What changed in this filing

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Item 1. Legal Proceedings

2023-07-24 compared with 2023-01-13 · 61 added, 57 removed, 20 unchanged (86% of the section changed)

Legal Proceedings

The Company is subject to legal proceedings and

claims that have arisen in the ordinary course of business.

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

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adversely affected.

In 2017, the Company’s former COO was awarded

approximately $238,000 in accrued salary and related charges by the California labor board.

In August 2021, the Company reached a settlement

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.

In 2017, the Company’s

former COO was awarded approximately $238 in accrued salary and related charges by the California labor board.

In August 2021, the Company

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

of the time of this filing, the Company has paid approximately $277 toward the settlement amount.

The remaining balance of approximately $53

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 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.

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.

In March 2019, various stockholders of the Company

controlling a combined total of more than 27.5 million shares delivered signed written consents to the Company removing Ronald Buschur,

William Anderson, and Si Ryong Yu as directors of the Company’s Board and electing Cipora Lavut, David Mann and Dr.

Robert Lempert

as directors in their stead.

These written consents represented a majority of the then-outstanding shares of the Company’s

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.

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

Between July 2017

and March 2022, the Company was engaged in litigation with a former director, Robert Kopple, relating to more than $13,000 and the current

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

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 resolved 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, the Company agreed to pay an aggregate amount of $10,000 over a period

of seven years, including $3,000 initial payment to be paid in June 2022.

$150 was paid in June 2022, and the balance of the initial

payment of $2,850 was extended to August 1, 2023, In exchange for the extension, the Company was required to pay $195 in extension and

forbearance fees in cash and $530 in accrued forbearance fees.

Beginning in January 2023, interest accrues on the unpaid balance at a

rate of 6%, compounded annually.

All amounts, including all accrued interest and deferred fees, 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 3,331,664

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 installment due to Kopple, having made

an initial payment of $150 in June 2022.

(See Part I, Note 5 to the Financial Statements).

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.

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.

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,

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

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

In addition to the other information set forth

in this report, you should carefully consider the risk factors disclosed in Item 1A, “Risk Factors,” of the Company’s

Fiscal 2022 Annual Report on Form 10-K issued on June 21, 2022.

In addition to

the other information set forth in this report, you should carefully consider the risk factors disclosed in Item 1A, “Risk Factors,”

of the Company’s Fiscal 2023 Annual Report on Form 10-K issued on May 26, 2023.

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