AUSI Aura Systems Inc (PK)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.     )

CONSENT STATEMENT

June 7, 2019

Dear Fellow Stockholder:

This Consent Statement and the accompanying WHITE consent card are being furnished to you as a stockholder of Aura Systems, Inc., a Delaware corporation (“Aura” or the “Company”), by Zvi Kurtzman, Elimelech Lowy, Cipora Lavut, David Mann and Robert Lempert (collectively, the “Participants”, “us”, “our” or “we”) in connection with our solicitation of written consents to remove three of the five members of the current Board of Directors of the Company (the “Board”), and replace them with our three director nominees and to repeal any amendments to the Company’s Bylaws adopted after January 1, 2019 that were not adopted or approved by the Company’s stockholders (this “Consent Solicitation”).

As a group of significant stockholders of the Company, with aggregate ownership of 21,571,195 shares of the Company’s Common Stock, par value $0.0001 per share (the “Common Stock”), constituting approximately 40.35% of the outstanding shares, we believe that the Board must be significantly and immediately reconstituted to ensure that the best interests of the Company and its stockholders, the true owners of Aura, are appropriately represented in the boardroom. The interests of the three directors that we are proposing to remove are poorly aligned with those of the Company’s stockholders because, based on the Company’s public filings, they own almost no stock of your company.  The Participants believe that they have support for the Proposals by other stockholders who own an additional approximately 4.3 million shares of Common Stock, representing an additional 8% of the outstanding Common Stock. One of these stockholders is Hebiao Song, who owns 1,428,571 shares of Common Stock and is the CEO of Jiangsu AoLunTe Electrical Machinery Industrial Co., Ltd., a company which has a joint venture with Aura to exploit Aura’s axial flux induction technology in the Chinese market.  Accordingly, counting the aggregate share ownership of the Participants and the share ownership of other stockholders supporting the Proposals, the Participants believe that there will be votes in favor of the Proposals aggregating approximately 48.35% of the Company’s outstanding Common Stock, plus any additional favorable votes obtained through this Consent Solicitation.

The address of the principal executive offices of the Company is 10541 Ashdale Street, Stanton California 90680.  This Consent Solicitation is not being made by the Company.  This Consent Statement and WHITE consent card are first being sent or given to the stockholders of Aura on or about June 7, 2019.

A solicitation of written consents is a process that allows a company’s stockholders to act by submitting written consents to any proposed stockholder actions in lieu of voting in person or by proxy at an annual or special meeting of stockholders.  Each of the Participants, including the Nominees (as defined below) are deemed to be participants in this Consent Solicitation.  See the section titled “INFORMATION REGARDING THE PARTICIPANTS” for more information.

We are soliciting written consents from the holders of shares of the Common Stock to take the following actions (each, as more fully described in this Consent Statement, a “Proposal” and

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together, the “Proposals”), in the following order, without a stockholders’ meeting, as authorized by Delaware law:

PROPOSAL NO. 1 :  To remove Ronald Buschur, Si Ryong Yu and William Anderson as directors of the Company (the “Director Removal Proposal”);

PROPOSAL NO. 2:   To elect David Mann, Cipora Lavut and Robert Lempert (each a “Nominee” and collectively, the “Nominees”) as directors of the Company to serve until their respective successors are duly elected and qualified (the “Director Election Proposal”); and

PROPOSAL NO. 3:   To repeal any amendments to the Company’s Bylaws adopted after January 1, 2019 that were not adopted or approved by the Company’s stockholders.

We are soliciting your written consent in favor of the adoption of the Proposals.  We believe that neither Aura’s current management nor the current Board is representing the long-term interests of the Company’s stockholders, as a result of which Aura’s stockholders will be better served by a change to leadership that is aligned with the Company’s stockholders and is committed to creating stockholder value and a positive corporate culture.

If we are successful in this Consent Solicitation, then the Board will be composed of the three Nominees, together with current directors Gary Douglas and Salvador Diaz-Versón, Jr.  You should refer to the Company’s Current Reports on Form 8-K filed on April 5, 2018 and July 10, 2018, respectively, for the background, qualifications and other information concerning the incumbent directors.

Section 228 of the General Corporation Law of the State of Delaware (the “DGCL”) governs the circumstances under which the Proposals will become legally effective, and Section 213(b) of the DGCL governs the record dates for determination of the stockholders entitled to cast their votes by executing written consents.  See the sections entitled “RECORD DATES” and “CONSENT PROCEDURES” for additional information.

WE URGE YOU TO ACT TODAY TO ENSURE THAT YOUR CONSENT WILL COUNT.

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As of the date of this filing, the participants, are beneficial owners of an aggregate of 21,571,195 shares of the Company’s Common Stock, constituting approximately 40.35% of the currently outstanding shares of the Company’s Common Stock.  The shares of Common Stock are held for the following accounts:

The percentages used herein are calculated based upon the 53,453,661 shares of Common Stock outstanding as of March 26, 2019, each entitled to one vote per share.  Information regarding the outstanding shares of Common Stock is based on a report (the “Transfer Online Report”) from Transfer Online, the Company’s transfer agent.  The Transfer Online Report was provided to the Participants by counsel to the Company on April 12, 2019 and such counsel represented to the Participants that the Transfer Online Report represents the Company’s stockholder list as of March 26, 2019.

We urge you to consent to the Proposals by signing, dating and returning the enclosed WHITE consent card.  If you take no action, you will in effect be rejecting the Proposals .  The failure to execute and return a WHITE consent card and “withheld consents” will have the same effect as a “no” vote.  Please note that in addition to signing the enclosed WHITE consent card, you must also date it to ensure its validity.

IMPORTANT
PLEASE READ THIS CAREFULLY

Shares Registered in Your Own Name. If your shares of Common Stock are registered in your own name, please submit your written consent today by signing, dating and returning the enclosed WHITE consent card by e-mail, in PDF form, to harry@kurtzman.name or drrtl@comcast.net.

Shares Held in “Street Name.” The current Board has taken the position that only stockholders owning shares in their own name can exercise the right to consent by signing a

(1)  Includes 7,547,693 shares for which Mr. Lowy has the power to vote under powers of attorney.

(2)  Includes 451,911 shares for which Mr. Mann has the power to vote under powers of attorney.

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consent card, regardless of who is the beneficial owner.  To avoid unnecessary disputes, if you hold your shares in “street” name with a bank, brokerage firm, dealer, trust company or other nominee, that nominee should exercise the right to consent with respect to the shares of Common Stock that you beneficially own through such nominee upon receipt of your specific instructions.  Accordingly, it is critical that you promptly give instructions to your bank, brokerage firm, dealer, trust company or other nominee to execute a consent in writing in favor of the Proposals.  Please follow the consent instructions provided on the enclosed WHITE consent card.  We urge you to confirm in writing your instructions to the person responsible for your account and provide a copy of those instructions to Zvi Kurtzman or Robert Lempert at the e-mail addresses provided below, so that we will be aware of all instructions given and can seek to ensure that such instructions are followed.

Execution and delivery of a WHITE consent card by a record holder of shares of Common Stock will be presumed and treated to be a written consent with respect to all shares held by such record holder unless specified otherwise.  If you are a stockholder of record as of the close of business on the Record Dates, you will retain your right to consent in writing to the Proposals even if you sell your shares of Common Stock after the Record Dates.

WITHHELD CONSENTS AND FAILURES TO CONSENT WILL HAVE THE SAME EFFECT AS REJECTING THE PROPOSALS.

If you have any questions regarding your WHITE consent card or need assistance in executing your consent, please contact Zvi Kurtzman or Robert Lempert.

RECORD DATES

Section 213(b) of the DGCL governs the record date for stockholder action by written consent. Section 213(b) states as follows:

(b) In order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the board of directors, and which date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the board of directors. If no record date has been fixed by the board of directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the board of directors is required by [the DGCL], shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in this State, its principal place of business or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the board of directors and prior action by the board of directors is required by [the DGCL], the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the board of directors adopts the resolution taking such prior action.

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The following information is qualified in its entirety by the quoted language of Section 213(b) of the DGCL set forth above.

For the three Proposals for which written consents are being requested, no prior action by the board of directors is required by the DGCL.  Further, to the knowledge of the Participants, no resolution fixing a record date has been adopted by Aura’s Board of Directors.

The Participants delivered a signed written consent to the Company on March 26, 2019 removing Ronald Buschur as a member of the Company’s Board and electing Cipora Lavut as a director of the Company.  The Participants delivered a further signed written consent to the Company on March 27, 2019 removing William Anderson and Si Ryong Yu as members of the Company’s Board and electing Robert Lempert and David Mann as directors of the Company.  Accordingly, the Participants believe that the Record Date for the proposed removal Ronald Buschur as a member of the Company’s Board and electing Cipora Lavut as a director of the Company is March 26, 2019 and the Record Date for the proposed removal of William Anderson and Si Ryong Yu as members of the Company’s Board and the election of Robert Lempert and David Mann as directors of the Company March 27, 2019 (together, the “Record Dates”).

CONSENT PROCEDURES

Consent Procedures for corporations having stockholders are governed by Section 228(a), (c), (d) and (e) of the DGCL, which provide as follows:

(a) Unless otherwise provided in the certificate of incorporation, any action required by this chapter to be taken at any annual or special meeting of stockholders of a corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the corporation by delivery to its registered office in this State, its principal place of business or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested.

* * * *

(c) No written consent shall be effective to take the corporate action referred to therein unless written consents signed by a sufficient number of holders or members to take action are delivered to the corporation in the manner required by this section within 60 days of the first date on which a written consent is so delivered to the corporation. Any person executing a consent may provide, whether through instruction to an agent or otherwise, that such a consent will be effective at a future time (including a time determined upon the happening of an event), no later than 60 days after such instruction is given or such provision is made, if evidence of such instruction or provision is provided to the corporation. Unless otherwise provided, any such consent shall be revocable prior to its becoming effective.

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(d)(1) A telegram, cablegram or other electronic transmission consenting to an action to be taken and transmitted by a stockholder, member or proxyholder, or by a person or persons authorized to act for a stockholder, member or proxyholder, shall be deemed to be written and signed for the purposes of this section, provided that any such telegram, cablegram or other electronic transmission sets forth or is delivered with information from which the corporation can determine (A) that the telegram, cablegram or other electronic transmission was transmitted by the stockholder, member or proxyholder or by a person or persons authorized to act for the stockholder, member or proxyholder and (B) the date on which such stockholder, member or proxyholder or authorized person or persons transmitted such telegram, cablegram or electronic transmission. No consent given by telegram, cablegram or other electronic transmission shall be deemed to have been delivered until such consent is reproduced in paper form and until such paper form shall be delivered to the corporation by delivery to its registered office in this State, its principal place of business or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders or members are recorded. Delivery made to a corporation’s registered office shall be made by hand or by certified or registered mail, return receipt requested. Notwithstanding the foregoing limitations on delivery, consents given by telegram, cablegram or other electronic transmission, may be otherwise delivered to the principal place of business of the corporation or to an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders or members are recorded if, to the extent and in the manner provided by resolution of the board of directors or governing body of the corporation.

(2) Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.

(e) Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders or members who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that written consents signed by a sufficient number of holders or members to take the action were delivered to the corporation as provided in this section. In the event that the action which is consented to is such as would have required the filing of a certificate under any other section of this title, if such action had been voted on by stockholders or by members at a meeting thereof, the certificate filed under such other section shall state, in lieu of any statement required by such section concerning any vote of stockholders or members, that written consent has been given in accordance with this section.

The Company’s Certificate of Incorporation does not prohibit or otherwise restrict the ability of stockholders of the Company from taking any action by written consent.

The following information and instructions are qualified in their entirety by the quoted language of Sections 228(a), (c), (d) and (e) set forth above.

As of March 26, 2019, based on the Transfer Online Report, there were 53,453,661 shares of the Company’s Common Stock outstanding, each entitled to one vote per share.  The Participants are not aware of any changes in the number of shares of outstanding common stock of the Company between March 26 and March

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27.  As a result, Participants believe that, based upon this number of outstanding shares of Common Stock, the Proposals will become effective upon proper delivery of properly completed unrevoked written consents representing at least 26,726,831 shares of Common Stock.

A stockholder may consent to the removal of less than all of the incumbent directors by designating the names of one or more directors who are not to be removed.  Similarly, a stockholder may consent to the election of less than all of the Nominees by designating the names of one or more Nominees who are not to be elected.

If your shares of Common Stock are registered in your own name, please submit your consent to us today by signing, dating and returning the enclosed WHITE consent card by e-mail, in PDF form, to harry@kurtzman.name or drrtl@comcast.net.

If you hold your shares in “street” name with a bank, brokerage firm, dealer, trust company or other nominee, only that nominee can exercise the right to provide consent with respect to the shares of Common Stock you beneficially own through such nominee and only upon receipt of your specific instructions.  Accordingly, it is critical that you promptly give instructions to consent in writing to the Proposals to your bank, brokerage firm, dealer, trust company or other nominee.  Please follow the consent instructions provided on the enclosed WHITE consent card.  We urge you to confirm in writing your instructions to the person responsible for your account and provide a copy of those instructions to Zvi Kurtzman or David Mann so that we will be aware of all instructions given and can seek to ensure that such instructions are followed.

Execution and delivery of a WHITE consent card by a record holder of shares of Common Stock will be presumed and treated to be a written consent with respect to all shares held by such record holder unless specified otherwise.  An executed consent card may be revoked by marking, dating, signing and delivering a written revocation before the time that the action authorized by the executed consent becomes effective.  A revocation may be in any written form validly signed by the record holder as long as it clearly states that the consent previously given is no longer effective.  The delivery of a subsequently dated consent card that is properly completed will constitute a revocation of any earlier consent.  The revocation may be delivered either to the Company or to Zvi Kurtzman or David Mann.  Although a revocation is effective if delivered to the Company, we request that either the original or photostatic copies of all revocations of consents be mailed or delivered to Zvi Kurtzman or David Mann, at the address set forth above, so that we will be aware of all revocations and can more accurately determine if and when consents to the Proposals have been received from the holders of record of a majority of the shares of Common Stock outstanding on the Record Dates.

IF YOU TAKE NO ACTION, YOU WILL IN EFFECT BE REJECTING THE PROPOSALS.  WITHHELD CONSENTS AND FAILURES TO CONSENT WILL HAVE THE SAME EFFECT AS REJECTING THE PROPOSALS.

If you have any questions regarding your WHITE consent card or need assistance in executing your consent, please contact Zvi Kurtzman or Robert Lempert.

If the Proposals become effective as a result of this Consent Solicitation, prompt notice of the action taken will be given under Section 228(e) of the DGCL to stockholders who have not

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consented in writing to the Proposals and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Company in accordance with Section 228 of the DGCL.

REASONS FOR THE CONSENT SOLICITATION

The objective of the Consent Solicitation is to cause the election of directors who will be better aligned with Aura’s stockholders and place a greater emphasis on the enhancement of stockholder value for all stockholders of the Company.  The Participants believe that the Company’s stock performance, market valuation and future prospects have been unduly impaired by the actions of Messrs. Buschur, Anderson and Yu.  The Company’s last annual meeting was held on January 11, 2018.  Prior to that, the Company had not held an annual meeting since October 27, 2011. 

On May 15, 2019, three of the Participants brought an action in the Delaware Court of Chancery under Section 211 of the DGCL seeking to compel the Company to hold a meeting of its stockholders for the purpose of electing directors and transacting such other business as may properly come before the meeting.  On June 4, 2019, Aura filed a Current Report on Form 8-K disclosing that Aura has purportedly scheduled an annual meeting of stockholders for August 26, 2019. On June 3, 2019, counsel to the Participants filed a letter with the Court requesting a scheduling conference for purposes of setting an annual meeting prior to the August 26, 2019 date.  While opposing counsel has filed its own letter, the Court has not responded or scheduled a conference.

Accordingly, due to such remaining uncertainty, we believe that it is in the best interests of the Company and its stockholders for the stockholders of Aura to act now by written consent to replace Messrs. Buschur, Anderson and Yu with the Nominees who will enable the Board to change course and vigorously pursue enhanced stockholder value.

BACKGROUND OF THE CONSENT SOLICITATION

The following is a chronology of the events and circumstances that preceded the solicitation from the stockholders of the Company written consents to (1) remove Ronald Buschur, Si Ryong Yu, and William Anderson as members of the Company’s five-member Board and (2) to elect Cipora Lavut, Robert Lempert and David Mann to fill the vacancies created by such removals.

·                                           On March 26, 2019, each of the Participants in this solicitation, as well as Hebiao Song, Donald Kendall and Peter Dalrymple delivered a written consent to the Company to effect the removal of Ronald Buschur as a director of the Company and the election of Cipora Lavut to fill the vacancy created thereby on the Board.  On March 27, 2019, the same stockholders delivered written consents to the Company to effect the removal of Si Ryong Yu, and William Anderson as directors of the Company and the election of Robert Lempert and David Mann to fill the vacancies created by their removal.  These written consents (the “Original Consents”) represented a majority of the outstanding shares of the Company’s common stock as of March 26, 2019 and March 27, 2019, respectively.

·                                           In a March 27, 2019, letter to Mr. Mann, Mr. Gagerman, Aura’s interim chief executive officer, wrote that the Original Consents were ineffective, claiming such consenting stockholders were not the record owners of more than 50% of the voting stock.  According to Mr. Gagerman, such consenting Stockholders were record owners of a total of 15,873,597 shares — 8,527,288 less than the amount needed. Mr. Gagerman’s vote count was repeated in an April 5, 2019, letter from a law firm purporting to represent the Company, which asserted that stockholder written consents are only valid as to the shares held of record by the signatories.

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·                                           Because of Aura’s refusal to recognize the legal effectiveness of the Original Consents, on April 8, 2019, Participants Cipora Lavut, Robert Lempert, David Mann and Zvi Kurtzman, as well as Peter Dalrymple, filed a suit against Aura in the Court of Chancery of the State of Delaware pursuant to Section 225 of the DGCL, seeking an order confirming the validity of the Original Consents and declaring that Aura’s Board consists of Ms. Lavut, Mr. Mann, Mr. Lempert, Mr. Douglas and Mr. Diaz-Versón, Jr. See Lavut, et al., v. Aura Systems, Inc. , Case No. 2019-0263-JRS.  A copy of the Verified Complaint filed in that suit, which is currently pending, is attached hereto as Annex III.

·                                           On April 16, 2019, Peter Dalrymple delivered a revocation of his consents to Aura, and on April 18, Donald Kendall delivered a revocation of his consents to Aura.  On April 24, 2019, Peter Dalrymple’s notice and proposed order to withdraw from the Delaware litigation was approved by the Court of Chancery.

·                                           On April 29, 2019, Aura filed its Answer and Verified Counterclaim in the Delaware Court of Chancery suit, a copy of which is attached hereto as Annex IV.

·               May 15, 2019, three of the Participants brought an action in the Delaware Court of Chancery under Section 211 of the DGCL seeking to compel the Company to hold a meeting of its stockholders for the purpose of electing directors and transacting such other business as may properly come before the meeting. On June 4, 2019, Aura filed a Current Report on Form 8-K disclosing that Aura has purportedly scheduled an annual meeting of stockholders for August 26, 2019. On June 3, 2019, counsel to the Participants filed a letter with the Court requesting a scheduling conference for purposes of setting an annual meeting prior to the August 26, 2019 date.  While opposing counsel has filed its own letter, the Court has not responded or scheduled a conference.

Although the remaining plaintiffs in the Delaware Court of Chancery litigation (Participants Cipora Lavut, Robert Lempert, David Mann and Zvi Kurtzman) may challenge the legal effectiveness of the revocations delivered by Messrs. Dalrymple and Kendall, there can be no assurance of how the court will rule on the issue. Similarly, there can be no assurance as to when the Company will hold a meeting of its stockholder for the purpose of electing directors. To avoid further delay and unnecessary complications and disputes, the Participants seek to obtain additional consents that will moot the issues and ensure the accomplishment of the objectives of removing Messrs. Buschur, Yu and Anderson as directors of the Company and electing Ms. Lavut, Mr. Mann and Mr. Lempert in their place.

THE PROPOSALS

The Participants are seeking written consents from the Company’s stockholders to remove three of Aura’s five current directors and to elect the three Nominees without a stockholders meeting, as permitted by the DGCL and to repeal any amendments to the Company’s Bylaws adopted after January 1, 2019 that were not adopted or approved by the Company’s stockholders.  The effectiveness of each of the Proposals is subject to, and conditioned upon, the adoption by the holders of record, as of the close of business on the Record Dates, of a majority of the shares of Aura’s Common Stock entitled to vote thereon and then outstanding.

(1) Unless the certificate of incorporation otherwise provides, in the case of a corporation whose board is classified as provided in subsection (d) of this section, stockholders may effect such removal only for cause; or

(2) In the case of a corporation having cumulative voting, if less than the entire board is to be removed, no director may be removed without cause if the votes cast against such director’s removal would be sufficient to elect such director if then cumulatively voted at an election of the entire board of directors, or, if there be classes of directors, at an election of the class of directors of which such director is a part.

Whenever the holders of any class or series are entitled to elect 1 or more directors by the certificate of incorporation, this subsection shall apply, in respect to the removal without cause of a director or directors so elected, to the vote of the holders of the outstanding shares of that class or series and not to the vote of the outstanding shares as a whole.

The following information is qualified in its entirety by the language of Section 141(k) of the DGCL as set forth above.

The Company does not have a classified board or cumulative voting in the election of its directors.  Consequently, Section 141(k) of the DGCL permits the stockholders of the Company to remove any director or the entire Board without cause.  Article III, Section 3.12 of the Bylaws provides that, unless otherwise provided in the certificate of incorporation, any director or the entire board of directors may be removed with or without cause by the holders of a majority of the shares then entitled to vote at an election of directors. You should refer to Exhibit 3(II) of the Company’s Annual Report on Form 10-K filed on June 15, 2009 for a full copy of the Bylaws.  Aura’s Certificate of Incorporation does not provide otherwise.

If a stockholder wishes to consent in writing to the removal of certain of the members of the Board, but not to the removal of all three current directors recommended for removal by the Participants, such stockholder may do so by checking the appropriate “consent” box on the enclosed WHITE consent card and writing the name of each such person that the stockholder does not wish to be removed.  If fewer than three directors are removed pursuant to the Director Removal Proposal and there are more Nominees receiving the requisite number of consents to fill vacancies pursuant to the Director Election Proposal than the number of such resulting vacancies, then the Participants intends to fill the vacancies in the following order:  Cipora Lavut, David Mann and Robert Lempert.

As of March 26, 2019, based on the Transfer Online Report, there were 53,453,661 shares of Common Stock outstanding, each entitled to one consent per share.  Accordingly, the written consent of the holders of at least 26,726,831 shares of outstanding Common Stock and entitled to vote would be necessary to effect the Director Removal Proposal and remove Messrs. Buschur, Anderson and Yu from Aura’s Board.  Therefore, to avoid disputes arising from the withdrawal of consents by Mr. Darymple and Mr. Kendall, written consents representing shares of Common Stock in addition to the shares of Common Stock entitled to consent held by the Participants and their supporters are being sought to effect the Director Removal Proposal and remove the three members of the Board.  In the event that holders of less than 26,726,831 shares of Common Stock consent to the removal of any existing director, then such director will not be removed pursuant to the Director Removal Proposal.

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The text of the Director Removal Proposal resolution is as follows:

RESOLVED, that pursuant to and in accordance with Section 141(k) of the DGCL and Article III, Section 3.12 of the Bylaws, each of Ronald Buschur, Si Ryong Yu and William Anderson be, and each hereby is, removed without cause, effective immediately, as directors of the Company.

WE URGE YOU TO CONSENT TO THE DIRECTOR REMOVAL PROPOSAL.

INFORMATION REGARDING THE NOMINEES

Set forth below is the name, age, present principal occupation and employment history of each of the Nominees for at least the past five years.  The information regarding each Nominee has been furnished to the Participants by each Nominee.

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None of the corporations or organizations in which each of the Nominees has conducted his or her principal occupation or employment during the past five years was a parent, subsidiary or other affiliate of the Company.  No Nominee holds any current position or office with the Company or has any family relationship with any current executive officer or director of the Company.  No Nominee or any associate of any Nominee has any arrangement or understanding with any person with respect to any future employment of the Company or with respect to any future transactions to which the registrant or any of its affiliates will or may be a party.  I f elected, we believe that

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each of the Nominees will be considered an independent director of the Company under Item 407(a) of Regulation S-K.

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The principal business and principal business address of each Nominee is disclosed in the section titled “INFORMATION REGARDING THE NOMINEES” above.

Please see Annex I for all transactions in the Common Stock effectuated by each of the Participants during the past two years.

Except as set forth in this Consent Statement (including the Annexes hereto): (i) during the past ten years, no Participant has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors); (ii) no Participant in this Consent Solicitation directly or indirectly beneficially owns any securities of the Company; (iii) no Participant owns any securities of the Company which are owned of record but not beneficially; (iv) no Participant has purchased or sold any securities of the Issuer during the past two years; (v) no part of the purchase price or market value of the securities of the Company owned by any Participant is represented by funds borrowed or otherwise obtained for the purpose of acquiring or holding such securities; (vi) no Participant is, or within the past year was, a party to any contract, arrangements or understandings with any person with respect to any securities of the Company, including, but not limited to, joint ventures, loan or option arrangements, puts or calls, guarantees against loss or guarantees of profit, division of losses or profits, or the giving or withholding of proxies; (vii) no associate (as that term is defined in Rule 14a-1 of the Exchange Act) of any Participant owns beneficially, directly or indirectly, any securities of the Company; (viii) no Participant owns beneficially, directly or indirectly, any securities of any parent or subsidiary of the Company; (ix) no Participant or any of his, her or its associates was a party to any transaction, or series of similar transactions, since the beginning of the Company’s last fiscal year, or is a party to any currently proposed transaction, or series of similar transactions, to which the Company or any of its subsidiaries was or is to be a party, in which the amount involved exceeds $120,000; (x) no Participant or any of his, her or its associates has any arrangement or understanding with any person with respect to any future employment by the Company or its affiliates, or with respect to any future transactions to which the Company or any of its affiliates will or may be a party; and (xi) no person, including any of the Participants, who is a party to an arrangement or understanding pursuant to which the Nominees are proposed to be elected, has a substantial interest, direct or indirect, by security holdings or otherwise in any matter to be acted on as set forth in this Consent Statement.

Except as disclosed in this Consent Statement, there are no material proceedings to which any Participant or any of his, her or its associates is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries.  With respect to each of the Nominees, none of the events enumerated in Item 401(f)(1)-(8) of Regulation S-K of the Exchange Act occurred during the past ten years.

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SOLICITATION OF CONSENTS

The solicitation of consents pursuant to this Consent Solicitation is being made by the Participants.  Consents may be solicited by mail, facsimile, telephone, Internet, in person and by advertisements.  The Participants will solicit consents from individuals, brokers, banks, bank nominees and other institutional holders.  The Participants have requested banks, brokerage houses and other custodians, nominees and fiduciaries to forward all solicitation materials to the beneficial owners of the shares of Common Stock they hold of record.  The Participants have not retained any proxy advisors to provide solicitation or advisory services in connection with this Consent Soliciation.

Our estimate of the total maximum cost to be incurred in connection with this Consent Solicitation (excluding litigation costs, if any) is $200,000.  To date, approximately $120,000 of expenses have been incurred in connection with this Consent Solicitation.  The Participants will bear the costs of this Consent Solicitation.  To the extent legally permissible, if successful in the adoption of the Proposals in whole or in part, we currently intend to seek reimbursement from the Company for our costs and expenses in connection of this Consent Solicitation.  We do not currently intend to submit the question of such reimbursement to a vote of the stockholders of the Company.

APPRAISAL RIGHTS

Stockholders are not entitled to appraisal rights under Delaware law in connection with the Proposals or this Consent Solicitation.

SPECIAL INSTRUCTION:

If you were a record holder of shares of Common Stock as of the close of business on the Record Dates for this Consent Solicitation, you may elect to consent to, withhold consent or abstain with respect to the Proposals by marking the “CONSENT”, “WITHHOLD CONSENT” or “ABSTAIN” box, as applicable, underneath each Proposal on the accompanying WHITE consent card and signing, dating and returning it promptly in the enclosed post-paid envelope.

IF A STOCKHOLDER EXECUTES AND DELIVERS A WHITE CONSENT CARD, BUT FAILS TO CHECK A BOX MARKED “CONSENT,” “WITHHOLD CONSENT” OR “ABSTAIN” FOR THE PROPOSALS THAT STOCKHOLDER WILL BE DEEMED TO HAVE CONSENTED TO ALL PROPOSALS, EXCEPT THAT THE STOCKHOLDER WILL NOT BE DEEMED TO CONSENT TO THE REMOVAL OF ANY DIRECTOR WHOSE NAME IS WRITTEN IN THE APPLICABLE SPACE PROVIDED IN ACCORDANCE WITH THE INSTRUCTION TO PROPOSAL 1 ON THE CONSENT CARD.  IF A STOCKHOLDER EXECUTES AND DELIVERS A WHITE CONSENT CARD, BUT FAILS TO CHECK A BOX MARKED “CONSENT” OR “WITHHOLD CONSENT” FOR PROPOSAL 2 THAT THE STOCKHOLDER WILL NOT BE DEEMED TO CONSENT TO THE ELECTION OF ANY DIRECTOR WHOSE NAME IS WRITTEN IN THE APPLICABLE SPACE PROVIDED IN ACCORDANCE WITH THE INSTRUCTION TO PROPOSAL 2 ON THE CONSENT CARD.

If your shares are held in the name of a bank, brokerage firm, dealer, trust company or other nominee, only it can execute a consent with respect to those shares of Common Stock and only on receipt of specific instructions from you.  Thus, you should contact the person responsible for your account and give instructions for the WHITE consent card to be signed representing your shares.  You should confirm in writing your instructions to the person responsible for your account and provide a copy of those instructions to Zvi Kurtzman or Robert Lempert, so that we will be aware of all instructions given and can seek to ensure that those instructions are followed.

If you have any questions, require assistance in voting your WHITE consent card, or need additional copies of this Consent Statement, please contact Zvi Kurtzman or Robert Lempert at the phone number or email listed below.

Important Notice Regarding the Availability of this Consent Statement

This Consent Statement and all other solicitation materials in connection with this Consent Solicitation are available on the Internet, free of charge, at the SEC’s website at www.sec.gov.

Information Concerning the Issuer

Stockholders are referred to the Company’s public filings with respect to certain disclosure relating to the Company that this Consent Statement has omitted.  The Participants expect that the Company will furnish the stockholders with t his information, in the Company’s consent revocation statement or proxy statement for the Company’s annual meeting.  Such disclosure include, among other things, information regarding securities of the Company beneficially owned by the Company’s directors, nominees and management; certain stockholders’ beneficial ownership of more than 5% of the Company’s voting securities; information concerning executive compensation; and information concerning the procedures for submitting stockholder proposals and director nominations intended for consideration at the next Annual Meeting and for consideration for inclusion in the proxy materials for that meeting.  If the Company does not distribute its consent revocation statement or proxy statement for the Company’s annual meeting, we will distribute to the stockholders a supplement to this Consent Statement containing those required disclosures that have been omitted herein.

Except as otherwise noted herein, the information in this Consent Statement concerning the Company has been taken from or is based upon documents and records on file with the SEC and other publicly available information.  The Company’s SEC filings available to the public at the SEC’s website at www.sec.gov.  We do not take responsibility, except to the extent imposed by law, for the accuracy or completeness of statements in public documents and records that were not prepared by or on behalf of the Participants, or for any failure of the Company to disclose in its public documents and records any events that may affect the significance or accuracy of the information contained herein.  For information regarding the security ownership of certain beneficial owners and management of the Company, see Annex II.

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Conclusion

We urge you to carefully consider the information contained in the attached Consent Statement and then support our efforts by signing, dating and returning the enclosed WHITE consent card today.

Thank you for your support.

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ANNEX I

TRANSACTIONS BY THE PARTICIPANTS IN THE SECURITIES OF AURA SYSTEMS, INC. DURING THE PAST TWO YEARS

This Annex I sets forth information with respect to each purchase and sale of shares of Common Stock that was effectuated by a Participant, or affiliates of a Participant, during the past two years.  Unless otherwise indicated, all transactions were effectuated in the open market through a broker.

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In addition to the transactions disclosed above, during the past two years, Aura issued shares of Common Stock to the Participants as follows:

In February 28, 2018, Robert Lempert received 44,449 shares of Common Stock in conversion of a portion of indebtedness of Aura to Dr. Lempert.

On February 28, 2018, the Company issued to Elimelech Lowy 2,653,061 shares of Common Stock for $1.3 million.

On February 28, 2018, Aura issued to Cipora Lavut 158,730 shares of Common Stock in payment of unpaid wages earned during her employment (2006 — 2016).

On February 28, 2018, Aura issued to Zvi Kurtzman 357,142 shares of Common Stock in partial payment of unpaid wages earned during his employment (2006 — 2015).

On March 14, 2018, Aura issued to David Mann 247,555 shares of Common Stock for $113,500.

On August 15, 2018, Aura issued 7,364,735 shares of Common Stock to Zvi Kurtzman in connection with the Consulting Agreement with BetterSea LLC dated June 19, 2017.

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ANNEX II

(5) Including 703,414 warrants and options exercisable within 60 days of February 28, 2018.

(6) The business address of Mr. Kopple is 10866 Wilshire Blvd., Suite 1500, Los Angeles, California 90024. The Company is also presently engaged in a dispute with Mr. Kopple that includes a claim regarding approximately 3.27 million warrants which Mr. Kopple claims to be owed to him and his affiliates by the Company. The Company believes that it has valid defenses against Mr. Kopple’s claims and that no warrants are issuable to Mr. Kopple. Accordingly, the amount reflected herein does not include the warrants in dispute. See Item 3. “Legal Proceedings”, “Liquidity and Capital Resources” in “Item 7.

(7) Includes 4,186,561 warrants exercisable within 60 days of February 28, 2018 and 4,207,329 shares of common stock over which Mr. Lowy holds a power of attorney to vote such shares.

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ANNEX III

IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE

VERIFIED COMPLAINT PURSUANT TO 8 DEL. C. § 225

Plaintiffs, by and through their undersigned counsel, bring this Verified Complaint pursuant to 8 Del. C . § 225 against Aura Systems, Inc. (“Aura” or the “Company”). The allegations in this Verified Complaint are based upon Plaintiffs’ personal knowledge with regard to their own acts and upon information and belief as to all other matters.

INTRODUCTION

1.                                       Plaintiffs are among several stockholders who hold the power to vote, in the aggregate, a majority of Aura’s shares and who delivered consents with respect to those shares. On March 26 and 27, 2019, a majority of stockholders delivered to the Company written consents (the “Consents”) removing and replacing three of five members of Aura’s Board of Directors (the “Board”). The action was precipitated by growing concerns that the Board abdicated its

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responsibility to manage the Company’s business and affairs and protect its crucially important intellectual property, and was participating in, or acquiescing to, self-dealing and gross mismanagement by senior executives.

2.                                       Refusing to accept the stockholders’ will, members of the displaced Board falsely contended the number of shares as to which the Consents were expressed fell short of a majority. In addition, purporting to speak on behalf of the deposed Board majority (the “Old Board Majority”), former directors and others repeatedly threatened that unless the Consents are withdrawn, they would defame signatories and promulgate litigation claims they admitted lack a good faith basis. One signatory also was offered a “consulting contract” as an inducement to withdraw his Consents.

3.                                       Against this backdrop, the displaced directors are presiding over the looting of the business through transfers of assets, operations and intellectual property to entities affiliated with those who, until recently, ran the company. Defendants’ conduct is damaging Aura.

4.                                       Plaintiffs bring this action to enforce the Consents and to confirm the Aura Board’s current membership.(1)

(1)                                  Because this is a narrow summary proceeding, Plaintiffs have not brought substantive claims against members of the “Old Board” at this juncture, but reserve the right to do so at a proper time.

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THE PARTIES

5.                                       Defendant Aura Systems, Inc. is a Delaware corporation headquartered at 10541 Ashdale St., Stanton, California 90680. Founded in 1987, Aura designs, assembles and sells induction power systems for mobile power generation applications. As set forth in the Company’s Form 10-Q/A filed February 1, 2019, as of January 14, 2019, the Company had 48,801,770 shares of common stock outstanding, trading on the over-the-counter market.

6.                                       Plaintiffs are Aura stockholders. As detailed below, each, along with others, executed written Consents in March 2019 to remove and replace three of five members of Aura’s Old Board (as defined below). In the aggregate, the Consents represented a majority of Aura’s voting shares. Pursuant to the Consents, Plaintiffs Cipora Lavut, Robert Lempert and David Mann were elected to replace the removed directors and each is presently a member of the Board. Ms. Lavut was elected Chairman on March 27, 2019. Defendants refuse to recognize the effectiveness of the Consents.

7.                                       Non-parties Ronald Buschur, Si Ryong Yu, William Anderson, Gary Douglas and Salvador Diaz-Verson, Jr. were members of the Board of Directors of Aura (the “Old Board”). Yu, Buschur and Anderson were removed as a result of the Consents although, on information and belief, each continues to claim he is a director. Douglas and Diaz-Verson remain on the Board.

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8.                                       Prior to April 6, 2019, Gagerman was Aura’s Chief Executive Officer, Secretary and Interim Chief Financial Officer. On that date, the new majority, at a special meeting of the Board, terminated his employment by the Company. On information and belief, Mr. Gagerman denies that his status as CEO, Secretary and Interim CFO was terminated.

9.                                       Mr. Buschur was appointed to fill a board vacancy on July 3, 2018. Upon information and belief, shortly thereafter, Buschur was elected chairman of the Board and began exercising day-to-day control over the Company’s business, including through instructions issued to Defendant Gagerman.

10.                                Non-party Kevin Michaels, in concert with Mr. Buschur, has exercised control over Aura since shortly after Mr. Buschur was designated as the Company’s Chair. On information and belief, in March 2019, Mr. Buschur named Mr. Michaels Aura’s Treasurer and Controller, vesting him with check-signing authority. As shown below, Mr. Michaels is and has been a key conspirator with the Old Board in the wrongs alleged in this Complaint, including: denying the effectiveness of the Consents; obstructing the efforts of Aura’s new Board to exercise control over the Company; and improperly and recklessly disclosing Aura’s highly sensitive intellectual property to third parties.

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SUBSTANTIVE ALLEGATIONS

11.                                Aura’s business is centered on its patented axial flux electromagnetic technology. The technology was developed by a team including physicist Zvi Kurtzman, a founder and significant shareholder of Aura. Aura invested more than $150 million developing and commercializing the technology and has gone to great lengths protecting its exclusive control over it. The technology is used by the militaries of the United States, South Korea, Israel, Great Britain and others. It has been adopted for commercial applications in over twenty different countries.

12.                                For a period, Mr. Kurtzman was Aura’s Chief Executive Officer. In 2001, the Securities and Exchange Commission began an inquiry into alleged accounting issues at a previously wholly-owned Aura subsidiary that had been spun out in an IPO in 1997. Aura retained majority stock ownership in the new public company, but Kurtzman was never an officer, director, or shareholder. In 2002, Mr. Kurtzman agreed in an SEC consent decree to step down from formal involvement as an officer and director in Aura.

13.                                In June 2005, Aura sought relief under chapter 11 of the Federal Bankruptcy law. In February 2006, it emerged as a reorganized public company, and Mr. Gagerman became Chief Executive Officer and Chief Financial Officer. Under Mr. Gagerman, debt swelled from zero to more than $55 million. The Company also was chronically late on SEC filings and failed to hold stockholder

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meetings. By mid-2015, Gagerman had mothballed the Company and placed all of its physical assets in storage.

14.                                The Board turned back to Mr. Kurtzman for help restoring viability and stability to the Company. In late 2015, Aura retained his consulting company, BetterSea LLC (“BetterSea”), to advise and assist Aura in organizing and implementing Kurtzman’s proposed debt and capital restructuring plan and to raise new investment capital. The engagement was later broadened to include advice and assistance in scientific development of magnetic technology for axial induction machinery and electromagnetic high force actuators, as well as technical and sales support relating to various government and quasi-government grants and commercial customers.

15.                                Over the next two years, Mr. Kurtzman pared Aura’s debt by $35 million, raised $5 million in new equity, was instrumental in creating a joint venture to exploit the Chinese market with a Chinese partner — Jiangsu Shengfeng Mobile Power Technology Co., Ltd. (“JSMPT”) — that invested more than $10 million in the effort. Aura also came current on its SEC filings and, in January 2018, held its first (and only) stockholder meeting in seven years.

Turmoil at the Top

16.                                Immediately prior to the January 2018 stockholder meeting, the Aura Board consisted of Mr. Gagerman, Mr. Diaz-Verson, Robert Kopple and Plaintiffs

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Robert Lempert and David Mann. On January 11, stockholders elected an entirely new slate of directors, including Mr. Buschur, Roland Bopp, Michael Paritee, Jonathan Sloane and Gary Wells.

17.                                By late March, Messrs. Sloane, Bopp and Buschur had resigned. The remaining directors filled the vacancies with Michael Sawruk, John M. Cochran and Jeffrey D. Cowan. In addition, the Board appointed Dr. Timothy B. O’Brien as interim Chief Executive Officer and Timothy O’Toole as interim Chief Financial Officer, replacing Mr. Gagerman.

18.                                By March 29, 2018, however, Mr. Gagerman convinced a majority of the stockholders to reinstate him. On that date, the full Board was removed by written consent of a majority of the stockholders and replaced with Messrs. Douglas, Diaz-Verson and Anderson, leaving two seats vacant. (Ex. A, attached) Stockholders expressing consents solicited and used by Mr. Gagerman in 2018 included several stockholders who expressed Consents last month — Plaintiffs Rabbi Lowy (voting 10,872,625 shares) and Mr. Mann (1,347,541 shares), as well as non-party Hebiao Song (1,428,571 shares) — which were accepted as valid by the Company. The newly constituted Board then fired the interim CEO and CFO, reinstalling Mr. Gagerman.

19.                                Aura does not have a classified Board and its Certificate of Incorporation does not contain any provision limiting the right of stockholders to

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act by written consent or to remove directors. Indeed, the By-Laws explicitly recognize the right of stockholders to approve by written consents any action that can be taken by a stockholder vote, and the ability of stockholders to remove directors for any reason or no reason. Amended and Restated Bylaws of Aura Systems, Inc., §§ 2.13, 3.12.

20.                                On July 3, 2018, the Board appointed Messrs. Buschur and Yu to fill the two board vacancies that remained after the March 2018 action by written consent. Mr. Buschur claimed to have significant ties with Middle Eastern investors and represented he could raise at least $10 million in new capital from them. On the strength of his representations, Mr. Buschur was elected Chairman with the understanding that he would become CEO if he raised at least $10 million in new equity.

Buschur’s and Michael’s Control

21.                                Shortly after being named Chairman, Mr. Buschur hired Mr. Michaels, supposedly to develop a long-term growth plan. In reality, Mr. Michaels has functioned as Aura’s de facto Chief Operating Officer, with direct day-to-day control over the Company’s operations and assets.

22.                                Previously, Mr. Buschur and Mr. Michaels served together as senior executives of now-defunct PowerWave Technologies Inc. (“PowerWave”). In 2013, PowerWave filed for bankruptcy protection. In July 2015, the chapter 7

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trustee filed an adversary proceeding alleging Messrs. Buschur and Michaels schemed with other senior executives to inflate the company’s results (and their own performance bonuses) through fraudulent artifices, including reporting fictitious income. It also was alleged that, on the eve of the bankruptcy, the executives transferred over $10 million in assets to foreign affiliates to put them out of the creditors’ reach. The executives agreed to pay $5.5 million to settle the claims.

23.                                In or around March 2019, with the agreement or acquiescence of the Old Board, Mr. Buschur and Mr. Gagerman caused Aura to formalize Mr. Michaels’ role as de facto treasurer and controller. The new role gives Mr. Michaels check signing authority with respect to Aura’s accounts.

24.                                The Old Board offered to vest Mr. Buschur with the title of CEO. On information and belief, no agreement to that effect was finalized, but the terms discussed included options on five million shares to vest over five years, and an initial salary of $175,000 per annum, increasing to $250,000 if and when Mr. Buschur raised new financing of $10 million. Although Mr. Buschur has been in office for nine months, the promised Middle East investment has not materialized.

Buschur’s Mismanagement

25.                                As noted above Mr. Gagerman’s first tour as CEO led to swollen debts and missed deadlines. Since he retook the helm, the Gagerman-Buschur-

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Michaels cabal has taken numerous actions that are, at best, questionable and that raise questions of self-dealing.

26.                                In late 2018, Aura’s Chinese Partner, JSMPT, placed a $1 million order for the Company’s proprietary systems. Payment was due in three installments, with the final $300,000 tranche due on delivery of the units in January 2019. Mr. Buschur, however, claimed there was a “billion dollar” opportunity with an unidentified classified government agency. Mr. Buschur asserted he was on a committee evaluating proposals for the secret project and, as a result, he had inside knowledge that Peak Industries of Spokane, Washington, would win the contract. Mr. Buschur and Mr. Gagerman directed that the Company focus all efforts on working with Peak, as a result of which Aura was unable to make timely delivery of the order for JSMPT and forfeited the final payment. JSMPT offered, nonetheless, to release a portion of the final payment if Aura completed a reduced delivery by mid-March, but the focus on Peak prevented that from happening as well.

27.                                Mr. Buschur’s biography identifies him as an “advisor” of Peak Industries. (Ex. B at 4, attached)

The 2019 Consents

28.                                For numerous reasons, including those described above, many of Aura’s stockholders became increasingly concerned about the Company’s

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direction. Unfortunately, despite its statutory obligation to do so, the Company has failed to hold an annual meeting of stockholders since January 2018.

29.                                On March 26, 2019, stockholders with the power to vote a majority of Aura’s shares expressed written consents removing Mr. Buschur as a director, replacing him with Ms. Lavut (the “First Consent”) (Ex. C, attached). The stockholders who expressed consents are listed below, along with the number of shares each had the power to vote:

The shares as to which consents were expressed totaled 27,581,769 — 56.5% of the total 48,801,770 shares outstanding as of January 14, 2019 according to Aura’s Form 10-Q/A filed February 1, 2019. (Ex. D at 2 of 25, attached)

30.                                Mr. Mann emailed the First Consents to Mr. Gagerman on March 26, also sending them by First Class Mail to the Company’s headquarters and to Aura’s Registered Agent for service in Delaware.

31.                                Almost immediately after Mr. Mann emailed out the First Consent,

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Mr. Gagerman texted Mr. Mann, confirming he received the First Consent, adding he would call Mr. Mann shortly to discuss it.

32.                                Mr. Mann heard nothing further from Mr. Gagerman, and on March 2,7 a majority of Aura shareholders delivered by the same means additional written consents removing Messrs. Yu and Anderson as directors and replacing them with Mr. Mann and Mr. Lempert (the “Second Consents” and together with the First Consent, the “Consents”). (Ex. E, attached)

The Response to the Consents

33.                                Also on March 27, Mr. Douglas (who was not removed) called Ms. Lavut and told her he was not opposed to the Consents, and that the Board would meet later in the day to discuss the validity of the Consents. None of the newly elected directors was invited to the meeting. Ms. Lavut objected in writing that she was now a director and should attend. (Ex. F, attached)

34.                                Later that day, Mr. Gagerman called Mr. Dalrymple, one of the signatories to the Consents, and told him the displaced Board refused to acknowledge the Consents. Mr. Gagerman falsely accused Mr. Kurtzman of taking millions of dollars from Aura, and claimed the Board had hired attorneys to draft “numerous” complaints against Mr. Kurtzman. Mr. Gagerman further attempted to convince Mr. Dalrymple to withdraw his support for the Consents.

35.                                Mr. Gagerman also spoke with Mr. Mann that evening, claiming he

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had uncovered “dirt” on Aura’s largest shareholder — Rabbi Lowy — which he and the Old Board would publicize if the Consents were not rescinded.(2) In addition, Mr. Gagerman threatened to initiate a complaint with the Securities and Exchange Commission falsely claiming Mr. Kurtzman was improperly controlling Aura.

36.                                Gagerman then called Mr. Kurtzman. In that call, Gagerman repeated his threats to malign the reputation of Rabbi Lowy and to initiate a frivolous SEC complaint against Mr. Kurtzman.

37.                                An attorney for Mr. Kurtzman contacted Mr. Gagerman and demanded that he cease from making false accusations and defamatory statements. (Ex. G, attached) The correspondence went unanswered.

The New Board Meets

38.                                On March 27, the newly appointed Board members met by teleconference. The two directors who had not been removed from the Old Board (Mr. Douglas and Mr. Diaz-Verson) were given notice, but did not attend. Mr. Gagerman also was asked to participate, but did not do so. Ms. Lavut was elected Board Chair.

39.                                Later that evening, Mr. Gagerman again called Mr. Mann and repeated the threats to defame Rabbi Lowy and Mr. Kurtzman. In another call

(2)          Known as the Tosher Rebbe, Rabbi Lowy is the Grand Rabbi of the Tosh Hassidic dynasty, founded in Hungary. Following the Holocaust, the movement relocated to North America and is centered in Quebec and New York State.

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with Mr. Kurtzman, Mr. Gagerman made the threats yet again. Mr. Gagerman told Mr. Kurtzman there was no good faith basis to file a claim with the SEC, but said the “perception” created by such a claim would be damaging to Mr. Kurtzman.

40.                                In a March 27, 2019 letter to Mr. Mann, Mr. Gagerman wrote that the Consents were ineffective, claiming the Majority Stockholders did not own enough shares to cross the 50% threshold. (Ex. H, attached). According to Mr. Gagerman, the Majority Stockholders owned a total of 15,873,597 shares — 8,527,288 less than the amount needed. The vote count was false in several respects.

41.                                Mr. Gagerman purported to set forth the number of shares each stockholder owned according to Aura’s stock register. In fact, the signatories to the Consents are the record owners, and hold powers of attorney for record owners, of 24,490,828 shares — enough to effectuate the action. For example, Mr. Gagerman credited Rabbi Lowy with 3,519,768 shares, although he actually owns 9,724,224 of record. The inaccuracy is particularly curious given that Mr. Gagerman himself signed the certificates evidencing the shares. (Ex. I, attached)(3)

42.                                Mr. Gagerman excluded shares for which the Company knows the stockholder expressing the consent has full voting power. For example, Aura’s Report on Form 10-K for the year ended February 28, 2018, as of May 31, 2018, states that Rabbi Lowy owned 14,092,051 shares including 4,186,561 warrants

(3)   Mr. Gagerman has not released all of the share certificates to the record owners.

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exercisable within 60 days of February 28, 2018 and 4,207,329 shares of common stock over which Mr. Lowy holds a power of attorney to vote such stock.” (Ex. J at 44-45 of 71, attached) He credited Mr. Dalrymple with no shares, ignoring 2,077,103 shares held by LPD Investments, as to which Peter Dalrymple has sole voting authority. He credited Mr. Mann with 557,264 shares, ignoring 400,882 shares as to which Mr. Mann had voting authority under powers of attorney.

43.                                Mr. Gagerman’s erroneous vote count was echoed in an April 5 letter from a law firm purporting to represent the Company, which introduced an additional error by omitting the shares of two of the signatories to the Consents who, together own 2.7 million shares of record. (Ex. K, attached) The letter also repeated the threats directed to Rabbi Lowy and Mr. Kurtzman, making conclusory allegations of supposed wrongdoing devoid of detail or corroboration. Plaintiffs’ counsel responded in an April 8 letter, again rejecting the threats. (Ex. L, attached)

44.                                The law firm’s letter was particularly surprising because the firm also represented the stockholders who removed and replaced the Board in 2018 — including three stockholders to which the firm is now adverse. Moreover, the contention that only shares held of record may be counted is inconsistent with that firm’s position in 2018 — when it successfully demanded that shares subject to powers of attorney running to Rabbi Lowy and Mr. Mann be counted. (Ex. M, attached)

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45.                                On March 29, Mr. Anderson called Mr. Kurtzman, telling him that if he dropped his support for the Consents, Aura would reinstate the agreement under which Mr. Kurtzman’s consulting firm provided services to the Company. Mr. Kurtzman refused the inducement. Mr. Anderson called again on March 30, at which point he told Mr. Kurtzman he “was not necessarily opposed” to Mr. Buschur’s removal and would discuss the matter further with the remainder of the Old Board.

46.                                As of the filing of this Complaint, the Old Board continues to reject the Consents.

Devaluing Aura’s Intellectual Property

47.                                Aura’s trade secrets and proprietary know-how is central to the Company’s value — particularly given the adoption of Aura’s technology by numerous Western militaries. Given that sensitivity, Aura has made the preservation of its secrets a high priority. For example, Aura’s Chinese joint venture partner JSMPT, is not permitted to manufacture the AuraGen® rotor and must acquire all rotor sub-assemblies and certain software elements from the Company.

48.                                Plaintiffs have learned that over the past several months, Mr. Buschur (with the apparent acquiescence of Mr. Gagerman and the Old Board) has undercut Aura’s control over its intellectual property by disclosing it to other parties. Mr.

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Buschur directed that all generator manufacturing for any project will be done by Peak and, in January 2019, provided Peak with the know-how required to fabricate the sub-assemblies and of finished generators. Mr. Buschur assigned two Aura employees to provide technical assistance and training for Peak personnel.

49.                                On April 4, 2019, Mr. Kurtzman received a call from Khaliq Rahman, an Aura engineering consultant with whom Mr. Kurtzman had worked in the past. Mr. Rahman disclosed he had been directed by Mr. Gagerman to deliver engineering drawings, schematics, part lists, proprietary software files, and board layouts to Mr. Yu, an electrical engineer formerly employed by Daewoo Electronics Company in a senior manufacturing management position. Mr. Yu told Mr. Rahman he would provide the materials to Korean engineers with whom he was affiliated so that they could fabricate components needed to complete the JSMPT order. When Mr. Rahman expressed concerns about the disclosures of Aura’s proprietary know-how, Mr. Gagerman told him “you must do this.”

50.                                Plaintiffs, including a majority of the Board, believe the disclosure of Aura’s intellectual property seriously threatens the Company’s future. Unencumbered by the Old Board’s interference, they would halt further knowledge transfers and do whatever they can to recover the information that already was compromised.

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51.                                The Old Board’s actions appear to be part of an undisclosed plan to scrap Aura’s manufacturing capability and to convert the Company into a licensing firm. Plaintiffs also have received information indicating that the Old Board plans to close Aura’s 20,000 square foot facility and move to a luxurious office suite and that they have directed employees to identify inventory and equipment to be sold or abandoned. The Old Board is also pursuing a large stock placement that would place a large amount of stock in friendly hands.

52.                                The disclosures of Aura’s intellectual property is contrary to the will of the stockholders as expressed through the Consents, and to the will of a majority of the Board as reconstituted through the Consents. It threatens Aura with catastrophic irreparable harm, and may have already caused significant harm. Plaintiffs are without an adequate remedy at law.

COUNT I

53.                                Plaintiffs repeat and re-allege the allegations of the Complaint as if set forth fully here.

54.                                Plaintiffs are among several stockholders who hold the power to vote, in the aggregate, a majority of Aura’s shares in a meeting or by written consent. Each validly executed and delivered the Consents, removing and replacing a majority of the Old Board.

55.                                The Consents are valid and effective.

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56.                                The refusal to accept the Consents and the corporate changes effected by the Consents is improper.

57.                                Plaintiffs have been and continue to be harmed by Defendants’ misconduct.

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs demand judgment as follows:

a.                                       Temporarily, preliminarily and permanently enjoining Aura, those acting in concert with it, members of the Old Board and their respective associates, affiliates and representatives from altering the status quo pending resolution of this action;

b.                                       Declaring that (i) the Consents are valid and effective; and (ii) the proper Aura Board of Directors consists of Ms. Lavut, Mr. Mann, Mr. Lempert, Mr. Douglas and Mr. Diaz-Verson;

c.                                        Permanently barring members of the Old Board and their respective associates, affiliates and representatives from denying the validity of the 2019 Consents and the authority of the directors elected by those Consents;

d.                                       Permanently barring members of the Old Board removed as a result of the 2019 Consents from purporting to act as members of the Aura Board of Directors, as officers, employees or representatives of Aura,

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or in any other way purporting to exercise authority on behalf of Aura;

e.                                        Awarding Plaintiffs the costs and disbursements of this action, including reasonable attorneys’ fees and expenses; and

f.                                         Granting such other and further relief as the Court deems just and proper.

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UNSWORN DECLARATION UNDER 10 DEL. C. § 3927

I, Cipora Lavut, a plaintiff in the action, declare under penalty of perjury that I have read the Verified Complaint and that the factual allegations contained therein are true and correct, except that in the case of allegations based upon information and belief, I believe such allegations to be true; and insofar as they relate to the acts of any other person, they are believed by me to be true. I make this verification under penalty of perjury under the laws of Delaware.

Executed on the 8 th  day of April, 2019.

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UNSWORN DECLARATION UNDER 10 DEL. C. § 3927

I, Robert Lempert, a plaintiff in the action, declare under penalty of perjury that I have read the Verified Complaint and that the factual allegations contained therein are true and correct, except that in the case of allegations based upon information and belief, I believe such allegations to be true; and insofar as they relate to the acts of any other person, they are believed by me to be true. I make this verification under penalty of perjury under the laws of Delaware.

Executed on the 8 th  day of April, 2019.

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UNSWORN DECLARATION UNDER 10 DEL. C. § 3927

I, David Mann, a plaintiff in the action, declare under penalty of perjury that I have read the Verified Complaint and that the factual allegations contained therein are true and correct, except that in the case of allegations based upon information and belief, I believe such allegations to be true; and insofar as they relate to the acts of any other person, they are believed by me to be true. I make this verification under penalty of perjury under the laws of Delaware.

Executed on the 8 th   day of April, 2019.

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UNSWORN DECLARATION UNDER 10 DEL. C. § 3927

I, Zvi Kurtzman, a plaintiff in the action, declare under penalty of perjury that I have read the Verified Complaint and that the factual allegations contained therein are true and correct, except that in the case of allegations based upon information and belief, I believe such allegations to be true; and insofar as they relate to the acts of any other person, they are believed by me to be true. I make this verification under penalty of perjury under the laws of Delaware.

Executed on the 8 th   day of April, 2019.

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SUPPLEMENTAL INFORMATION PURSUANT TO RULE 3(A)

OF THE RULES OF THE COURT OF CHANCERY

The information contained herein is for the use by the Court for statistical and administrative purposes only. Nothing stated herein shall be deemed an admission by or binding upon any party.

1. Caption of Case:

Cipora Lavut, Robert Lempert, David Mann, Peter Dalrymple, and Zvi Kurtzman v. Aura Systems, Inc.

2. Date Filed:                         April 8, 2019

3. Name and address of counsel for plaintiff(s):

David J. Margules (Del. No. 2254), Elizabeth A. Sloan (Del. No. 5045), R. Michael Lindsey (Del. No. 2711),

Brittany M. Giusini (Del. No. 6034)

919 North Market Street, 11th Floor

Wilmington, DE 19801-3034

4. Short statement and nature of claim asserted:

Plaintiffs seek enforcement of consents removing and replacing a majority of the Aura Systems, Inc. Board of Directors as well as a status quo order governing the company pending judgment.

5. Substantive field of law involved (check one):

6. Related cases, including any Register of Wills matters (this requires copies of all documents in this matter to be filed with the Register of Wills):

N/A

7. Basis of court’s jurisdiction (including the citation of any statute(s) conferring jurisdiction):

10 Del. C. § 341; 8 Del. C. § 225

8. If the complaint seeks preliminary equitable relief, state the specific preliminary relief sought.

N/A

9. If the complaint seeks a TRO, summary proceedings, a Preliminary Injunction, or Expedited Proceedings, check here x . (If #9 is checked, a Motion to Expedite must accompany the transaction.)

10. If the complaint is one that in the opinion of counsel should not be assigned to a Master in the first instance, check here and attach a statement of good cause. x

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IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE

CERTIFICATE OF GOOD CAUSE

I, David J. Margules, counsel for Plaintiffs Cipora Lavut, Robert Lempert, David Mann, Peter Dalrymple, and Zvi Kurtzman, state that this action should not be assigned to a Master in the first instance because it is a summary proceeding that will require the prompt attention of the Chancellor or a Vice-Chancellor. Specifically, Plaintiffs are seeking expedited temporary relief in the form of a status quo order.

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ANSWER AND VERIFIED COUNTERCLAIM PURSUANT TO 8

DEL. C. § 225

Defendant and Counterclaim Plaintiff Aura Systems, Inc. (“Aura” or the “Company”), by and through its undersigned attorneys, hereby responds to the Verified Complaint Pursuant to 8 Del. C. §225 (the “Complaint”) as follows:

INTRODUCTION (1)

1.                                       Plaintiffs are among several stockholders who hold the power to vote, in the aggregate, a majority of Aura’s shares and who delivered consents with respect to those shares. On March 26 and 27, 2019, a majority of stockholders delivered to the Company written consents (the “Consents”) removing and replacing three of five members of Aura’s Board of Directors (the “Board”). The action was precipitated by growing concerns that the Board abdicated its responsibility to manage the Company’s business and affairs and protect its crucially important intellectual property, and was participating in, or acquiescing to, self-dealing and gross mismanagement by senior executives.

(1) The headings throughout the Complaint do not constitute well-pleaded allegations of fact and therefore require no response. To the extent a response is deemed required, they are denied.

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ANSWER: Aura denies the allegations in the first sentence of Paragraph 1, except admits that Plaintiffs are stockholders of the Company. The allegations in the second sentence of Paragraph 1 are Plaintiffs’ characterization of this action and legal conclusions, to which no response is required. To the extent a response is deemed required, the allegations in the second sentence of Paragraph 1 are denied. Aura is without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in Paragraph 1.

2.                                       Refusing to accept the stockholders’ will, members of the displaced Board falsely contended the number of shares as to which the Consents were expressed fell short of a majority. In addition, purporting to speak on behalf of the deposed Board majority (the “Old Board Majority”), former directors and others repeatedly threatened that unless the Consents are withdrawn, they would defame signatories and promulgate litigation claims they admitted lack a good faith basis. One signatory also was offered a “consulting contract” as an inducement to withdraw his Consents.

ANSWER: Aura denies the allegations of Paragraph 2.

3.                                       Against this backdrop, the displaced directors are presiding over the looting of the business through transfers of assets, operations and intellectual property to entities affiliated with those who, until recently, ran the company. Defendants’ conduct is damaging Aura.

ANSWER: Aura denies the allegations of Paragraph 3.

4.                                       Plaintiffs bring this action to enforce the Consents and to confirm the Aura Board’s Current membership.

ANSWER: The allegations of Paragraph 4 and the corresponding footnote are legal conclusions and Plaintiffs’ characterization of this action, to which no response is required.

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THE PARTIES

5.                                       Defendant Aura Systems, Inc. is a Delaware corporation headquartered at 10541 Ashdale St., Stanton, California 90680. Founded in 1987, Aura designs, assembles and sells induction power systems for mobile power generation applications. As set forth in the Company’s Form 10-Q/A filed February 1, 2019, as of January 14, 2019, the Company had 48,801,770 shares of common stock outstanding, trading on the over-the-counter market.

ANSWER: Aura admits the allegations in the first and second sentence of Paragraph 5, except denies that the allegations are a complete description of the Company’s business activities and function. Aura admits the allegations in the third sentence of Paragraph 5.

6.                                       Plaintiffs are Aura stockholders. As detailed below, each, along with others, executed written Consents in March 2019 to remove and replace three of five members of Aura’s Old Board (as defined below). In the aggregate, the Consents represented a majority of Aura’s voting shares. Pursuant to the Consents, Plaintiffs Cipora Lavut, Robert Lempert and David Mann were elected to replace the removed directors and each is presently a member of the Board. Ms. Lavut was elected Chairman on March 27, 2019. Defendants refuse to recognize the effectiveness of the Consents.

ANSWER: Aura admits the allegation in the first sentence of Paragraph 6. The allegations of the second, third, fourth and fifth sentences of Paragraph 6 are legal conclusions, to which no response is required. To the extent a response is deemed required, those allegations are denied. The allegations of the final sentence of Paragraph 6 are admitted.

7.                                       Non-parties Ronald Buschur, Si Ryong Yu, William Anderson, Gary Douglas and Salvador Diaz-Verson, Jr. were members of the Board of Directors of Aura (the “Old Board”). Yu, Buschur and Anderson were removed as a result of

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the Consents although, on information and belief, each continues to claim he is director. Douglas and Diaz-Verson remain on the Board.

ANSWER: Aura admits the allegations in the first sentence of Paragraph 7, except denies that Messrs. Buschur, Yu, Anderson, Douglas and Diaz-Verson, Jr. are former Board members or the “Old Board,” as Plaintiffs characterize it. The allegations in the second sentence of Paragraph 7 are legal conclusions, to which no response is required. To the extent a response is deemed required, Aura denies the allegations in the second sentence of Paragraph 7, except admits that Messrs. Yu, Buschur, and Anderson claim they are members of the Board. Aura admits the allegations in the third sentence of Paragraph 7.