STOCKHOLDERS' DEFICIT

12 Months Ended

Feb. 28, 2014

STOCKHOLDERS' DEFICIT [Abstract]

STOCKHOLDERS' DEFICIT

NOTE 10 - STOCKHOLDERS' DEFICIT

Common Stock

At February 28, 2014 and February 28, 2013, we had 150,000,000 shares of $0.0001 par value common stock authorized for issuance, respectively. During the years ended February 28, 2014 and February 28, 2013, we issued 12,309,926 and 4,661,904 shares of common stock, respectively.

During the year ended February 28, 2014, $1,127,002 of notes payable and accrued interest were converted into 2,660,225 shares of common stock; 1,833,333 shares of common stock and 916,666 7-year warrants to purchase our stock with an exercise price of $0.75 were issued to re-price a prior issuance of stock in December 2012,; 4,254,250 shares of common stock were issued in exchange for the cancellation of warrants to purchase 5,005,000 shares of common stock at an exercise price of $0.75 per share which would have expired on September 22, 2016,; and 3,562,118 shares of common stock were issued for services valued at $974,726.

In the year ended February 28, 2013, we issued 3,866,867 shares of common stock, with 2,033,333 five year warrants attached with an exercise price of $1.00, for cash proceeds of $1,252,100 and the availability of up to $500,000 in additional loans on favorable terms; 341,748 shares were issued upon the conversion of $259,729 of notes payable and accrued interest with 206,941 five year warrants attached with an exercise price of $1.00 with a gain on settlement of debt of $102,336; 37,500 shares were issued in settlement of $30,000 of accounts payable with 25,000 five year warrants attached with an exercise price of $1.00 with a gain on settlement of debt of $10,688; and 415,789 shares were issued for marketing services and investor relation services valued at $316,000.

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 the year ended February 28, 2014, the Company granted 240,333 options to certain employees. These options vest immediately, have an exercise price of $.75, and have a seven year life.  The grant date fair value of these options amounted to $19,589 which was calculated using the Black-Scholes option pricing model with the following assumptions:  risk free rate of return of 1.26%, volatility of 76.06%, a dividend yield of 0%, and an expected life of 7 years.

The Company incurred stock options related expenses of $62,921 and $911,730, during the years ended February 28, 2014 and February 28, 2013, respectively.

Activity in this plan is as follows:

	2006 Plan
	Weighted-Average Exercise Price		Aggregate Intrinsic Value		Number of Options
Outstanding, February 28, 2012	$	0.75-$1.00	$	0.00		6,268,500
Granted	$	0.75				2,590,500
Cancelled	$	0.75				(311,000	)
Outstanding, February 28, 2013	$	0.75-$1.00	$	0.00		8,548,000
Granted	$	0.75				240,333
Cancelled	$	0.75				(186,000	)
Outstanding, February 28, 2014	$	0.75-$1.00	$	0.00		8,602,333

The exercise prices for the options outstanding at February 28, 2014, 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-$1.00

8,602,333

5.9 years

$

0.76

6.0 years

8,235,666

$

0.76

The weighted average fair values of the options on the date of grant for the year ended February 28, 2014 and February 28, 2013 were $0.08 per share and $0.31 per share, respectively.

A summary of the status of the Company's non-vested shares as of February 28, 2014, and changes during the year ended February 28, 2014, is presented below:

Non-vested Shares	Shares		Weighted-AverageGrant-DateFair Value
Non-vested at February 28, 2013	500,000		$	0.38
Granted	240,333		$	0.08
Vested	(373,666	)	$	0.31
Non-vested at February 28, 2014	366,667		$	0.38

As of February 28, 2014, there was $57,781 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 1.50 years.

Warrants

Activity in issued and outstanding warrants is as follows:

	Number of Shares			Exercise Prices
Outstanding, February 28, 2013		38,783,290		$	0.75-$3.00
Granted		14,895,430		$	0.75
Expired		(5,175,000	)	$	1.00-$3.00
Outstanding, February 28, 2014		48,503,720		$	0.75-$2.00

The exercise prices for the warrants outstanding at February 28, 2014, 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
$	0.75		3,368,762		3,368,762	74 months	$	0.75	$	0.75	$	0.00
$	0.75		11,526,668		11,526,668	60 months	$	0.75	$	0.75	$	0.00
$	0.75-$1.00		8,756,942		8,756,942	65 months	$	0.81	$	0.81	$	0.00
$	0.75-$1.00		1,220,000		1,220,000	32 months	$	1.03	$	1.03	$	0.00
$	1.00		16,722,787		16,722,787	30 months	$	1.00	$	1.00	$	0.00
$	1.50		155,000		155,000	25 months	$	1.50	$	1.50	$	0.00
$	0.75-1.50		1,109,198		1,109,198	22 months	$	1.17	$	1.17	$	0.00
$	1.50		156,000		156,000	18 months	$	1.50	$	1.50	$	0.00
$	1.50		704,000		704,000	17 months	$	1.50	$	1.50	$	0.00
$	1.50		350,642		350,642	14 months	$	1.50	$	1.50	$	0.00
$	0.75-$2.00		58,000		58,000	10 months	$	1.78	$	1.78	$	0.00
$	2.00		725,721		725,721	7 months	$	2.00	$	2.00	$	0.00
$	0.75-2.00		3,650,000		3,650,000	4 months	$	1.03	$	1.03	$	0.00
			48,503,720		48,503,720