STANTON, Calif.--(BUSINESS WIRE)--Aura Systems, Inc. (OTCBB: AUSID) (the “Company”) today announced that, having received approval by FINRA, on February 14, 2018, it filed a Certificate of Amendment of its Restated Certificate of Incorporation (the “Certificate of Amendment”) with the Secretary of State of Delaware to effect a 1-for-7 reverse stock split of the shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), either outstanding or held by the Company as treasury stock, effective on February 21, 2018 (the “Reverse Stock Split”).
As previously reported on Form 8-K, the Company held an annual meeting of stockholders on January 11, 2017, at which meeting the Company’s stockholders, by an affirmative vote of the majority of the Company’s outstanding shares, approved the amendment to the Company’s Restated Certificate of Incorporation (the “Certificate of Incorporation”) to effect a reverse split of the Common Stock at a ratio of one-for-seven shares. The Company’s Board of Directors in turn determined to effect the Reverse Stock Split and approved the corresponding final form of the Certificate of Amendment.
As a result of the Reverse Stock Split, every seven shares of issued and outstanding Common Stock has been automatically combined into one issued and outstanding share of Common Stock, without any change in the par value per share. Likewise, all shares of the Company’s Common Stock subject to outstanding equity awards (including stock options) under Company’s 2006 Stock Option Plan and 2011 Directors and Executive Officer Stock Option Plan and the number of shares of common stock which have been authorized for issuance under those plans but as to which no equity awards have yet been granted or which have been returned to the Company upon cancellation or expiration of such equity awards have been converted at into one-seventh (1/7) of the number of such shares immediately preceding the Reverse Split (subject to adjustment for fractional interests). No fractional shares will be issued as a result of the Reverse Stock Split. Any fractional shares that would otherwise have resulted from the Reverse Stock Split will be paid in cash in a proportionate amount based on the closing sales price of the Company’s common stock as quoted on the OTC Bulletin Board, as of the effective date.
The Reverse Stock Split has reduced the number of shares of Common Stock outstanding from approximately 125 million shares to approximately 43 million shares, subject to adjustment for the payment of cash in lieu of fractional shares. The number of authorized shares of Common Stock under the Certificate of Incorporation will remain unchanged at 150 million shares.
As a result of the Reverse Stock Split, the Company has also eliminated approximately $40 million of debt obligations, representing approximately 80% of the Company’s total debt exiting prior to January 11, 2018. “This Reserve Split represents a significant milestone for this Company — eliminating much of our long-term debt and cleaning up our balance sheet,” said Melvin Gagerman, Chief Executive Officer of Aura Systems. “Aura is now well positioned to move forward with the execution of several projects,” Gagerman added, “which will allow for the Company’s growth and expanding operations.” In the coming months, “we at Aura are very much looking forward to enhancing the Company’s asset base and building shareholder value,” said Gagerman.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the Safe Harbor created by those sections. Forward-looking statements include statements regarding future events or our future performance or financial condition; the opportunity for us to significantly expand our business; statements regarding the demand for our services; statements regarding our expectations with respect to growth; statements regarding future value of our company; statements regarding trends in power industries; and statements regarding estimated results in 2018 and beyond.
Any statements that are not statements of historical fact, such as the statements described above, should be considered forward-looking statements. Some of these statements may be identified by the use of the words “may,” “will,” “believes,” “plans,” “anticipates,” “expects” and similar expressions. Aura Systems has based these forward-looking statements on current expectations and projections about future events as of the date of this press release. These forward-looking statements are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as result of a number of factors, including those described from time to time in Aura Systems’ most recent Annual Report on Form 10-K under the heading “Risk Factors” and in subsequent filings with the Securities and Exchange Commission. Aura Systems undertakes no duty to update any forward-looking statements made herein.