RELATED PARTY TRANSACTIONS

9 Months Ended

Nov. 30, 2012

RELATED PARTY TRANSACTIONS [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 12 – RELATED PARTIES TRANSACTIONS

At November 30, 2012 the balance consists of $13,919,960 of unsecured notes payable plus accrued interest of $3,097,818 to a member of our Board of Directors, payable on demand, bearing interest at a rate of 10% per annum. The notes are subordinated to the Convertible Debt we entered into on September 23, 2011. During the nine months ended November 30, 2012 and November 30, 2011, interest amounting to $960,078 and $459,417 respectively, was incurred on these notes. During the quarter ended November 30, 2012, we repaid $940,040 of principal on these notes from the proceeds of a legal settlement.

During the nine months period ended November 30, 2012, Aura Systems made advances for legal fees of $150,000 to a law firm of a relative of a major shareholder of the Company. This law firm received $512,000 of the legal settlement we entered into with our former bankruptcy attorneys.