STOCKHOLDERS' EQUITY

12 Months Ended

Feb. 29, 2012

SHAREHOLDERS' EQUITY [Abstract]

SHAREHOLDERS' EQUITY

NOTE 10 - STOCKHOLDERS' EQUITY

Common Stock

At February 29, 2012 and February 28, 2011, we had 150,000,000 and 75,000,000 shares of $0.0001 par value common stock authorized for issuance, respectively. During the years ended February 29, 2012 and February 28, 2011, we issued 11,221,713 and 8,031,895 shares of common stock, respectively.

In the year ended February 29, 2012, we issued 2,460,849 shares of common stock, with 1,288,333 five year warrants attached with exercise prices ranging from $0.50-$0.75, for cash proceeds of $1,453,520; 2,227,612 shares were issued upon the conversion of $1,515,960 of notes payable and accrued interest; 1,006,054 shares were issued in settlement of $599,492 of accounts payable; 2,484,999 shares were issued for marketing services, investor relation services and finders fees valued at $1,153,000; and 3,042,199 shares were issued to employees in lieu of $2,259,865 in unpaid salary.

In the year ended February 2, 2011, we issued 4,647,292 shares of common stock, with 2,069,840 five year warrants attached with exercise prices ranging from $0.75-$1.50, for cash proceeds of $2,479,487; 338,408 shares were issued upon the conversion of $181,852 of notes payable and accrued interest (a loss on conversion of $57,032 was recorded); 367,619 shares were issued in settlement of $270,029 of accounts payable; 1,618,384 shares were issued for services valued at $1,183,750; and 887,142 shares were issued to employees in lieu of $487,928 in unpaid salary.

Employee Stock Options

In September, 2006, our Board of Directors adopted the 2006 Employee Stock Option Plan, subject to shareholder approval, which was obtained at a special shareholders meeting.   Under the Plan, the Company may grant options for up to the greater of Three Million (3,000,000) or 10% of the number of shares of the Common Stock of Aura from time to time outstanding. The exercise price of each option shall be at least equal to the fair market value of such shares on the date of grant. The term of the options may not be greater than ten years, and they typically vest over a three year period.

During fiscal 2011, the Board of Directors determined that, in order to provide incentives to its employees, it was in the best interest of the Company to re-price the outstanding employee options that had been granted.  Accordingly, the outstanding options were re-priced to an exercise price of $0.75 with all other terms remaining the same.  In accordance with FASB ASC 718, the Company accounted for this transaction as a modification.  Accordingly, the decremental compensation cost resulting from this modification was determined to be $59,242 calculated as the difference between the fair value of the modified award and the fair value of the original award immediately before it was modified.  The fair values were calculated using the Black-Scholes option pricing.  Assumptions used for the modified award were a risk free rate of return of 1.125%, volatility of 83.6%, a dividend yield of 0%, and an expected life of 3.5 years and 4.2 years.

Also during the year ended February 29, 2012, the Company granted 424,000 options to certain employees.  These options vest over three years, have an exercise price of $.75, and have a five year life.  The grant date fair value of these options amounted to $94,360 which was calculated using the Black-Scholes option pricing model with the following assumptions:  risk free rate of return of 1.125%, volatility of 90.39%, a dividend yield of 0%, and an expected life of 5 years.

The Company incurred stock options related expenses of $162,940 and $6,221,074, during the years ended February 29, 2012 and 2011, respectively.

Activity in this plan is as follows:

	2006 Plan
		Weighted-Average Exercise Price		Aggregate  Intrinsic Value		Number of  Options
Outstanding, February 28, 2010		$	1.50	$	0.00		6,283,500
Granted		$	0.75				424,000
Cancelled		$	1.50				(3,000	)
Re-characterized		$	1.50				(1,400,000	)
Outstanding, February 28, 2011		$	0.75	$	0.00		5,304,500
Granted		$	0.75-$1.00.				1,319,000
Cancelled		$	0.75				(338,000	)
Outstanding, February 29, 2012		$	0.75-$1.00	$	0.00		6,285,500

The exercise prices for the options outstanding at February 29, 2012, and information relating to these options is as follows:

Options Outstanding							Exercisable Options
Range of Exercise Price		Number		Weighted  Average Remaining  Life	Weighted  Average Exercise Price		Weighted Average  Remaining  Life	Number	Weighted Average  Exercise  Price
$	0.75		6,285,500	3.3 years	$	0.80	3.3 years	5,023,439	$	0.76

The weighted average fair values of the options on the date of grant for the year ended February 29, 2012 and February 28, 2011 were $0.38 per share and $0.48 per share, respectively.

During the year ended February 28, 2011, 1,400,000 employee stock options previously granted to our CEO under the 2006 Employee Stock Option Plan were re-characterized as warrants with the same terms and conditions.

A summary of the status of the Company's non-vested shares as of February 29, 2012, and changes during the year ended February 29, 2012, is presented below:

Non-vested Shares	Shares			Weighted-Average Grant-Date Fair Value
Non-vested at February 28, 2011		508,916		$	0.48
Granted		1,319,000		$	0.38
Vested		(350,242	)	$	0.48
Cancelled		(215,613	)	$	0.83
Non-vested at February 29, 2012		1,262,061		$	0.38

As of February 29, 2012, there was $584,292 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 2.75 years.

Warrants

Activity in issued and outstanding warrants is as follows:

	Number of Shares			Exercise Prices
Outstanding, February 28, 2011		8,688,576		$	0.75-$4.00
Granted		23,102,787		$	1.00-$1.50
Expired		(781,625	)	$	1.00-$4.00
Outstanding, February 29, 2012		31,009,738		$	0.75-$4.00

During the year ended February 29, 2012, the Company granted 9,400,000 warrants to certain employees & directors.  These warrants vest immediately, have an exercise price of $1.00, and have a five year life.  The grant date fair value of these warrants amounted to $3,562,578 which was calculated using the Black-Scholes option pricing model with the following assumptions:

Stock Warrants Granted	Risk free rate of return	Volatility	Dividend Yield	Expected Life
9,000,000	0.98%	78.99%	0%	5 years
400,000	0.625%	78.83%	0%	5 years

The exercise prices for the warrants outstanding at February 29, 2012, and information relating to these warrants is as follows:

Range of  Exercise Prices		Stock Warrants Outstanding		Stock Warrants Exercisable		Weighted- Average Remaining Contractual Life	Weighted- Average Exercise Price of Warrants  Outstanding		Weighted- Average  Exercise Price of Warrants Exercisable		Intrinsic Value
$	1.00		6,225,000		5,825,000	55 months	$	1.00	$	1.00	$	0.00
$	1.00		16,722,787		16,722,787	53 months	$	1.00	$	1.00	$	0.00
$	1.50		155,000		155,000	49 months	$	1.50	$	1.50	$	0.00
$	0.75-1.50		2,693,286		2,693,286	35 months	$	0.90	$	0.90	$	0.00
$	0.75-1.25		1,314,710		1,314,710	29 months	$	1.25	$	1.25	$	0.00
$	1.50		1,900,000		1,900,000	27 months	$	1.50	$	1.50	$	0.00
$	1.00-$4.00		1,998,955		1,998,955	2 months	$	3.90	$	3.90	$	0.00
			31,009,738		30,609,738