What changed in this filing

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Item 1. Legal Proceedings

2023-01-13 compared with 2022-10-07 · 46 added, 46 removed, 31 unchanged (75% of the section changed)

13 unchanged sentences

by which the Company agreed to pay approximately $330,000, representing the principal award plus accrued interest.

As of the time of this

filing, the Company has paid approximately $187,000 toward the settlement amount.

As of the time of

this filing, the Company has paid approximately $187,000 toward the settlement amount.

The remaining balance of approximately $171,000

is to be paid no later than March 1, 2023, and accrues interest of 10% per annum until paid.

Since July 2017 the Company has been engaged in

litigation with a former director, Robert Kopple, relating to more than $13 million and the current equivalent of the approximately 23

Since July 2017 the Company has been engaged

in litigation with a former director, Robert Kopple, relating to more than $13 million and the current equivalent of the approximately

23 million warrants, exercisable for seven years at a price of $0.10 per share, which Mr.

Kopple and his affiliated entities (collectively

the “Kopple Parties”) claimed should have been originally issued to them pursuant to various agreements with the Company entered

to between 2013-2016.

In March 2022, the Company reached a settlement with the Kopple Parties that resolves all claims asserted against

the Company without any admission, concession or finding of any fault, liability or wrongdoing on the part of the Company.

Under the terms

of the settlement, we have agreed to pay an aggregate amount of $10 million over a period of seven years;

$3 million of which was originally

to be paid in June 2022, and subsequently amended to extend the initial installment to November 2022, after which, interest will accrue

on the unpaid balance at a rate of 6%, compounded annually.

All amounts, including all accrued interest, are to be paid no later than

eight years from the date of the initial payment.

The Kopple Parties have also received seven-year warrants to purchase up to an aggregate

of approximately 3.3 million shares of our common stock at a price of $0.85 per share.

The settlement also provides for standard mutual

general release provisions and includes customary representations, warranties, and covenants, including certain increases in the amount

payable to the Kopple Parties and the right of such parties to enter judgment against the Company if the Company remains in uncured default

in its payment obligations under the settlement.

As of the date of this report, the Company has not yet paid the full $3,000,000 installment

due to Kopple;

the “Kopple Parties”) claimed should have been originally issued to them pursuant to various agreements with the Company

entered to between 2013-2016.

In March 2022, the Company reached a settlement with the Kopple Parties that resolves all claims asserted

against the Company without any admission, concession or finding of any fault, liability or wrongdoing on the part of the Company.

the terms of the settlement, we have agreed to pay an aggregate amount of $10 million over a period of seven years;

$3 million of which

was originally to be paid in June 2022, and subsequently amended to extend the initial installment to January 2023, after which, interest

will accrue on the unpaid balance at a rate of 6%, compounded annually.

All amounts, including all accrued interest, are to be paid no

later than eight years from the date of the initial payment.

The Kopple Parties have also received seven-year warrants to purchase up

to an aggregate of approximately 3.3 million shares of our common stock at a price of $0.85 per share.

The settlement also provides for

standard mutual general release provisions and includes customary representations, warranties, and covenants, including certain increases

in the amount payable to the Kopple Parties and the right of such parties to enter judgment against the Company if the Company remains

in uncured default in its payment obligations under the settlement.

As of the date of this report, the Company has not yet paid the full

$3,000,000 installment due to Kopple;

having made a partial payment of $150,000 in June 2022.

6 unchanged sentences

common stock.

Because of the refusal by not only the removed directors but also Aura’s prior management to recognize the legal effectiveness

of the consents, in April 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.

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.

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.

As a result of prior management’s unsuccessful opposition to this stockholders’ action filed

in the Court of Chancery, such stockholders may be potentially entitled to recoup their litigation costs from the Company under Delaware’s

corporate benefit doctrine and/or other legal provisions.

To date, no final determination has been made as to the amount of recoupment,

if any, to which such stockholders may be entitled.

Because of the refusal by not only the removed directors but also Aura’s prior management to recognize the legal

effectiveness of the consents, in April 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.

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.

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.

As a result of prior management’s unsuccessful opposition to this stockholders’

action filed in the Court of Chancery, such stockholders may be potentially entitled to recoup their litigation costs from the Company

under Delaware’s corporate benefit doctrine and/or other legal provisions.

To date, no final determination has been made as to

the amount of recoupment, if any, to which such stockholders may be entitled.

In June 2022, Melvin

Gagerman, the Company’s former CEO and CFO whose employment with Aura was permanently terminated in July 2019, brought suit against

the Company for repayment of an allegedly unsecured demand promissory note presumably in the principal amount of $82,000 which he claims

was entered into in April 2014 and bears interest at a rate of 10% per annum.

Despite the fact that, based on Gagerman’s allegations,

the note was issued during a period when he was the Company’s CEO, CFO, Corporate Secretary and Chairman of Aura’s Board of

Directors, Gagerman has stated that he does not possess a copy of the alleged promissory note.

The Company disputes that any amount is

presently owed to Gagerman and has filed a cross-complaint against him for, among things, conversion, violation of California Business

& Professions Code §17200, and various breaches of fiduciary duty that the Company believes Gagerman committed against Aura,

including without limitation, Gagerman’s actions in opposing the valid 2019 stockholder consent action.

the Company for repayment of an allegedly unsecured demand promissory note in the principal amount of $82,000 which he claims was entered

into in April 2014 and bears interest at a rate of 10% per annum.

Despite the fact that, based on Gagerman’s allegations, the note

was issued during a period when he was the Company’s CEO, CFO, Corporate Secretary and Chairman of Aura’s Board of Directors,

Gagerman has stated that he does not possess a copy of the alleged promissory note.

The Company disputes that any amount is presently

owed to Gagerman and has filed a cross-complaint against him for, among things, conversion, violation of California Business& Professions

Code §17200, and various breaches of fiduciary duty that the Company believes Gagerman committed against Aura, including without

limitation, Gagerman’s actions in opposing the valid 2019 stockholder consent action.

In addition to the other information set forth

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Legal Proceedings