SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    Form 10-Q


                  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

  For the Quarter Ended August 31, 1999           Commission File Number 0-17249



                               AURA SYSTEMS, INC.
             (Exact name of Registrant as specified in its charter)

       Delaware                                         95-4106894
 (State or other jurisdiction              (I.R.S. Employer Identification No.)
of incorporation or organization)

                                2335 Alaska Ave.
                          El Segundo, California 90245
                    (Address of principal executive offices)

Registrant's telephone number, including area code:           (310) 643-5300

Former  name,  former  address and former  fiscal  year,  if changed  since last
report: None

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days: YES NO X

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date.

        Class                                   Outstanding at February 4, 2000

Common Stock, par value                              177,249,203 Shares
   $.005 per share




<PAGE>


                       AURA SYSTEMS, INC. AND SUBSIDIARIES

                                      INDEX



                                                                        Page No.

PART I.       FINANCIAL INFORMATION

ITEM 1.      Financial Statements

Statement Regarding Financial Information                                     2

Condensed Consolidated Balance Sheets as of August 31, 1999                   3
and February 28, 1999

Condensed Consolidated Statement of Operations for the Three Months and Six   4
Months Ended August 31, 1999 and 1998

Condensed Consolidated Statements of Cash Flows for the Six Months Ended      5
August 31, 1999 and 1998

Notes to Condensed Consolidated Financial Statements                          6

ITEM 2.     Management's Discussion and Analysis of Financial Condition and
            Results of Operations                                             9


PART II. OTHER INFORMATION

ITEM 1.      Legal Proceedings                                               12

ITEM 6.      Exhibits and Reports on Form 8-K                                12

SIGNATURES                                                                   13




<PAGE>




                       AURA SYSTEMS, INC. AND SUBSIDIARIES

                          QUARTER ENDED AUGUST 31, 1999

                          PART I. FINANCIAL INFORMATION



The  financial  statements  included  herein have been prepared by Aura Systems,
Inc. (the  "Company"),  without audit,  pursuant to the rules and regulations of
the Securities and Exchange  Commission (the "SEC").  As contemplated by the SEC
under Rule 10-01 of Regulation S-X, the  accompanying  financial  statements and
footnotes  have been  condensed  and  therefore  do not contain all  disclosures
required by  generally  accepted  accounting  principles.  However,  the Company
believes that the disclosures are adequate to make the information presented not
misleading.  These financial  statements  should be read in conjunction with the
financial  statements and notes thereto  included in the Company's Form 10-K for
the year ended February 28, 1999 as filed with the SEC (file number 0-17249).




<PAGE>


                       AURA SYSTEMS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                              August 31,               February 28,

Assets                                                                          1999                      1999
<S>                                                                         <C>                        <C>
                                                                            -------------            ---------------

Current assets
     Cash and equivalents                                                     $            --          $       3,822,210
     Receivables-net                                                                1,301,967                  8,380,414
     Inventories                                                                   11,963,602                 18,477,058
     Notes Receivable                                                               2,416,776                    250,000
     Prepayments                                                                           --                  3,435,645
     Other current assets                                                             129,279                  2,124,535
                                                                              ---------------            ---------------

       Total current assets                                                        15,811,624                 36,489,862

     Property and equipment, at cost                                               42,941,669                 47,976,699
     Less accumulated depreciation
         and amortization                                                         (12,354,613)              (10,994,734)
                                                                              ----------------           ---------------

Net property and equipment                                                         30,587,056                 36,981,965

     Long-Term investments                                                          2,373,835                  2,923,835
     Long-Term receivables                                                          3,901,774                  2,500,000
     Patents and trademarks, net                                                    4,949,772                  5,293,278
     Goodwill, net                                                                         --                  5,383,208
     Other assets                                                                   3,524,283                    571,244
                                                                              ---------------           ----------------
       Total                                                                  $    61,148,344          $      90,143,392
                                                                                   ==========           ================

Liabilities and Stockholder's Equity

Current liabilities:
     Notes payable                                                            $     3,606,701          $       8,787,113
     Convertible note-unsecured                                                     2,000,000                  2,000,000
     Accounts payable                                                              15,216,251                 22,515,842
     Accrued expenses                                                               8,652,298                  8,056,783
                                                                              ---------------           ----------------

       Total current liabilities                                                   29,475,250                 41,359,738

Notes payable and other liabilities                                                20,221,918                 25,955,529
                                                                              ---------------           ----------------
Convertible notes                                                                  36,481,782                 36,481,782
                                                                              ---------------           ----------------

COMMITMENTS AND CONTINGENCIES

Stockholders' equity
   Common stock par value $.005 per share paid in
capital.  Issued and outstanding 107,822,043
     and 107,752,043 shares respectively.                                         218,702,545                218,693,245
   Cumulative currency translation adjustment                                        (365,932)                  (365,932)
   Accumulated deficit                                                           (243,367,219)              (231,980,970)
                                                                              ---------------         -------------------

       Total stockholders' equity                                                 (25,030,606)              (13,653,657)
                                                                              ----------------          ----------------
       Total                                                                  $    61,148,344          $      90,143,392
                                                                               ==============          =================
</TABLE>


     See accompanying notes to condensed consolidated financial statements.


<PAGE>



                       AURA SYSTEMS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               THREE AND SIX MONTHS ENDED AUGUST 31, 1999 AND 1998
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                        Three Months                                    Six Months

                                                            1999               1998               1999              1998
                                                            ----               ----               ----              ----

<S>                                                   <C>                <C>                 <C>             <C>

Net Revenues                                             $2,644,388        $39,103,054         $5,225,081    $     71,555,592

     Cost of goods and overhead                           3,622,715         31,132,222          8,268,383          55,550,241
                                                          ---------         ----------          ---------          ----------

Gross Profit                                              (978,327)          7,970,832         (3,043,302)         16,005,351

Expenses

     Selling, general and administrative                  2,723,850          9,236,673           6,021,276         16,334,154
     Research and development                               128,494            525,387             244,621            821,733
                                                     --------------     --------------     ---------------     --------------

     Total costs and expenses                             2,852,344          9,762,060           6,265,897         17,155,887
                                                     --------------     --------------      --------------         ----------

Income (loss) from operations                           (3,830,671)        (1,791,228)          (9,309,199)       (1,150,536)

Other (income) and expense

Equity in losses of unconsolidated
        joint ventures                                           --            175,000                 --             500,000
    (Gain) loss on sale of subsidiary                            --                 --           (877,512)
     Loss on disposition of assets                        1,405,049                 --          1,405,049
     Other income                                           110,701           (170,906)           (22,659)         (1,740,729)
     Legal settlements and legal costs                           --          6,300,000                 --           6,300,000
     Interest expense-net                                   774,350          3,005,190          1,572,172           5,744,663
                                                       ------------       ------------      -------------       -------------

Income (loss) before income taxes and minority
interests                                                (5,899,369)       (11,100,512)       (11,386,249)        (11,954,470)
     Provision for taxes                                         --            314,000                 --             942,000
Minority interests in income of consolidated subsidiaries
                                                                 --            264,863                 --             765,860
                                                       ------------       ------------      -------------       -------------

Net income (loss)                                    $   (5,899,369)      $(11,679,375)  $     (11,386,249)      $(13,662,330)
                                                      ==============        ==========         ============       ============

Net income (loss) per common
share-basic                                                    (.06)  $ (.14)              $         (.11)   $ (.17)
                                                     ===============   ======               ==============    ======

Weighted average shares used to
compute net income (loss)  per share                    107,822,043         82,630,599        107,804,271          81,328,557
                                                   ================         ==========   ================          ==========
</TABLE>






     See accompanying notes to condensed consolidated financial statements.


<PAGE>


                       AURA SYSTEMS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE SIX MONTHS ENDED AUGUST 31, 1999 AND 1998
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                             1999                      1998
                                                                         -----------               -------------
<S>                                                                  <C>                       <C>

Net cash (used) in operations                                         $    (6,074,253)          $    (8,196,839)
                                                                       ---------------           ---------------

Cash flows from investing activities:

     Proceeds from sale of subsidiary                                       1,000,000                        --
     Equity investments                                                            --                (5,000,000)
     Additions to property and equipment                                      (70,704)              (10,736,873)
     Note Receivable                                                        1,329,204                        --

     Net cash provided by (used) in investing
         activities                                                         2,258,000               (15,736,873)
                                                                       --------------            ---------------

Cash flows from financing activities:

     Net proceeds (repayment) from short-term
       borrowing                                                                   --                 5,419,324
     Proceeds from issuance of convertible debt                                    --                 8,000,000
     Net proceeds (repayment) of debt                                         (15,757)                1,505,300
     Proceeds from exercise of stock options                                       --                   103,000
     Proceeds from exercise of warrants                                         9,300                 7,574,358
                                                                      ---------------           ---------------

     Net cash provided by financing activities:                                (6,457)               22,601,982
                                                                      ---------------           ---------------

Net increase (decrease) in cash                                            (3,822,210)               (1,331,730)

Cash and cash equivalents at beginning of year                              3,822,210                 6,079,411
                                                                      ---------------           ---------------

Cash and cash equivalents at end of period                           $              0          $      4,747,681
                                                                     ================           ===============

Supplemental  disclosures of cash flow  information  Cash paid during the period
       for:
              Interest                                                $        145,188          $      2,975,814
              Income Tax                                                             0                   949,200
                                                                        ==============            ==============
</TABLE>


Supplemental disclosure of noncash investing and financing activities:

In the six months ended August 31, 1999, the Company sold its MYS subsidiary for
$4.2 million in the form of a note  receivable in the amount of $3.2 million and
a cash down  payment  of $1  million.  The  Company  also sold the assets of its
AuraSound subsidiary for a note receivable of $2 million.




     See accompanying notes to condensed consolidated financial statements.


<PAGE>


                               AURA SYSTEMS, INC.
                         NOTES TO CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS
                                   (Unaudited)


1)       Management Opinion

         The condensed consolidated financial statements include the accounts of
Aura Systems,  Inc. ("the Company") and subsidiaries from the effective dates of
acquisition.  All material inter-company balances and inter-company transactions
have been eliminated.

         In the opinion of management,  the accompanying  condensed consolidated
financial   statements  reflect  all  adjustments  (which  include  only  normal
recurring  adjustments) and  reclassifications  for  comparability  necessary to
present  fairly the  financial  position and results of operations as of and for
the three and six months ended August 31, 1999.

2)       Capital

         In the six months ended August 31,  1999,  warrants to purchase  70,000
shares of common  stock of the Company were  exercised.  In the six months ended
August 31, 1998, the Company  received  proceeds of $7,677,358 from the exercise
of warrants and options to purchase the Company's common stock.

3)       Significant Customers

         Sales of  communication  and  multimedia  products  to three major mass
merchandisers  accounted for approximately $34.5 million in the six months ended
August 31, 1998.  None of the above customers are related or affiliated with the
Company or any customers of the Company.

4)       Contingencies

         The Company is engaged in various legal actions See the Company's  Form
10-K, Item 3 - Legal Proceedings,  for the year ended February 28, 1999 as filed
with the SEC (file number  0-17249) for a description of the legal  actions.  To
the extent that judgment has been rendered,  appropriate provision has been made
in the financial statements.


<PAGE>


                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         This Report may contain forward-looking statements, which involve risks
and  uncertainties.  The Company's actual results may differ materially from the
results  discussed in such  statements.  Certain factors could also cause actual
results  to differ  materially  from  those  discussed  in such  forward-looking
statements,  including  factors  discussed  in the  Company's  Form 10-K for the
period ended February 28, 1999, and factors discussed in this Report.

         Results of Operations

         Revenue  for the three and six month  periods  ended  August  31,  1999
decreased by $36,458,666  and  $66,330,511 to $2,644,388 and $5,225,081 from the
corresponding  periods in the prior year.  The  decrease in revenue is primarily
attributable to the cessation of operations by the Company's previously majority
owned subsidiary,  NewCom, and the sale of the Company's wholly owned subsidiary
MYS.  Approximately  88% of the sales in the  proceeding  year six  months  were
attributable to these two subsidiaries.

         The Company's NewCom subsidiary sold computer related products to three
significant  customers  during the six months ended  August 31,  1998.  Sales of
communication  and multimedia  products to these three major mass  merchandisers
accounted  for  approximately  $34.5  million in the six months ended August 31,
1998.  There are no such sales in the  current  year  period.  None of the above
customers  are related or  affiliated  with the Company or any  customers of the
Company.

         Cost of goods and  overhead  for the three and six months  ended August
31, 1999  decreased  by  $27,509,507  and  $47,281,858  in  comparison  with the
corresponding  periods  in the prior year as a result of the  decrease  in sales
discussed above.

         General and administrative  costs decreased for the three and six month
periods by $6,512,823 and $10,312,878 due primarily to the decrease in personnel
and support services  related to the disposition of the two  subsidiaries  noted
above.

         Included in cost of goods  and overhead and general and administrative
costs for the  three and six months ended August 31, 1999, is  depreciation  and
amortization of $1,800,002 and $3,672,016, respectively.

         Research  and  development  costs for the three  and six  months  ended
August 31, 1999  decreased by $396,893  and $577,112 as the Company  focused its
reduced resources on marketing and sales of the Company's product, the AuraGen.

         In the period ended August 31, 1999, the Company recorded a gain on the
sale of its MYS subsidiary of $887,512,  and a loss on the disposition of assets
from the sale of its sound assets of $1,405,049.  In the six months ended August
31, 1998, the Company  recorded a gain on the sale of stock in its then majority
owned subsidiary NewCom of approximately $1.4 million.

         Net interest expense decreased by $2,230,840 to $774,350 and $4,172,491
to  $1,572,172  in the three and six  months  ended  August 31,  1999.  Interest
expense in the prior year  periods  included a  quarterly  fee being  charged to
interest   expense,   and  higher   borrowing  rates  associated  with  the  two
subsidiaries disposed of in the current year.

         Liquidity and Capital Resources

         At August 31,  1999,  the  Company  had no cash as  compared  to a cash
balance of  $3,822,210  at  February  28,  1999.  Accounts  payable  and accrued
expenses decreased by $6,704,076 from February 28, 1999.  Inventories  decreased
by $6,513,456, and accounts receivable decreased by $7,078,447.

         Cash flows used in operations  decreased by $2,122,586  compared to the
prior year six months.  Working capital was a negative $13,663,626 at August 31,
1999  compared to a negative  $4,869,876  at the Fiscal year ended  February 28,
1999,  with the current  ratio  declining to .54:1 from .88:1 at the Fiscal year
end.

         In the six months ended August 31, 1999, the Company received  proceeds
of $9,300 from the  exercise of  warrants.  In the six months  ended  August 31,
1998, the Company received  proceeds of $7,677,358 from the exercise of warrants
and options to purchase the Company's stock.

         In the past the Company's cash flow  generated from  operations has not
been sufficient to completely fund its working capital needs.  Accordingly,  the
Company has also relied  upon  external  sources of  financing  to maintain  its
liquidity.  In order to finance  continued  growth it will be necessary  for the
Company to obtain additional working capital from external sources.  The Company
is presently seeking additional sources of financing,  including bank and equity
financing.  No assurances  can be provided  that these  funding  sources will be
available at the times and in the amounts required. The inability of the Company
to obtain  sufficient  working capital at the times and in the amounts  required
would have a material adverse effect on the Company's business and operations.

For  additional  information  regarding   the   Company's  financial  condition,
see the  Company's  Form  10-K,  Item 7 -  Management's Discussion  and Analysis
of Financial Condition and Results of Operations for the year ended February 28,
1999 as filed with the SEC (file number 0-17249).

         Forward Looking Statements

         The Company wishes to caution readers that important  factors,  in some
cases,  have  affected,  and in the future could affect,  the  Company's  actual
results and could cause the Company's actual consolidated  results for the third
quarter of Fiscal 2000, and beyond, to differ materially from those expressed in
any forward-looking statements made by, or on behalf of the Company.

         Such factors  include,  but are not limited to, the following risks and
contingencies:  Changed  business  conditions  in the  consumer  electronic  and
automotive   industries  and  the  overall  economy;   increased  marketing  and
manufacturing  competition and accompanying  prices pressures;  contingencies in
initiating   production   at  new   factories   along   with   their   potential
underutilization,  resulting in production  inefficiencies  and higher costs and
start-up expenses and;  inefficiencies,  delays and increased depreciation costs
in connection with the start of production in new plants and expansions.

         Relating  to the  above  are  potential  difficulties  or delays in the
development,  production,  testing and marketing of products, including, but not
limited to, a failure to ship new products and  technologies  when  anticipated.
There might exist a difficulty in obtaining raw materials,  supplies,  power and
natural  resources and any other items needed for the  production of Company and
another products,  creating capacity  constraints limiting the amounts of orders
for certain  products and thereby  causing  effects on the Company's  ability to
ship its  products.  Manufacturing  economies  may fail to develop when planned,
products  may be  defective  and/or  customers  may fail to  accept  them in the
consumer marketplace.

         In addition to the above,  risks and  contingencies may exist as to the
amount and rate of growth in the Company's  selling,  general and administrative
expenses,  and the impact of unusual items resulting from the Company's  ongoing
evaluation  of its business  strategies,  asset  valuations  and  organizational
structures.  Furthermore,  any  financing or other  financial  incentives by the
Company  under or  related to major  infrastructure  contracts  could  result in
increased  bad debt or other  expenses or  fluctuation  of profit  margins  from
period to period.  The focus by some of the  Company's  businesses  on any large
system order could entail fluctuating results from quarter to quarter.

         The effects of, and changes in,  trade,  monetary and fiscal  policies,
laws and  regulations,  other  activities of  governments,  agencies and similar
organizations,  and social and economic  conditions,  such as trade restrictions
impose  yet other  constraints  on any  company  statements.  The cost and other
effects of legal and administrative cases and proceedings present another factor
which may or may not have an impact.



<PAGE>



PART II - OTHER INFORMATION



ITEM 1        Legal Proceedings

              For information regarding pending legal proceedings, see Note 4 to
              the  Company's   Condensed   Consolidated   Financial   Statements
              appearing elsewhere herein.


ITEM 6        Exhibits and Reports on Form 8-K

              a)  Exhibits:
              See Exhibit Index

              b)  Reports On Form 8-K:

              Form 8-K Filed on June 16, 1999 regarding Item 5 - Other Events



<PAGE>




                                   SIGNATURES




         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.







                                                      AURA SYSTEMS, INC.
                                                          (Registrant)






Date:     February 10, 2000                  By:  /s/Steven C. Veen
      ------------------------------        ----------------------------------
                                                  Steven C. Veen
                                               Senior Vice President
                                              Chief Financial Officer
                                  (Principal Financial and Accounting Officer)






<PAGE>




                                INDEX TO EXHIBITS


          Exhibit                                              Sequential
          Number                                                  Page No.

           EX-27             Financial Data Schedule