Aura Systems 10-K: Going Concern Warning, $44.8M Deficit, and Material Weakness
AUSI has more than doubled off its 52-week low of $0.061 on light trading volume (0.3× avg).
Summary
Aura Systems' 10-K discloses a going concern warning, $44.8M stockholders' deficit, material weakness in internal controls, and past-due debt of $5.2M. The company needs $5M to survive fiscal 2027.
Key Events · Earnings and Guidance · AUSI
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Going Concern Warning
Both the auditor and management raise substantial doubt about the company's ability to continue as a going concern. A net loss of $10.9M, cash used in operations of $3.4M, and a stockholders' deficit of $44.8M underscore the severity.
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Past-Due Debt of $5.2M
Notes payable and related accrued interest totaling $5.2M have reached maturity and are past due. With only $11K in cash and no bank line of credit, liquidity is critically constrained.
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Material Weakness in Internal Controls
Management identified a material weakness due to insufficient full-time personnel with U.S. GAAP knowledge and SEC reporting experience. As of February 28, 2026, disclosure controls and procedures were not effective.
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Massive Potential Dilution from Kopple Note
The Kopple convertible note carries a $22.8M derivative liability and could convert into 174.5M shares at $0.069 per share—far below the current $0.19 price. The company has insufficient authorized shares to satisfy all convertible securities.
Analysis · AUSI · Manufacturing
The fiscal 2026 annual report from Aura Systems paints a picture of severe financial distress. An auditor's going concern warning follows a $10.9M net loss, $3.4M in cash used by operations, and a $44.8M stockholders' deficit. Past-due notes payable and accrued interest total $5.2M, while cash on hand is just $11K. Management also disclosed a material weakness in internal controls stemming from insufficient accounting personnel. To sustain operations through fiscal 2027, the company estimates it needs $5M, yet no committed financing is in place. The Kopple convertible note carries a $22.8M derivative liability and could convert into 174.5M shares at $0.069 per share—far below the current $0.19 price—creating massive potential dilution. With insufficient authorized shares to satisfy all convertible securities, shareholder approval would be required to increase the authorized count.
How filings like this one have moved
In the 30 days to Sep 10, 2026, 43.9% of the 578 measured filings Wiseek scored 9 moved their stock by 5% or more by the next session's close. The median move was -0.54%. These are measured outcomes after filings of this importance, not a forecast for this one.
Measured one observation per ticker per day, after exclusions. Current figures: Filing Impact Tracker · open dataset
At the time of this filing, AUSI was trading at $0.19 on OTC in the Manufacturing sector, with a market capitalization of approximately $25.8M. The 52-week trading range was $0.06 to $0.40. This filing was assessed with negative market sentiment and an importance score of 9 out of 10.