Press release·09/11/2026 07:20:41

Overview

Aura’s business is focused on the exploitation of its Axial Flux Induction technology for both electric motors and generators. The company’s power generation solutions based on this technology are known as the AuraGen® for commercial and industrial applications and the VIPER for military applications. Aura’s axial flux induction technology provides several key advantages, including higher efficiency, smaller and lighter machines, higher reliability, and the use of widely available raw materials like copper and steel instead of rare earth magnets.

Aura’s business model consists of three main components: sales and marketing, design and engineering, and manufacturing of axial flux induction motors and generators. The company has recently completed the design of several new motor and generator products ranging from 1.5 kW to 250 kW, and is also exploring licensing and joint venture opportunities with industrial partners.

Critical Accounting Policies and Estimates

Aura’s financial reporting relies on several critical accounting estimates and judgments, including assumptions around inventory reserves, impairment of long-lived assets, valuation of deferred tax assets and derivative liabilities, and share-based compensation. These estimates could have a material impact on the company’s financial statements.

Revenue Recognition

Aura recognizes revenue for its generator sets at the time of product delivery to domestic distributors, which corresponds to the passage of legal title and the satisfaction of performance obligations.

Inventories

Inventories are valued at the lower of cost or net realizable value. The company regularly reviews inventory for excess or obsolete items and writes down the value accordingly.

Derivative Financial Instruments

Aura evaluates its financial instruments to determine if they contain embedded derivatives that require separate accounting and valuation. Derivative instrument liabilities are classified as current or non-current based on potential cash settlement requirements.

Inflation

Aura notes that higher inflation, interest rate hikes, and rising energy prices are creating economic uncertainty that has impacted and is expected to continue impacting the company’s business. This may lead to higher operating expenses and cost of capital.

Results of Operations

Fiscal 2026 vs. Fiscal 2025

• Revenues increased from $50,000 in FY2025 to $278,000 in FY2026, though still negatively impacted by the shift to new product development.
• Gross profit improved from $21,000 to $253,000 due to the revenue increase.
• Engineering, R&D expenses increased from $1.2 million to $1.6 million as the company expanded its engineering capabilities.
• SG&A expenses decreased from $3.6 million to $2.2 million, driven by a $1.5 million reduction in stock-based compensation.
• Interest expense increased from $1.8 million to $2.2 million, and the company recorded a $5.3 million loss on the change in fair value of its derivative liability.
• Net loss decreased from $21.1 million to $10.9 million, due to the factors above.

Liquidity and Capital Resources

Aura faces substantial doubt about its ability to continue as a going concern. The company recorded a $10.9 million net loss in FY2026, used $3.2 million in cash from operations, and had a $44.8 million stockholders’ deficit. Additionally, $5.2 million in notes payable and accrued interest have reached maturity and are past due.

To maintain liquidity, Aura has historically relied on external financing, primarily equity and private debt. The company estimates it will need an additional $5 million to fund operations in FY2027 and increase shipment volumes. However, Aura cannot assure that additional financing will be available, and any further equity raises would dilute existing shareholders. If the company cannot raise the needed funds, it will be forced to make substantial reductions in operating expenses, which could adversely impact its business.