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Subsequent Events
12 Months Ended
Feb. 28, 2015
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 16 - SUBSEQUENT EVENTS:

 

From April 2016 to February 2017, the Company issued convertible notes payable to certain note-holders. The notes carry an interest rate of 5% and might be converted into the company shares of common stock if the stockholders approve a 1-for-7 reverse stock split.

 

On January 24, 2017 the Company entered into a debt refinancing agreement with Warren Breslow, a Director of the Company. Pursuant to the agreement, both Mr. Breslow and the Company acknowledged that total debt owed to Mr. Breslow was $23,872,614 including $88,890,574 of accrued interest. Mr. Breslow agreed to cancel and forgive all interest, waive all events of default, and sign a new five-year convertible note in the amount of $14,930,041 providing for no interest for six months and interest of 5% per annum thereafter payable monthly in arrears. The note also provides various default provisions. The agreement further provides that $11,982,041 of the note will be converted into 7,403,705 shares of common stock upon stockholders approving a 1 for 7 reverse stock split within one year of entering this agreement; the remaining balance may be converted at any time thereafter. In the absence of stockholder approval of a reverse stock split within one year, this agreement will become null and void. The Company has elected to continue to accrue interest on this agreement until such time as the 1 for 7 reverse stock split has been approved.

 

On January 27, 2017, the Company entered into a joint venture (JV) agreement with a Chinese company to manufacture, market and distribute certain mobile power products based on Aura’s patented technology solely within the Peoples Republic of China. The Company owns 49% of the JV and contributed $250,000 and a license to specific technology. The Chinese company owns 51% of the JV and is required to contribute $9,750,000. In addition, the Chinese company has invested $2,000,000 in Aura at $0.20 per share for a total of 10,000,000 shares of common stock and is required to purchase a minimum of $1,250,000 of product supported by letters of credit for distribution until the JV factory is fully built and staffed. In order to properly train JV personnel in the workings of Aura’s products, Aura has also committed to supply limited technical staff to the JV for a period of six months at no cost to the JV other than to reimbursement for travel, room and board. The agreement was subject to the approval of the Chinese Government which was received in April, 2017.

 

On January 30, 2017 the Company entered into an agreement entitled First Amendment to Transaction Documents with five of seven secured creditors holding a security interest in all of the Company’s assets except for its patents and other intellectual properties. The original agreement dated May 7, 2013 provided that if at least 75% of the stock issuable upon conversion of the convertible notes votes to amend the agreement, the agreement is binding on all seven of the secured creditors. The total debt at October 31, 2016 was approximately $4,095,700 including interest of $1,606,884. The five secured creditors signing the amendment total in excess of 95% of the issuable stock upon conversion and, therefore the agreement is binding on all seven of the secured creditors. The agreement provided that all accrued and unpaid interest will be added to the principal amount. The amended note bears no interest from November 1, 2016 to May 1, 2016 and 16% per annum thereafter. Upon stockholder approval of a 1-for-7 reverse stock split and the election of a new Board of Directors, 80% of the total debt including accrued interest will be converted into shares of common stock and a new five-year 5% per annum convertible note to be issued for the remaining balance. The note also provides for early payoff under certain conditions and contains various default provisions. The agreement was further amended subsequent to year end to extend the time for the Company to file a proxy statement.

 

On February 21, 2017 the Company entered into several debt refinancing agreements with debt holders relating to an aggregate debt totaling $2,237,456 including interest of $489,466. Pursuant to these agreements, all past events of default are waived and new five-year 5% convertible notes with no interest for the first six months have replaced the original debt instruments. Upon stockholder approval of a 1 for 7 reverse stock split, these new notes will be converted into an aggregate total of 1,164,555 shares of stock. The notes also provide various default provisions.

 

The Company is presently engaged in a dispute with one of its directors, Robert Kopple, relating to approximately $5.4 million and approximately 22 million warrants which Mr. Kopple claims to be owed to him and his affiliates by the Company. In July 2017, Mr. Kopple filed suit against the Company as well as against current Directors Mr. Gagerman and Mr. Diaz-Verson together with former Directors Mr. Breslow and Mr. Howsmon in connection with these allegations. The Company believes that it has valid defenses in these matters and intends to vigorously defend against these claims.