Nature of Operations and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Aug. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations

Nature of Operations

Aura Systems, Inc., ("Aura", "We" or the "Company") a Delaware corporation, was founded to engage in the development, commercialization, and sales of products, systems, and components, using its patented and proprietary electromagnetic technology. Aura develops and sells AuraGen^® axial flux mobile induction power systems to the industrial, commercial, and defense mobile power generation markets. In addition, the Company has also developed and patented High Force Electromagnetic Linear Actuators which it has sold in prior years.

Basis of Presentation

Basis of Presentation 

In the opinion of management, the unaudited interim condensed financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. However, the results of operations included in such financial statements may not necessary be indicative of annual results.

The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted. These unaudited condensed financial statements should be read in conjunction with the Company's audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended February 29, 2020 ("Fiscal 2020") filed with the Securities and Exchange Commission ("SEC") on July 13, 2020 ("2020 Form 10-K.").

Our fiscal year ends on the last day of February. Accordingly, the current fiscal year is ending on February 28, 2021; we refer to the current fiscal as ("Fiscal 2021"). The prior fiscal year is Fiscal 2020.

Significant Accounting Policies

Significant Accounting Policies

For a detailed discussion about the Company's significant accounting policies, refer to Note 2 — "Summary of Significant Accounting Policies," in our financial statements included in Company's 2020 Form 10-K. During the three and six-months ended August 31, 2020, the Company recognized aggregate gains of approximately $2.7 million in connection with the cancellation of certain accounts payable balances and accrued payroll related to unpaid wages and salaries and approximately $0.9 million in connection with demand promissory notes with three persons for which the respective statute of limitations periods have expired.

Earnings Per Share

Earnings Per Share

The following table sets forth the basic and dilutive earnings per share for the three and six-months ended August 31, 2020. The dilutive earning per share includes only the dilutive incremental effect of additional shares issued on an "as if converted basis" in relation to the convertible notes payable principle amounts outstanding as of August 31, 2020 (see Notes 3 and 6).

	Three-Months Ended August 31, 2020
	Income		Shares		Per-share
	(Numerator)		(denominator)		Amount
Basic EPS
Income available to common stockholders	$	2,723,315		59,515,727	$	0.05
Effect of Dilutive Securities
Convertible notes payable	$	48,559		4,046,180	$	0.01
Dilutive EPS
Income available to common stockholders plus assumed conversions	$	2,771,874		63,561,907	$	0.04

	Six-Months Ended August 31, 2020
	Income		Shares		Per-share
	(Numerator)		(denominator)		Amount
Basic EPS
Income available to common stockholders	$	2,117,314		58,294,261	$	0.04
Effect of Dilutive Securities
Convertible notes payable	$	97,117		4,046,180	$	0.02
Dilutive EPS
Income available to common stockholders plus assumed conversions	$	2,214,431		62,340,440	$	0.04

Use of Estimates

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Reclassifications

Certain prior period amounts have been reclassified to conform to the current year presentation.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued Accounting Standards Update 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instrument. Subsequent to the issuance of ASU 2016-13, the FASB clarified the guidance through several ASUs. The collective new guidance (ASC 326) generally requires entities to use a current expected credit loss model, which is a new impairment model based on expected losses rather than incurred losses. Under this model, an entity would recognize an impairment allowance equal to its current estimate of all contractual cash flows that the entity does not expect to collect. The entity's estimate would consider relevant information about past events, current conditions, and reasonable and supportable forecasts. ASC 326 is effective for annual and interim fiscal reporting periods beginning after December 15, 2022, with early adoption permitted for annual reporting periods beginning after December 15, 2018. The Company is continuing to evaluate the expected impact of this ASC 326 but does not expect it to have a material impact on its financial statements upon adoption.