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Aura Systems (AUSI) Risk Analysis

Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning. Aura Systems disclosed 23 risk factors in its most recent earnings report. Aura Systems reported the most risks in the “Finance & Corporate” category.

Risk Overview Q1, 2026

Source: the company's latest filing for the period ended Feb 28, 2026, filed Sep 09, 2026

Risk Distribution
23Risks
Sector Avg.Finance & CorporateTech & InnovationLegal & RegulatoryProductionAbility to SellMacro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Risk Change Over Time

Aura Systems disclosed risks per quarterNo. of Risks2122232425Q3Q4Q12023Q2Q3Q4Q12024Q2Q3Q4Q12025Q2Q3Q12026Showing: Q1, 2026
Risks removedRisks addedRisks changedAura Systems Risk Factors
Risk Changed (3)
  • Share Price & Shareholder Rights - Risk 1
    The Company may not have sufficient authorized shares of common stock to satisfy the full conversion of its outstanding convertible securities.

    As described in Notes 6, 7, and 13 to the financial statements, the number of shares of common stock potentially issuable upon conversion of the Company's outstanding convertible notes, and the exercise of options and warrants, currently exceeds the number of authorized but unissued shares of common stock available. The Company does not have a present obligation to issue shares in excess of its authorized share capital. However, if holders of such securities seek conversion or exercise and the Company does not have sufficient authorized shares available, the Company would be required to obtain shareholder approval to amend its Certificate of Formation to increase the number of authorized shares. There can be no assurance that such approval would be obtained in a timely manner or at all. If the Company is unable to obtain the necessary authorization, holders of these securities may be unable to convert or exercise their securities when otherwise entitled to do so.

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Risk Highlights Q1, 2026

Main Risk Category
Finance & Corporate
With 8 Risks
Number of Disclosed Risks
23
+1
From last report
S&P 500 Average: 32
Recent Changes
1Risks added
0Risks removed
3Risks changed
Since Feb 2026
Number of Risk Changed
3
+3
From last report
S&P 500 Average: 1

Risk Word Cloud

we need to invest in tooling to have a more extensive line of products. if we cannot expand our tooling, it may not be possible for us to expand our operations.extensive line of productsif we do not receive additional financing when and as needed, we may not be able to continue the research, development and commercialization of our technology and products. in that case, our business and results of operations would be materially and adversely affected.commercialization of our technologywe occasionally become subject to commercial disputes that could harm our business by distracting our management from the operation of our business, by increasing our expenses and, if we do not prevail, by subjecting us to potential monetary damages and other remedies.subject to commercial disputeswe have substantial indebtedness and obligations to pay interest.obligations to pay interestwe have been a party to litigation, a consent solicitation and a proxy contest with shareholders controlling a majority of the company's stock, which is costly and time-consuming and has had a material adverse effect on our business, results of operations and financial condition and could adversely affect our stock price.adversely affect our stock pricewe will need to renew sources of component supplies to meet increases in demand for our axial flux induction machine. there is no assurance that our suppliers can or will supply the components to us on favorable terms or at all.our axial flux induction machinewe will need additional capital in the future to meet our obligations, and financing may not be available. during fiscal 2026 and fiscal 2025, the company increased its engineering and manufacturing activities, but it still struggled with meeting its financial requirements. if we cannot obtain additional capital, we will not be able to continue our operations.future to meet our obligationsour intellectual property rights are valuable, and any inability or failure to protect them could reduce the value of our products, services and brand, which would have a material adverse effect on our business.our intellectual property rightstrading on the otc markets is volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares.our stockholders to resellin the future we may be named in litigation, all of which will require significant management time and attention, result in significant legal expenses and may result in an unfavorable outcome, which could have a material adverse effect on our business, operating results and financial condition.require significant management time

Risk Factors Full Breakdown - Total Risks 23

Share Price & Shareholder Rights2 | 8.7%
  • Share Price & Shareholder Rights - Risk 1Added
    The Company may not have sufficient authorized shares of common stock to satisfy the full conversion of its outstanding convertible securities.

    As described in Notes 6, 7, and 13 to the financial statements, the number of shares of common stock potentially issuable upon conversion of the Company's outstanding convertible notes, and the exercise of options and warrants, currently exceeds the number of authorized but unissued shares of common stock available. The Company does not have a present obligation to issue shares in excess of its authorized share capital. However, if holders of such securities seek conversion or exercise and the Company does not have sufficient authorized shares available, the Company would be required to obtain shareholder approval to amend its Certificate of Formation to increase the number of authorized shares. There can be no assurance that such approval would be obtained in a timely manner or at all. If the Company is unable to obtain the necessary authorization, holders of these securities may be unable to convert or exercise their securities when otherwise entitled to do so.

  • Share Price & Shareholder Rights - Risk 2
    Trading on the OTC Markets is volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares.

    Our common stock is quoted on the Pink Sheets of the OTC Markets. Trading in stock quoted on the OTC Markets is often thin and characterized by wide fluctuations in trading prices, due to many factors, some of which may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the OTC Markets is not a stock exchange, and trading of securities on the OTC Markets is often more sporadic than the trading of securities listed on a quotation system like NASDAQ or a stock exchange like the New York Stock Exchange. These factors may result in investors having difficulty reselling any shares of our common stock.

Accounting & Financial Operations1 | 4.3%
Debt & Financing3 | 13.0%
Corporate Activity and Growth2 | 8.7%

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky. The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment. They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result. It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process. Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”. Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report. According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing. You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector. Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements. A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below. 1. Financial & Corporate Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results. Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing. Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments. Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances. 2. Legal & Regulatory Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company. Regulation – risks related to compliance, GDPR, and new legislation. Environmental / Social – risks related to environmental regulation and to data privacy. Taxation & Government Incentives – risks related to taxation and changes in government incentives. 3. Production Costs – risks related to costs of production including commodity prices, future contracts, inventory. Supply Chain – risks related to the company’s suppliers. Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls. Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation. 4. Technology & Innovation Innovation / R&D – risks related to innovation and new product development. Technology – risks related to the company’s reliance on technology. Cyber Security – risks related to securing the company’s digital assets and from cyber attacks. Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying. 5. Ability to Sell Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers. Competition – risks related to the company’s competition including substitutes. Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration. Brand & Reputation – risks related to the company’s brand and reputation. 6. Macro & Political Economy & Political Environment – risks related to changes in economic and political conditions. Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19. International Operations – risks related to the global nature of the company. Capital Markets – risks related to exchange rates and trade, cryptocurrency.