What changed in this filing

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Item 1. Legal Proceedings

2025-07-21 compared with 2025-01-21 · 48 added, 36 removed, 47 unchanged (64% of the section changed)

10 unchanged sentences

expectations, the Company’s financial statements for that reporting period could be materially adversely affected.

In 2017, the Company’s former COO was awarded

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

In November 2021, the Company reached a settlement

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

As of the time of this

filing, the Company has paid the full amount toward the settlement amount, leaving no remaining balance.

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.

Between July 2017 and March 2022, the Company

was 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 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 million over a period of seven years, including $3 million initial

payment to be paid in June 2022.

$150 was paid in June 2022, and the balance of the initial payment of $2.85 million was extended to May

29, 2023, In exchange for the extension, the Company was required to pay $165 in extension and forbearance fees in cash and $430 in accrued

forbearance fees.

Beginning in January 2023, interest accrues on the unpaid balance at a rate of 6%, compounded annually.

including all accrued interest and deferred fees, are to be paid no later than eight years from the date of the initial payment.

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.

During the year ended February 29, 2024, the note

was amended multiple times to extend the payment dates of the balance of the initial payment of $2,850, originally due in June 2022, and

the first installment payment of $1,000, originally due in June 2023 (collectively, the “past due principal”).

of these amendments, the Company incurred additional extension and forbearance fees totaling $450 and adjustment to principal balance

of $23 that was recorded as part of interest expense.

As of February 29, 2024, outstanding principal balance amounted to $10,938, including

the $3,850 past due principal (see below).

In March 2024, the Company and Kopple again amended

the note payable.

The amendment (i) replaced the requirement to pay the $3,850 past due principal balance with the requirement to

pay $2,000 due December 15, 2024, effectively extending the payment of $1,850 to future periods;

(ii) increased the stated

interest rate to 10%;

The amendment (i) replaced the requirement to pay the $3,850 past due principal balance with the requirement to pay

$2,000 due December 15, 2024, effectively extending the payment of $1,850 to future periods;

(ii) increased the stated interest rate to

(iii) added a fee of $15 monthly until the Company makes a principal payment of $2 million by December 2024;

(iv) effective November 30, 2024, the Company will grant Kopple a conversion right that gives Kopple the option to be able to convert

the note payable into equity of the Company at a conversion price of the lower of $1.00 per share or 50% of the 10 day

volume weighted average price of the Company’s common stock;

(v) during Fiscal 2025, will require the Company to pay 20% of

all collected revenues within 10 days of the end of each fiscal quarter;

(vi) will require the Company to pay Kopple 20% of any amount

raised in new capital in the form of equity, debt or convertible debt above $3.5 million;

(vii) reduces the exercise price of the

warrants granted to Kopple in March 2022 from $0.85 per share to $0.50 per share;

(iv) effective August

30, 2024, the Company will grant Kopple a conversion right that gives Kopple the option to be able to convert the note payable into equity

of the Company at a conversion price of the lower of $1.00 per share or 50% of the 10 day volume weighted average price of the Company’s

common stock;

(v) during Fiscal 2025, will require the Company to pay 20% of all collected revenues within 10 days of the end of each

fiscal quarter;

toward the outstanding debt reduction (vi) will require the Company to pay Kopple 20% of any amount raised in new capital

in the form of equity, debt or convertible debt above $3.5 million toward the outstanding debt reduction;

(vii) reduces the exercise price

of the warrants granted to Kopple in March 2022 from $0.85 per share to $0.50 per share;

and (vii) extends the warrant expiration date

from March 8, 2029, to March 31, 2031.

The installment payment of $ 2.0 million, which became due in December 2024, was extended

to February 27, 2025.

The principal payment of $2 million was extended to March 31, 2025, for $100,000.

the principal payment was extended to the end of June 2025 for an additional $100,000 payment.

On March 26, 2019, various stockholders of the

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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 in the principal amount of $82 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.

As of the time of this filing, all disputes with Gagerman have been settled

with zero payment from the Company.

In addition to the other information set forth

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and Use of Proceeds

During the nine-months ended November 30, 2024,

the Company issued 10,268,363 shares of common stock for approximately $2,623 in net cash.

During the three months ended May 31, 2025, the

Company issued 3,415,152 shares of common stock for approximately $848 in net cash.

Defaults Upon Senior Securities.

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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