<PAGE>
As filed with the Securities and Exchange Commission on February 29, 1996
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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AURA SYSTEMS, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 95-4106394
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2335 Alaska Avenue, El Segundo, California 90245
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(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive office)
Zvi (Harry) Kurtzman, Chief Executive Officer
Aura Systems, Inc.
2335 Alaska Avenue
El Segundo, CA 90245
(310) 643-5300
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(Name, Address, including zip code, and
telephone number, including area code, of agent for service)
Copy to:
Samuel S. Guzik, Esq.
Guzik & Associates
1800 Century Park East, Fifth Floor
Los Angeles, CA 90067
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Approximate date of proposed sale to the public: From time to time after the
effective date of the Registration Statement.
If the only securities registered on this form are being offered pursuant to
dividend or interest reinvestment plans, check the following box. [_]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED
MAXIMUM PROPOSED
OFFERING MAXIMUM
TITLE OF EACH CLASS AMOUNT TO PRICE PER AGGREGATE AMOUNT OF
OF SECURITIES TO BE BE UNIT OR OFFERING PRICE REGISTRATION
REGISTERED REGISTERED SHARE (1) (1) FEE
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<S> <C> <C> <C> <C>
Common Stock, $.005 par value 1,328,300 shares(1) $5.50 $7,305,650 $2,519.19
Common Stock, $.005 par value 135,000 shares(2)(3) $4.00 $ 540,000 $ 186.21
Common Stock, $.005 par value 682,000 shares(2)(4) $5.00 $3,410,000 $1,175.86
Common Stock, $.005 par value 611,578 shares(2)(5) $4.00 $2,446,310 $ 843.56
Common Stock, $.005 par value 170,000 shares(2)(6) $3.06 $ 520,200 $ 179.38
Common Stock, $.005 par value 38,000 shares(2)(7) $1.50 $ 57,000 $ 19.66
Common Stock, $.005 par value 40,000 shares(2)(8) $4.75 $ 190,000 $ 65.52
Common Stock, $.005 par value 550,000 shares(2)(9) $4.0625 $2,234,375 $ 770.47
Common Stock, $.005 par value 10,000 shares(2)(10) $7.25 $ 72,500 $ 25.00
Common Stock, $.005 par value 50,000 shares(2)(11) $5.375 $ 268,750 $ 92.67
Common Stock, $.005 par value 100,000 shares(2)(12) $4.50 $ 450,000 $ 155.17
Common Stock, $.005 par value 50,000 shares(2)(13) $5.50 $ 275,000 $ 94.93
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Total Fee $6,127.62
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</TABLE>
(1) Common Stock to be sold by Selling Stockholders. Estimated for the purpose
of calculating the registration fee pursuant to Rule 457(c) on the basis of
the average high and low prices of the Registrant's Common Stock on
February 22, 1996.
(2) Pursuant to Rule 416, there are also being registered such additional
securities as may be issued pursuant to the anti-dilution provisions of the
Options and Warrants.
(3) Common Stock issuable upon the exercise of Warrants at $4.00 per share.
(4) Common Stock issuable upon the exercise of Warrants at $5.00 per share.
(5) Common Stock issuable upon the exercise of Options at $4.00 per share.
(6) Common Stock issuable upon the exercise of Options at $3.06 per share.
(7) Common Stock issuable upon the exercise of Options at $3.06 per share.
(8) Common Stock issuable upon the exercise of Options at $4.75 per share.
(9) Common Stock issuable upon the exercise of Warrants at $4.0625 per share.
(10) Common Stock issuable upon the exercise of Warrants at $7.25 per share.
(11) Common Stock issuable upon the exercise of Warrants at $5.375 per share.
(12) Common Stock issuable upon the exercise of Options at $4.50 per share.
(13) Common Stock issuable upon the exercise of Options at $5.50 per share.
- ------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE>
AURA SYSTEMS, INC.
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Cross-Reference Sheet Pursuant to Regulation S-K, Item 501(b)
<TABLE>
<CAPTION>
Item Number and Heading in Form S-3
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Registration Statement Location in Prospectus
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<S> <C>
1. Forepart of the Registration Statement
and Outside Front Cover Page of
Prospectus Front Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus Inside Front Cover Page; and
Outside Back Cover Pages of
Prospectus; Additional Information
3. Summary Information, Risk Factors
and Ratio of Earnings to Fixed Charges Summary; Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Risk Factors; Plan of Distribution
6. Dilution Dilution
7. Selling Security Holders Selling Stockholders and Plan of
Distribution
8. Plan of Distribution Front Cover page of Prospectus;
9. Description of Securities
to be Registered Description of Capital Stock
10. Interest of Named Experts and Counsel Legal Matters
11. Material Changes Material Changes
12. Incorporation of Certain Information
by Reference Incorporation of Certain
Information by Reference
13. Disclosure of Commission Position
on Indemnification for Securities
Act Liabilities Inapplicable
</TABLE>
<PAGE>
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to completion, dated February 29, 1996
PROSPECTUS
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3,764,878 SHARES OF COMMON STOCK
AURA SYSTEMS, INC.
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This Prospectus relates to (i) an aggregate of 1,427,000 shares of Common
Stock, $.005 par value ("Common Stock") of Aura Systems, Inc. ("Aura" or the
"Company") which are being offered for sale by the Company pursuant to
outstanding warrants at exercise prices ranging from $4.10 to $7.25 per share
(the "Warrants"); (ii) an aggregate of 1,009,578 shares of Common Stock of the
Company which are being offered pursuant to outstanding options at exercise
prices ranging from $1.50 to $5.50 per share (the "Options"); and (iii)
1,328,300 shares of Common Stock of the Company acquired by certain Selling
Stockholders in private transactions which are being offered for the account of
the Selling Stockholders named herein. See "Selling Stockholders and Plan of
Distribution." The Company will receive proceeds from the exercise of
outstanding Warrants and Options from time to time if and when they are
exercised. However, the Company will not receive any of the proceeds from the
sale of shares by the Selling Stockholders.
Of the 2,436,578 shares of Common Stock covered by this Prospectus and
issuable upon exercise of the Warrants and Options, 1,516,578 of these shares
were previously registered by the Company and were covered by a Prospectus dated
August 30, 1994. Such registration statement and Prospectus have been
superseded in their entirety by this Prospectus and the new Registration
Statement to which it relates.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY
PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The Common Stock of the Company is traded on the NASDAQ National Market
System under the symbol "AURA". On February 26, 1996, the last reported sales
price for Aura's Common Stock on the NASDAQ National Market System was $6.43.
See "PRICE RANGE OF COMMON STOCK".
The date of this Prospectus is __________ ____, 1996
<PAGE>
AVAILABLE INFORMATION
Aura is subject to the informational reporting requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Regional Offices located at 7 World Trade Center, New
York, New York 10048 and Northwestern Atrium Center, 500 W. Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material can also be
obtained from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates.
The Company has filed with the Commission a Registration Statement (together
with all amendments and exhibits, the "Registration Statement") on Form S-3
under the Securities Act of 1933 (the "Securities Act") with respect to the
Common Stock offered pursuant to this Prospectus. This Prospectus does not
contain all the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. Statements made in this Prospectus as to the contents of any
agreement or other document referred to herein are not necessarily complete and
reference is made to the copy of such agreement or other reference is made to
the Registration Statement and to the exhibits and schedules filed therewith.
Copies of the material containing this information may be obtained from the
Commission upon payment of the prescribed fee.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, all of which are previously filed with the
Commission pursuant to the Securities Exchange Act of 1934, are hereby
incorporated by reference in this Prospectus: (i) the Company's Annual Report on
Form 10-K for the fiscal year ended February 28, 1995 ("1995 Form 10-K"); (ii)
the Company's Quarterly Reports on Form 10-Q for the quarters ended May 31,
August 31, and November 30, 1995; and (iii) the Company's Proxy Statement dated
July 21, 1995.
All other reports and documents filed by the Company subsequent to the date
of this Prospectus pursuant to Sections 13(a), 13(c), and 14 or 15(d) of the
Exchange Act prior to the termination of the offering of the Common Stock
covered by this Prospectus shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of those
documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that such statement is modified or
replaced by a statement contained in this Prospectus or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference into this Prospectus. Any such statement so modified or superseded
shall not be deemed, except as so modified or replaced, to constitute a part of
this Prospectus. The Company will provide without charge to each person to whom
a copy of this Prospectus has been delivered, upon the written request of any
such person, a copy of any or all of the documents referred to above that have
been or may be incorporated in this Prospectus by reference, other than exhibits
to such documents. Written requests for such copies should be directed to
Steven C. Veen, Senior Vice President and Chief Financial Officer, Aura Systems,
Inc., 2335 Alaska Avenue, El Segundo, California 90245, (310) 643-5300.
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<PAGE>
SUMMARY
The following summary is qualified in its entirety by reference to the more
detailed information and financial statements (including the notes thereto)
appearing elsewhere in this Prospectus. An investment in the shares of the
Common Stock offered hereby involves a high degree of risk. Prospective
investors should carefully consider the factors discussed under "RISK FACTORS".
THE COMPANY
Aura Systems, Inc. ("Aura" or the "Company") is engaged in the development,
commercialization and sales of products, systems and components using its
patented and proprietary electromagnetic technology. The Company's proprietary
and patented technology is being developed for use in systems and products for
commercial, industrial, consumer and government use. To date, a combination of
Aura funds and commercial and governmental development contracts have been
utilized in the process of developing product applications.
TECHNOLOGY
The Company's electromagnetics technology involves: (i) high force
electromagnetic actuators ("HFAs"), which are devices that create lateral force
upon command and combine the high forces and long strokes of hydraulic or
pneumatic actuators with the speed and precision of voice coil actuators; (ii)
dielectric resonator oscillators ("DROs"), which are devices used to create
electromagnetic radiation and are used in wireless communications systems such
as cellular telephones, satellite transponders, radiotelephonic communications
and microwave links; and (iii) actuated mirror array ("AMA") display technology,
which are images generated by a light valve and have no absorptive or dispersive
surfaces between the light source and the eyes of users, which the Company
expects has applications in large screen television, movie or exhibition
displays.
PRINCIPAL PRODUCTS AND APPLICATIONS
AURASOUND SPEAKERS. Aura has developed a line of audio speakers, AuraSound
speakers which utilize a patented electro-magnetic design, resulting in a more
efficient speaker which requires no magnetic shielding. AuraSound speakers have
been sold commercially since 1993, and are currently sold to both end users and
computer OEM's. AuraSound speakers are also showcased by its subsidiary,
Electrotec, which provides high end concert sound systems to the contemporary
touring music industry.
COMMUNICATIONS. Aura, through its NewCom subsidiary, is engaged in the
manufacture and sale of leading edge, high performance computer multimedia
products for the personal computer market. These products include sound cards,
which can be utilized with AuraSound speakers, and data fax modems. Through its
Delphi Components subsidiary the Company manufactures and sells DRO's for use in
state-of-the-art communications products and systems.
INTERACTIVE PRODUCTS. The Company has developed a line of interactive
products which utilize Aura's electromagnetic technology. The first interactive
product, which Aura introduced in 1994, is called the "Interactor(TM)", a vest
that incorporates an electromagnetic actuator and is configured to be worn over
the upper torso and can be plugged into most video game systems currently on the
market. This product allows the video player to feel the action which is seen on
the video screen. Aura is also selling its Theater Seat Transducers, which
create the same interactive experience in movie theatres with a movie
soundtrack. Aura is also currently marketing the Bass Shaker(TM), a product
incorporating an electromagnetic actuator, which is designed to produce the feel
and sound of bass in an automobile without producing sound outside the vehicle.
-3-
<PAGE>
AUTOMOTIVE. Aura has developed three breakthough automotive products,
each of which has recently been demonstrated through a working prototype in a
fully functioning gasoline powered vehicle. Aura's Electromagnetic Valve
---------------------
Actuator System ("EVA") is a patented electromagnetically powered system which
- ---------------
opens and closes engine valves. The patented design simplifies conventional
engine mechanics by eliminating the entire camshaft assembly and operates more
efficiently than a conventional engine. The Company is currently retro-fitting
EVA to adapt its design and configuration for different types of diesel,
automobile and motorcycle engines. The Flywheel Alternator System ("FAS") is a
--------------------------
unique electromagnetic device mounted directly to the flywheel of an automobile
engine, which replaces the conventional starter and alternator. FAS turns a
vehicle's idling engine into a generator capable of producing thousands of watts
of power, enough to power the car and also serve as an auxilliary generator for
non-automobile use. The Sparking Gasket System ("SGS") is an automotive engine
----------------------
head gasket with built-in spark plug probes. SGS puts the sparking points
directly inside the head gasket, making it the first known practical application
of multipoint sparking technology. The design is believed to increase engine
performance and fuel economy and reduce hydrocarbon emissions.
DISPLAY SYSTEMS. In 1992, the Company entered into a joint development
and licensing agreement with Daewoo Electronics Co., Ltd. ("Daewoo") to develop
and commercialize televisions using the AMA display technology. Daewoo, who is
solely responsible for manufacturing and sales under the license agreement, has
advised the Company that it expects to begin commercial production of large
screen display televisions under the license agreement in the first half of
1996. There are no assurances as to when or if Daewoo will commence commercial
production of televisions incorporating Aura's AMA display technology.
References herein to the "Company" or "Aura" include Aura and its
subsidiaries, unless the context indicates otherwise. The Company's
headquarters are located at 2335 Alaska Avenue, El Segundo, California 90245,
and its telephone number is (310) 643-5300.
RISK FACTORS
See "RISK FACTORS" for a discussion of certain factors that investors should
consider carefully in evaluating an investment in the Common Stock offered
hereby. These risk factors, include among other things, a history of operating
losses, the continuing need for additional capital, competition and other
factors.
THE OFFERING
The securities offered hereby include the following:
<TABLE>
<S> <C>
Shares of Common Stock issuable upon exercise of
Outstanding Warrants...................................... 1,427,000
Shares of Common Stock issuable upon exercise of
Outstanding Options....................................... 1,009,578
Shares of Common Stock Offered by the Selling
Stockholders.............................................. 1,328,300
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Shares Outstanding:
Common Stock Outstanding before
The Offering.............................................. 61,735,557
Common Stock Outstanding after
The Exercise of Options and Warrants in the Offering/1/... 64,177,135
Use of Proceeds The estimated proceeds of approximately $12,699,712 will
be used by the Company for working capital purposes. The
estimated proceeds do not include proceeds from the sale
of shares by the Selling Stockholders. Expenses incurred
in connection with the registration of Common Stock
offered by the Company and the Selling Stockholders,
estimated at $25,000 and payable by the Company, have not
be subtracted from the estimated proceeds.
NASDAQ/NMS Symbol................................................. AURA
</TABLE>
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/1/ Based upon the number of shares outstanding as of February 26, 1996.
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<PAGE>
SUMMARY FINANCIAL INFORMATION
AURA SYSTEMS, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
(UNAUDITED) (UNAUDITED)
NINE MONTHS NINE MONTHS YEAR ENDED YEAR ENDED YEAR ENDED
ENDED ENDED FEBRUARY 28, FEBRUARY 28, FEBRUARY 28,
NOVEMBER 30, NOVEMBER 30, 1995 1994 1993
1995 1994
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Gross Revenues $ 55,716,103 $32,214,127 $44,214,242 $ 16,369,825 $11,005,379
Net (loss) (2,022,571) (389,404) (2,649,879) (10,594,302) (9,645,117)
Net (loss) per share (.04) (.01) (.07) (.35) (.36)
Weighted average
shares outstanding 51,374,076 35,819,115 37,217,673 30,117,742 26,881,421
BALANCE SHEET DATA:
Working Capital $ 86,445,237 $33,178,431 $33,796,181
Total Assets 129,998,677 78,449,421 73,467,003
Total Liabilities (including
deferred income) $ 15,989,039 $27,074,409 $19,213,584
Net Stockholders' Equity $114,009,638 $51,375,012 $54,253,419
</TABLE>
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<PAGE>
RISK FACTORS
THE SHARES OF AURA'S COMMON STOCK MUST BE CONSIDERED A SPECULATIVE
------------------------------------------------------------------
INVESTMENT INVOLVING A HIGH DEGREE OF RISK. IN ADDITION TO OTHER INFORMATION
- -----------------------------------------------------------------------------
CONTAINED IN THIS PROSPECTUS, PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER
- -----------------------------------------------------------------------------
THE FOLLOWING FACTORS IN EVALUATING THE COMPANY AND ITS BUSINESS BEFORE
- -----------------------------------------------------------------------
INVESTING IN THE SHARES OF COMMON STOCK OFFERED HEREBY.
- ------------------------------------------------------
HISTORY OF LOSSES; SIGNIFICANT ACCUMULATED DEFICIT; POSSIBILITY OF FUTURE LOSSES
The Company and its predecessors on a consolidated basis have recognized net
losses in each fiscal year to date. The Company has incurred cumulative losses
in each fiscal year to date and has an accumulated deficit through February 28,
1995 ("Fiscal 1995") of approximately $41 million. The Company incurred a loss
for the fiscal year ended February 28, 1995 of $2,649,879, and incurred a loss
of $2,022,571 for the nine months ended November 30, 1995. There can be no
assurance if or when the Company will become profitable or that its activities
or operations will be successful. In addition, because the Company's efforts
have been directed towards product development and the introduction of new
products in the recent past, revenues and operating results have been uneven and
may continue to be so during Fiscal 1997 and beyond.
GENERAL NEED FOR ADDITIONAL CAPITAL AND NO ASSURANCE IT WILL BE AVAILABLE
The cash flow generated from the Company's operations to date has not been
sufficient to fund its working capital needs. The Company has relied upon
external sources of financing to maintain its liquidity, principally private and
bank indebtedness and equity financing. The Company has raised over $50 million
in equity financing since the beginning of Fiscal 1995. The Company expects to
fund any operating shortfall in Fiscal 1996 from cash on hand and expects to
continue to seek external sources of capital such as debt and equity financing.
In the event any such financing involves the issuance of equity securities,
existing stockholders may suffer dilution in net tangible book value per share.
The Company has no commitments to obtain funds from any external sources,
however, and there are no assurances that such funds will be available at the
times or in the amounts required by the Company. The unavailability of funds
could have a material adverse effect on the Company's financial statements,
results of operations and ability to expand its operations.
HIGHLY COMPETITIVE INDUSTRIES
The industries in which the Company operates are extremely competitive and
characterized by rapid technological change. Many of its competitors have
substantially greater financial resources than the Company, spend considerably
larger sums than the Company on research, new product development and marketing,
and have long-standing customer relationships. Furthermore, the Company must
compete with many larger and better established companies in the hiring and
retention of qualified personnel. Although the Company believes it has certain
technological advantages over its competitors, realizing and maintaining such
advantages will require the Company to develop customer relationships and will
depend on market acceptance of its products. Future revenues and profits will
be dependent to a large extent on the introduction of new products. Competitive
pressures could reduce market acceptance of the Company's products, and there
can be no assurance the Company will have the financial resources, technical
expertise or marketing and support capabilities to compete successfully in the
future.
DEPENDENCE ON KEY PERSONNEL
The Company depends to a considerable degree on the continued services of
Zvi (Harry) Kurtzman,
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<PAGE>
its President, and Arthur J. Schwartz, its Executive Vice President, as well as
a limited number of highly qualified scientists. The Company has non-
competition and secrecy agreements with these individuals; however, none of
these individuals has an employment agreement with the Company, nor does the
Company maintain key-man life insurance. The loss of any of these individuals
could have a material adverse effect on the Company.
PROTECTION OF PATENTS AND PROPRIETARY TECHNOLOGY
The Company protects its proprietary technology by means of patent
protection, trade secrets and unpatented proprietary know-how. No assurance can
be given that pending or future patent applications will issue as patents or
that any patents which have been or may be issued will provide the Company with
adequate protection with respect to the covered products or technology.
Moreover, a portion of the Company's proprietary technology is dependent upon
unpatented trade secrets and know-how. Although the Company enters into
confidentiality agreements with individuals and companies having access to
proprietary technology whenever practicable, such agreements may not provide
meaningful protection for this technology in the event of any unauthorized use
or disclosure of such know-how. Further, in cases where patent protection does
not exist, the Company may be exposed to competitors who independently develop
substantially equivalent technology or otherwise gain access to the Company's
trade secrets, know-how or other proprietary information.
LIMITED MANUFACTURING EXPERIENCE
Although the Company has substantial experience in the manufacture of
microwave components and has begun to acquire experience regarding manufacture
of products utilizing its magnetics technology, the Company currently has
limited capability to manufacture its proposed products by itself on a
commercial scale. Accordingly, the Company could experience delays in meeting
customer needs. In order to reduce risks associated with manufacturing, for
certain of its manufacturing needs, the Company has entered and in the future
intends to enter into joint development, joint venture or subcontract
arrangements with qualified manufacturers. As a result, the Company expects
that it will be dependent on partners, licensees or other entities for
commercial scale manufacturing of its products. In the event the Company
decides to establish a commercial scale manufacturing facility, the Company may
require substantial additional funds and personnel and would be required to
comply with regulations applicable to such a facility. There can be no
assurance that the Company will be able to enter into arrangements for the
manufacturing of its product or to obtain additional capital to conduct such
activities independently.
SHARES ELIGIBLE FOR FUTURE SALE
Future sales of Common Stock in the public market by stockholders (and
future issuances of Common Stock upon the exercise of options, warrants, or
convertible debt) may adversely affect the market price of the Company's stock.
For example, pursuant to an outstanding registration statement on file with the
Commission a total of approximately 7,000,000 shares of Common Stock issuable
upon the exercise of outstanding warrants and options are eligible for future
resale in the public market. Approximately 1,085,000 shares will become eligible
for resale upon the conversion of the Company's 7% Secured Convertible Notes.
In addition, the Company has issued $8,000,000 of convertible debentures (the
"Debentures") which are convertible into shares of Common Stock. See "Recent
Developments-Recent Financing Activities" herein.
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<PAGE>
SHAREHOLDER LITIGATION
Claims have been made against the Company and certain of its directors in
two purported class action lawsuits filed in May 1995 alleging that as a result
of information disseminated by the Company the market price of Aura's Common
Stock was artificially inflated at certain times. Although no prediction can be
made as to the ultimate outcome of the proceedings, the Company believes that it
has meritorious defenses. See Note 7 to the Company's financial statements
appearing in its Form 10-Q for the quarter ended November 30, 1995.
ABSENCE OF DIVIDENDS
The Company has never paid cash dividends on its Common Stock and does not
expect to pay any cash dividends in the foreseeable future. The Company
currently intends to retain any future earnings for use in its business.
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<PAGE>
USE OF PROCEEDS
The net proceeds to be received by the Company from the issuance of up to
2,436,578 shares of Common Stock upon exercise of the Warrants and Options
offered by the Company are estimated to be $12,699,712. There is no assurance
that any Warrants or Options will be exercised. Thus, the Company may not
receive any proceeds from the exercise of such Warrants or Options. The Company
will not receive any proceeds from the sale of shares of Common Stock offiered
by the Selling Stockholders.
The Company currently anticipates that it will use the net proceeds of this
offering to fund working capital requirements in connection with anticipated
growth of the Company resulting from the sale and distribution of new products.
In the event sufficient proceeds are not received, the Company's short term plan
to meet cash needs is through external financing sources such as bank financing
and private offerings of debt and/or equity. The Company also expects that cash
flow from operations will provide additional funds as the Company as operating
revenues increase.
The cost, timing and amount of funds required for such uses by the Company
cannot be precisely determined at this time and will be based on, among other
things, competitive developments, the rate of the Company's progress in product
development, and the availability of alternative methods of financing. In
addition, the Board of Directors has broad discretion in determining how the
proceeds of the offering will be applied.
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<PAGE>
DILUTION
As of November 30, 1995, the net tangible book value of the Company was
approximately $108,240,241 or $1.80 per share of Common Stock. Net tangible
book value is computed as follows:
<TABLE>
<S> <C> <C>
TOTAL ASSETS $129,998,677
Less:
Current Liabilities 11,390,023
Long Term Debt 4,599,016
Intangible Assets/1/ 5,769,397 (21,758,436)
---------- ------------
Net Tangible Assets $108,240,241
============
Shares Outstanding 59,986,906
============
Net Tangible Assets Per Share $1.80
============
</TABLE>
Without taking into account changes in net tangible book value after
November 30, 1995, (other than to give effect to the issuance of 1,427,000
shares issuable upon exercise of Warrants initially exercisable at an average
price of $4.43 per share, and 1,009,578 shares issuable upon exercise of
Options), the pro forma net tangible book value of the Company as of November
30, 1995 would have been $120,939,953, or approximately $2.016 per share of
Common Stock, representing dilution for shares yet to be issued as follows:
<TABLE>
<CAPTION>
SHARES DILUTION
--------- --------
<S> <C> <C>
Warrants (at exercise prices from $4.00 to $7.25) 1,427,000 $2.41
Options 1,009,578 4.35
Aggregate Dilution if the above Warrants and Options
were exercised 2,441,578 3.18
</TABLE>
No recognition has been given in any of the above calculations to (i)
approximately 3,000,000 shares reserved for issuance upon conversion of
outstanding warrants and options not covered by this Prospectus, (ii)
approximately 1,085,000 shares issuable upon conversion of the Secured 7%
Convertible Notes, (iii) approximately 4,076,000 shares issuable upon exercise
of outstanding options under the Company's 1989 Stock Option Plan, and (iv)
shares issuable upon conversion of the Debentures.
- ------------------
/1/ Intangible assets include patents, deferred costs, and a customer list
(arising from the acquisition of Delphi Components, Inc.) and miscellaneous
other items.
-11-
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company on a
consolidated basis, (i) as of November 30, 1995, and (ii) and as adjusted on a
pro forma basis to give effect to the issuance of 2,441,578 shares by the
Company upon the exercise of 1,427,000 Warrants and 1,009,578 Options to which
this Prospectus relates and the issuance of $8,000,000 of Debentures subsequent
to November 30, 1995. For further information regarding the Debentures, see
"Recent Developments" herein.
<TABLE>
<CAPTION>
SECURITIES
ISSUED
------
ACTUAL AS ADJUSTED /1/
----- ---------------
<S> <C> <C>
Total Debt:
Current Installments of
Notes Payable $ 1,925,825 1,925,825
Secured 7% Convertible
Notes - due 2002 and
other debt 4,599,016 4,599,016
5% Convertible Debentures --- 8,000,000
------------ -----------
$ 6,524,841 $14,524,841
Stockholders' equity:
Common Stock, $.005 per
value, 100,000,000 shares
authorized, and
59,896,906 shares issued
and outstanding 299,485 311,668
Additional paid-in capital 157,306,291 169,993,820
Accumulated deficit (43,596,638) (43,596,138)
------------ ------------
Net stockholders' equity $114,009,138 $126,708,850
------------
Total Capitalization $120,534,479 $141,233,691
============ ============
</TABLE>
/1/ Excludes (i) approximately 3,000,000 shares reserved for issuance upon
conversion of outstanding warrants and options not covered by this Prospectus,
(ii) approximately 1,085,000 shares issuable upon conversion of the Secured 7%
Convertible Notes, (iii) approximately 4,076,000 shares issuable upon exercise
of outstanding options under the Company's 1989 Stock Option Plan, and (iv)
shares issuable upon conversion of the Debentures.
-12-
<PAGE>
PRICE RANGE OF COMMON STOCK
From March 1987 until November 1988, Aura's Common Stock was traded over-
the-counter but was not quoted in any automated quotation system of a registered
securities association. Since November 1988 Aura Common Stock has been quoted
on the NASDAQ quotation system under the trading symbol "AURA". In May 1991
Aura shares became listed on the NASDAQ National Market System.
Set forth below are high and low sales prices of the Common Stock of Aura
for each quarterly period in each of the three most recent fiscal years through
February 26, 1996. Such quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commissions and may not necessarily represent actual
transactions in Common Stock. The Company had approximately 20,000 stockholders
of record as of February 26, 1996.
<TABLE>
<CAPTION>
PERIOD HIGH LOW
- ------ ---- ----
<S> <C> <C>
Fiscal Year Ended February 28, 1994 ("Fiscal 1994")
First Quarter ended May 31, 1993 6.19 3.13
Second Quarter ended August 31, 1993 6.38 4.63
Third Quarter ended November 30, 1993 8.56 4.88
Fourth Quarter ended February 28, 1994 9.56 6.13
Fiscal Year Ended February 28, 1995 ("Fiscal 1995")
First Quarter ended May 31, 1994 9.00 6.50
Second Quarter ended August 31, 1994 9.38 7.00
Third Quarter ended November 30, 1994 7.88 3.94
Fourth Quarter ended February 28, 1995 5.38 3.06
Fiscal Year Ended February 29, 1996 ("Fiscal 1996")
First Quarter ended May 31, 1995 5.68 3.00
Second Quarter ended August 31, 1995 5.50 4.50
Third Quarter ended November 30, 1995 8.25 4.50
Fourth Quarter through February 26, 1996 6.75 4.06
</TABLE>
On February 26, 1996, the last reported sales price for the Company's Common
Stock was $6.437.
DIVIDEND POLICY
The Company has not paid any dividends on its Common Stock and currently
intends to retain any future earnings for use in its business. Therefore, the
Company does not anticipate paying any dividends on its Common Stock in the
foreseeable future.
-13-
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following Selected Consolidated Financial Data has been taken or derived
from the audited consolidated financial statements of the Company or the
Company's unaudited financial statements, and should be read in conjunction with
and is qualified in its entirety by the full consolidated financial statements,
related notes and other information included elsewhere herein.
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
----------------- ----------
(Unaudited)
November 30, November 30, February 28, February 28,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues 55,716,103 32,214,127 $ 44,214,242 $ 16,369,825
Cost of Revenues 43,890,839 20,715,877 30,064,935 13,714,813
Research and development expenses 1,921,718 1,366,560 2,037,467 2,286,051
General and administrative expenses 11,472,459 10,328,525 14,407,919 6,259,748
Provision for contract losses 11,975,320 133,261 17,133
Equity losses from AMS investments/1/ --- --- --- 9,454
Total costs and expenses 57,787,877 32,410,962 46,643,582 22,287,199
(Loss) from operations (2,071,774) (196,835) (2,429,340) (5,917,374)
Other Income and Expense:
Interest expenses (income) net (49,203) 192,569 220,539 301,928
Class action litigation and other
settlement --- --- --- 4,375,000
Net (loss) $ (2,022,571) $ (389,404) $ (2,649,879) $(10,594,302)
Net (loss) per common share $(.04) $(.01) $(.07) $(.35)
Weighted average number of
common shares 51,374,076 35,819,115 37,217,673 30,117,742
<CAPTION>
Year Ended
----------
February 28, February 29, February 28,
1993 1992 1991
<S> <C> <C> <C>
Revenues $11,005,379 $11,134,502 $ 8,339,159
Cost of Revenues 10,605,654 7,488,192 7,702,435
Research and development expenses 2,813,018 2,040,662 2,544,852
General and administrative expenses 6,402,428 5,277,936 2,532,782
Provision for contract losses 183,597 435,267 ---
Equity losses from AMS investments/1/ 511,923 649,355 ---
Total costs and expenses 20,516,620 15,891,412 12,780,069
(Loss) from operations (9,511,241) (4,756,910) (4,440,910)
Other Income and Expense:
Interest expenses (income) net 133,876 42,925 530,608
Class action litigation and other
settlement --- --- ---
Net (loss) $(9,645,117) $(4,799,835) $(4,971,518)
Net (loss) per common share $(.36) $(.19) $(.22)
Weighted average number of
common shares 26,881,421 25,837,069 22,471,867
</TABLE>
<TABLE>
<CAPTION>
November 30, November 30, February 28, February 28,
Balance Sheet Data 1995 1994 1995 1994
<S> <C> <C> <C> <C>
Working capital 86,445,237 11,354,414 $ 33,796,181 $ 11,353,783
Total assets 129,998,677 78,449,421 73,467,003 37,564,037
Total Liabilities and deferrals 15,989,039 19,488,244 19 ,213,584 19,488,244
Net stockholders' equity 114,009,638 51,375,012 54,253,419 18,075,793
<CAPTION>
February 28, February 29, February 28,
1993 1992 1991
<S> <C> <C> <C>
Working capital $ 3,593,473 $ 4,906,224 $ 726,862
Total assets 22,695,481 20,158,394 18,773,218
Total Liabilities and deferrals 15,439,765 4,634,002 12,978,557
Net stockholders' equity 7,255,716 15,524,392 5,794,661
</TABLE>
- ------------------
1) In the fiscal years ended February 28, 1994, February 28, 1993 and
February 29, 1992, the Company reported results of Aura Medical Systems, Inc. on
the equity method. In the fiscal years ended February 28, 1995 and February 28,
1991, they were consolidated.
-14-
<PAGE>
AURA SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET/1/
NOVEMBER 30, 1995
<TABLE>
<S> <C>
ASSETS
- ------
CURRENT ASSETS
Cash and equivalents $ 19,657,820
Trade receivables and other 47,303,067
Inventories and Contracts in progress 25,706,250
Other current assets 5,168,123
------------
TOTAL CURRENT ASSETS 97,835,260
Property and equipment, at cost 27,016,082
Less accumulated depreciation and amortization (6,767,578)
NET PROPERTY AND EQUIPMENT 20,248,504
Patents - net 2,109,183
Investments and Joint Ventures 5,855,924
Deferred charges 2,498,178
Other assets 1,451,628
------------
$129,998,677
============
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Current installments of notes payable $ 1,925,825
Accounts payable and accrued expenses 9,464,198
------------
TOTAL CURRENT LIABILITIES 11,390,023
Secured 7% Convertible Notes 3,787,900
Notes payable and other liabilities 811,116
</TABLE>
/1/ Does not give effect to the issuance by the Company of $8,000,000 of
Debentures subsequent to November 30, 1995, or the receipt of the proceeds
therefrom.
-15-
<PAGE>
<TABLE>
<S> <C>
STOCKHOLDERS' EQUITY
Common stock, 59,896,906 shares issued
and outstanding 157,605,776
Accumulated deficit (43,596,138)
Net Stockholders' equity 114,009,638
------------
$129,998,677
============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
-16-
<PAGE>
RECENT DEVELOPMENTS
The following information describes certain changes in the Company's affairs
which have occurred since the end of Fiscal 1995 and should be read in
conjunction with the financial statements, related notes and other information
included elsewhere or incorporated by reference in this Prospectus.
RECENT FINANCING ACTIVITIES
In February 1996 the Company completed a private placement of $8 million
principal amount of its unsecured 5% Convertible Debentures (the "Debentures").
Interest on the Debentures is payable quarterly, in arrears, at the rate of 5%
per annum, with the entire principal amount due in 1998. Principal may be
converted by the holder into Common Stock of the Company in accordance with a
stated formula, subject to certain conditions, prior to maturity.
-17-
<PAGE>
SELLING STOCKHOLDERS AND PLAN OF DISTRIBUTION
Of the 3,764,878 shares of Common Stock of the Company covered by this
Prospectus, 2,436,578 are being sold for the account of the Company and
1,328,300 are being sold for the account of the selling stockholders named in
the table below under "Shares of Common Stock Offered by Selling Stockholders
(the "Selling Stockholders"). The shares being offered by the Company consist
of the following: (i) 135,000 shares issuable upon exercise of outstanding
Warrants at an exercise price of $4.00 per share; (ii) 682,000 shares issuable
upon exercise of outstanding Warrants at $5.00 per share; (iii) 611,578 shares
issuable upon exercise of outstanding Options at $4.00 per share; (iv) 170,000
shares issuable upon exercise of outstanding Options at $3.06 per share; (v)
38,000 shares issuable upon exercise of outstanding Options at $1.50 per share;
(vi) 40,000 shares issuable upon exercise of outstanding Options at $4.75 per
share; (vii) 550,000 shares issuable upon exercise of outstanding Warrants at
$4.0625 per share; (viii) 10,000 shares issuable upon exercise of outstanding
Warrants at $7.25 per share; (ix) 50,000 shares issuable upon exercise of
outstanding Warrants at $5.375 per share; (x) 100,000 shares issuable upon
exercise of outstanding Options at $4.50 per share; and (xi) 50,000 shares
issuable upon exercise of outstanding Options at $5.50 per share. All of the
Warrants and Options are presently exercisable. For further information
regarding the terms of the Warrants and Options, see "DESCRIPTION OF CAPITAL
STOCK" .
SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF OUTSTANDING WARRANTS AND
OPTIONS
The 2,436,578 shares of Common Stock issuable upon the exercise of
outstanding Warrants and Options may be issued from time to time by the Company
in accordance with the terms of the respective Warrants and Options.
The shares of Common Stock to which this Prospectus relates when issued
would have been "restricted securities" under the Securities Act prior to
registration hereunder. This Prospectus has been prepared so that future sales
of the shares of Common Stock issuable upon exercise of the Options and Warrants
will not be restricted other than as set forth herein. In connection with any
sales, persons selling shares acquired upon the exercise of Options and Warrants
and any brokers participating in such sales may be deemed to be "underwriters"
within the meaning of the Securities Act.
SHARES OF COMMON STOCK OFFERED BY SELLING STOCKHOLDERS
The shares of Common Stock offered by the Selling Stockholders consist of
(i) 315,000 shares issued to Parviz Nazarian in July 1995 in connection with the
acquisition by Aura of an interest in Auratech, Inc., an Aura affiliate; (ii)
66,135 shares issued to the shareholders of GS Systems, Inc. in July 1994 to
acquire certain noise cancellation technology; (iii) 812,000 shares issued to
four individuals in October 1994 in exchange for their common stock in Aura
Medical Systems, Inc., a subsidiary of the Company; and (iv) 35,165 shares of
Common Stock issued to Wall Street Group upon exercise of options at $2.84 per
share.
The shares of Common Stock offered by the Selling Stockholders may be
offered for sale from time to time at market prices prevailing at the time of
sale or at negotiated prices, and without payment of any underwriting discounts
or commissions except for usual and customary selling commissions paid to
brokers or dealers. This Prospectus has been prepared so that future sales of
the shares of Common Stock by the Selling Stockholders will not be restricted
other than as set forth herein. In connection with any sales, the Selling
Stockholders and any brokers participating in such sales may be deemed to be
"underwriters" within the meaning of the Securities Act.
Pursuant to Rule 10b-6 of the Exchange Act, a Selling Stockholder who is
neither affiliated nor
-18-
<PAGE>
directly or indirectly acting in concert with the issuer or with any other
Selling Stockholder will be required to observe the appropriate "cooling off"
period and other restrictions only prior to the individual stockholder's
distribution and until such distribution ends or the shares are withdrawn from
registration. Conversely, a Selling Stockholder who is affiliated or acting in
concert with the issuer or another Selling Stockholder will be required to
observe the appropriate "cooling off" period and other restrictions under Rule
10b-6 with resect to all offers and sales by affiliated persons.
Except as described above, no Selling Stockholder has had any material
relationship with the Company or an affiliate of the Company within the past
three years. No officer, director or 5% beneficial owner of the Company's
Common Stock owns any of the Warrants or Options to which this Prospectus
relates.
The shares of Common Stock sold for the account of the Selling Stockholders
may be sold in one or more of the following transactions: (a) block trades in
which the broker or dealer so engaged will attempt to sell such shares as agent
but may position and resell a portion of the block as principal to facilitate
any transaction, (b) purchases by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this Prospectus, and (c)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers. In effecting sales, brokers and dealers engaged by Selling
Stockholders may arrange for other brokers or dealers to participate. Brokers or
dealers will receive commissions or discounts from Selling Stockholders in
amounts to be negotiated (and, if such broker-dealer acts as agent for the
purchaser of such shares, from such purchaser). Broker-dealers may agree with
the Selling Stockholders to sell a specified number of such shares at a
stipulated price per share, and, to the extent such a broker-dealer is unable to
do so acting as agent for a Selling Stockholder, to purchase as principal any
unsold shares at the price required to fulfill the broker-dealer commitment to
such Selling Stockholder. Broker-dealers who acquire such shares as principals
may thereafter resell such shares from time to time in transactions (which may
involve crosses and book transactions and which may involve sales to and through
other broker-dealers, including transaction, of the nature described above) in
the over-the-counter market, in negotiated transactions or otherwise, at market
prices prevailing at the time of sale or at negotiated transactions or
otherwise, at market prices prevailing at the time of sale or at negotiated
prices, and in connection with such resales may pay to or receive from the
purchasers of such shares commissions as described above.
-19-
<PAGE>
Listed below are the names of each selling stockholder, the total number of
shares owned and the number of shares to be sold in this offering by each
selling stockholder, and the percentage of Common Stock owned by each selling
stockholder before and after this offering:
<TABLE>
<CAPTION>
Number of
Shares of Shares of
Common Stock to Common Stock
Shares of be Offered for Owned of
Common Stock Selling Record After
Owned of Record Stockholder's Completion of
Name Prior to Offering Account Offering**
- ----------------------- ----------------- --------------- ---------------
Number Percent Number Percent
------- ------- ------ -------
<S> <C> <C> <C> <C> <C>
Lawrence Bober 14,915 * 14,915 *
H.F. Boeckmann II 400,000 * 400,000 *
Dr. Daniel Graupe 27,220 * 27,220 *
Alan John Skobin and
Romelia Skobin,
Husband and Wife 12,000 * 12,000 *
David Sitrick 24,000 * 24,000 *
Parviz Nazarian 315,000 * 315,000 *
Wall Street Group 35,165 * 35,165 *
D & S Wilstein
Family Trust 220,000 * 200,000 20,000 *
Leonard Wilstein
and Joyce Wilstein
Revocable Trust 200,000 * 200,000 *
</TABLE>
- ----------------
*Less than one percent.
**Assuming the issuance of all Common Stock offered by the Company hereby.
-20-
<PAGE>
DESCRIPTION OF CAPITAL STOCK
As of the date of this Prospectus, the authorized capital stock of the
Company consists of 100,000,000 shares of Common Stock, par value $.005 per
share, of which 61,735,557 are issued and outstanding and 10,000,000 shares of
Preferred Stock, none of which are outstanding.
COMMON STOCK
Holders of Common Stock are entitled to one vote per share on all matters to
be voted upon by the stockholders. Common stockholders are entitled to receive
such dividends, if any, as may be declared from time to time by the Board of
Directors out of funds legally available therefor. The Common Stock has no
preemptive or conversion rights or other subscription rights and there are no
redemptive or sinking funds provisions applicable to the Common Stock. All
outstanding shares of Common Stock are fully paid and nonassessable, and all the
shares of Common Stock offered by the Company hereby will, when issued, be fully
paid and nonassessable.
PREFERRED STOCK
The Company's Board of Directors is authorized, without further action by
the Company's stockholders, to issue Preferred Stock from time to time in one or
more series and to fix, as to any such series, the voting rights, if any,
applicable to such series and such other designations, preferences and special
rights as the Board of Directors may determine, including dividend, conversion,
redemption and liquidation rights and preferences.
WARRANTS AND OPTIONS
The Company's outstanding warrants and options contain substantially similar
terms. They are exercisable at prices ranging from $1.50 per share to $15.00
per share and expire between 1996 and 2006. The warrants, which are exercisable
in whole or in part, have registration rights which allow the underlying shares
of Common Stock to be included in a registration proposed by the Company. The
warrants also have provisions which require the adjustment of the exercise price
in the event of certain Company distributions, reclassifications, stock splits,
or issuances of rights or warrants to purchase Common Stock at less than market
value to holders of Common Stock.
ANTI-TAKEOVER PROVISIONS
The Company is subject to Section 203 of the Delaware General Corporation
Law ("Section 203"). In general, Section 203 prohibits certain publicly held
Delaware corporations from engaging in a "business combination" with an
"interested stockholder" for a period of three years following the date of the
transaction in which the person or entity became an interested stockholder,
unless the business combination is approved in a prescribed manner. For
purposes of Section 203, "business combination" is defined broadly to include
mergers, asset sales and other transactions resulting in a financial benefit to
the interested stockholder. An "interested stockholder" is any person or entity
who, together with affiliates and associates, owns (or within the three
immediately preceding years did own) 15% or more of the Company's voting stock.
The provisions of Section 203 requiring a super majority vote to approve certain
corporate transactions could enable a minority of the Company's stockholders to
exercise veto powers over such transactions.
-21-
<PAGE>
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Company's Common Stock is Interwest
Transfer, Salt Lake City, Utah.
LEGAL MATTERS
Certain legal matters with respect to the validity of the shares of Common
Stock offered hereby will be passed upon for the Company by Guzik & Associates,
Los Angeles, California. A principal of this firm owns 40,000 options and
warrants covered by this Registration Statement.
EXPERTS
The consolidated financial statements of the Company and subsidiaries for
the years ended February 28, 1995, February 28, 1994 and February 28, 1993,
incorporated by reference in this Prospectus and Registration Statement have
been audited by Pannell Kerr Forster, independent auditors. Such financial
statements and schedules have been so incorporated in reliance upon such report
given the authority of such firm as experts in accounting and auditing.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission a
Registration Statement under the Securities Act of 1933, as amended, with
respect to the Common Stock offered hereby. This Prospectus does not contain
all the information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information with respect to the Company and the
Common Stock, reference is hereby made to such Registration Statement, exhibit
and schedules. Statements contained in this Prospectus regarding the contents
of any contract or other document are not necessarily complete with respect to
each such contract or document filed as an exhibit to the Registration
Statement, reference is made to the exhibit for a more complete description of
the matter involved, and each such statement shall be deemed qualified in its
entirety by such reference. The Registration Statement, including the exhibits
and schedules thereto, may be inspected without charge at the Commission in
Washington, D.C. and copies of such material may be obtained from such upon
payment of the fees prescribed by the Commission.
No dealer, salesman or other person has been authorized to give any
information or to make any representation orth than those contained in this
Prospectus. If given or made, such information or representation must not be
relied upon as having been authorized by the Company. This Prospectus does not
constitute an offer to sell or solicitation of an offer to buy any securities
other than the shares of Common Stock to which it relates or an offer or
solicitation to any person in any jurisdiction where such an offer or
solicitation would be unlawful. Neither delivery of this Prospectus nor sale
made hereunder shall under any circumstances create an implication that
information contained herein is correct as of any time subsequent to its date.
-22-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses payable by the Registrant in
connection with the sale and distribution of the securities being registered
hereby. All amounts are estimated except the Securities and Exchange Commission
registration fee.
<TABLE>
<S> <C>
SEC registration fee.................................................. $6,127.62
Blue Sky fees and expenses............................................ *
Accounting fees and expenses.......................................... *
Legal fees and expenses............................................... *
Printing and engraving expenses....................................... *
Registrar and Transfer Agent's fees................................... *
Miscellaneous fees and expenses....................................... *
Total................................................................. *
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides for the
indemnification of officers, directors, and other corporate agents in terms
sufficiently broad to indemnify such persons under certain circumstances for
liabilities (including reimbursement of expenses incurred) arising under the
Securities Act of 1933, as amended (the "Act"). The Registrant has entered into
agreements with its directors to provide indemnity to such persons to the
maximum extent permitted under applicable laws.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits:
(1) 4.1 Certificate of Incorporation of Registrant.
(1) 4.2 Bylaws of Registrant.
(2) 4.3 Form of Warrant.
* 5.1 Opinion of Guzik & Associates.
24.1 Consent of Pannell Kerr Forster, certified public accountants.
* 24.2 Consent of Guzik & Associates.
- ------------------
* To be filed by amendment.
(1) Incorporated by reference to the Exhibits to the Registration Statement on
Form S-1 (File No. 33-19530).
II-1
<PAGE>
(2) Incorporated by reference to the Exhibits to the Registrant's Annual Report
on Form 10-K for the fiscal year ended February 28, 1994 (File No.
0-17249).
(b) Financial Statement Schedules
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(c) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of El Segundo, State of
California, on the 28th day of February, 1996.
AURA SYSTEMS, INC.
By /s/ Zvi (Harry) Kurtzman
-------------------------------------
Zvi (Harry) Kurtzman
President and Chief Executive Officer
KNOW BY ALL MEN THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Steven C. Veen or Anthony T. Cascio or either of
them, his true and lawful attorney-in-fact and agent, with full power of
substitution, for him and his name, place and stead, in any and all capacities,
to sign any and all amendments (including post-effective amendments) to this
Registration Statement, and to file the same with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and ratifying
and confirming all that said attorney-in-fact and agent or his substitute or
substitutes may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
/s/ Zvi (Harry) Kurtzman President and Director February 28, 1996
- --------------------------- (Principal Executive Officer)
Zvi (Harry) Kurtzman
/s/ Steven C. Veen Vice President, Chief February 28, 1996
- --------------------------- Financial Officer
Steven C. Veen (Principal Financial Officer
and Principal Accounting
Officer)
/s/ Arthur J. Schwartz Director February 28, 1996
- ---------------------------
Arthur J. Schwartz
/s/ Cipora Kurtzman Lavut Director February 28, 1996
- ---------------------------
Cipora Kurtzman Lavut
/s/ Norman Reitman Director February 28, 1996
- ---------------------------
Norman Reitman
II-3
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/s/ Harvey Cohen Director February 28, 1996
- ---------------------------
Harvey Cohen
/s/ Anthony T. Cascio Director February 28, 1996
- ---------------------------
Anthony T. Cascio
/s/ Neal B. Kaufman Director February 28, 1996
- ---------------------------
Neal B. Kaufman
/s/ Phillip G. Saffman Director February 28, 1996
- ---------------------------
Phillip G. Saffman
II-4
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EXHIBIT 24.1
CONSENT OF PANNELL KERR FORSTER
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3 of our report dated May 24, 1995, on our audits of the
consolidated financial statements of Aura Systems, Inc. as of February 28, 1995,
February 28, 1994, and February 28, 1993, and for each of the three years then
ended, which report appears in Form 10-K of Aura Systems, Inc. for the fiscal
year ended February 28, 1995. We also hereby consent to the reference to our
firm under the caption "Experts" in the Registration Statement.
PANNELL KERR FORSTER
Los Angeles, California
February 28, 1996
