Column on Aura Systems Was Off-Base

To say I was disappointed in Tom Petruno’s June 9 column (“Promises and More Promises, Losses and More Losses”) would be an understatement. Mr. Petruno writes, “ . . . as a shareholder of a small company, you have to keep your eye on many things.” I couldn’t agree more. First, however, it is important that you understand the fundamentals. It is clear from reading Mr. Petruno’s column that he does not understand the fundamentals of Aura Systems Inc.

His statement “Investors have handed Aura Systems Inc. tens of millions of dollars over the last nine years, lured by the El Segundo company’s myriad promises about its supposed technological breakthroughs” is typical of his tone throughout the article. However, here, as elsewhere throughout the story, it is not just we who disagree with Mr. Petruno’s conclusions. So do independent industry experts.

Writing about our “supposed” technological breakthroughs, Automotive Industries magazine, in its March 1996 edition, wrote, “Aura Systems has a couple of unique technologies that could profoundly affect the way engines work.” Ward’s Automotive magazine, that same month, stated, “This year’s Society of Automotive Engineers Congress offers interest in every aisle, but one development that has industry engineers buzzing is a prototype electromagnetic value actuation system developed by Aura Systems Inc.” And the Ballistic Missile Defense Organization, in its 1995 Technology Applications Report, wrote, “Aura has made great strides in commercializing the company’s BMDO-funded electromagnetic research. . . .”

I also have a problem with quotes attributed to me by Mr. Petruno in the article, particularly as they relate to the Securities Exchange Commission investigation. They are not accurate. I never told Mr. Petruno that “SEC staff members are overstepping their boundaries.” Nor was I ever “insisting” that “they are not going to bring charges.” What I told Mr. Petruno was that the SEC had not yet brought charges against the company, and then I read him the applicable section of our 10-K on this subject. We stand by the disclosure in our 10--K.

Toward the end of his story, Mr. Petruno writes at great length about the company’s fund-raising efforts and its issuance of millions of shares of common stock. Nowhere, however, does he mention that (1) all of the money raised through these efforts--and then some--was reinvested in the company; and (2) despite the fact that I am the company’s largest shareholder, with approximately 1.7 million Aura shares, I have never sold a single share of Aura stock. Also, notably absent is the fact that shareholder equity at Aura has increased 450% over the past two years to more than $99 million; per-share book value has increased over the past five years from 27 cents to $1.75; and revenue had increase from $16 million to $82 million in just 24 months.

ZVI “HARRY” KURTZMAN

President/CEO

Aura Systems Inc.

El Segundo

Editor’s Note: The Times stands by the accuracy of all quotes attributed to Mr. Kurtzman in Tom Petruno’s column.