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Item 3. Legal Proceedings

2026-09-10 compared with 2025-06-13 · 34 added, 57 removed, 46 unchanged (66% of the section changed)

11 unchanged sentences

on the Company’s financial condition or operating results.

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.

fiscal 2024, the Company has paid the full $330 toward the settlement amount.

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

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.

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 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”).

As a result 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).

2022, the Company was engaged in litigation with a former director, Robert Kopple, relating to debt and warrants, 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 million over a period of seven years, including $3 million initial payment to be paid in June 2022.

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.

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 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.

In March 2024, the Company

and Kopple again amended the note payable.

4 unchanged sentences

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

(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;

(iv) effective August 30, 2024, the Company will grant Kopple for 36 month 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) only 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 principal payment of $2 million was extended to March 31,

2025, for $100,000.

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

and (vii) extends the warrant expiration date from March 8, 2029, to March 31, 2031.

The principal payment of $2 million was extended

to March 31, 2025, for $100,000.

Subsequently, the principal payment was extended several times up to September 30, 2026, for an

additional deferred payment.

On March 26, 2019, various

22 unchanged sentences

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%

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 October 2024 the Company settled all disputes with Gagerman at zero cost to the Company.

MINE SAFETY DISCLOSURES

Not applicable.

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-K

Item 3. Legal Proceedings