In
May 2002, Surge and an officer of Surge founded and became sole owners of Surge Components, Limited ("Surge Limited"), a
Hong Kong corporation. Under current Hong Kong law, Surge Limited is required to have at least two shareholders. Surge owns 999 shares
of the outstanding common stock and the officer of Surge owns 1 share of the outstanding common stock. The officer of Surge has assigned
his rights regarding his 1 share to Surge. Surge Limited started doing business in July 2002. Surge Limited operations have been consolidated
with the Company. Surge Limited is responsible for the sale of Surge's products to customers located in Asia.

 On
August 31, 2010, the Company changed its corporate domicile by merging into a newly-formed corporation, Surge Components, Inc. (Nevada),
which was formed in the State of Nevada for that purpose. Surge Components Inc. is the surviving entity.

 In
February 2019, the Company converted into a Delaware corporation. The number of authorized shares of common stock was decreased to 50,000,000
shares.

 In
December 2021, the Company changed its corporate domicile to Nevada.

 NOTE
B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 (1)
 Principles of Consolidation:

 The
consolidated financial statements include the accounts of Surge, Challenge, and Surge Limited (collectively the "Company").
All material intercompany balances and transactions have been eliminated in consolidation.

 (2)
 Accounts Receivable:

 Trade
accounts receivable are recorded at the net invoice value net of the allowance for credit losses in the consolidated balance sheet and
are not interest bearing. The Company considers receivables past due based on the payment terms. The Company reviews its exposure to
accounts receivable and reserves specific amounts if collectability is no longer reasonably assured. The Company also reserves a percentage
of its trade receivable balance based on collection history and current economic trends that might impact the level of future credit
losses. The Company re-evaluates such reserves on a regular basis and adjusts its reserves as needed. Based on the Company's operating
history and customer base, bad debts to date have not been material. Repayment terms vary from customer to customer and range from 15
days to 120 days.

 (3)
 Revenue Recognition:

 In
May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2014-09,
"Revenue from Contracts with Customers: Topic 606." This ASU replaces nearly all existing U.S. generally accepted accounting
principles guidance on revenue recognition. The standard prescribes a five-step model for recognizing revenue, the application of which
will require significant judgment by the Company. The Company adopted the standard using the modified retrospective approach in its fiscal
year beginning December 1, 2017. The preponderance of the Company's contracts with customers are standard ship and bill arrangements
where revenue is recognized at the time of shipment.

 F- 9

 SURGE

 Notes

 NOTE
B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 (3)
 Revenue Recognition (continued):

 Revenue
is recognized for products sold by the Company when persuasive evidence of an arrangement exists, delivery has occurred, the price is
fixed and determinable, collectability is reasonably assured and title and risk of loss have been transferred to the customer. This occurs
when product is shipped from the Company's warehouse.

 For
direct shipments, revenue is recognized when product is shipped from the Company's supplier. The Company has a long term supply
agreement with one of our suppliers. The Company purchases the merchandise from the supplier and has the supplier directly ship to the
customer through a freight forwarder. Title passes to customer upon the merchandise being received by a freight forwarder. Direct shipments
were approximately $ 4,540,576 and $ 4,192,768 for the years ended November 30, 2024 and November 30, 2023 respectively.

 The
Company also acts as a sales agent to certain customers in North America for one of its suppliers. The Company reports these commissions
as revenues in the period earned. Commission revenue totaled $ 95,584 and $ 106,885 for the years ended November 30, 2024 and November
30, 2023 respectively.

 The
Company performs ongoing credit evaluations of its customers and maintains reserves for potential credit losses.

 The
Company and its subsidiaries currently have agreements with several distributors. There are no provisions for the granting of price concessions
in any of the agreements. Revenues under these distribution agreements were approximately $ 5,204,000 and $ 7,810,000 for the years ended
November 30, 2024 and November 30, 2023 respectively.

 (4)
 Inventories:

 Inventories,
which consist solely of products held for resale, are stated at the lower of cost (first-in, first-out method) or net realizable value.
Products are included in inventory when the Company obtains title and risk of loss on the products, primarily when shipped from the supplier.
Inventory in transit principally from foreign suppliers at November 30, 2024 was $ 1,802,762. The Company, at November 30, 2024 has a
reserve against slow moving and obsolete inventory of $ 415,054. From time to time the Company's products are subject to legislation
from various authorities on environmental matters.

 (5)
 Depreciation and Amortization:

 Fixed
assets are recorded at cost. Depreciation is generally calculated on a straight line method and amortization of leasehold improvements
is provided for on the straight-line method over the estimated useful lives of the various assets as follows:

 Furniture, fixtures and equipment

 5 - 7 years

 Computer equipment

 5 years

 Leasehold Improvements

 Estimated useful life or lease term, whichever is shorter

 Maintenance
and repairs are expensed as incurred while renewals and betterments are capitalized.

 (6)
 Concentration of Credit Risk:

 Financial
instruments that potentially subject the Company to concentrations of credit risk consist principally of accounts receivable. The Company
maintains substantially all of its cash balances in a limited number of financial institutions. At November 30, 2024 and November 30,
2023, the Company's uninsured cash balances totaled $ 4,563,198 and $ 6,569,806, respectively.

 F- 10

 SURGE

 Notes

 NOTE
B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 (7)
 Income Taxes:

 The
Company's deferred income taxes arise primarily from the differences in the recording of allowances for bad debts, inventory reserves
and depreciation expense for financial reporting and income tax purposes. A valuation allowance is provided when it has been determined
to be more likely than not that the likelihood of the realization of deferred tax assets will not be realized. See Note H.

 The
Company follows the provisions of the Accounting Standards Codification topic, ASC 740, "Income Taxes" (ASC 740). There have
been no unrecognized tax benefits and, accordingly, there has been no effect on the Company's financial condition or results of
operations as a result of ASC 740.

 The
Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company is no longer
subject to U.S. federal tax examinations for years before fiscal years ending November 30, 2020, and state tax examinations for
years before fiscal years ending November 30, 2019. Management does not believe there will be any material changes in our unrecognized
tax positions over the next twelve months.

 The
Company's policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.
As of the date of adoption of ASC 740, there was no accrued interest or penalties associated with any unrecognized benefits, nor was
any interest expense recognized during the years ended November 30, 2024 and November 30, 2023.

 (8)
 Cash Equivalents:

 The
Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

 (9)
 Use of Estimates:

 The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.

 (10)
 Marketing and promotional costs:

 Marketing
and promotional costs are expensed as incurred and have not been material to date. The Company has contractual arrangements with several
of its distributors which provide for cooperative advertising rights to the distributor as a percentage of sales. Cooperative advertising
is reflected as a reduction in revenues and has not been material to date.

 (11)
 Fair Value of Financial Instruments:

 The
carrying amount of cash balances, marketable securities, accounts receivable, accounts payable and accrued expenses approximate
their fair value based on the nature of those items. Estimated fair values of financial instruments are determined using available
market information and appropriate valuation methodologies. Considerable judgment is required to interpret the market data used to
develop the estimates of fair value, and accordingly, the estimates are not necessarily indicative of the amounts that could be
realized in a current market exchange.

 (12)
 Marketable securities and other investments

 Our
marketable securities are stated at fair value in accordance with ASC Topic 321, Investments- Equity Securities. Any changes in
the fair value of the Company's marketable debt securities are included in the statement of other comprehensive income. The
market value of the securities is determined using prices as reflected on an established market. Realized and unrealized gains and losses
are determined on an average cost basis. The marketable securities are investments predominately in Treasury bills treasury notes which
are being invested until such time the funds are needed for operations and reflected as available for sale debt securities.

 The
value of these marketable securities at November 30, 2024 and November 30, 2023 is as follows:

 2024

 2023

 Cost

 $
 7,023,649

 $
 3,203,944

 Gross unrealized gain

 89,701

 Gross unrealized loss

 ( 4,371
)

 -

 Fair value

 $
 7,108,979

 $
 3,204,772

 F- 11

 SURGE

 Notes

 NOTE
B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 (13)
 Shipping Costs

 The
Company classifies shipping costs as a component of selling expenses. Shipping costs totaled $ 2,747 and $ 2,182 for the years ended
November 30, 2024, and November 30, 2023 respectively.

 (14)
 Earnings Per Share

 Basic
earnings per share includes no dilution and is computed by dividing net income available to common stockholders by the weighted average
number of common shares outstanding for the period. The difference between reported basic and diluted weighted-average common shares
results from the assumption that all dilutive stock options and convertible preferred stock exercised into common stock. Total potentially
dilutive shares excluded from diluted weighted shares outstanding at November 30, 2024 and November 30, 2023 totaled 282,962 and 266,282,
respectively.

 (15)
 Stock Based Compensation

 Stock
Based Compensation to Employees

 The
Company accounts for its stock-based compensation for employees in accordance with Accounting Standards Codification ("ASC")
718. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation
issued to employees and non-employees over the related vesting period.

 Stock
Based Compensation to Other than Employees

 The
Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance
with ASC 718. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the
equity instruments issued, whichever is more reliably determinable. The value of equity instruments issued for consideration other than
employee services is determined on the earlier of a performance commitment or completion of performance by the provider of goods or services.
In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting
agreement.

 (16)
 Leases:

 In
February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) ("Topic 842").
Topic 842 requires the entity to recognize the assets and liabilities for the rights and obligations created by leased assets. Leases
will be classified as either finance or operating, with classification affecting expense recognition in the income statement.

 On
December 1, 2019, the Company adopted Topic 842 applying the optional transition method, which allows an entity to apply the new standard
at the adoption date with a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. As a
result of adopting Topic 842, the Company recognized assets and liabilities for the rights and obligations created by operating leases
totaling approximately $ 290,000.

 The
Company determines if a contract contains a lease at inception based on whether it conveys the right to control the use of an identified
asset. Substantially all of the Company's leases are classified as operating leases. The Company records operating lease right-of-use
assets within "Other assets" and lease liabilities are recorded within "current and noncurrent liabilities" in
the consolidated balance sheets. Lease expenses are recorded within "General and administrative expenses" in the consolidated
statements of operations. Operating lease payments are presented within "Operating cash flows" in the consolidated statements
of cash flows.

 F- 12

 SURGE

 Notes

 NOTE
B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

 (16)
 Leases (continued):

 Operating
lease right-of-use assets and lease liabilities are recognized based on the net present value of future minimum lease payments over the
lease term starting on the commencement date. The Company generally is not able to determine the rate implicit in its leases and, as
such, applies an incremental borrowing rate based on the Company's cost of borrowing for the relevant terms of each lease. Lease
expense for minimum lease payments is recognized on a straight-line basis over the lease term. Lease terms may include an option to extend
or terminate a lease if it is reasonably certain that the Company will exercise such options. The Company has elected the practical expedient
to not separate lease components from non-lease components, and also has elected not to record a right-of-use asset or lease liability
for leases which, at inception, have a term of twelve months or less. Variable lease payments are recognized in the period in which the
obligation for those payments is incurred.

 NOTE
C – FIXED ASSETS

 Fixed
assets consist of the following:

 2024

 2023

 Furniture and Fixtures

 $
 329,186

 $
 329,186

 Leasehold Improvements

 1,078,985

 1,070,044

 Computer Equipment

 530,712

 528,662

 Less-Accumulated Depreciation

 ( 1,828,156
)

 ( 1,757,772
)

 Net Fixed Assets

 $
 110,727

 $
 170,120

 Depreciation
and amortization expense for the years ended November 30, 2024 and November 30, 2023 was $ 70,384 and $ 70,247, respectively.

 F- 13

 SURGE

 Notes

 NOTE
D – LOANS PAYABLEIs this still in effect?

 In
February 2017, the Company obtained a line of credit with a bank for up to $ 3,000,000 (the "Credit Line"). Borrowings under
the Credit Line are due upon demand and accrue interest at the greater of the prime rate or the LIBOR rate plus two percent (and may
be increased by three percent in the event the Company fails to (i) repay all amounts due on the Credit Line upon demand or (ii) comply
with any terms or conditions relating to the Credit Line). The Credit Line is collateralized by substantially all the assets of the Company.
As of November 30, 2024, the balance on the Credit Line was $ 0. As of November 30, 2024, the Company was in compliance with the covenant
for the debt service coverage ratio for the Credit Line. Effective July 1, 2023, the use of the LIBOR rate was discontinued and
replaced with the secured overnight financing rate (SOFR).

 NOTE
E – ACCRUED EXPENSES

 Accrued
expenses consist of the following:

 2024

 2023

 Commissions

 $
 242,515

 $
 229,882

 Preferred stock dividends

 171,569

 166,569

 Other accrued expenses

 274,556

 338,932

 $
 688,640

 $
 735,383

 NOTE
F – RETIREMENT PLAN

 In
June 1997, the Company adopted a qualified 401(k) retirement 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 employee's
salary through salary reduction. The Company makes a matching contribution of twenty percent ( 20 %) of each employee's contribution
for each dollar of employee deferral up to five percent ( 5 %) of the employee's salary. Net assets for the plan, as estimated by
Axa Equitable, Inc., which maintains the plan's records, were approximately $ 2,147,000 at November 30, 2024. Pension expense for
the years ended November 30, 2024 and November 30, 2023 was $ 47,989 and $ 64,864, respectively, The decrease is due in part to the implementation
of a new safe harbor plan.

 F- 14

 SURGE

 Notes

 NOTE
G – SHAREHOLDERS' EQUITY

 [1]
 Preferred Stock:

 In
February 1996, the Company amended its Certificate of Incorporation to authorize the issuance of 1,000,000 shares of preferred stock
in one or more series. In August 2010, the number of preferred shares authorized for issuance was increased to 5,000,000 shares.

 In
November 2000, the Company authorized 100,000 shares of preferred stock as Non-Voting Redeemable Convertible Series C Preferred Stock
("Series C Preferred"). Each share of Series C Preferred is automatically convertible into 10 shares of our common stock
upon shareholder approval. If the Series C Preferred were converted into common stock on or before April 15, 2001, these shares were
entitled to cumulative dividends at the rate of $.50 per share per annum commencing April 15, 2001 payable on June 30 and December 31
of each year. In November 2000, 70,000 shares of the Series C Preferred were issued in payment of financial consulting services to its
investment banker and a shareholder of the Company.

 Dividends
aggregating $ 171,569 have not been paid for the semi-annual periods ended December 31, 2001 through the semi-annual payment due June
30, 2024. The Company has accrued these dividends. At November 30, 2024, there are 10,000 shares of Series C Preferred issued and outstanding.

 In
October 2016, the Company authorized 75,000 shares of preferred stock as Voting Non-Redeemable Convertible Series D Preferred Stock ("Series
D Preferred"). None of the Series D Preferred Stock is outstanding as of November 30, 2024.

 [2]
 2015 Incentive Stock Plan

 In
November 2015, the Company adopted and the shareholders ratified, the 2015 Incentive Stock Plan ("2015 Stock Plan"). The
2015 Stock Plan provides for the grant of options to officers, employees, directors or consultants to the Company to purchase an aggregate
of 1,500,000 common shares.

 In
April 2021, a total of 26,786 shares were issued to the Company's officers as a part of their 2021 bonus compensation under the
2015 stock plan. The Company recorded a cost of $ 75,000 relating to the issuance of these shares in the second quarter of 2021.

 In
March 2022, a total of 26,000 shares were issued to the Company's officers as part of their bonus compensation under the 2015 stock
plan. The Company recorded a cost of $ 97,500 relating to the issuance of these shares in the second quarter of 2022.

 In
March 2022, the Company granted stock options to (a) four non-employee directors to each purchase 20,000 shares of common stock, (b)
one non-employee-director to purchase 30,000 shares of common stock, and (c) two Company officers to each purchase 40,000 shares of common
stock at an exercise price of $ 3.55 per share, the market price of the common stock on the date of the grant. These options vest immediately
and expire five years from the grant date. The Company recorded a cost of $ 492,132 related to the granting of these options.

 In
April 2023, a total of 28,179 shares were issued to the Company's officers as part of their bonus compensation under the 2015 stock
plan. The Company recorded a cost of $ 97,500 relating to the issuance of these shares in the second quarter of 2023.

 In
April 2024, a total of 5,085 shares were issued to one of the Company's officers as part of their bonus compensation under the
2015 stock plan. The Company recorded a cost of $ 15,000 relating to the issuance of these shares in the second quarter of 2024.

 In
November 2024, the Company adopted and the shareholders ratified, the 2024 Incentive Stock Plan ("2024 Stock Plan"). The
2024 Stock Plan provides for the grant of options to officers, employees, directors or consultants to the Company to purchase an aggregate
of 1,000,000 common shares. No grants were made under the 2024 Plan in 2024

 F- 15

 SURGE

 Notes

 NOTE
G – SHAREHOLDERS' EQUITY (Continued)

 [2]
 2015 Incentive Stock Plan (continued)

 Activity
in the Company's stock plans for the period ended November 30, 2024 is summarized as follows:

 Shares

 Weighted
 Average
 Exercise
 Price

 Options outstanding December 1, 2023

 $
 2.59

 Options issued in the fiscal year ended November 30, 2024

 -

 $
 -

 Options exercised in the fiscal year ended November 30, 2024

 $
 -

 Options cancelled in the fiscal year ended November 30, 2024

 -

 $
 -

 Options outstanding at November 30, 2024

 $
 2.59

 Options exercisable at November 30, 2024

 $
 2.59

 The
intrinsic value of the exercisable options at November 30, 2024 totaled $ 130,200. At November 30, 2024 the weighted average remaining
life of the stock options is 1.45 years. At November 30, 2024, there was no unrecognized compensation cost related to the stock options
granted under the plan.

 [3]
 Compensation of Directors

 Compensation
for each non-employee director is $ 3,000 per month (and $ 4,000 per month for a non-employee director that serves as the chairman of more
than two committees of the Board of Directors).

 NOTE
H – INCOME TAXES

 Deferred
income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes using the enacted tax rates in effect in the years in which the differences
are expected to reverse.

 The
Company's deferred income taxes are comprised of the following:

 2024

 2023

 Deferred Tax Assets

 Depreciation

 $
 43,847

 $
 35,684

 Allowance for bad debts

 17,493

 17,309

 Inventory

 84,450

 84,450

 Facilities rental

 39,668

 35,473

 Other

 75,398

 68,412

 Total deferred tax assets

 260,856

 241,328

 Valuation allowance

 -

 -

 Deferred Tax Assets

 $
 260,856

 $
 241,328

 F- 16

 SURGE

 Notes

 NOTE
H– INCOME TAXES (Continued)

 A
valuation allowance for the deferred tax assets relates principally to the uncertainty of the utilization of deferred tax assets and
was calculated in accordance with the provisions of ASC 740, which requires that a valuation allowance be established or maintained when
it is "more likely than not" that all or a portion of deferred tax assets will not be realized.

 The
Company's income tax expense consists of the following:

 Years Ended

2024

2023

 Current:

 Federal

 $
 301,928

 $
 444,557

 States

 127,573

 221,070

 429,501

 665,627

 Deferred:

 Federal

 ( 14,912
)

 ( 9,662
)

 States

 ( 4,616
)

 ( 2,568
)

 ( 19,528
)

 ( 12,230
)

 Provision for income taxes

 $
 409,973

 $
 653,397

 The
Company files a consolidated income tax return with its wholly-owned subsidiaries. A reconciliation of the difference between the
expected income tax rate using the statutory federal tax rate and the Company's effective rate is as follows:

 Years
 ended

 2024

 2023

 U.S
 Federal Income tax statutory rate

 %

 %

 State
 income taxes

 %

 %

 Other

 %

 %

 Effective
 tax rate

 %

 %

 F- 17

 SURGE

 Notes

 NOTE
I – OPERATING LEASE COMMITMENTS

 The
Company leases its office and warehouse space through 2030 from a corporation that is partly owned by officers/shareholders of the Company
("Related Company"). Annual minimum rental payments to the Related Company approximated $ 194,000 for the year ended November
30, 2024, and increase at the rate of two per cent per annum throughout the lease term.

 Pursuant
to the lease, rent expense charged to operations differs from rent paid because of scheduled rent increases. Accordingly, the Company
has recorded deferred rent. Rent expense is calculated by allocating to rental payments, including those attributable to scheduled rent
increases, on a straight line basis, over the lease term.

 The
Company has a lease to rent office space and a warehouse in Hong Kong through June 2025. Annual minimum rental payments for this space
are approximately $ 73,580.

 The
Company has a lease to rent additional warehouse space in Hong Kong through November 30, 2025. Annual minimum rental payments for this
space are approximately $ 76,170.

 The
Company's future minimum rental commitments at November 30, 2024 are as follows:

 Twelve
Months Ended November 30,

 2025

 $
 330,166

 2026

 210,372

 2027

 214,580

 2028

 218,872

 2029

 223,250

 2030 and after

 189,132

 $
 1,386,372

 Net
rental expense for the years ended November 30, 2024 and November 30, 2023 were $ 452,019 and $ 449,057 respectively, of which $ 282,894
and $ 278,599 respectively, was paid to the Related Company.

 The
remaining weighted average lease term is 5 years at November 30, 2024. The weighted average discount rate is 5.25 % at November 30, 2024.

 NOTE
J – EMPLOYMENT AND OTHER AGREEMENTS

 In
February 2016, the Company entered into revised employment agreements with two officers of the Company. Pursuant to these agreements,
the base salary for one officer is $ 275,000 and the base salary for the other officer is $ 225,000. The agreements continue until terminated
by either party. In April 2021, the base salaries for the two officers were amended to $ 300,000 for one officer and $ 250,000 for
the other officer. In April 2024, the employment agreements for Ira Levy and Steven Lubman were amended to increase the base salary to
$ 330,000 and $ 275,000, respectively.

 The
Company's compensation committee may award these officers with bonuses and will review the base salary amounts for each of the
officers on an annual basis to determine if any changes to the base salary amounts need to be made and may also award these officers
with annual bonuses. Pursuant to the employment agreements, the officers are prohibited from engaging in activities which are competitive
with those of the Company during their employment with the Company and for one year following termination. If the agreement is terminated
other than for cause, the officer would be entitled to all base salary earned through the date of termination, accrued but unused vacation,
all vested equity, and bonus amounts payable to the officer through the date of termination. The officers would also be entitled to receive
an additional thirty-six months of annual compensation equal to the average of his base salary and bonus for the three calendar years
prior to the date of termination, payable in accordance with the Company's regular payroll practice over a 52-week period.

 F- 18

 SURGE

 Notes

 NOTE
K – MAJOR CUSTOMERS

 The
Company had two customers who respectively accounted for 19 % and 15 % of net sales for the year ended November 30, 2024 and two customers
who accounted for 20 % and 18 % of net sales for the year ended November 30, 2023. The Company had one customer who accounted for 34 % of
accounts receivable at November 30, 2024 and one customer who accounted for 27 % of accounts receivable at November 30, 2023.

 NOTE
L – MAJOR SUPPLIERS

the years ended November 30, 2024 and November 30, 2023 there was one foreign supplier accounting for 28 % and 31 % of total inventory
purchased.

 The
Company purchases substantially all of its products overseas. For the year ended November 30, 2024, the Company purchased 31 % of
its products from Taiwan, 15 % from Hong Kong, 49 % from elsewhere in Asia and less than 1% overseas outside of Asia. The Company purchases
the balance of its products in the United States.

 NOTE
M – EXPORT SALES

 The
Company's export sales were as follows:

 Years Ended

 2024

 2023

 Canada

 3,563,825

 5,606,222

 China

 8,577,535

 5,869,886

 Other Asian Countries

 773,311

 1,288,598

 South America

 86,193

 188,220

 Europe

 1,459,678

 1,133,838

 Mexico

 43,860

 -

 Revenues
are attributed to countries based on location of customer.

 F- 19

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