Investment Thesis
Aura Systems exhibits severe financial distress with negative stockholders equity of -36.9M, liabilities exceeding assets by a significant margin, and deteriorating operational performance. The company generated -2.1M net loss on minimal 265K revenue with negative operating cash flow of -2.4M, indicating fundamental business viability concerns and imminent solvency risk.
Strengths
- High gross margin of 90.6% suggests reasonable unit economics when products sell
- Minimal recent insider selling indicates management may retain confidence
- Low revenue base provides potential for meaningful absolute growth from current levels
Risks
- Negative stockholders equity of -36.9M indicates technical insolvency and negative book value
- Extreme liquidity crisis with current ratio of 0.01x and only 107K cash against 38.2M liabilities
- Severe operational losses with -919.6% operating margin and -2.4M operating cash burn indicate non-viable business model
- Revenue declined 10.7% YoY despite high gross margins, suggesting demand destruction
- Long-term debt of 4.9M represents existential burden relative to equity position and cash generation
Key Metrics to Watch
- Operating cash flow trend - currently -2.4M with zero recovery visible
- Revenue stabilization - currently declining at -10.7% YoY
- Debt restructuring or covenant status - 4.9M long-term debt unsustainable given equity position
- Cash balance depletion rate - 107K cash will not sustain operations at current burn rate
Financial Metrics
Revenue
265.0K
Net Income
-2.1M
EPS (Diluted)
$-0.02
Free Cash Flow
-2.4M
Total Assets
1.3M
Cash
107.0K
Profitability Ratios
Gross Margin
90.6%
Operating Margin
-919.6%
Net Margin
-794.0%
ROE
N/A
ROA
-159.9%
FCF Margin
-909.4%
Balance Sheet & Liquidity
Current Ratio
0.01x
Quick Ratio
0.01x
Debt/Equity
N/A
Debt/Assets
2,906.1%
Interest Coverage
-6.33x
Long-term Debt
4.9M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-03-20T10:30:12.146342 |
Data as of: 2025-11-30 |
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