Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
May 31, 2017 | Oct. 13, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | AURA SYSTEMS INC | |
Entity Central Index Key | 826,253 | |
Amendment Flag | false | |
Trading Symbol | AUSI | |
Current Fiscal Year End Date | --02-28 | |
Document Type | 10-Q | |
Document Period End Date | May 31, 2017 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 126,608,391 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | May 31, 2017 | Feb. 28, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 974,669 | $ 255,869 |
Other current assets | 5,588 | 2,894 |
Total current assets | 980,257 | 258,763 |
Deposits | 3,500 | 3,500 |
Investment in Joint Venture | 250,000 | |
Total assets | 1,233,757 | 262,263 |
Current liabilities: | ||
Accounts payable | 4,500,805 | 4,943,559 |
Accrued expenses | 6,493,051 | 5,939,251 |
Customer advances | 641,751 | 641,751 |
Investor advance | 650,000 | |
Notes payable | 3,584,498 | 4,776,938 |
Convertible note payable and accrued interest-related party, net of discount | 3,153,467 | 2,920,172 |
Convertible notes payable, net of discount | 5,848,810 | 4,177,283 |
Notes payable and accrued interest- related party | 29,383,178 | 29,669,693 |
Total current liabilities | 54,255,560 | 53,068,647 |
Total liabilities | 54,255,560 | 53,068,647 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Common stock, $0.0001 par value; 150,000,000 shares authorized at May 31 and February 28, 2017; 126,608,391 and 113,991,432 issued and outstanding at May 31 and February 28, 2017, respectively | 12,661 | 11,399 |
Additional paid-in capital | 412,666,277 | 410,499,597 |
Accumulated deficit | (465,700,741) | (463,317,380) |
Total stockholders' deficit | (53,021,803) | (52,806,384) |
Total liabilities and stockholders' deficit | $ 1,233,757 | $ 262,263 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) (Unaudited) - $ / shares | May 31, 2017 | Feb. 28, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 126,608,391 | 113,991,432 |
Common stock, shares outstanding | 126,608,391 | 113,991,432 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | ||
May 31, 2017 | May 31, 2016 | ||
Income Statement [Abstract] | |||
Net Revenues | $ 0 | $ 0 | |
Cost of goods sold | 0 | 0 | |
Gross Profit | 0 | 0 | |
Operating expenses: | |||
Engineering, research and development expenses | 0 | 33,788 | |
Selling, general and administrative expenses | 567,996 | 616,977 | |
Total operating expenses | 567,996 | 650,765 | |
Loss from operations | (567,996) | (650,765) | |
Other (income) and expense: | |||
Interest expense, net | 1,028,228 | 827,947 | |
Gain on debt settlement | 0 | (70,288) | |
Other (income) expense, net | 787,136 | (1,767) | |
Total other (income) expense | 1,815,364 | 755,892 | |
Net Loss | $ (2,383,360) | $ (1,406,657) | |
Total basic and diluted loss per share | $ (0.02) | $ (0.01) | |
Weighted average shares used to compute basic and diluted loss per share | [1] | 121,821,466 | 113,848,171 |
[1] | Basic and diluted weighted average number of shares are equivalent since the effect of potential dilutive securities is anti-dilutive. |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Cash flow from operating activities: | ||
Net Loss | $ (2,383,360) | $ (1,406,657) |
Depreciation Expense | ||
Amortization of debt discount | 43,417 | 64,110 |
Gain on debt settlement | 0 | (70,288) |
FMV of warrants issued for services | 177,737 | |
Stock issued for services | 990,205 | |
(Increase) decrease in: | ||
Accounts receivable | 2,115 | |
Other current assets and deposit | (2,694) | 96,819 |
Increase (decrease) in: | ||
Accounts payable, customer deposit and accrued expenses | 111,046 | 1,215,829 |
Net cash used in operations | (1,063,649) | (98,072) |
Investing Activities: | ||
Investment in Joint Venture | (250,000) | |
Net cash used in investing activities | (250,000) | |
Financing activities: | ||
Issuance of common stock | 1,000,000 | |
Proceeds from notes payable-net | 382,500 | 405,000 |
Proceeds from notes payable-related party, net | 28,208 | |
Investor Advance | 650,000 | |
Net cash provided by financing activities: | 2,032,450 | 433,208 |
Net increase (decrease) in cash & cash equivalents | 718,801 | 335,136 |
Cash and cash equivalents at beginning of period | 255,869 | 22,175 |
Cash and cash equivalents at end of period | 974,669 | 357,311 |
Cash paid during the period for: | ||
Interest | ||
Income taxes |
Accounting Policies
Accounting Policies | 3 Months Ended |
May 31, 2017 | |
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES | NOTE 1 – ACCOUNTING POLICIES Accounting principles In the opinion of management, the accompanying balance sheets and related interim statements of income and comprehensive income, and cash flows include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the Company’s annual report on Form 10-K for the year ended February 28, 2017 filed on September 18, 2017 with the U.S. Securities and Exchange Commission. Estimates The preparation of financial statements 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. Recently Issued Accounting Pronouncements In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, Interest–Imputation of Interest (Subtopic 835-30) (“ASU 2015-03”), which changes the presentation of debt issuance costs in financial statements. ASU 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. It is effective for annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The new guidance will be applied retrospectively to each prior period presented. The Company is currently in the process of evaluating the impact of adoption of ASU 2015-03 on its balance sheets. In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2016-01, which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact of adopting this guidance. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Topic 842 affects any entity that enters into a lease, with some specified scope exemptions. The guidance in this Update supersedes Topic 840, Leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For public companies, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact of adopting ASU No. 2016-02 on our financial statements. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) that clarifies how to apply revenue recognition guidance related to whether an entity is a principal or an agent. ASU 2016-08 clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transferred to the customer and provides additional guidance about how to apply the control principle when services are provided and when goods or services are combined with other goods or services. The effective date for ASU 2016-08 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Company has not yet determined the impact of ASU 2016-08 on its financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation, or ASU No. 2016-09. The areas for simplification in this Update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. We are currently evaluating the impact of adopting ASU No. 2016-09 on our financial statements. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which provides further guidance on identifying performance obligations and improves the operability and understandability of licensing implementation guidance. The effective date for ASU 2016-10 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. In May 2016, the FASB issued ASU 2016-12 “Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients,” which amends the guidance on transition, collectability, non-cash consideration, and the presentation of sales and other similar taxes. ASU 2016-12 clarifies that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. In addition, ASU 2016-12 clarifies how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. The standard allows for both retrospective and modified retrospective methods of adoption. The Company has not yet determined the impact of ASU 2016-10 on its financial statements. In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Statements," which requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2019 (fiscal year 2021 for the Company). The Company has not yet determined the potential effects of the adoption of ASU 2016-13 on its Financial Statements. In August 2016, the FASB issued ASU 2016-15, "Classification of Certain Cash Receipts and Cash Payments," which aims to eliminate diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. ASU 2016-15 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017 (fiscal year 2019 for the Company). The Company has not yet determined the potential effects of the adoption of ASU 2016-15 on its Financial Statements. Reclassifications Certain reclassifications have been made to the comparative financial statements to conform to the current period presentation. |
Going Concern
Going Concern | 3 Months Ended |
May 31, 2017 | |
Going Concern [Abstract] | |
GOING CONCERN | NOTE 2 – GOING CONCERN The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. During the Three months ended May 31, 2017 and May 31, 2016, the Company incurred losses of $2,383,360 and $1,406,657, respectively and had negative cash flows from operating activities of $1,063,649 and $98,072, respectively. If the Company is unable to generate profits and is unable to continue to obtain financing for its working capital requirements, it may have to curtail its business sharply or cease business altogether. Substantial additional capital resources will be required to fund continuing expenditures related to our research, development, manufacturing and business development activities. The Company's continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis, to retain its current financing, to obtain additional financing, and ultimately to attain profitability. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that could result from the outcome of this uncertainty. During the next twelve months we intend to restart operations of our AuraGen/VIPER business both domestically and internationally. At the next shareholders meeting the shareholders will vote for an entire new slate of five board candidates. The new board when elected will hire a new management team. In addition we plan to acquire a new facility of approximately 45,000 square feet for operations, as well as, rebuild the engineering QA and sales teams to support the operation. We anticipate being able to fund these additions in the upcoming fiscal year. |
Notes Payable
Notes Payable | 3 Months Ended |
May 31, 2017 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | NOTE 3 – NOTES PAYABLE Notes payable consisted of the following: May 31, February 28, Demand notes payable, at 10% and 16% $ 3,584,498 $ 3,782,468 Convertible Promissory Note dated August 10, 2012, due August 10, 2017, convertible into shares of our common stock at a price of $0.76 per share. The note carries an interest rate of 7% with interest only payments due on the 10 th 1,000,000 972,632 Convertible Promissory Note dated October 2, 2012, due October 2, 2017, convertible into shares of our common stock at a price of $0.76 per share. The note carries an interest rate of 7% with interest only payments due on the 2 nd 500,000 483,951 Senior secured convertible notes dated May 7, 2013, due May 7, 2014, convertible into shares of our common stock at a price of $0.75 per share. The note was not repaid. 2,395,700 2,395,700 Senior secured convertible notes dated June 20, 2013, due June 20, 2014, convertible into shares of our common stock at a price of $0.50 per share. The note was not repaid. 325,000 325,000 Convertible notes dated April thru June, 2016. The notes carry an interest rate of 5% and might be converted into shares of Company’s common stock if the shareholders approve a 7:1 reverse stock split. 1,628,110 994,700 9,433,308 8,994,221 Less: Current portion $ 9,433,308 $ 8,994,221 Long-term portion $ - $ - CONVERTIBLE DEBT On May 7, 2013, the Company transferred 4 notes payable with a total principal value of $1,000,000 together with accrued interest, and consulting fees to a senior secured convertible note with a principal value of $1,087,000 and warrants to Kenmont Capital Partners. This new note has a 1-year maturity date and is convertible into shares of common stock at the conversion price of $0.75 per share. The warrants entitle the holder to acquire 1,449,333 shares of common stock, have an initial exercise price of $0.75 per share, and have a 7-year term. The Company recorded $342,020 as a discount, which will be amortized over the life of the note. On May 7, 2013, the Company transferred 2 note payables with a total principal value of $550,000 together with accrued interest to a senior secured convertible note with a principal value of $558,700 and warrants to LPD Investments, Ltd. This new note has a 1-year maturity date and is convertible into shares of common stock at the conversion price of $0.75 per share. The warrants entitle the holder to acquire 744,933 shares of common stock, have an initial exercise price of $0.75 per share, and have a 7-year term. The Company recorded $175,793 as a discount, which will be amortized over the life of the note. On May 7, 2013, the Company entered into an agreement with an individual for the sale of a secured convertible note payable in the original principal amount of $750,000 and warrants. This note has a 1-year maturity date and is convertible into shares of common stock at the conversion price of $0.75 per share. The warrants entitle the holder to acquire 1,000,000 shares of common stock, have an initial exercise price of $0.75 per share, and have a 7-year term. The Company recorded $235,985 as a discount, which will be amortized over the life of the note. On June 20, 2013, the Company entered into an agreement with four individuals for the sale of secured convertible notes payable in the original amount of $325,000 and warrants. These Notes have a 1-year maturity date and are convertible into shares of common stock at the conversion price of $0.50 per share. The warrants entitle the holders to acquire 433,334 shares of common stock, have an initial exercise price of $0.75 per share, and have a 7-year term. The Company recorded $63,622 as a discount, which will be amortized over the life of the notes. On August 19, 2013, the Company entered into an agreement with a member of its Board of Directors for the sale of $2,500,000 of unsecured convertible notes payable and warrants. These notes carry a base interest rate of 9.5%, have a 4-year maturity date and are convertible into shares of common stock at the conversion price of $0.50 per share. The warrants entitle the holder to acquire 5,000,000 shares of common stock, have an initial exercise price of $0.75 per share and have a 7-year term. The Company recorded $667,118 as a discount, which will be amortized over the life of the note. All convertible notes payable are due within twelve months or have not been paid when originally due. CONVERTIBLE PROMISSORY NOTES At February 28, 2013, the three other unsecured convertible promissory notes payable amounted to $1,447,938, net of discounts of $402,063. These convertible notes bear interest at 7% per annum, and are convertible into common stock of the Company at $0.76 per share (as well as variable conversion rates as described below). These notes are due on August 10, 2017, October 2, 2017, and January 4, 2013. On May 7, 2013, the note due on January 4, 2013 was converted into a portion of the note due June 15, 2013, which carries an interest rate of 12%. Between March 1, 2017 and May 31, 2017, the Company entered into agreements with various individuals for the aggregate sale of $153,000 of unsecured convertible notes and warrants. Pursuant to the terms of these notes, such notes will be converted in their entirety into shares of common stock of the Company at the conversion price of $0.07 per share upon stockholder approval of a 1-for-7 reverse stock split. The warrants entitle the holders to acquire up to an aggregate of 122,400 shares of common stock and have an initial exercise price of $0.20 per share, which will be adjusted to $1.40 per share upon stockholder approval of a 1-for-7 reverse stock split. 7% Convertible Promissory Notes: On August 10, 2012 the Company entered into an agreement with an individual for the sale of an unsecured convertible promissory note in the original principal amount of $1,000,000. This convertible promissory note is due and payable on August 10, 2017 and bears an interest rate is 7% per annum. Interest on the unpaid principal amount of this note is payable monthly in arrears on the tenth day of each calendar month commencing September 10, 2012. Interest is computed on the actual number of days elapsed over a 360-day year. The Holder has the right to convert any outstanding and unpaid principal portion of this convertible promissory note into shares of common stock. The company recorded $310,723 as a debt discount, which will be amortized over the life of the note. On October 2, 2012 the Company entered into an agreement with an individual for the sale of an unsecured convertible promissory note in the original principal amount of $500,000. This convertible promissory note is due and payable on October 2, 2017 and bears an interest rate is 7% per annum. Interest on the unpaid principal amount of this note is payable monthly in arrears on the second day of each calendar month commencing November 2, 2012. Interest is computed on the actual number of days elapsed over a 360-day year. The Holder has the right to convert any outstanding and unpaid principal portion of this convertible promissory note into shares of common stock. The company recorded $137,583 as a debt discount, which will be amortized over the life of the note. On January 30, 2017 the Company entered into an agreement entitled First Amendment to Transaction Documents with five of seven of its secured creditors. These creditors hold a security interest in all of the Company’s assets except for its patents and other intellectual properties. The original agreement dated May 7, 2013 provided that if the holders of at least 75% of the stock issuable upon conversion of the convertible notes votes to amend the agreement, then such amendments will be binding on all the secured creditors. The five secured creditors signing the amendment total in excess of 95% of the issuable stock upon conversion and, therefore the agreement is binding on all seven of the secured creditors. The amended agreement provides that all accrued and unpaid interest will be added to the principal amount, the amended notes bear interest at the rate of 0% through the sooner of (i) January 15, 2018 or (ii) the fifth business day following a stockholder meeting and 5% per annum thereafter, subject to reduction to comply with applicable law, and mature in 60 months from the effective date of a proposed 1-for-7 reverse stock split (which may only be effected if approved by the stockholders at the next annual meeting of stockholders). Upon certain financings, within five business days following stockholder approval of a 1-for-7 reverse stock split, the Company is obligated to make a payment to the holders of the amended notes in the amount of 20% of the outstanding secured notes. Upon the effectiveness of a proposed 1-for-7 reverse stock split, if approved by the stockholders at the next annual meeting of stockholders, the remaining 80% balance of the amended notes is converted into shares of the Company’s common stock. After the effectiveness of a proposed 1-for-7 reverse stock split, the secured note holders may voluntarily convert the unpaid principal and interest thereon into the Company’s common stock at the conversion price of $1.40 per share. On February 21, 2017 the Company entered into debt refinancing agreements with several debt holder relating to aggregate unsecured debt totaling $2,237,456 including interest of $489,466. This refinancing agreements waives any past events of default and provides for new five-year convertible notes which bear no interest through the sooner of (i) January 15, 2018 or (ii) the fifth business day following a stockholder meeting and 5% per annum thereafter. Upon stockholder approval of a 1-for-7 reverse stock split, these notes will be converted into a total of 1,164,555 shares of common stock. The notes also provide various default provisions. As of the date of filing, the Company’s stockholders have not approved any reverse stock split. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
May 31, 2017 | |
Accrued Expenses [Abstract] | |
ACCRUED EXPENSES | NOTE 4 – ACCRUED EXPENSES Accrued expenses consisted of the following: May 31, February 28, Accrued payroll and related expenses $ 2,817,386 $ 3,099,842 Accrued rent 202,036 202,036 Accrued interest 3,438,629 2,562,375 Other 35,000 75,000 Total $ 6,493,051 $ 5,939,252 Accrued payroll and related expenses consists of salaries and vacation time accrued but not paid to employees due to our lack of financial resources. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
May 31, 2017 | |
Shareholders' Equity [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 5 – SHAREHOLDERS’ EQUITY Common Stock During the three months ended May 31, 2017, we issued 5,000,000 shares of common stock for $1,000,000 in conjunction with our Chinese Joint Venture, we issued 5,116,959 shares of common stock valued at $665,204 as part of a settlement agreement, and we issued 2,500,000 shares of common stock valued at $325,000 in connection with a consulting agreement. During the three months ended May 31, 2016, we issued 950,000 shares of common stock were issued in settlement for a note payable balance $150,000 plus accrued interest of $15,288. Employee Stock Options During the Three months ended May 31, 2017, there were no stock options granted to employees. In September, 2006, our Board of Directors adopted the 2006 Employee Stock Option Plan. Activity in this plan is as follows: 2006 Plan Weighted- Aggregate Number of Outstanding, February 28, 2017 $0.75-$1.00 $ 0.00 7,224,000 Cancelled - - - Granted - - - Outstanding, May 31, 2017 $0.75-$1.00 $ 0.00 7,224,000 The exercise prices for the options outstanding at May 31, 2017, and information relating to these options is as follows: Options Outstanding Exercisable Options Range of Number Weighted Weighted Weighted Number Weighted $0.75-$1.00 7,224,000 2.75 years $ 0.79 2.75 years 7,224,000 $ 0.79 Warrants Activity in issued and outstanding warrants is as follows: Number of Shares Exercise Prices Outstanding, February 28, 2017 27,554,021 $0.10-$1.00 Granted 1,400,000 $ .20 Exercised - - Cancelled - - Outstanding, May 31, 2017 28,954,021 $0.10-$1.00 The exercise prices for the warrants outstanding at May 31, 2017, and information relating to these warrants is as follows: Range of Stock Warrants Stock Warrants Weighted- Weighted- Weighted- Intrinsic $0.20 1,400,000 1,400,000 57 months $ 0.20 $ 0.20 $ 0.00 $0.10-$0.75 19,481,012 19,481,012 46 months $ 0.56 $ 0.56 $ 0.00 $0.75 1,082,734 1,082,734 45 months $ 0.75 $ 0.75 $ 0.00 $0.75 1,000,000 1,000,000 35 months $ 0.75 $ 0.75 $ 0.00 $0.75-$1.00 5,990,275 5,990,275 30 months $ 0.77 $ 0.77 $ 0.00 28,954,021 28,954,021 |
Related Parties Transactions
Related Parties Transactions | 3 Months Ended |
May 31, 2017 | |
Related Parties Transactions [Abstract] | |
RELATED PARTIES TRANSACTIONS | NOTE 6 – RELATED PARTIES TRANSACTIONS On January 24, 2017 the Company entered into a Debt Refinancing Agreement with Mr. Warren Breslow, who served as a Director of the Company from 2006 to 2017. Mr. Breslow resigned his position on our board in March 2017. Pursuant to this agreement, both Mr. Breslow and the Company acknowledged that total debt owed to Mr. Breslow and his affiliates was $23,872,614 including $8,890,574 of accrued interest. Mr. Breslow agreed to cancel and forgive all interest due, waive any past events of default and sign a new, five-year unsecured convertible note, in the amount of $14,930,041. This new note bears no interest through the sooner of (i) January 15, 2018 or (ii) the fifth business day following a shareholder meeting, and 5% per annum thereafter. This new note also provides various default provisions. The refinancing agreement further provides that $11,982,041 of Mr. Breslow’s new note will be converted into 7,403,705 shares of common stock upon stockholder approval of a 1-for-7 reverse stock split within eighteen months of entering into that agreement; the remaining balance may thereafter be converted at any time. In the absence of stockholder approval of a 1-for-7 reverse stock split within eighteen months, the refinancing agreement will become null and void. The Company has elected to continue to accrue interest on this agreement until such time as the 1-for-7 reverse stock split has been approved. As of the date of filing, the stockholders have not approved the reverse stock split. At May 31, 2017, the balance in Notes Payable and accrued interest-related party, current, includes $14,982,041 of unsecured notes payable plus accrued interest of $9,266,516 to Mr. Breslow, a member of our Board of Directors, payable on demand, bearing interest at a rate of 10% per annum. The balance was $14,982,041 plus accrued interest of $8,890,574 as of February 28, 2017. During the periods ended May 31, 2017 and May 31, 2016, interest amounting to $375,942 and $374,378 respectively, was incurred on these notes. Related Parties Transactions also includes $82,000 of unsecured notes payable plus accrued interest of $31,198 and $29,141 to our CEO pursuant to a demand note entered into on April 5, 2014 and an unsecured note payable to Mr. Kopple, another member of our Board of Directors in the total amount of $3,587,322 and $3,418,738 plus accrued interest of $2,098,616 and $784,934 pursuant to 10% demand note payable as of February 28, 2017 and February 29, 2016, respectively. At May 31, 2017, the balance in Convertible note payable and accrued interest-related party, long term, includes $2,000,000 of secured convertible notes payable plus accrued interest of $995,763 to Mr. Kopple. |
Commitments
Commitments | 3 Months Ended |
May 31, 2017 | |
Commitments [Abstract] | |
COMMITMENTS | NOTE 7 – COMMITMENTS Leases Our facilities consist of approximately 20,000 rented square feet in Stanton, California. The Stanton facility is currently being used for small quantity assembly and testing using components that are produced by various suppliers as well as for general offices, engineering and warehousing. The rent for the Stanton facility is $10,000 per month. The facility is not sufficient for our near term anticipated needs and the Company is actively looking for a new facility. The Company arrangements for the Stanton facility are on a month per month rent. Joint Venture On January 27, 2017, the Company entered into a joint venture (JV) agreement with a Chinese company to manufacture, market and distribute certain mobile power products based on Aura’s patented technology solely for the Peoples Republic of China territories. The JV is owned 49% by the Company and 51% by the Chinese company. The Company has contributed $250,000 and a license to specific technology and the Chinese company is required to contribute $9,750,000. In addition, the Chinese company will invest $2,000,000 in Aura at $0.20 per share for a total of 10,000,000 shares of common stock. Additionally, the Chinese company will purchase a minimum of $1,250,000 of product supported by letters of credit for distribution until the joint venture factory is built, equipped, and staffed. In order to assure proper training of joint venture personnel, Aura has also committed to supply instructional personnel for six months at no cost other than reimbursement for travel, room and board. The agreement was subject to the approval of the Chinese Government which was received in April, 2017. |
Subsequent Events
Subsequent Events | 3 Months Ended |
May 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 8 – SUBSEQUENT EVENTS: The Company is presently engaged in a dispute with one of its directors, Robert Kopple, relating to approximately $5.4 million and approximately 22 million warrants which Mr. Kopple claims to be owed to him and his affiliates by the Company. In July 2017, Mr. Kopple filed suit against the Company as well as against current Directors Mr. Gagerman and Mr. Diaz-Verson together with former Directors Mr. Breslow and Mr. Howsmon in connection with these allegations. The Company believes that it has valid defenses in these matters and intends to vigorously defend against these claims. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
May 31, 2017 | |
Accounting Policies [Abstract] | |
Accounting principles | Accounting principles In the opinion of management, the accompanying balance sheets and related interim statements of income and comprehensive income, and cash flows include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the Company’s annual report on Form 10-K for the year ended February 28, 2017 filed on September 18, 2017 with the U.S. Securities and Exchange Commission. |
Estimates | Estimates The preparation of financial statements 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. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, Interest–Imputation of Interest (Subtopic 835-30) (“ASU 2015-03”), which changes the presentation of debt issuance costs in financial statements. ASU 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. It is effective for annual reporting periods beginning after December 15, 2016. Early adoption is permitted. The new guidance will be applied retrospectively to each prior period presented. The Company is currently in the process of evaluating the impact of adoption of ASU 2015-03 on its balance sheets. In January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2016-01, which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company is currently evaluating the impact of adopting this guidance. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. Topic 842 affects any entity that enters into a lease, with some specified scope exemptions. The guidance in this Update supersedes Topic 840, Leases. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For public companies, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact of adopting ASU No. 2016-02 on our financial statements. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) that clarifies how to apply revenue recognition guidance related to whether an entity is a principal or an agent. ASU 2016-08 clarifies that the analysis must focus on whether the entity has control of the goods or services before they are transferred to the customer and provides additional guidance about how to apply the control principle when services are provided and when goods or services are combined with other goods or services. The effective date for ASU 2016-08 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. The Company has not yet determined the impact of ASU 2016-08 on its financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation, or ASU No. 2016-09. The areas for simplification in this Update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. Amendments related to the timing of when excess tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted. Amendments related to the presentation of employee taxes paid on the statement of cash flows when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively. Amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating expected term should be applied prospectively. An entity may elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method. We are currently evaluating the impact of adopting ASU No. 2016-09 on our financial statements. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which provides further guidance on identifying performance obligations and improves the operability and understandability of licensing implementation guidance. The effective date for ASU 2016-10 is the same as the effective date of ASU 2014-09 as amended by ASU 2015-14, for annual reporting periods beginning after December 15, 2017, including interim periods within those years. In May 2016, the FASB issued ASU 2016-12 “Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients,” which amends the guidance on transition, collectability, non-cash consideration, and the presentation of sales and other similar taxes. ASU 2016-12 clarifies that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. In addition, ASU 2016-12 clarifies how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. The standard allows for both retrospective and modified retrospective methods of adoption. The Company has not yet determined the impact of ASU 2016-10 on its financial statements. In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Statements," which requires companies to measure credit losses utilizing a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2019 (fiscal year 2021 for the Company). The Company has not yet determined the potential effects of the adoption of ASU 2016-13 on its Financial Statements. In August 2016, the FASB issued ASU 2016-15, "Classification of Certain Cash Receipts and Cash Payments," which aims to eliminate diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows, and other Topics. ASU 2016-15 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017 (fiscal year 2019 for the Company). The Company has not yet determined the potential effects of the adoption of ASU 2016-15 on its Financial Statements. |
Reclassifications | Reclassifications Certain reclassifications have been made to the comparative financial statements to conform to the current period presentation. |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
May 31, 2017 | |
Notes Payable [Abstract] | |
Schedule of notes payable | May 31, February 28, Demand notes payable, at 10% and 16% $ 3,584,498 $ 3,782,468 Convertible Promissory Note dated August 10, 2012, due August 10, 2017, convertible into shares of our common stock at a price of $0.76 per share. The note carries an interest rate of 7% with interest only payments due on the 10 th 1,000,000 972,632 Convertible Promissory Note dated October 2, 2012, due October 2, 2017, convertible into shares of our common stock at a price of $0.76 per share. The note carries an interest rate of 7% with interest only payments due on the 2 nd 500,000 483,951 Senior secured convertible notes dated May 7, 2013, due May 7, 2014, convertible into shares of our common stock at a price of $0.75 per share. The note was not repaid. 2,395,700 2,395,700 Senior secured convertible notes dated June 20, 2013, due June 20, 2014, convertible into shares of our common stock at a price of $0.50 per share. The note was not repaid. 325,000 325,000 Convertible notes dated April thru June, 2016. The notes carry an interest rate of 5% and might be converted into shares of Company’s common stock if the shareholders approve a 7:1 reverse stock split. 1,628,110 994,700 9,433,308 8,994,221 Less: Current portion $ 9,433,308 $ 8,994,221 Long-term portion $ - $ - |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
May 31, 2017 | |
Accrued Expenses [Abstract] | |
Schedule of accrued expenses | May 31, February 28, Accrued payroll and related expenses $ 2,817,386 $ 3,099,842 Accrued rent 202,036 202,036 Accrued interest 3,438,629 2,562,375 Other 35,000 75,000 Total $ 6,493,051 $ 5,939,252 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
May 31, 2017 | |
Shareholders' Equity [Abstract] | |
Schedule of 2006 employee stock option plan | 2006 Plan Weighted- Aggregate Number of Outstanding, February 28, 2017 $0.75-$1.00 $ 0.00 7,224,000 Cancelled - - - Granted - - - Outstanding, May 31, 2017 $0.75-$1.00 $ 0.00 7,224,000 |
Schedule of exercise price options outstanding | Options Outstanding Exercisable Options Range of Number Weighted Weighted Weighted Number Weighted $0.75-$1.00 7,224,000 2.75 years $ 0.79 2.75 years 7,224,000 $ 0.79 |
Schedule of activity in issued and outstanding warrants | Number of Shares Exercise Prices Outstanding, February 28, 2017 27,554,021 $0.10-$1.00 Granted 1,400,000 $ .20 Exercised - - Cancelled - - Outstanding, May 31, 2017 28,954,021 $0.10-$1.00 |
Schedule of exercise prices warrants outstanding | Range of Stock Warrants Stock Warrants Weighted- Weighted- Weighted- Intrinsic $0.20 1,400,000 1,400,000 57 months $ 0.20 $ 0.20 $ 0.00 $0.10-$0.75 19,481,012 19,481,012 46 months $ 0.56 $ 0.56 $ 0.00 $0.75 1,082,734 1,082,734 45 months $ 0.75 $ 0.75 $ 0.00 $0.75 1,000,000 1,000,000 35 months $ 0.75 $ 0.75 $ 0.00 $0.75-$1.00 5,990,275 5,990,275 30 months $ 0.77 $ 0.77 $ 0.00 28,954,021 28,954,021 |
Going Concern (Details)
Going Concern (Details) | 3 Months Ended | |
May 31, 2017USD ($)ft² | May 31, 2016USD ($) | |
Going Concern (Textual) | ||
Net Loss | $ (2,383,360) | $ (1,406,657) |
Cash flows from operating activities | $ (1,063,649) | $ (98,072) |
Area of land | ft² | 45,000 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | May 31, 2017 | Feb. 28, 2017 |
Debt Instrument [Line Items] | ||
Convertible notes payable | $ 9,433,308 | $ 8,994,221 |
Less: Current portion | 9,433,308 | 8,994,221 |
Long-term portion | ||
Demand notes payable [Member] | ||
Debt Instrument [Line Items] | ||
Demand notes payable | 3,584,498 | 3,782,468 |
Convertible Promissory Note dated August 10, 2012 [Member] | ||
Debt Instrument [Line Items] | ||
Demand notes payable | 1,000,000 | 972,632 |
Convertible Promissory Note dated October 2, 2012 [Member] | ||
Debt Instrument [Line Items] | ||
Demand notes payable | 500,000 | 483,951 |
Senior secured convertible notes dated May 7, 2013 [Member] | ||
Debt Instrument [Line Items] | ||
Demand notes payable | 2,395,700 | 2,395,700 |
Senior secured convertible notes dated June 20, 2013 [Member] | ||
Debt Instrument [Line Items] | ||
Demand notes payable | 325,000 | 325,000 |
Convertible notes dated April thru February 2017 [Member] | ||
Debt Instrument [Line Items] | ||
Demand notes payable | $ 1,628,110 | $ 994,700 |
Notes Payable (Parenthetical) (
Notes Payable (Parenthetical) (Details) | 3 Months Ended |
May 31, 2017$ / shares | |
Demand notes payable [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Notes payable interest rate | 10.00% |
Demand notes payable [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Notes payable interest rate | 16.00% |
Convertible Promissory Note dated August 10, 2012 [Member] | |
Debt Instrument [Line Items] | |
Notes payable interest rate | 7.00% |
Due date of notes | Aug. 10, 2017 |
Conversion price per share of notes payable | $ 0.76 |
Convertible Promissory Note dated October 2, 2012 [Member] | |
Debt Instrument [Line Items] | |
Notes payable interest rate | 7.00% |
Due date of notes | Oct. 2, 2017 |
Conversion price per share of notes payable | $ 0.76 |
Senior secured convertible notes dated May 7, 2013 [Member] | |
Debt Instrument [Line Items] | |
Due date of notes | May 7, 2014 |
Conversion price per share of notes payable | $ 0.75 |
Senior secured convertible notes dated June 20, 2013 [Member] | |
Debt Instrument [Line Items] | |
Due date of notes | Jun. 20, 2014 |
Conversion price per share of notes payable | $ 0.50 |
Convertible notes dated April thru February 2017 [Member] | |
Debt Instrument [Line Items] | |
Notes payable interest rate | 5.00% |
Due date of notes | Jun. 30, 2016 |
Reverse stock split | 7:1 reverse stock split. |
Notes Payable (Details Textual)
Notes Payable (Details Textual) | Feb. 21, 2017USD ($)shares | Aug. 19, 2013USD ($)$ / sharesshares | Jun. 20, 2013USD ($)$ / sharesshares | May 07, 2013USD ($)Notes$ / sharesshares | Feb. 28, 2013USD ($)$ / shares | Oct. 02, 2012USD ($) | Aug. 10, 2012USD ($) | Jan. 30, 2017 | May 31, 2017USD ($) | May 31, 2016USD ($) |
Notes Payable (Textual) | ||||||||||
Amortization of debt discount | $ 43,417 | $ 64,110 | ||||||||
Kenmont Capital Partners [Member] | Convertible Secured Notes [Member] | ||||||||||
Notes Payable (Textual) | ||||||||||
Pre conversion debt principal amount | $ 1,000,000 | |||||||||
Debt principal amount | $ 1,087,000 | |||||||||
Conversion price per share of notes payable | $ / shares | $ 0.75 | |||||||||
Term of warrant | 7 years | |||||||||
Amortization of debt discount | $ 342,020 | |||||||||
Exercise price per common share under warrant one (in dollars per share) | $ / shares | $ 0.75 | |||||||||
Number of common shares entitlement on exercise of warrant one (in shares) | shares | 1,449,333 | |||||||||
Number of notes payable to transferred | Notes | 4 | |||||||||
Notes maturity date, term | 1 year | |||||||||
LPD Investments, Ltd [Member] | Convertible Secured Notes [Member] | ||||||||||
Notes Payable (Textual) | ||||||||||
Pre conversion debt principal amount | $ 550,000 | |||||||||
Debt principal amount | $ 558,700 | |||||||||
Conversion price per share of notes payable | $ / shares | $ 0.75 | |||||||||
Term of warrant | 7 years | |||||||||
Amortization of debt discount | $ 175,793 | |||||||||
Exercise price per common share under warrant one (in dollars per share) | $ / shares | $ 0.75 | |||||||||
Number of common shares entitlement on exercise of warrant one (in shares) | shares | 744,933 | |||||||||
Number of notes payable to transferred | Notes | 2 | |||||||||
Notes maturity date, term | 1 year | |||||||||
Holder [Member] | ||||||||||
Notes Payable (Textual) | ||||||||||
Description of convertible promissory note | Holders of at least 75% of the stock issuable upon conversion of the convertible notes votes to amend the agreement, then such amendments will be binding on all the secured creditors. The five secured creditors signing the amendment total in excess of 95% of the issuable stock upon conversion and, therefore the agreement is binding on all seven of the secured creditors. The amended agreement provides that all accrued and unpaid interest will be added to the principal amount, the amended notes bear interest at the rate of 0% through the sooner of (i) January 15, 2018 or (ii) the fifth business day following a stockholder meeting and 5% per annum thereafter, subject to reduction to comply with applicable law, and mature in 60 months from the effective date of a proposed 1-for-7 reverse stock split (which may only be effected if approved by the stockholders at the next annual meeting of stockholders). Upon certain financings, within five business days following stockholder approval of a 1-for-7 reverse stock split, the Company is obligated to make a payment to the holders of the amended notes in the amount of 20% of the outstanding secured notes. Upon the effectiveness of a proposed 1-for-7 reverse stock split, if approved by the stockholders at the next annual meeting of stockholders, the remaining 80% balance of the amended notes is converted into shares of the Company's common stock. After the effectiveness of a proposed 1-for-7 reverse stock split, the secured note holders may voluntarily convert the unpaid principal and interest thereon into the Company's common stock at the conversion price of $1.40 per share. | |||||||||
Holder [Member] | Unsecured Debt [Member] | ||||||||||
Notes Payable (Textual) | ||||||||||
Notes maturity date, term | 5 years | |||||||||
Notes payable interest rate | 5.00% | |||||||||
Description of convertible promissory note | Upon stockholder approval of a 1-for-7 reverse stock split | |||||||||
Aggregate unsecured debt | $ 2,237,456 | |||||||||
Interest of debt | $ 489,466 | |||||||||
Converted shares of common stock | shares | 1,164,555 | |||||||||
Holder [Member] | Convertible Secured Notes [Member] | ||||||||||
Notes Payable (Textual) | ||||||||||
Debt principal amount | $ 325,000 | $ 750,000 | ||||||||
Conversion price per share of notes payable | $ / shares | $ 0.50 | $ 0.75 | ||||||||
Term of warrant | 7 years | 7 years | ||||||||
Amortization of debt discount | $ 63,622 | $ 235,985 | ||||||||
Exercise price per common share under warrant one (in dollars per share) | $ / shares | $ 0.75 | $ 0.75 | ||||||||
Number of common shares entitlement on exercise of warrant one (in shares) | shares | 433,334 | 1,000,000 | ||||||||
Notes maturity date, term | 1 year | 1 year | ||||||||
Holder [Member] | Board of Directors [Member] | Unsecured Convertible Notes and Warrants [Member] | ||||||||||
Notes Payable (Textual) | ||||||||||
Pre conversion debt principal amount | $ 2,500,000 | |||||||||
Conversion price per share of notes payable | $ / shares | $ 0.50 | |||||||||
Term of warrant | 7 years | |||||||||
Amortization of debt discount | $ 667,118 | |||||||||
Exercise price per common share under warrant one (in dollars per share) | $ / shares | $ 0.75 | |||||||||
Number of common shares entitlement on exercise of warrant one (in shares) | shares | 5,000,000 | |||||||||
Notes maturity date, term | 4 years | |||||||||
Notes payable interest rate | 9.50% | |||||||||
Unsecured Convertible Promissory Note [Member] | ||||||||||
Notes Payable (Textual) | ||||||||||
Pre conversion debt principal amount | $ 500,000 | $ 1,000,000 | ||||||||
Debt principal amount | $ 1,447,938 | $ 153,000 | ||||||||
Conversion price per share of notes payable | $ / shares | $ 0.76 | |||||||||
Amortization of debt discount | $ 402,063 | $ 137,583 | $ 310,723 | |||||||
Due date of notes | Aug. 10, 2017 | Oct. 2, 2017 | Aug. 10, 2017 | |||||||
Notes payable interest rate | 7.00% | 7.00% | 7.00% | |||||||
Description of convertible promissory note | The note due on January 4, 2013 was converted into a portion of the note due June 15, 2013, which carries an interest rate of 12%. | Interest on the unpaid principal amount of this note is payable monthly in arrears on the second day of each calendar month commencing November 2, 2012. Interest is computed on the actual number of days elapsed over a 360-day year. | Interest on the unpaid principal amount of this note is payable monthly in arrears on the tenth day of each calendar month commencing September 10, 2012. Interest is computed on the actual number of days elapsed over a 360-day year. | Pursuant to the terms of these notes, such notes will be converted in their entirety into shares of common stock of the Company at the conversion price of $0.07 per share upon stockholder approval of a 1-for-7 reverse stock split. The warrants entitle the holders to acquire up to an aggregate of 122,400 shares of common stock and have an initial exercise price of $0.20 per share, which will be adjusted to $1.40 per share upon stockholder approval of a 1-for-7 reverse stock split. | ||||||
Unsecured Convertible Promissory Note One [Member] | ||||||||||
Notes Payable (Textual) | ||||||||||
Debt principal amount | $ 1,447,938 | |||||||||
Conversion price per share of notes payable | $ / shares | $ 0.76 | |||||||||
Amortization of debt discount | $ 402,063 | |||||||||
Due date of notes | Oct. 2, 2017 | |||||||||
Notes payable interest rate | 7.00% | |||||||||
Unsecured Convertible Promissory Note Two [Member] | ||||||||||
Notes Payable (Textual) | ||||||||||
Debt principal amount | $ 1,447,938 | |||||||||
Conversion price per share of notes payable | $ / shares | $ 0.76 | |||||||||
Amortization of debt discount | $ 402,063 | |||||||||
Due date of notes | Jan. 4, 2013 | |||||||||
Notes payable interest rate | 7.00% |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | May 31, 2017 | Feb. 28, 2017 |
Accrued Expenses [Abstract] | ||
Accrued payroll and related expenses | $ 2,817,386 | $ 3,099,842 |
Accrued rent | 202,036 | 202,036 |
Accrued interest | 3,438,629 | 2,562,375 |
Other | 35,000 | 75,000 |
Total | $ 6,493,051 | $ 5,939,251 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - 2006 Plan [Member] | 3 Months Ended |
May 31, 2017USD ($)$ / sharesshares | |
Weighted - Average Exercise Price | |
Weighted - Average Exercise Price, Cancelled | |
Weighted - Average Exercise Price, Granted | |
Aggregate Intrinsic Value | |
Aggregate Intrinsic Value, Outstanding | $ | $ 0 |
Aggregate Intrinsic Value, Cancelled | $ | |
Aggregate Intrinsic Value, Granted | $ | |
Aggregate Intrinsic Value, Outstanding | $ | $ 0 |
Number of Options | |
Number of Options, Outstanding | shares | 7,224,000 |
Number of Options, Cancelled | shares | |
Number of Options, Granted | shares | |
Number of Options, Outstanding | shares | 7,224,000 |
Minimum [Member] | |
Weighted - Average Exercise Price | |
Weighted - Average Exercise Price, Outstanding | $ 0.75 |
Weighted - Average Exercise Price, Outstanding | 0.75 |
Maximum [Member] | |
Weighted - Average Exercise Price | |
Weighted - Average Exercise Price, Outstanding | 1 |
Weighted - Average Exercise Price, Outstanding | $ 1 |
Shareholders' Equity (Details 1
Shareholders' Equity (Details 1) - 0.75-$1.00 [Member] | 3 Months Ended |
May 31, 2017$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Options Outstanding, Range of Exercise Price, Minimum | $ 0.75 |
Options Outstanding, Range of Exercise Price, Maximum | $ 1 |
Options Outstanding, Number | shares | 7,224,000 |
Options Outstanding, Weighted Average Remaining Life | 2 years 9 months |
Options Outstanding, Weighted Average Exercise Price | $ 0.79 |
Exercisable Options, Weighted Average Remaining Life | 2 years 9 months |
Exercisable Options, Number | shares | 7,224,000 |
Exercisable Options, Weighted Average Exercise Price | $ 0.79 |
Shareholders' Equity (Details 2
Shareholders' Equity (Details 2) | 3 Months Ended |
May 31, 2017$ / sharesshares | |
Class of Stock [Line Items] | |
Number of Shares, Outstanding | shares | 28,954,021 |
Warrants [Member] | |
Class of Stock [Line Items] | |
Number of Shares, Outstanding | shares | 27,554,021 |
Number of Shares, Granted | shares | 1,400,000 |
Number of Shares, Exercised | shares | |
Number of Shares, Cancelled | shares | |
Number of Shares, Outstanding | shares | 28,954,021 |
Exercise Prices, Granted | $ 0.20 |
Exercise Prices, Exercised | |
Exercise Prices, Cancelled | |
Warrants [Member] | Maximum [Member] | |
Class of Stock [Line Items] | |
Exercise Prices, Outstanding | 1 |
Exercise Prices, Outstanding | 1 |
Warrants [Member] | Minimum [Member] | |
Class of Stock [Line Items] | |
Exercise Prices, Outstanding | 0.10 |
Exercise Prices, Outstanding | $ 0.10 |
Shareholders' Equity (Details 3
Shareholders' Equity (Details 3) | 3 Months Ended |
May 31, 2017$ / sharesshares | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Stock Warrants Outstanding | shares | 28,954,021 |
Stock Warrants Exercisable | shares | 28,954,021 |
0.20 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices | $ 0.20 |
Stock Warrants Outstanding | shares | 1,400,000 |
Stock Warrants Exercisable | shares | 1,400,000 |
Weighted-Average Remaining Contractual Life | 57 months |
Weighted-Average Exercise Price of Warrants Outstanding | $ 0.20 |
Weighted-Average Exercise Price of Warrants Exercisable | 0.20 |
Intrinsic Value | $ 0 |
0.10-$0.75 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Stock Warrants Outstanding | shares | 19,481,012 |
Stock Warrants Exercisable | shares | 19,481,012 |
Weighted-Average Remaining Contractual Life | 46 months |
Weighted-Average Exercise Price of Warrants Outstanding | $ 0.56 |
Weighted-Average Exercise Price of Warrants Exercisable | 0.56 |
Intrinsic Value | 0 |
0.10-$0.75 [Member] | Maximum [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices | 0.75 |
0.10-$0.75 [Member] | Minimum [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices | 0.10 |
0.75 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices | $ 0.75 |
Stock Warrants Outstanding | shares | 1,082,734 |
Stock Warrants Exercisable | shares | 1,082,734 |
Weighted-Average Remaining Contractual Life | 45 months |
Weighted-Average Exercise Price of Warrants Outstanding | $ 0.75 |
Weighted-Average Exercise Price of Warrants Exercisable | 0.75 |
Intrinsic Value | 0 |
0.75 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices | $ 0.75 |
Stock Warrants Outstanding | shares | 1,000,000 |
Stock Warrants Exercisable | shares | 1,000,000 |
Weighted-Average Remaining Contractual Life | 35 months |
Weighted-Average Exercise Price of Warrants Outstanding | $ 0.75 |
Weighted-Average Exercise Price of Warrants Exercisable | 0.75 |
Intrinsic Value | $ 0 |
0.75-$1.00 [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Stock Warrants Outstanding | shares | 5,990,275 |
Stock Warrants Exercisable | shares | 5,990,275 |
Weighted-Average Remaining Contractual Life | 30 months |
Weighted-Average Exercise Price of Warrants Outstanding | $ 0.77 |
Weighted-Average Exercise Price of Warrants Exercisable | 0.77 |
Intrinsic Value | 0 |
0.75-$1.00 [Member] | Maximum [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices | 1 |
0.75-$1.00 [Member] | Minimum [Member] | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Range of Exercise Prices | $ 0.75 |
Shareholders' Equity (Details T
Shareholders' Equity (Details Textual) - USD ($) | 3 Months Ended | |
May 31, 2017 | May 31, 2016 | |
Shareholders' Equity (Textual) | ||
Common stock shares issued, Shares | 950,000 | |
Settlement of note payable | $ 150,000 | |
Accrued interest | $ 15,288 | |
Common Stock [Member] | Settlement Agreement [Member] | ||
Shareholders' Equity (Textual) | ||
Common stock shares issued | $ 665,204 | |
Common stock shares issued, Shares | 5,116,959 | |
Common Stock [Member] | Consulting Agreement [Member] | ||
Shareholders' Equity (Textual) | ||
Common stock shares issued | $ 325,000 | |
Common stock shares issued, Shares | 2,500,000 | |
Common Stock [Member] | Chinese Joint Venture [Member] | ||
Shareholders' Equity (Textual) | ||
Common stock shares issued | $ 1,000,000 | |
Common stock shares issued, Shares | 5,000,000 |
Related Parties Transactions (D
Related Parties Transactions (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Jan. 24, 2017 | May 31, 2017 | May 31, 2016 | Feb. 28, 2017 | Feb. 29, 2016 | |
Related Parties Transactions (Textual) | |||||
Unsecured notes payable and accrued interest- related party | $ 29,383,178 | $ 29,669,693 | |||
Interest expense incurred on unsecured notes payable | $ 375,942 | $ 374,378 | |||
Convertible Secured Notes [Member] | |||||
Related Parties Transactions (Textual) | |||||
Interest rate | 7.00% | ||||
Mr.Breslow [Member] | |||||
Related Parties Transactions (Textual) | |||||
Unsecured notes payable and accrued interest- related party | $ 14,930,041 | ||||
Debt principal amount | 23,872,614 | ||||
Convertible note payable and accrued interest-related party, net of discount | $ 8,890,574 | ||||
New debt agreement, term | 5 years | ||||
Convertible note, amount | $ 11,982,041 | ||||
Convertible note, shares | 7,403,705 | ||||
Reverse stock split, description | Stockholder approval of a 1-for-7 reverse stock split within eighteen months of entering into that agreement; the remaining balance may thereafter be converted at any time. In the absence of stockholder approval of a 1-for-7 reverse stock split within eighteen months, the refinancing agreement will become null and void. The Company has elected to continue to accrue interest on this agreement until such time as the 1-for-7 reverse stock split has been approved. As of the date of filing, the stockholders have not approved the reverse stock split. | ||||
Interest rate | 5.00% | 10.00% | |||
Mr.Breslow [Member] | Unsecured Debt [Member] | |||||
Related Parties Transactions (Textual) | |||||
Unsecured notes payable and accrued interest- related party | $ 14,982,041 | 14,982,041 | |||
Mr.Breslow [Member] | Accrued interest [Member] | |||||
Related Parties Transactions (Textual) | |||||
Unsecured notes payable and accrued interest- related party | 9,266,516 | $ 8,890,574 | |||
CEO [Member] | |||||
Related Parties Transactions (Textual) | |||||
Unsecured notes payable and accrued interest- related party | $ 29,141 | ||||
Related party transaction, date | Apr. 5, 2014 | ||||
CEO [Member] | Unsecured Debt [Member] | |||||
Related Parties Transactions (Textual) | |||||
Unsecured notes payable and accrued interest- related party | $ 82,000 | ||||
CEO [Member] | Accrued interest [Member] | |||||
Related Parties Transactions (Textual) | |||||
Unsecured notes payable and accrued interest- related party | 31,198 | ||||
Mr. Kopple [Member] | |||||
Related Parties Transactions (Textual) | |||||
Interest rate | 10.00% | 10.00% | |||
Mr. Kopple [Member] | Convertible Secured Notes [Member] | |||||
Related Parties Transactions (Textual) | |||||
Convertible note payable and accrued interest-related party, net of discount | 2,000,000 | ||||
Mr. Kopple [Member] | Unsecured Debt [Member] | |||||
Related Parties Transactions (Textual) | |||||
Unsecured notes payable and accrued interest- related party | $ 3,587,322 | $ 3,418,738 | |||
Mr. Kopple [Member] | Accrued interest [Member] | |||||
Related Parties Transactions (Textual) | |||||
Unsecured notes payable and accrued interest- related party | $ 2,098,616 | $ 784,934 | |||
Convertible note payable and accrued interest-related party, net of discount | $ 995,763 |
Commitments (Details)
Commitments (Details) | 1 Months Ended | 3 Months Ended | |
Jan. 27, 2017USD ($)$ / sharesshares | May 31, 2017USD ($)ft² | May 31, 2016USD ($) | |
Commitments (Textual) | |||
Area of facility (in square feet) | ft² | 20,000 | ||
Rent expense | $ 10,000 | ||
Payments for joint venture agreement | $ 250,000 | $ 250,000 | |
Joint venture (JV) agreement [Member] | |||
Commitments (Textual) | |||
Joint venture cost method interest rate, percentage | 49.00% | ||
Chinese company [Member] | |||
Commitments (Textual) | |||
Payments for joint venture agreement | $ 9,750,000 | ||
Sale of equity method investments interest | $ 2,000,000 | ||
Shares issue of price per share | $ / shares | $ 0.20 | ||
Ownership percentage in joint venture | 51.00% | ||
Sale of common stock | shares | 10,000,000 | ||
Common stock purchase minimum amount | $ 1,250,000 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | May 31, 2017USD ($)shares |
Subsequent Events (Textual) | |
Stock warrants outstanding | 28,954,021 |
Robert Kopple [Member] | |
Subsequent Events (Textual) | |
Warrants issued value | $ | $ 5.4 |
Stock warrants outstanding | 22,000,000 |