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Surge Components stockholders launch proxy fight

Dissident stockholders of Surge Components in Deer Park

Dissident stockholders of Surge Components in Deer Park said they plan to seek two board seats and push for the sale of the company. Photo Credit: Google Maps

Dissident stockholders who hold more than 20 percent of the outstanding shares of Deer Park-based Surge Components Inc. have announced they plan to seek two board seats and push for the sale of the company.

After a delayed opening Friday morning on the OTC Markets platform, Surge shares climbed 3.8 percent to close at $1.09.

Shareholders Michael Tofias and Bradley Rexroad filed a proxy statement as Concerned Stockholders of Surge Components Inc. seeking board seats at the annual meeting, which is expected to be in November.

In a statement issued late Thursday, they characterized Surge’s corporate governance as “exceedingly poor” and said that management should seek a buyer for the company given its “history of poor stockholder returns.”

A Surge spokesman said in an emailed statement that the company is reviewing materials from Tofias and Rexroad, but added, “We believe that continuing to focus on executing our business strategy and realizing value through the growth of our company remains in the best interests of all our shareholders.”

As of Nov. 30, 2015, Surge had 33 employees, according to its latest annual report. The company distributes capacitors and semiconductors sourced from Asia to the energy, computer and automotive markets.

Tofias said in a statement that Surge shares had declined 17 percent over five years compared to a 105 percent gain for the Standard & Poor’s 500. That measure didn’t include gains since the dissident shareholders went public earlier this week.

Tofias owns 15.6 percent of shares outstanding, making him the company’s largest shareholder, according to Bloomberg data, while Rexroad has 6.7 percent.

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