SURGE COMPONENTS, INC. (OTCMKTS:SPRS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement

On August 16, 2018, Surge Components, Inc. (the “Company”), entered into an amendment (the “Amendment”) to that certain settlement agreement (the “Settlement Agreement”), dated December 22, 2016, by and among the Company, and Ira Levy, Peter Levy, Steven J. Lubman, Alan Plafker, Lawrence Chariton, Gary Jacobs and Martin Novick, on the one hand, and Messrs. Michael D. Tofias and Bradley P. Rexroad, on the other hand.

to the Amendment, certain provisions related to the Company’s proposal to reincorporate from the State of Nevada to the State of Delaware (the “Reincorporation Proposal”) have been amended to provide that the Company will as soon as possible convene a shareholders meeting to vote on a proposal to reincorporate the Company from the State of Nevada to the State of Delaware. If, however, stockholders representing more than 40,000 shares of the Company’s common stock seek to exercise dissenter’s rights under the Nevada Revised Statutes, the Company may elect to withdraw the Reincorporation Proposal at such meeting and take steps to reconvene a meeting no later than February 1, 2019 for the purpose of re-submitting the Reincorporation Proposal to the Company’s stockholders. If at such meeting, stockholders representing more than 60,000 shares of common stock seek to exercise dissenter’s rights, then the Company may elect to withdraw such second Reincorporation Proposal at the 2019 shareholders meeting and take steps to reconvene a meeting no later than February 1, 2020 for the purpose of re-submitting the Reincorporation Proposal to the Company’s stockholders for a third and final time. The Company may not withdraw the Reincorporation Proposal from the 2020 meeting.

In addition, the Amendment provides for certain corporate governance actions to be taken by the Company in the event that the Company’s Reincorporation Proposal is withdrawn as a result of the exercise of such dissenter’s rights and will continue to be effective until the Reincorporation Proposal is approved, including the following:

● the Board shall promptly take all steps necessary and within its power to eliminate any anti-takeover protections contained in the Company’s Articles of Incorporation or Amended and Restated Bylaws that are prohibited under Delaware Law; and

● the Board shall promptly take all steps necessary and within its power to provide the procedural protections described in Kahn v. M&F Worldwide, 88 A.3d 635 (Del. 2014), and its progeny for the Company’s minority stockholders.

The above summary is qualified in its entirety by reference to the full text of the Amendment, a copy of which is attached herewith as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

(d)Exhibits

SURGE COMPONENTS INC Exhibit
EX-10.1 2 f8k081618ex10-1_surgecomp.htm AMENDMENT TO SETTLEMENT AGREEMENT,…
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About SURGE COMPONENTS, INC. (OTCMKTS:SPRS)

Surge Components, Inc. (Surge) is a supplier of electronic products and components. The Company’s 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 the Company sells are utilized in the electronic circuitry of products, including automobiles, telecomm, audio, cellular telephones, computers, consumer electronics, garage door openers, household appliances, power supplies and security equipment. The products that the Company sells are sold to both original equipment manufacturers (OEMs) and to distributors of the lines of products it sells. Surge supplies a range of electronic components, which can be divided into approximately two categories, including capacitors and discrete components.