Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
May 31, 2019 | Oct. 28, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | AURA SYSTEMS INC | |
Entity Central Index Key | 0000826253 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --02-28 | |
Document Type | 10-Q | |
Document Period End Date | May 31, 2019 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Incorporation State Country Code | DE | |
Entity File Number | 0-17249 | |
Entity Interactive Data Current | No | |
Entity Common Stock, Shares Outstanding | 54,110,729 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | May 31, 2019 | Feb. 28, 2019 |
Current assets | ||
Cash and cash equivalents | $ 10,773 | $ 358,209 |
Other current assets | 47,086 | 59,849 |
Total current assets | 57,859 | 418,058 |
Investment in joint venture | 250,000 | 250,000 |
Total assets | 307,859 | 668,058 |
Current liabilities | ||
Accounts payable | 2,516,183 | 2,635,664 |
Accrued expenses | 3,380,687 | 3,205,456 |
Customer advances | 1,136,542 | 1,136,542 |
Notes payable, current portion | 877,537 | 847,537 |
Convertible notes payable and accrued interest-related party, net of discount | 3,720,194 | 3,644,354 |
Notes payable and accrued interest-related party | 6,289,907 | 6,156,375 |
Total current liabilities | 17,921,050 | 17,625,929 |
Notes payable-related party | 3,000,000 | 3,000,000 |
Note payable | 185,181 | 215,181 |
Convertible notes payable | 1,421,647 | 1,421,647 |
Total liabilities | 22,527,878 | 22,262,757 |
Commitments and contingencies | ||
Shareholders' deficit | ||
Common stock: $0.0001 par value; 150,000,000 shares authorized at May 31 and February 28, 2019; 53,870,395 and 53,714,145 issued and outstanding at May 31 and February 28, 2019, respectively | 5,386 | 5,371 |
Additional paid-in capital | 442,569,076 | 442,519,092 |
Accumulated deficit | (464,794,482) | (464,119,161) |
Total shareholders' deficit | (22,220,020) | (21,594,699) |
Total liabilities and shareholders' deficit | $ 307,859 | $ 668,058 |
Balance Sheets (Unaudited) (Par
Balance Sheets (Unaudited) (Parenthetical) - $ / shares | May 31, 2019 | Feb. 28, 2019 |
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 | 53,870,395 | 53,714,145 |
Common stock, shares outstanding | 53,870,395 | 53,714,145 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Income Statement [Abstract] | ||
Net revenue | $ 37,400 | |
Cost of goods sold | 14,677 | |
Gross profit | 22,723 | |
Operating expenses | ||
Engineering, research & development | 44,082 | 132,853 |
Selling, general & administration | 314,223 | 1,001,966 |
Total operating expenses | 358,305 | 1,134,819 |
Loss from operations | (358,305) | (1,112,096) |
Other income (expense) | ||
Interest expense, net | (317,015) | (277,217) |
Other (expense) | 352,931 | |
Total income (expense) | (317,015) | 75,714 |
Net income (loss) | $ (675,321) | $ (1,036,382) |
Net income (loss) per share | $ (0.01) | $ (0.03) |
Basic weighted average shares outstanding | 53,863,602 | 41,437,035 |
Diluted income (loss) per share | $ (0.01) | $ (0.03) |
Dilutive weighted average shares outstanding | 53,863,602 | 41,437,035 |
Statements of Shareholders' Def
Statements of Shareholders' Deficit (Unaudited) - 3 months ended May 31, 2019 - USD ($) | Common Stock | Additional Paid-In Capital | Subscription Receivable | Accumulated Deficit | Total |
Beginning balance at Feb. 28, 2019 | $ 5,371 | $ 442,519,092 | $ (464,119,162) | $ (21,594,699) | |
Beginning balance, Shares at Feb. 28, 2019 | 53,714,145 | ||||
Shares issued for cash | $ 15 | 49,985 | 50,000 | ||
Shares issued for cash, Shares | 156,250 | ||||
Net loss | (675,321) | (675,321) | |||
Ending balance at May. 31, 2019 | $ 5,386 | $ 442,569,077 | $ (464,794,483) | $ (22,220,020) | |
Ending balance, Shares at May. 31, 2019 | 53,870,395 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Cash flows from operating activities: | ||
Net Income (loss) | $ (675,321) | $ (1,036,382) |
Adjustments to reconcile net loss to cash used in operating activities | ||
FMV of warrants issued for services | 312,072 | |
Amortization of debt discount | ||
Gain on settlement of debt | ||
Stock issued for legal settlement | ||
Stock issued for services | ||
(Increase) decrease in | ||
Accounts receivable | (30,751) | |
Other current assets | 12,763 | 3,608 |
Increase (decrease) in | ||
Accts payable, customer deposits and accrued expenses | 265,122 | (249,400) |
Cash used in operating activities | (397,436) | (1,000,853) |
Cash flows from financing activities | ||
Issuance of common stock | 50,000 | |
Payment on notes payable | (50,000) | |
Proceeds from subscription receivable | 500,000 | |
Cash provided by financing activities | 50,000 | 450,000 |
Net incr (decr) in cash and cash equivalents | (347,436) | (550,853) |
Beginning cash | 358,209 | 748,008 |
Ending cash | 10,773 | 197,155 |
Cash paid in the period for: | ||
Interest | ||
Income taxes |
Organization and Operations
Organization and Operations | 3 Months Ended |
May 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND OPERATIONS | NOTE 1 – ORGANIZATION AND OPERATIONS Aura Systems, Inc., ("Aura", "We" or the "Company") a Delaware corporation, was founded to engage in the development, commercialization, and sales of products, systems, and components, using its patented and proprietary electromagnetic technology. Aura develops and sells AuraGen ® |
Accounting Policies
Accounting Policies | 3 Months Ended |
May 31, 2019 | |
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES | NOTE 2 – 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 Amended Annual Report on Form 10-K/A for the year ended February 28, 2019 filed on October 24, 2019 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 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. The Company evaluated the impact of the adoption of Topic 842 effective for the three-months ended May 31, 2019 and the impact was none on the Condensed 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. The Company adopted Accounting Standards Codification ("ASC") 606. ASC 606, Revenue from Contracts with Customers, establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The Company has assessed the impact of the guidance by performing the following five steps analysis: Step 1: Identify the contract Step 2: Identify the performance obligations Step 3: Determine the transaction price Step 4: Allocate the transaction price Step 5: Recognize revenue 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, 2019 | |
Going Concern [Abstract] | |
GOING CONCERN | NOTE 3 – GOING CONCERN The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. During the three months ended May 31, 2019 and 2018, the Company incurred losses of $675,321 and $1,036,382, respectively, and had negative cash flows from operating activities of $397,436 and $1,000,853, 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 increase operations of our AuraGen ® |
Notes Payable
Notes Payable | 3 Months Ended |
May 31, 2019 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 4 – NOTES PAYABLE Notes payable consisted of the following: May 31, February 28, Demand promissory notes payable with six individuals, carrying an interest rate of 10% (see Demand Promissory Notes below) $ 777,537 $ 777,537 Note payable – related party, carrying an interest rate of 5% - see note 6, Breslow Note, for further details 3,000,000 3,000,000 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 264,462 264,462 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 133,178 133,178 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 notes carry an interest rate of 12% with interest due on the last day of the month. On January 30, 2017, this note was amended providing, among other things, for the conversion of 80% of the principal and accrued interest into common stock at $1.386 per share conditioned on the occurrence of certain future events the last of which was completed on February 14, 2018. See Convertible Debt – Kenmont Capital Partners, LPD Investments and Guenther for further details. 945,825 945,825 Senior secured convertible notes dated June 20, 2013, due June 20, 2014, convertible into shares of our common stock at a price of $0.50per share. On January 30, 2017, this note was amended providing, among other things, for the conversion of 80% of the principal and accrued interest into common stock at $1.386 per share conditioned on the occurrence of certain future events the last of which was completed on February 14, 2018. See Convertible Debt – Dresner and Lempert for further details. 78,182 78,182 $ 1,421,647 $ 1,421,647 In 2016, the Company and the Company's former Chief Executive Officer, Melvin Gagerman, were named among several other defendants in a lawsuit filed by two secured creditors demanding repayment of loans totaling $125,000 plus accrued interest and exemplary damages. In January 2017, the Company entered into an agreement with all secured creditors other than the two plaintiffs. In September 2018 the court entered a judgment of approximately $235,000 plus legal fees in favor of the two secured creditors. The Company subsequently appealed this judgment and, in September 2019, reached a settlement agreement with these creditors for an aggregate principle amount of $315,000, including $80,000 of plaintiff's legal expenses, and initial payment of $20,000 , , a payment schedule for monthly repayments of $10,000 commencing on October 15, 2019 and continuing for 12 months, and a final payment due on November 15, 2020. 285,000 285,000 $ 5,484,184 $ 5,484,184 Less: Current portion $ 877,537 $ 847,537 Long-term portion $ 4,606,647 $ 4,636,647 DEMAND PROMISSORY NOTES The Demand Promissory Notes are six individual notes issued in 2015 that are payable on demand with an interest rate of 10% per annum. The principal amount of each note and the person/entity they are payable to are as follows: $10,000 Mr. Zeitlin, a former director of the Company; $30,000 Mr. Sook; $461,537 Mr. Macleod, a former president of the Company; $4,500 Mr. Howsmon, a former director of the Company; $4,500 El Pais, an entity controlled by Salvador Diaz, a current director of the Company. In February 2018, the Company issued 192,641 shares of its common stock to Steven Veen in satisfaction of $267,000 in debt. Despite this issuance, Mr. Veen claims to continue to be entitled to repayment of the $267,000 debt. Mr. Veen has, to-date, not surrendered the shares issued to him in fulfillment of the debt he claims to be still owed and continues to own the 192,641 shares as of the date of this filing. The Company's new management team is in the process of investigating the circumstances surrounding Mr. Veen. CONVERTIBLE DEBT Kenmont Capital Partners 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 ("New Kenmont Note") and warrants to Kenmont Capital Partners LP. The New Kenmont Note had a 1-year maturity date and was convertible into shares of common stock at the conversion price of $0.75 per share. The warrants were subsequently exercised. The Company recorded $342,020 as a discount, which has been fully amortized. There is a remaining balance of $549,954 as of May 31, 2019. LPD Investments 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 ("New LPD Note") and warrants to LPD Investments, Ltd. The New LPD Note had a 1-year maturity date and was convertible into shares of common stock at the conversion price of $0.75 per share. The warrants were subsequently exercised. The Company recorded $175,793 as a discount, which has been fully amortized. There is a remaining balance of $163,677 as of May 31, 2019. Guenther On May 7, 2013, the Company entered into an agreement with an individual, Mr. Guenther, for the sale of $750,000 of secured convertible note payable (the "Note") and warrants. The Note had a 1-year maturity date and was 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 and 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 has been fully amortized. There is a remaining balance of $232,194 as of May 31, 2019. Dresner and Lempert On June 20, 2013, the Company entered into an agreement with two individuals, Mr. Dresner and Mr. Lempert, for the sale of $200,000 of secured convertible notes payable (the "Notes") and warrants. The Notes had a 1-year maturity date and were convertible into shares of common stock at the conversion price of $0.50 per share. The warrants were subsequently exercised. The Company recorded $39,152 as a discount, which has been fully amortized. There is a remaining balance of $78,182 as of May 31, 2019. Abdou and Abdou On June 20, 2013, the Company entered into an agreement with two individuals, Mr. M. Abdou and Mr. W. Abdou, for the sale of $125,000 of secured convertible notes payable (the "Notes") and warrants. The Notes had a 1-year maturity date and were convertible into shares of common stock at the conversion price of $0.50 per share. The warrants were subsequently exercised. The Company recorded $24,470 as a discount, which has been fully amortized. There is a remaining balance of $125,000 as of February 28, 2018. In 2016, the Company and the Company's former Chief Executive Officer, Melvin Gagerman, were named among several other defendants in a lawsuit filed by the Mssrs. Abdou demanding repayment of loans totaling $125,000 plus accrued interest and exemplary damages. In January 2017, the Company entered into an agreement with all secured creditors other than Mr. W. Abdou and Mr. M. Abdou. In September 2018 the court entered a judgment of approximately $235,000 plus legal fees in favor of the Mssrs. Abdou. The Company subsequently appealed this judgment and, in September 2019, reached a settlement agreement with these creditors. Kopple Notes On August 19, 2013, the Company entered into an agreement with Robert Kopple, a former member of its Board of Directors for the sale of $2,500,000 of convertible notes payable (the "Kopple Notes") and warrants. The Kopple 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 were subsequently exercised. The Company recorded $667,118 as a discount, which has been fully amortized. The Company also entered into a demand note payable with this individual in the amount of $20,000, which bears interest at a rate of 5%. As of May 31, 2019, the balance of the $2,000,000 note including interest is $3,621,944, and the balance of the demand note payable including interest is $22,410. The total owed under these two notes is $3,644,354. 7% Convertible Promissory Notes: Dalrymple – August 2012 On August 10, 2012 the Company entered into an agreement with an individual, Mr. Dalrymple, for the sale of $1,000,000 of unsecured Convertible Promissory Note. The Convertible Promissory Note balance together with all accrued interest thereon was due and payable on August 10, 2017 and the annual interest rate was 7% per annum and was due to be repaid 5 years from the closing date. The Company recorded $310,723 as a debt discount, which will be amortized over the life of the note . Dalrymple – October 2012 On October 2, 2012 the Company entered into an agreement with an individual, Mr. Dalrymple, for the sale of $500,000 of unsecured Convertible Promissory Note. This Convertible Promissory Note balance together with all accrued interest thereon was due and payable on October 2, 2017 and the annual interest rate was 7% per annum and was due to be repaid 5 years from the closing date. 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 secured creditors holding a security interest in all of the Company's assets except for its patents and other intellectual properties. These creditors are the seven listed above under Convertible Debt and include the following: Kenmont Capital Partners, LPD Investments, Guenther, Dresner, Lempert and Mr. M. Abdou and Mr. W. Abdou. All of the creditors entered into the January 30, 2017 agreement with the exception of the Messrs. Abdou. The original agreement dated May 7, 2013 provided that if at least 75% of the stock issuable upon conversion of the convertible notes votes to amend the agreement and/or waive any conditions or defaults, then any such amendments or waivers shall be binding on all 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 agreement provided that all accrued and unpaid interest will be added to the principal amount. The amended note provided for no interest from November 1, 2016 to February 14, 2018, the date at which the 1-for-7 reverse stock split became effective at which time 80% of the total debt including accrued interest was converted into shares of common stock and a new five year 5% per annum convertible note was issued for the remainder. The new amended and restated senior convertible notes have a maturity date of January 30, 2022. The five creditors and the Company entered into a Second Amendment to Transaction Documents on March 14, 2017 and a Third Amendment to Transaction Documents on April 8, 2017, both of which extended the required date of the stockholder approval of the 1-for-7 reverse stock split, which was completed on February 14, 2018. The amended and restated senior convertible notes also require the Company to make a "Required Cash Payment" as defined in the agreement if the Company receives at least $4,000,000 in aggregate gross proceeds from the sale of equity securities (including securities convertible into equity securities) of the Company in one or a series of related transactions. The Required Cash Payment is equal to the current outstanding balance of the notes, which was $1,149,007 at May 31, 2019, plus any outstanding accrued interest. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
May 31, 2019 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | NOTE 5 – ACCRUED EXPENSES Accrued expenses consisted of the following: May 31, February 28, Accrued payroll and related expenses $ 2,847,194 $ 2,732,019 Accrued interest 533,494 428,625 Other - 44,812 Total $ 3,380,687 $ 3,205,456 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, 2019 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 6 – SHAREHOLDERS' EQUITY Common Stock During the three months ended May 31, 2019, we issued 156,250 shares of common stock for $50,000. During the three months ended May 31, 2018, we did not issue any shares of common stock. Employee Stock Options The 2006 Employee Stock Option Plan In September 2006, our Board of Directors adopted the 2006 Employee Stock Option Plan, subject to shareholder approval, which was obtained at a special shareholders meeting in 2009. Under the 2006 Plan, the Company may grant options for up to the greater of Three Million (3,000,000) or 10% of the number of shares of the Common Stock of Aura from time to time outstanding. The shares of Common Stock available under the 2006 Plan was increased to the greater of Ten Million shares (10,000,000) or 15% of the number of shares of Common Stock of Aura from time to time outstanding at the October 2011 shareholders meeting. The exercise price of each option shall be at least equal to the fair market value of such shares on the date of grant. The term of the options may not be greater than ten years, and they typically vest over a three-year period. No options were issued during the three-month period ended May 31, 2019. Activity in the plan for the three-month period ended May 31, 2019 is as follows: Weighted Number of Exercise Average Shares Prices Value Outstanding, February 28, 2019 647,000 $ 1.40 $ - Granted - - - Exercised - - - Cancelled - - - Outstanding, May 31, 2019 647,000 $ 1.40 $ - Information regarding the options outstanding and exercisable as of May 31, 2019 follows: Options Outstanding Exercisable Options Weighted Weighted Weighted Average Average Average Weighted Range of Remaining Exercise Remaining Average Exercise Price Number Life Price Life Number Exercise $ 1.40 647,000 .75 Yr $ 1.40 .75 Yr 647,000 $ 1.40 The 2011 Director and Executive Officers Stock Option Plan In October 2011 shareholders approved the 2011 Director and Executive Officers Stock Option Plan at the Company's annual meeting. Under the 2011 Plan, the Company may grant options for up to 15% of the number of shares of Common Stock of the Company from time to time outstanding. Pursuant to this plan, the Board or a committee of the Board may grant an option to any person who is elected or appointed a director or executive officer of the Company. The exercise price of each option shall be at least equal to the fair market value of such shares on the date of grant. The term of the options may not be greater than five years. Activity in the plan for the three-month period ended May 31, 2019 is as follows: Warrants Activity in issued and outstanding warrants is as follows: Number of Exercise Shares Prices Outstanding, February 28, 2019 7,490,987 $ 1.40 Granted - - Exercised - - Cancelled - - Outstanding, May 31, 2019 7,490,987 $ 1.40 Information regarding the warrants outstanding and exercisable as of May 31, 2019 follows Range of Exercise Price Stock Warrants Outstanding Stock Warrants Exercisable Weighted Average Remaining Contractual Life Weighted Average Exercise Price of Warrants Outstanding Weighted Average Exercise Price of Warrants Exercisable $ 1.40 7,490,987 7,485,987 3.25 Yrs. $ 1.40 $ 1.40 |
Related Parties Transactions
Related Parties Transactions | 3 Months Ended |
May 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES TRANSACTIONS | NOTE 7 – RELATED PARTIES TRANSACTIONS Breslow Note On January 24, 2017 the Company entered into a Debt Refinancing Agreement with Mr. Breslow, a former Director of the Company. Pursuant to the agreement, both Mr. Breslow and the Company acknowledged that total debt owed to Mr. Breslow was $23,872,614 including $8,890,574 of accrued interest. Mr. Breslow agreed to cancel and forgive all interest due, waive all events of default and sign a new five-year convertible note in the amount of $14,982,041 providing for no interest for six months and interest of 5% per annum thereafter payable monthly in arrears. The note also provides various default provisions. In accordance with the agreement, on February 14, 2018, the effective date of the 1-for-7 reverse stock split, $11,982,041 of the note was converted into 7,403,705 shares of common stock and the then accrued interest of $9,388,338 was forgiven. A new $3,000,000 five-year note representing the remaining balance was entered into. The note bears interest at a rate of 5% per annum payable monthly in arrears. Kopple Note At May 31, 2019, the balance in Notes Payable and accrued interest-related party, current of $6,289,907, includes $3,424,882 plus accrued interest of $2,526,564 to Mr. Kopple (a former Board member), a 10% shareholder. At May 31, 2019, the balance in Convertible note payable and accrued interest-related party includes $2,000,000 of unsecured convertible notes payable plus accrued interest of $1,697,534 and an unsecured convertible note of $20,000 plus accrued interest of $2,659 to Mr. Kopple. Gagerman Note Related parties transactions also includes $82,000 of unsecured notes payable plus accrued interest of $50,346 owed to Melvin Gagerman, the Company's former CEO, pursuant to a demand note entered into on April 5, 2014. |
Commitments & Contingencies
Commitments & Contingencies | 3 Months Ended |
May 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS & CONTINGENCIES | NOTE 8 – COMMITMENTS & CONTINGENCIES Leases Our facilities consist of approximately 20,000 square feet in Stanton, California and an additional storage facility in Santa Clarita, California. The Stanton facility is used for some assembly and testing of AuraGen ® Following the adoption of Topic 842, Leases, as of the start of fiscal year 2020, the Company determined that there was no impact on its Condensed Financial Statements during the three month period ended May 31, 2019. The standard requires entities to evaluate all lease transactions including leases previously classified as operating leases, and, if required under Topic 842, a right-to-use asset and a corresponding lease liability may be recorded on the balance sheet in the period in which the lease commences. Joint Venture In March 2017 the Company entered into a joint venture with a Chinese partner to form Jiangsu Shengfeng Mobile Power Technology Co., Ltd. ("Jiangsu Shengfeng") to address the Chinese market. Under the Jiangsu Shengfeng joint venture agreement, Aura owns 49% of the venture and our Chinese partner owns 51%. The Chinese partner is to contribute approximately $9.25 million to the venture –– principally in the form of facilities and equipment as wells as approximately $500,000 in cash. The Company contributed to the venture in the form of $250,000 in cash as well as a limited license to the joint venture to manufacture, sell and service the AuraGen ® ® In addition, Jiangsu Shengfeng is required to purchase a minimum of $1,250,000 of product from the Company supported by letters of credit for distribution until their factory is built, equipment installed, and staff hired and properly trained by Aura personnel. Aura has also committed to supply personnel for six months at no cost other than to be reimbursed for travel, room and board. This commitment has been fulfilled and Aura is under no further obligation to supply personnel at no cost. The agreement was subject to the approval of the Chinese Government which was received in April 2017. Mr. Song, the majority shareholder of the Chinese partner of the joint venture, invested $2,000,000 in Aura's common shares at a price of $1.40 per share. Contingencies We are subject to the legal proceedings and claims discussed below as well as certain other legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business. Our management evaluates our exposure to these claims and proceedings individually and in the aggregate and evaluates potential losses on such litigation if the amount of the loss is estimable and the loss is probable. However, the outcome of legal proceedings and claims brought against the Company is subject to significant uncertainty. Although management considers the likelihood of such an outcome to be remote, if one or more of these legal matters were resolved against the Company for amounts in excess of management's expectations, the Company's consolidated financial statements for that reporting period could be materially adversely affected. The Company settled certain matters subsequent to year end that did not individually or in the aggregate have a material impact on the Company's financial condition or operating results. In 2017, the Company's former COO was awarded approximately $238,000 in accrued salary and related charges by the California labor board. The Company believes that this award does not reflect the amount owed which is significantly lower and is exploring all its options and available remedies and is working toward an offer to settle this matter. In 2016, the Company and the Company's former Chief Executive Officer, Melvin Gagerman, were named among several other defendants in a lawsuit filed by two secured creditors demanding repayment of loans totaling $125,000 plus accrued interest and exemplary damages. In January 2017, the Company entered into an agreement with all secured creditors other than the two plaintiffs. In September 2018 the court entered a judgment of approximately $235,000 in favor of the two secured creditors. The Company subsequently appealed this judgment and, in September 2019, reached a settlement agreement with these creditors. The Company is presently engaged in a dispute with one of its former directors, Robert Kopple, relating to approximately $9 million and approximately 3.15 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 director Mr. Diaz-Verson and former directors Mr. Breslow and Mr. Howsmon, as well as Mr. Gagerman, the former CEO (not a director) in connection with these allegations. In 2018, the Court sustained demurrers by Mr. Diaz-Verson, Mr. Breslow, Mr. Howsmon and Mr. Gagerman and as a result of these successful demurrers, all four of these defendants have been dismissed from the suit. While the Company believes that it has certain valid defenses in these matters, the Company is currently in settlement discussions with Mr. Kopple. If the settlement negotiation is unsuccessful, the Company intends to vigorously defend against these claims. See "Liquidity and Capital Resources" in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this Annual Report on Form 10-K for additional information regarding the transactions under dispute with Mr. Kopple. In April 2018, the Company filed suit against its former counsel, Kilpatrick Townsend & Stockton LLP alleging various acts of malpractice and breach of fiduciary duty committed by the firm in connection with its representation of Aura. In June 2018, Kilpatrick Townsend & Stockton LLP filed a cross-complaint against the Company claiming in excess of $400,000 in allegedly unpaid legal fees. In January 2019, the Company reached a settlement with Kilpatrick Townsend & Stockton LLP, pursuant to which, among other things, Kilpatrick Townsend & Stockton LLP agreed to dismiss its cross-complaint and waive all unpaid legal fees. The action and the cross-complaint were both subsequently dismissed. In February 2018, the Company failed to issue shares of stock contractually owed to BetterSea, LLC ("BetterSea"), one of the Company's long-standing technical consultants. On August 15, 2018, 7,364,735 restricted shares were issued in fulfillment of this contractual obligation based on the then-outstanding closing quote of the stock. The issuance of the shares was previously reported by the Company. The Company also paid $20,000 in legal fees on behalf of BetterSea related to legal expense associated with the Company's delays in the issuance of the stock. In May 2018, Shelley Scholnick dba JB Transporters brought suit against the Company claiming ongoing fees in excess of $52,000 owed for the storage of the Company's property. Notably, in June 2017, the Company had brought suit against J.B. Moving & Delivery, a business operated and controlled by Scholnick's father, Jacob Binstok, for damages suffered by the Company as a result of the defendant's improper storage of the Company's property and improper refusal to return such property. In 2018, the Company successfully received a judgment against J.B. Moving & Delivery in the amount of approximately $114,000. The Company disputes that any amount is now owed to Scholnick. On March 26, 2019, various stockholders of the Company controlling a combined total of more than 27.5 million shares delivered a signed written consent to the Company removing Ronald Buschur as a member of the Company's Board and electing Cipora Lavut as a director of the Company. On March 27, 2019, those same stockholders delivered a further signed written consent to the Company removing William Anderson and Si Ryong Yu as members of the Company's Board and electing Robert Lempert and David Mann as directors of the Company. These written consents represented a majority of the outstanding shares of the Company's common stock as of March 26, 2019 and March 27, 2019, respectively. Because of Aura's refusal to recognize the legal effectiveness of the consents, on April 8, 2019 the stockholders filed suit in the Court of Chancery of the State of Delaware pursuant to Section 225 of the Delaware General Corporations Law, seeking an order confirming the validity of the consents and declaring that Aura's Board consists of Ms. Lavut, Mr. Mann, Mr. Lempert, Mr. Douglas and Mr. Diaz-Versón, Jr. On July 8, 2019 the Court of Chancery entered final judgment in favor of the stockholder plaintiffs, confirming that (a) Ronald Buschur, Si Ryong Yu and William Anderson had been validly removed by the holders of a majority of the Company's outstanding stock acting by written consent (b) Ms. Lavut, Mr. Mann and Mr. Lempert had been validly elected by the holders of a majority of the Company's outstanding stock acting by written consent, and (c) the Company's Board of Directors validly consists of Cipora Lavut, David Mann, Robert Lempert, Gary Douglas and Salvador Diaz-Versón, Jr. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
May 31, 2019 | |
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 Amended Annual Report on Form 10-K/A for the year ended February 28, 2019 filed on October 24, 2019 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 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. The Company evaluated the impact of the adoption of Topic 842 effective for the three-months ended May 31, 2019 and the impact was none on the Condensed 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. The Company adopted Accounting Standards Codification ("ASC") 606. ASC 606, Revenue from Contracts with Customers, establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The Company has assessed the impact of the guidance by performing the following five steps analysis: Step 1: Identify the contract Step 2: Identify the performance obligations Step 3: Determine the transaction price Step 4: Allocate the transaction price Step 5: Recognize revenue |
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, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable | May 31, February 28, Demand promissory notes payable with six individuals, carrying an interest rate of 10% (see Demand Promissory Notes below) $ 777,537 $ 777,537 Note payable – related party, carrying an interest rate of 5% - see note 6, Breslow Note, for further details 3,000,000 3,000,000 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 264,462 264,462 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 133,178 133,178 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 notes carry an interest rate of 12% with interest due on the last day of the month. On January 30, 2017, this note was amended providing, among other things, for the conversion of 80% of the principal and accrued interest into common stock at $1.386 per share conditioned on the occurrence of certain future events the last of which was completed on February 14, 2018. See Convertible Debt – Kenmont Capital Partners, LPD Investments and Guenther for further details. 945,825 945,825 Senior secured convertible notes dated June 20, 2013, due June 20, 2014, convertible into shares of our common stock at a price of $0.50per share. On January 30, 2017, this note was amended providing, among other things, for the conversion of 80% of the principal and accrued interest into common stock at $1.386 per share conditioned on the occurrence of certain future events the last of which was completed on February 14, 2018. See Convertible Debt – Dresner and Lempert for further details. 78,182 78,182 $ 1,421,647 $ 1,421,647 In 2016, the Company and the Company's former Chief Executive Officer, Melvin Gagerman, were named among several other defendants in a lawsuit filed by two secured creditors demanding repayment of loans totaling $125,000 plus accrued interest and exemplary damages. In January 2017, the Company entered into an agreement with all secured creditors other than the two plaintiffs. In September 2018 the court entered a judgment of approximately $235,000 plus legal fees in favor of the two secured creditors. The Company subsequently appealed this judgment and, in September 2019, reached a settlement agreement with these creditors for an aggregate principle amount of $315,000, including $80,000 of plaintiff's legal expenses, and initial payment of $20,000 , , a payment schedule for monthly repayments of $10,000 commencing on October 15, 2019 and continuing for 12 months, and a final payment due on November 15, 2020. 285,000 285,000 $ 5,484,184 $ 5,484,184 Less: Current portion $ 877,537 $ 847,537 Long-term portion $ 4,606,647 $ 4,636,647 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
May 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | May 31, February 28, Accrued payroll and related expenses $ 2,847,194 $ 2,732,019 Accrued interest 533,494 428,625 Other - 44,812 Total $ 3,380,687 $ 3,205,456 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
May 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of employee stock option plan | Weighted Number of Exercise Average Shares Prices Value Outstanding, February 28, 2019 647,000 $ 1.40 $ - Granted - - - Exercised - - - Cancelled - - - Outstanding, May 31, 2019 647,000 $ 1.40 $ - |
Schedule of exercise price options outstanding | Options Outstanding Exercisable Options Weighted Weighted Weighted Average Average Average Weighted Range of Remaining Exercise Remaining Average Exercise Price Number Life Price Life Number Exercise $ 1.40 647,000 .75 Yr $ 1.40 .75 Yr 647,000 $ 1.40 |
Schedule of activity in issued and outstanding warrants | Number of Exercise Shares Prices Outstanding, February 28, 2019 7,490,987 $ 1.40 Granted - - Exercised - - Cancelled - - Outstanding, May 31, 2019 7,490,987 $ 1.40 |
Schedule of exercise prices warrants outstanding | Range of Exercise Price Stock Warrants Outstanding Stock Warrants Exercisable Weighted Average Remaining Contractual Life Weighted Average Exercise Price of Warrants Outstanding Weighted Average Exercise Price of Warrants Exercisable $ 1.40 7,490,987 7,485,987 3.25 Yrs. $ 1.40 $ 1.40 |
Going Concern (Details)
Going Concern (Details) - USD ($) | 3 Months Ended | |
May 31, 2019 | May 31, 2018 | |
Going Concern (Textual) | ||
Net Income (Loss) | $ (675,321) | $ (1,036,382) |
Net cash used in operating activities | $ (397,436) | $ (1,000,853) |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | May 31, 2019 | Feb. 28, 2019 |
Debt Instrument [Line Items] | ||
Convertible notes payable | $ 5,484,184 | $ 5,484,184 |
Less: Current portion | 877,537 | 847,537 |
Long-term portion | 4,606,647 | 4,636,647 |
Demand promissory notes payable [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 777,537 | 777,537 |
Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | 3,000,000 | 3,000,000 |
Convertible Promissory Note dated August 10, 2012 [Member] | ||
Debt Instrument [Line Items] | ||
Convertible notes payable | 264,462 | 264,462 |
Convertible Promissory Note dated October 2, 2012 [Member] | ||
Debt Instrument [Line Items] | ||
Convertible notes payable | 133,178 | 133,178 |
Senior secured convertible notes dated May 7, 2013 [Member] | ||
Debt Instrument [Line Items] | ||
Convertible notes payable | 945,825 | 945,825 |
Senior secured convertible notes dated June 20, 2013 [Member] | ||
Debt Instrument [Line Items] | ||
Convertible notes payable | 78,182 | 78,182 |
Convertible Notes [Member] | ||
Debt Instrument [Line Items] | ||
Convertible notes payable | 1,421,647 | 1,421,647 |
Company and the Company's former Chief Executive Officer [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | $ 285,000 | $ 285,000 |
Notes Payable (Details) (Parent
Notes Payable (Details) (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended | |
May 31, 2019 | Feb. 28, 2019 | Feb. 28, 2018 | |
Debt Instrument [Line Items] | |||
Repayment of loans total | $ 125,000 | ||
Convertible Promissory Note dated August 10, 2012 [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable interest rate | 7.00% | ||
Common stock at price | $ 0.76 | ||
Conversion price per share of notes payable | $ 1.386 | ||
Conversion percentage | 80.00% | ||
Converted into common stock price | 7.00% | ||
Converted instrument date | Feb. 14, 2018 | ||
Convertible Promissory Note dated October 2, 2012 [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable interest rate | 7.00% | ||
Common stock at price | $ 0.76 | ||
Conversion price per share of notes payable | $ 1.386 | ||
Conversion percentage | 80.00% | ||
Converted into common stock price | 7.00% | ||
Converted instrument date | Feb. 14, 2018 | ||
Senior secured convertible notes dated May 7, 2013 [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable interest rate | 12.00% | ||
Common stock at price | $ 0.75 | ||
Conversion price per share of notes payable | $ 1.386 | ||
Conversion percentage | 80.00% | ||
Converted instrument date | Feb. 14, 2018 | ||
Senior secured convertible notes dated June 20, 2013 [Member] | |||
Debt Instrument [Line Items] | |||
Common stock at price | $ 0.50 | ||
Conversion price per share of notes payable | $ 1.386 | ||
Conversion percentage | 80.00% | ||
Converted instrument date | Feb. 14, 2018 | ||
Senior secured convertible notes dated June 20, 2013 [Member] | |||
Debt Instrument [Line Items] | |||
Common stock at price | $ 0.50 | ||
Conversion price per share of notes payable | $ 1.386 | ||
Conversion percentage | 80.00% | ||
Converted instrument date | Feb. 14, 2018 | ||
Demand Promissory Notes Payable [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable interest rate | 10.00% | ||
Repayment of loans total | $ 267,000 | ||
Aggregate principle amount | $ 267,000 | ||
Notes Payable [Member] | |||
Debt Instrument [Line Items] | |||
Notes payable interest rate | 5.00% | ||
Secured creditors 2016 [Member] | Former Chief Executive Officers [Member] | |||
Debt Instrument [Line Items] | |||
Repayment of loans total | $ 125,000 | ||
Secured creditors September 2018 [Member] | Former Chief Executive Officers [Member] | |||
Debt Instrument [Line Items] | |||
Judgment of approximately value plus legal fees | $ 235,000 | ||
Secured creditors September 2019 [Member] | Former Chief Executive Officers [Member] | |||
Debt Instrument [Line Items] | |||
Due date of notes | Nov. 15, 2020 | ||
Note holders single payment | $ 20,000 | ||
Monthly repayments | 10,000 | ||
Judgment of approximately value plus legal fees | 80,000 | ||
Aggregate principle amount | $ 315,000 |
Notes Payable (Details Textual)
Notes Payable (Details Textual) | Aug. 19, 2013USD ($)$ / shares | Jun. 20, 2013USD ($)$ / shares | May 07, 2013USD ($)Notes$ / sharesshares | Oct. 02, 2012USD ($) | Aug. 10, 2012USD ($) | Jan. 30, 2017 | May 31, 2019USD ($)$ / shares | May 31, 2018USD ($) | Feb. 28, 2019USD ($) | Feb. 28, 2018USD ($)shares |
Notes Payable (Textual) | ||||||||||
Amortization of debt discount | ||||||||||
Repayment of loans | $ 125,000 | |||||||||
Secured convertible note payable [Member] | Dresner and Lempert [Member] | ||||||||||
Notes Payable (Textual) | ||||||||||
Pre conversion debt principal amount | $ 200,000 | |||||||||
Conversion price per share of notes payable | $ / shares | $ 0.50 | |||||||||
Amortization of debt discount | $ 39,152 | |||||||||
Remaining principle and interest balance | $ 78,182 | |||||||||
Notes maturity date, term | 1 year | |||||||||
Secured convertible note payable [Member] | Abdou and Abdou [Member] | ||||||||||
Notes Payable (Textual) | ||||||||||
Pre conversion debt principal amount | $ 125,000 | |||||||||
Conversion price per share of notes payable | $ / shares | $ 0.50 | |||||||||
Amortization of debt discount | $ 24,470 | |||||||||
Remaining principle and interest balance | $ 125,000 | |||||||||
Notes maturity date, term | 1 year | |||||||||
Repayment of loans | $ 125,000 | |||||||||
Judgment of approximately value plus legal fees | $ 235,000 | |||||||||
Convertible Debt [Member] | ||||||||||
Notes Payable (Textual) | ||||||||||
Description of convertible promissory note | The seven listed above under Convertible Debt and include the following: Kenmont Capital Partners, LPD Investments, Guenther, Dresner, Lempert and Abdou and Abdou. All of the creditors entered into the January 30, 2017 agreement with the exception of Mr. Abdou and Mr. Abdou. The original agreement dated May 7, 2013 provided that if at least 75% of the stock issuable upon conversion of the convertible notes votes to amend the agreement and/or waive any conditions or defaults, then any such amendments or waivers shall be binding on all 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 agreement provided that all accrued and unpaid interest will be added to the principal amount. The amended note provided for no interest from November 1, 2016 to February 14, 2018, the date at which the 1-for-7 reverse stock split became effective at which time 80% of the total debt including accrued interest was converted into shares of common stock and a new five year 5% per annum convertible note was issued for the remainder. The new amended and restated senior convertible notes have a maturity date of January 30, 2022. The five creditors and the Company entered into a Second Amendment to Transaction Documents on March 14, 2017 and a Third Amendment to Transaction Documents on April 8, 2017, both of which extended the required date of the stockholder approval of the 1-for-7 reverse stock split, which was completed on February 14, 2018. The amended and restated senior convertible notes also require the Company to make a ?Required Cash Payment? as defined in the agreement if the Company receives at least $4,000,000 in aggregate gross proceeds from the sale of equity securities (including securities convertible into equity securities) of the Company in one or a series of related transactions. The Required Cash Payment is equal to the current outstanding balance of the notes, which was $1,149,007 at February 28, 2019, plus any outstanding accrued interest | |||||||||
Demand Promissory Notes Payable [Member] | ||||||||||
Notes Payable (Textual) | ||||||||||
Debt amount | $ 267,000 | |||||||||
Notes payable interest rate | 10.00% | |||||||||
Description of convertible promissory note | The principal amount of each note and the person/entity they are payable to are as follows: $10,000 Mr. Zeitlin, a former director of the Company; $30,000 Mr. Sook; $461,537 Mr. Macleod, a former president of the Company; $4,500 Mr. Howsmon, a former director of the Company; $4,500 El Pais, an entity controlled by Salvador Diaz, a current director of the Company. | |||||||||
Converted shares of common stock | shares | 192,641 | |||||||||
Repayment of loans | $ 267,000 | |||||||||
Convertible Five [Member] | ||||||||||
Notes Payable (Textual) | ||||||||||
Conversion price per share of notes payable | $ / shares | $ 1.386 | |||||||||
LPD Investments, Ltd [Member] | Secured convertible note payable [Member] | ||||||||||
Notes Payable (Textual) | ||||||||||
Pre conversion debt principal amount | $ 550,000 | |||||||||
Debt amount | $ 558,700 | |||||||||
Conversion price per share of notes payable | $ / shares | $ 1.38 | |||||||||
Amortization of debt discount | $ 175,793 | |||||||||
Remaining principle and interest balance | $ 163,677 | |||||||||
Number of notes payable to transferred | Notes | 2 | |||||||||
Notes maturity date, term | 1 year | |||||||||
Initial exercise price | $ / shares | $ 0.75 | |||||||||
Kenmont Capital Partners [Member] | Secured convertible note payable [Member] | ||||||||||
Notes Payable (Textual) | ||||||||||
Pre conversion debt principal amount | $ 1,000,000 | |||||||||
Debt amount | $ 1,087,000 | |||||||||
Conversion price per share of notes payable | $ / shares | $ 0.75 | |||||||||
Amortization of debt discount | $ 342,020 | |||||||||
Remaining principle and interest balance | 549,954 | |||||||||
Number of notes payable to transferred | Notes | 4 | |||||||||
Notes maturity date, term | 1 year | |||||||||
Initial exercise price | $ / shares | $ 0.75 | |||||||||
Refinancing Agreements [Member] | Secured convertible note payable [Member] | Board of Directors Chairman [Member] | ||||||||||
Notes Payable (Textual) | ||||||||||
Pre conversion debt principal amount | $ 2,500,000 | |||||||||
Conversion price per share of notes payable | $ / shares | $ 0.50 | |||||||||
Amortization of debt discount | $ 667,118 | |||||||||
Notes maturity date, term | 4 years | |||||||||
Notes payable interest rate | 9.50% | |||||||||
Description of convertible promissory note | The balance of the $2,000,000 note including interest is $3,621,944, and the balance of the demand note payable including interest is $22,410. The total owed under these two notes is $3,644,354. | |||||||||
Refinancing Agreements [Member] | Secured convertible note payable [Member] | Guenther [Member] | ||||||||||
Notes Payable (Textual) | ||||||||||
Pre conversion debt principal amount | $ 750,000 | |||||||||
Conversion price per share of notes payable | $ / shares | $ 0.75 | |||||||||
Term of warrant | 7 years | |||||||||
Amortization of debt discount | $ 235,985 | |||||||||
Number of common shares entitlement on exercise of warrant one (in shares) | shares | 1,000,000 | |||||||||
Remaining principle and interest balance | $ 232,194 | |||||||||
Notes maturity date, term | 1 year | |||||||||
Initial exercise price | $ / shares | $ 0.75 | |||||||||
Unsecured Debt [Member] | Convertible Debt [Member] | Dalrymple [Member] | ||||||||||
Notes Payable (Textual) | ||||||||||
Pre conversion debt principal amount | $ 500,000 | $ 1,000,000 | ||||||||
Amortization of debt discount | $ 310,723 | |||||||||
Remaining principle and interest balance | $ 137,583 | $ 264,462 | ||||||||
Notes maturity date, term | 5 years | |||||||||
Notes payable interest rate | 7.00% | 7.00% |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | May 31, 2019 | Feb. 28, 2019 |
Payables and Accruals [Abstract] | ||
Accrued payroll and related expenses | $ 2,847,194 | $ 2,732,019 |
Accrued interest | 533,494 | 428,625 |
Other | 44,812 | |
Total | $ 3,380,687 | $ 3,205,456 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - 2006 Plan [Member] | 3 Months Ended |
May 31, 2019USD ($)$ / sharesshares | |
Number of Shares | |
Number of Shares, Outstanding, February 28, 2019 | shares | 647,000 |
Number of Shares, Granted | shares | |
Number of Shares, Exercised | shares | |
Number of Shares, Cancelled | shares | |
Number of Shares, Outstanding, May 31, 2019 | shares | 647,000 |
Exercise Prices | |
Exercise Prices, Outstanding, February 28, 2019 | $ / shares | $ 1.40 |
Exercise Prices, Granted | $ / shares | |
Exercise Price, Outstanding, May 31, 2019 | $ / shares | $ 1.40 |
Weighted Average Intrinsic Value | |
Weighted Average Intrinsic Value, Outstanding, February 28, 2019 | $ | |
Weighted Average Intrinsic Value, Granted | $ / shares | |
Weighted Average Intrinsic Value, Exercised | $ | |
Weighted Average Intrinsic Value, Cancelled | $ / shares | |
Weighted Average Intrinsic Value, Outstanding, May 31, 2019 | $ |
Shareholders' Equity (Details 1
Shareholders' Equity (Details 1) - $1.40 [Member] | 3 Months Ended |
May 31, 2019$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options Outstanding, Range of Exercise Price | $ 1.40 |
Options Outstanding, Number | shares | 647,000 |
Options Outstanding, Weighted Average Remaining Life | 9 months |
Options Outstanding, Weighted Average Exercise Price | $ 1.40 |
Exercisable Options, Weighted Average Remaining Life | 9 months |
Exercisable Options, Number | shares | 647,000 |
Exercisable Options, Weighted Average Exercise Price | $ 1.40 |
Shareholders' Equity (Details 2
Shareholders' Equity (Details 2) - Warrants [Member] | 3 Months Ended |
May 31, 2019$ / sharesshares | |
Class of Stock [Line Items] | |
Number of Shares, Outstanding, February 28, 2019 | shares | 7,490,987 |
Number of Shares, Granted | shares | |
Number of Shares, Exercised | shares | |
Number of Shares, Cancelled | shares | |
Number of Shares, Outstanding, May 31, 2019 | shares | 7,490,987 |
Exercise Prices, Outstanding, February 28, 2019 | $ / shares | $ 1.40 |
Exercise Prices, Granted | $ / shares | |
Exercise Prices, Exercised | $ / shares | |
Exercise Prices, Cancelled | $ / shares | |
Exercise Prices, Outstanding, May 31, 2019 | $ / shares | $ 1.40 |
Shareholders' Equity (Details 3
Shareholders' Equity (Details 3) - Warrant [Member] - $ / shares | 3 Months Ended | |
May 31, 2019 | Feb. 28, 2019 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Stock Warrants Outstanding | 7,490,987 | 7,490,987 |
$1.40 [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Range of Exercise Prices | $ 1.40 | |
Stock Warrants Outstanding | 7,490,987 | |
Stock Warrants Exercisable | 7,485,987 | |
Weighted Average Remaining Contractual Life | 3 years 2 months 30 days | |
Weighted Average Exercise Price of Warrants Outstanding | $ 1.40 | |
Weighted Average Exercise Price of Warrants Exercisable | $ 1.40 |
Shareholders' Equity (Details T
Shareholders' Equity (Details Textual) | 3 Months Ended |
May 31, 2019USD ($)shares | |
Shareholders' Equity (Textual) | |
Common stock for cash | $ 50,000 |
2006 Employee Stock Option Plan [Member] | |
Shareholders' Equity (Textual) | |
Employee stock options, description | Under the 2006 Plan, the Company may grant options for up to the greater of Three Million (3,000,000) or 10% of the number of shares of the Common Stock of Aura from time to time outstanding. The shares of Common Stock available under the 2006 Plan was increased to the greater of Ten Million shares (10,000,000) or 15% of the number of shares of Common Stock of Aura from time to time outstanding at the October 2011 shareholders meeting. The exercise price of each option shall be at least equal to the fair market value of such shares on the date of grant. The term of the options may not be greater than ten years, and they typically vest over a three-year period. No options were issued during the three-month period ended May 31, 2019. |
2011 Director and Executive Officers Stock Option Plan [Member] | |
Shareholders' Equity (Textual) | |
Employee stock options, description | Under the 2011 Plan, the Company may grant options for up to 15% of the number of shares of Common Stock of the Company from time to time outstanding. Pursuant to this plan, the Board or a committee of the Board may grant an option to any person who is elected or appointed a director or executive officer of the Company. The exercise price of each option shall be at least equal to the fair market value of such shares on the date of grant. |
Common stock [Member] | |
Shareholders' Equity (Textual) | |
Shares of common stock | shares | 156,250 |
Common stock for cash | $ 15 |
Related Parties Transactions (D
Related Parties Transactions (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Feb. 14, 2018 | Jan. 24, 2017 | May 31, 2019 | Feb. 28, 2019 | Apr. 05, 2014 | |
Related Parties Transactions (Textual) | |||||
Unsecured notes payable and accrued interest - related party | $ 6,289,907 | $ 6,156,375 | |||
Convertible Secured Notes [Member] | |||||
Related Parties Transactions (Textual) | |||||
Interest rate | 7.00% | ||||
Accrued interest [Member] | Unsecured convertible notes payable [Member] | |||||
Related Parties Transactions (Textual) | |||||
Unsecured notes payable and accrued interest - related party | $ 1,697,534 | ||||
Accrued interest [Member] | Unsecured convertible note [Member] | |||||
Related Parties Transactions (Textual) | |||||
Unsecured notes payable and accrued interest - related party | 20,000 | ||||
Accrued interest [Member] | Convertible Secured Notes [Member] | |||||
Related Parties Transactions (Textual) | |||||
Convertible note payable and accrued interest-related party, net of discount | 2,000,000 | ||||
Mr. Breslow [Member] | |||||
Related Parties Transactions (Textual) | |||||
Unsecured notes payable and accrued interest - related party | $ 14,982,041 | ||||
Debt amount | 23,872,614 | ||||
Convertible note payable and accrued interest-related party, net of discount | $ 9,388,338 | $ 8,890,574 | |||
New debt agreement, term | 5 years | 5 years | |||
Convertible note, amount | $ 11,982,041 | ||||
Convertible note, shares | 7,403,705 | ||||
Reverse stock split, description | 1-for-7 reverse stock split. | ||||
Interest rate | 5.00% | 5.00% | |||
Remaining balance | $ 3,000,000 | ||||
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 | $ 50,346 | ||||
Mr. Kopple [Member] | |||||
Related Parties Transactions (Textual) | |||||
Unsecured notes payable and accrued interest - related party | $ 6,289,907 | ||||
Shareholder, rate | 10.00% | ||||
Mr. Kopple [Member] | Unsecured Debt [Member] | |||||
Related Parties Transactions (Textual) | |||||
Unsecured notes payable and accrued interest - related party | $ 3,424,882 | ||||
Mr. Kopple [Member] | Accrued interest [Member] | |||||
Related Parties Transactions (Textual) | |||||
Unsecured notes payable and accrued interest - related party | 2,526,564 | ||||
Convertible note payable and accrued interest-related party, net of discount | $ 2,659 |
Commitments & Contingencies (De
Commitments & Contingencies (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Mar. 26, 2019shares | Feb. 28, 2018 | Mar. 31, 2017USD ($)$ / shares | May 31, 2019USD ($)ft² | May 31, 2018USD ($) | Dec. 31, 2016 | Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) | |
Commitments & Contingencies (Textual) | ||||||||
Area of facility (in square feet) | ft² | 20,000 | |||||||
Payments for joint venture agreement | $ 9,250,000 | |||||||
Company invested amount | $ 2,000,000 | |||||||
Secured debt, description | The Company failed to issue shares of stock contractually owed to BetterSea, LLC ("BetterSea"), one of the Company's long-standing technical consultants. On August 15, 2018, 7,364,735 restricted shares were issued in fulfillment of this contractual obligation based on the then-outstanding closing quote of the stock. The issuance of the shares was previously reported by the Company. The Company also paid $20,000 in legal fees on behalf of BetterSea related to legal expense associated with the Company's delays in the issuance of the stock. | The Company successfully received a judgment against J.B. Moving & Delivery in the amount of approximately $114,000. The Company disputes that any amount is now owed to Scholnick. | ||||||
Unpaid Legal fees | $ 52,000 | $ 400,000 | ||||||
Stockholders combined total | shares | 27,500,000 | |||||||
Former Chief Executive Officers [Member] | ||||||||
Commitments & Contingencies (Textual) | ||||||||
Contingencies description | The Company and the Company's former Chief Executive Officer, Melvin Gagerman, were named among several other defendants in a lawsuit filed by two secured creditors demanding repayment of loans totaling $125,000 plus accrued interest and exemplary damages. In January 2017, the Company entered into an agreement with all secured creditors other than the two plaintiffs. In September 2018 the court entered a judgment of approximately $235,000 in favor of the two secured creditors. | |||||||
Director [Member] | ||||||||
Commitments & Contingencies (Textual) | ||||||||
Secured debt, description | The Company is presently engaged in a dispute with one of its former directors, Robert Kopple, relating to approximately $9 million and approximately 3.15 million warrants which Mr. Kopple claims to be owed to him and his affiliates by the Company. | |||||||
Storage facility [Member] | ||||||||
Commitments & Contingencies (Textual) | ||||||||
Rent per month | $ 5,000 | |||||||
Stanton facility [Member] | ||||||||
Commitments & Contingencies (Textual) | ||||||||
Rent per month | $ 10,000 | |||||||
Office space [Member] | ||||||||
Commitments & Contingencies (Textual) | ||||||||
Area of facility (in square feet) | ft² | 300 | |||||||
Rent per month | $ 2,350 | |||||||
Joint venture agreement [Member] | ||||||||
Commitments & Contingencies (Textual) | ||||||||
Ownership percentage in joint venture | 49.00% | |||||||
Purchase a minimum of product | $ 250,000 | |||||||
Shares issue of price per share | $ / shares | $ 1.40 | |||||||
Common stock purchase minimum amount | $ 1,250,000 | |||||||
Contingencies description | The Chinese partner is to contribute approximately $9.25 million to the venture - principally in the form of facilities and equipment as wells as approximately $500,000 in cash. | |||||||
Chinese company [Member] | ||||||||
Commitments & Contingencies (Textual) | ||||||||
Ownership percentage in joint venture | 51.00% | |||||||
California labor board [Member] | ||||||||
Commitments & Contingencies (Textual) | ||||||||
Accrued salary and related charges | $ 238,000 |