UNITED STATES DEPARTMENT OF JUSTICE

OFFICE OF THE UNITED STATES TRUSTEE

CENTRAL DISTRICT OF CALIFORNIA

In Re:			CHAPTER 11 (BUSINESS)
	Aura Systems, Inc.
	2355 Alaska Avenue		Case Number:	LA 05-24550-SB
	El Segundo, CA 90245		Operating Report Number:
		Debtor(s).	For the Month Ending:	June 24 - 30, 2005

I. CASH RECEIPTS AND DISBURSEMENTS
A. (GENERAL ACCOUNT*)
1. TOTAL RECEIPTS PER ALL PRIOR GENERAL ACCOUNT REPORTS		0.00
2. LESS: TOTAL DISBURSEMENTS PER ALL PRIOR GENERAL		0.00
ACCOUNT REPORTS
3. BEGINNING BALANCE:		0.00
4. RECEIPTS DURING CURRENT PERIOD:
	Accounts Receivable - Post-filing
	Accounts Receivable - Pre-filing
	General Sales
	Other (Specify)
	**Other (Specify)

	TOTAL RECEIPTS THIS PERIOD:	0.00
5. BALANCE:		0.00

6. LESS: TOTAL DISBURSEMENTS DURING CURRENT PERIOD
	Transfers to Other DIP Accounts (from page 2)	0.00
	Disbursements (from page 2)	0.00
	TOTAL DISBURSEMENTS THIS PERIOD:***		0.00
7. ENDING BALANCE:			0.00
8. General Account Number(s):		#3226077
	Depository Name & Location:	City National Bank
		Los Angeles Airport Office
		6033 West Century Blvd.
		Los Angeles, CA 90045

*	All receipts must be deposited into the general account.
**	Include receipts from the sale of any real or personal property out of the ordinary course of business; attach an exhibit specifying what was sold, to whom, terms, and date of Court Order or Report of Sale.
***	This amount should be the same as the total from page 2.
NOTE:
	The General Account was levied twice and all funds were frozen: $113,652.78/ Noy Hoyun and $1,419.17/Speedy International.
	There was also by reconciliaition, another $385.42 that the bank did not show as funds available nor frozen, which funds were later transferred by the City National Bank to the DIP General Account in July.

Page 1 of 16

TOTAL DISBURSEMENTS FROM GENERAL ACCOUNT FOR CURRENT PERIOD

Date mm/dd/yyyy	Check Number	Payee or DIP account	Purpose	*Amount Transfered	**Amount Disbursed	Amount
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
						0.00
		TOTAL DISBURSEMENTS THIS PERIOD:		0.00	0.00	$0.00

*	Fill in amounts in this column if they are TRANSFERS to another DIP account (e.g. Payroll or Tax); the "amount" column will be filled in for you.
**	Fill in amounts in this column if they are DISBURSEMENTS to outside payees; the "amount" column will be filled in for you.

Page 2 of 16

GENERAL ACCOUNT

BANK RECONCILIATION

	Bank statement Date:	6/30/2005	Balance on Statement:	0.00
Plus deposits in transit (a):
		Deposit Date	Deposit Amount
TOTAL DEPOSITS IN TRANSIT				0.00
Less Outstanding Checks (a):
	Check Number	Check Date	Check Amount
TOTAL OUTSTANDING CHECKS:				0.00
Bank statement Adjustments:
Explanation of Adjustments-
ADJUSTED BANK BALANCE:				$0.00

*	It is acceptable to replace this form with a similar form
**	Please attach a detailed explanation of any bank statement adjustment

Page 3 of 16

I. CASH RECEIPTS AND DISBURSEMENTS

B. (PAYROLL ACCOUNT)

1. TOTAL RECEIPTS PER ALL PRIOR PAYROLL ACCOUNT REPORTS		0.00
2. LESS: TOTAL DISBURSEMENTS PER ALL PRIOR PAYROLL		0.00
ACCOUNT REPORTS
3. BEGINNING BALANCE:		0.00
4. RECEIPTS DURING CURRENT PERIOD:
(Transferred from General Account)
5. BALANCE:		0.00
6. LESS: TOTAL DISBURSEMENTS DURING CURRENT PERIOD
TOTAL DISBURSEMENTS THIS PERIOD:***		0.00
7. ENDING BALANCE:		0.00
8.PAYROLL Account Number(s):	#3226085
Depository Name & Location:	City National Bank
	Los Angeles Airport Office
	6033 West Century Blvd.
	Los Angeles, CA 90045

Page 4 of 16

TOTAL DISBURSEMENTS FROM PAYROLL ACCOUNT FOR CURRENT PERIOD

Date mm/dd/yyyy	Check Number	Payee	Purpose	Amount
			TOTAL DISBURSEMENTS THIS PERIOD:	0.00

Page 5 of 16

PAYROLL ACCOUNT

BANK RECONCILIATION

	Bank statement Date:	6/30/2005	Balance on Statement:	$0.00
Plus deposits in transit (a):
		Deposit Date	Deposit Amount
TOTAL DEPOSITS IN TRANSIT				0.00
Less Outstanding Checks (a):
	Check Number	Check Date	Check Amount
TOTAL OUTSTANDING CHECKS:				0.00
Bank statement Adjustments:
Explanation of Adjustments-
ADJUSTED BANK BALANCE:				$0.00

*	It is acceptable to replace this form with a similar form
**	Please attach a detailed explanation of any bank statement adjustment

Page 6 of 16

I. CASH RECEIPTS AND DISBURSEMENTS

C. (TAX ACCOUNT)

1. TOTAL RECEIPTS PER ALL PRIOR TAX ACCOUNT REPORTS		0.00
2. LESS: TOTAL DISBURSEMENTS PER ALL PRIOR TAX		0.00
ACCOUNT REPORTS
3. BEGINNING BALANCE:		0
4. RECEIPTS DURING CURRENT PERIOD:
(Transferred from General Account)
5. BALANCE:		0.00
6. LESS: TOTAL DISBURSEMENTS DURING CURRENT PERIOD
TOTAL DISBURSEMENTS THIS PERIOD:***		0.00
7. ENDING BALANCE:		0.00
8. TAX Account Number(s):	#3226093
Depository Name & Location:	City National Bank
	Los Angeles Airport Office
	6033 West Century Blvd.
	Los Angeles, CA 90045

Page 7 of 16

TOTAL DISBURSEMENTS FROM TAX ACCOUNT FOR CURRENT PERIOD

Date mm/dd/yyyy	Check Number	Payee	Purpose	Amount
			TOTAL DISBURSEMENTS THIS PERIOD:	0.00

Page 8 of 16

TAX ACCOUNT

BANK RECONCILIATION

	Bank statement Date:	6/30/2005	Balance on Statement:	$0.00
Plus deposits in transit (a):
		Deposit Date	Deposit Amount
TOTAL DEPOSITS IN TRANSIT				0.00
Less Outstanding Checks (a):
	Check Number	Check Date	Check Amount
TOTAL OUTSTANDING CHECKS:				0.00
Bank statement Adjustments:
Explanation of Adjustments-
ADJUSTED BANK BALANCE:				$0.00

*	It is acceptable to replace this form with a similar form
**	Please attach a detailed explanation of any bank statement adjustment

Page 9 of 16

I. D SUMMARY SCHEDULE OF CASH

ENDING BALANCES FOR THE PERIOD:
	(Provide a copy of monthly account statements for each of the below)
			General Account:	0.00
			Payroll Account:	0.00
			Tax Account:	0.00
*Other Accounts:
*Other Monies:
			**Petty Cash (from below):	0.00
TOTAL CASH AVAILABLE:					0.00
Petty Cash Transactions:
Date		Purpose		Amount
TOTAL PETTY CASH TRANSACTIONS:					0.00

*	Specify the Type of holding (e.g. CD, Savings Account, Investment Security), and the depository name, location & account#
**	Attach Exhibit Itemizing all petty cash transactions

Page 10 of 16

II. STATUS OF PAYMENTS TO SECURED CREDITORS, LESSORS

AND OTHER PARTIES TO EXECUTORY CONTRACTS

Creditor, Lessor, Etc.	Frequency of Payments (Mo/Qtr)	Amount of Payment	Post-Petition payments not made (Number)	Total Due
Cap Mark / (Bldg Lease)	MO	$  41,122.00	1	$     13,688.80
AAA Copy Systems	MO	$       308.51	1	$          308.51
Pitney Bowes Credit	MO	$         27.35	1	$            27.35
			TOTAL DUE:	14,024.66

III. TAX LIABILITIES

FOR THE REPORTING PERIOD:
		Gross Sales Subjectto Sales Tax:		0.00
			Total Wages Paid:	0.00
		Total Post-Petition Amounts Owing	Amount Delinquent	Date Delinquent Amount Due
	Federal Withholding	2,027.89	0.00
	State Withholding	783.28	0.00
	FICA- Employer's Share	1,743.27	0.00
	FICA- Employee's Share	1,743.27	0.00
	Federal Unemployment	0.00	0.00
	Sales and Use	0.00	0.00
	Real Property	0.00	0.00
Other:
	TOTAL:	6,297.71	0.00

Page 11 of 16

IV. AGING OF ACCOUNTS PAYABLE AND RECEIVABLE

	*Accounts Payable	Accounts Receivable
	Post-Petition	Pre-Petition	Post-Petition
30 days or less		70,237.78	19,931.89 (1)
31 - 60 days		140,893.36
61 - 90 days		22,375.76
91 - 120 days		(20,088.50)
Over 120 days		61,150.16
TOTAL:	0.00	274,568.56	19,931.89

V. INSURANCE COVERAGE

		Name of Carrier	Amount of Coverage	Policy Expiration Date	Premium Paid Through (Date)
	General Liability	St Paul Travelers	2 Mil	9/15/2005	-
Worker's Compensation - CA		State Comp Ins Fund	1 Mil	4/15/2006	-
Worker's Comp - Outside CA		The Hartford	1 Mil	4/15/2006	-
Commercial & Other Property		St Paul Travelers	10.6 Mil	9/15/2005	-
	Vehicle	St Paul Travelers	1 Mil	9/15/2005	-
Others:	D&O	XL Speciality Ins	5 Mil	8/8/2005	-
	Crime	St Paul Travelers	150,000	9/15/2005	-
Boiler and Machinery		St Paul Travelers	12.5 Mil	9/15/2005	-

VI. UNITED STATES TRUSTEE QUARTERLY FEES

(TOTAL PAYMENTS)

Quarterly Period Ending (Date)	Total Disbursements	Quarterly Fees	Date Paid	Amount Paid	Quarterly Fees Still Owing
					0.00
					0.00
					0.00
					0.00
					0.00
					0.00
					0.00
					0.00
					0.00
		0.00		0.00	0.00

*	Post-Petition Accounts Payable SHOULD NOT include professionals' fees and expenses which have been incurred but not yet awarded by the court. Post-Petition Accounts Payable SHOULD include professionals' fees and expenses authorized by Court Order but which remain unpaid as of the close of the period report
Notes:	(1) Current month A/R is greater than current month Sales because: no cash collections on the A/R; and credit memos processed in the current month were credits associated to prior periods

Page 12 of 16

VII. SCHEDULE OF COMPENSATION PAID TO INSIDERS

Name of Insider	Date of Order Authorizing Compensation	*Authorized Gross Compensation	Gross Compensation Paid During the Month
Raymond Yu	6/24/2005		0.00
Sandra Ferro	6/24/2005		0.00

VIII. SCHEDULE OF OTHER AMOUNTS PAID TO INSIDERS

Name of Insider	Date of Order Authorizing Compensation	Description	Amount Paid During the Month
Raymond Yu	6/24/2005		0.00
Sandra Ferro	6/24/2005		0.00

* Please indicate how compensation was identified in the order (e.g. $1,000/week, $2,500/month)

Page 13 of 16

IX. PROFIT AND LOSS STATEMENT

(ACCRUAL BASIS ONLY)

	Current Month		Cumulative Post-Petition
Sales/Revenue:
Gross Sales/Revenue		16,005.75		16,005.75
Less: Returns/Discounts
Net Sales/Revenue		16,005.75		16,005.75
Cost of Goods Sold:
Beginning Inventory at cost		8,738,663.20		8,738,663.20
Purchases		0.00		0.00
Less: Ending Inventory at cost		8,740,564.51		8,740,564.51
Cost of Goods Sold (COGS)		-1,901.31		-1,901.31
Gross Profit		17,907.06		17,907.06
Other Operating Income (Itemize)
Operating Expenses:
Payroll - Insiders		0.00		0.00
Payroll - Other Employees		26,315.50		26,315.50
Payroll Taxes		1,743.27		1,743.27
Other Taxes (Itemize)		557.13		557.13
Depreciation and Amortization		2,639.70		2,639.70
Rent Expense - Real Property		13,688.80		13,688.80
Lease Expense - Personal Property		308.51		308.51
Insurance		11,672.41		11,672.41
Real Property Taxes
Telephone and Utilities		6,385.37		6,385.37
Repairs and Maintenance		250.00		250.00
Travel and Entertainment (Itemize)		1,232.24		1,232.24
Miscellaneous Operating Expenses (Itemize)		3,620.01		3,620.01
Total Operating Expenses		68,412.94		68,412.94
Net Gain/(Loss) from Operations		-50,505.88		-50,505.88
Non-Operating Income:
Interest Income		6,316.66		6,316.66
Net Gain on Sale of Assets (Itemize)		0.00		0.00
Other (Itemize)
Total Non-Operating income		6,316.66		6,316.66
Non-Operating Expenses:
Interest Expense		12,017.28		12,017.28
Legal and Professional (Itemize)		45,058.10		45,058.10
Other (Itemize)
Total Non-Operating Expenses		57,075.38		57,075.38
NET INCOME/(LOSS)		-101,264.60		-101,264.60
(Attach exhibit listing all itemizations required above)		101,264.60
		0.00
Other Taxes
Tax - Property		268.00		268.00
Tax & License		289.13		289.13
Total Other Taxes		557.13		557.13
Travel & Entertainment
Travel Manufacturing		692.16		692.16
Travel G&A		522.08		522.08
Client Entertainment		18.00		18.00
Total Travel & Entertainment		1,232.24		1,232.24
Miscellaneous Operating Expenses
Cost of Sales Std		4,102.46		4,102.46
COGS Samples/Demos		0.00		0.00
COGS Evaluation		846.00		846.00
COGS Replacement		-2,843.81		-2,843.81
COGS Field Service		0.00		0.00
COGS Product Exchange		0.00		0.00
COGS Returns/Allowances		0.00		0.00
Purchase Price Var...		9.09		9.09
Std. Cost Variance...		-2,508.23		-2,508.23
Manuf Clearing.INDUS.		686.64		686.64
Freight In ..........		25.02		25.02
Scrap (Obsolete).....		0.00		0.00
Physical Inv. Adj....		0.00		0.00
Part Number Changes..		0.00		0.00
Temporary..		0.00		0.00
Consultants		0.00		0.00
401K Employer Match..		54.59		54.59
Employee Business Exp.		133.00		133.00
Service Tech Supplies		0.00		0.00
Manufacturing Supplies		155.30		155.30
Shop Supplies		0.00		0.00
Postage..		0.00		0.00
Other/Misc. Expense		157.00		157.00
Sustaining Engineering		0.00		0.00
Work Ctr Applied IndS		0.00		0.00
Commissions Employee		0.00		0.00
Consultant		0.00		0.00
401K Employer Match		54.17		54.17
Employee Welfare		0.00		0.00
Janitorial Sup & Serv		0.00		0.00
Security - Building		0.00		0.00
Supplies - Office		0.00		0.00
Supplies - Computer		0.00		0.00
Online Services		249.95		249.95
Bank Charges		0.00		0.00
Public Company Expens		629.00		629.00
Research & Development - JC		0.00		0.00
Commission - Rep		986.39		986.39
Selling		0.00		0.00
Warranty/Customer Repair		0.00		0.00
Freight Out		963.29		963.29
Freight Collected		-79.85		-79.85
Marketing		0.00		0.00
Total Miscellaneous Operating Expenses		3,620.01		3,620.01
Legal and Professional
Audit & Accounting		2,600.00		2,600.00
Legal Compliance		42,458.10		42,458.10
Total Legal and Professional		45,058.10		45,058.10

Page 14 of 16

X. BALANCE SHEET

(ACCRUAL BASIS ONLY)

	Current Month End			6/30/2005
ASSETS
Current Assets:
Unrestricted Cash		15,994.12
Restricted Cash		114,921.95
Accounts Receivable		294,534.50
Inventory		6,791,423.85
Notes Receivable		0.00
Prepaid Expenses		130,774.26
Other (Itemize)		3,930,396.51
Total Current Assets					11,278,045.19
Property, Plant, and Equipment		4,237,883.12
Accumulated Depreciation/Depletion		-4,112,388.89
Net Property, Plant, and Equipment					125,494.23
Other Assets (Net of Amortization):
Due from Insiders
Other (Itemize)		6,539,514.40
Total Other Assets					6,539,514.40
TOTAL ASSETS					17,943,053.82
LIABILITIES
Post-petition Liabilities:
Accounts Payable		12,584.98
Taxes Payable		1,743.27
Notes Payable
Professional fees		42,458.10
Secured Debt
Other (Itemize)		38,144.06
Total Post-petition Liabilities					94,930.41
Pre-petition Liabilities:
Secured Liabilities		7,920,313.00
Priority Liabilities		54,481.46
Unsecured Liabilities		7,771,133.58	(a)
Other (Itemize)
Total Pre-petition Liabilities					15,745,928.04
TOTAL LIABILITIES					15,840,858.45
EQUITY:
Pre-petition Owners’ Equity		2,203,459.97
Post-petition Profit/(Loss)		-101,264.60
Direct Charges to Equity
TOTAL EQUITY					2,102,195.37

Other Current Assets
Investor Receivable	3,848,516.32
Vendor Advance - Current Asset	18,843.19
Deposits	62,037.00
Employee Advance	1,000.00
I/C Affiliates	0.00
Total Other Current Assets	3,930,396.51
Other Assets (Net of Amortization)
Patents	1,228,060.90
Amort Patents	-781,931.66
Patents In Progress	76,471.74
Long Term Deposits	486,105.50
Long Term Investments	286,060.80
Investment in Subs	5,238,931.12
Suspense	5,816.00
Total Other Assets (Net of Amortization)	6,539,514.40
Other Post-Petition Liabilities
Accrued Payroll	26,426.26
Accrued Interest	11,717.80
Total Other Post-Petition Liabilities	38,144.06

NOTES:   (a)   This item is being researched - We are analyzing the financial records to determine accuracy of debts.  

Page 15 of 16

XI. QUESTIONNAIRE

AURA SYSTEMS, INC.

CHAPTER 11 BANKRUPTCY CASE NO. LA-05-24550-SB

	30-Jun-05
		No	Yes
1.	Has the debtor-in-possession made any payments on its pre-petition unsecured debt, except as have been authorized by the court? If "Yes", explain below:	X
		No	Yes
2.	Has the debtor-in-possession during this reporting period provided compensation or remuneration to any officers, directors, principals, or other insiders without appropriate authorization? If "Yes", explain below:	X
3.	State what progress was made during the reporting period toward filing a plan of reorganization
	The Debtor was consumed with compliance filing of the case	X
4.	Describe potential future developments which may have a significant impact on the case:
	Increase in sales; second tranche of DIP financing and exit financing
5.	Attach copies of all Orders granting relief from the automatic stay that were entered during the reporting period.
	None
		No	Yes
6.	Did you receive any exempt income this month, which is not set forth in the operating report? If "Yes", please set forth the amounts and sources of the income below.	X
I,	Sandra Ferro
	declare under penalty of perjury that I have fully read and understood the foregoing debtor-in-possession operating report and that the information contained herein is true and complete to the best of my knowledge.

Page 16 of 16