<PAGE>
 
================================================================================

                      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 November 30, 1996           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  X  NO
                                               ---    ---

     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 January 13, 1997
               -----                   --------------------------------

      Common Stock, par value                  76,684,101 Shares
          $.005 per share


================================================================================
<PAGE>
 
                      AURA SYSTEMS, INC. AND SUBSIDIARIES

                                     INDEX
<TABLE> 
<CAPTION> 
                                                                        Page No.
<S>       <C>                                                           <C>
PART I.   FINANCIAL INFORMATION
 
          ITEM 1.  Financial Statements
 
                   Statement Regarding Financial Information                2
 
                   Condensed Consolidated Balance Sheets
                   as of November 30, 1996 and  February 29, 1996           3
 
                   Condensed Consolidated Statement of Operations
                   for the Three Months and Nine Months Ended 
                   November 30, 1996 and 1995                               4
 
                   Condensed Consolidated Statements of Cash Flows
                   for the Nine Months Ended November 30, 1996 and 1995     5
 
                   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                                       11
 
          ITEM 6.  Exhibits and Reports on Form 8-K                        11
 
 
SIGNATURES                                                                 12
</TABLE>
<PAGE>
 
                      AURA SYSTEMS, INC. AND SUBSIDIARIES

                        QUARTER ENDED NOVEMBER 30, 1996

                         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/A for
the year ended February 29, 1996 as filed with the SEC (file number 0-17249).

                                       2
<PAGE>
 
                      AURA SYSTEMS, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)
<TABLE>
<CAPTION>
 
                                            NOVEMBER 30,    FEBRUARY 29,
ASSETS                                          1996            1996
------                                      ------------    ------------
<S>                                         <C>             <C>
 
CURRENT ASSETS
 Cash and equivalents                       $  9,898,969    $ 21,900,364
 Trade receivables and other                  57,595,673      37,512,564
 Receivable from officers                        591,794              --
 Inventories and Contracts in progress        35,428,576      23,883,964
 Other current assets                         12,286,415       9,257,060
                                            ------------    ------------
 
     TOTAL CURRENT ASSETS                    115,801,427      92,553,952
                                            ------------    ------------
 
 Property and equipment, at cost              33,607,133      30,012,084
 Less accumulated depreciation
      and amortization                        (8,362,698)     (6,698,849)
                                            ------------    ------------
 
 NET PROPERTY AND EQUIPMENT                   25,244,435      23,313,235
 
 Long-term Investments                         8,176,809       4,165,000
 Long-term Receivables                         5,511,673       4,414,344
 Patents- net                                  2,667,577       2,294,059
 Investments and Joint Ventures                4,950,598       3,002,225
 Deferred charges                              1,616,861       1,376,506
 Other assets                                  5,020,339       2,961,247
                                            ------------    ------------
                                            $168,989,719    $134,080,568
                                            ============    ============
 
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
 
CURRENT LIABILITIES:
 Current installments of notes payable      $  5,396,104    $  3,378,758
 Accounts payable and accrued expenses        23,604,549      17,812,312
                                            ------------    ------------
 
   TOTAL CURRENT LIABILITIES                  29,000,653      21,191,070
 
Convertible Notes                              9,002,900      11,662,900
Notes payable and other liabilities            4,726,565       2,063,492
 
STOCKHOLDERS' EQUITY
 Common stock, issued and out-
   standing 74,074,790 and 62,222,438
   shares respectively                       191,942,788     166,845,201
 Accumulated deficit                         (65,683,187)    (67,682,095)
                                            ------------    ------------
 
Net stockholders' equity                     125,259,601      99,163,106
                                            ------------    ------------
                                            $168,989,719    $134,080,568
                                            ============    ============
</TABLE>


    See accompanying notes to condensed consolidated financial statements.
                                        

                                       3
<PAGE>
 
                      AURA SYSTEMS, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
             THREE AND NINE MONTHS ENDED NOVEMBER 30, 1996 AND 1995
                                  (UNAUDITED)
<TABLE> 
<CAPTION> 
                                           THREE MONTHS                  NINE MONTHS
                                    --------------------------    --------------------------
                                        1996          1995           1996           1995
                                    -----------    -----------    -----------    -----------
<S>                                 <C>            <C>            <C>            <C>
REVENUES                            $34,343,027    $27,998,869    $80,322,923    $55,213,242
 
 Cost of revenues                    25,814,596     22,138,410     59,004,256     43,890,839
                                    -----------    -----------    -----------    -----------
GROSS PROFIT                          8,528,431      5,860,459     21,318,667     11,322,403
 
EXPENSES
 
 General and administrative           5,293,397      5,321,563     13,236,608     11,472,459
 Research and development             2,255,398        932,914      5,719,512      1,921,718
                                    -----------    -----------    -----------    -----------
 Total costs and expenses             7,548,795      6,254,477     18,956,120     13,394,177
                                    -----------    -----------    -----------    -----------
 
INCOME (LOSS) FROM OPERATIONS           979,636       (394,018)     2,362,547     (2,071,774)

OTHER (INCOME) AND EXPENSE
 Interest income                        (86,352)      (262,273)      (235,055)      (446,614)
 Interest expense                       197,742        155,876        598,694        397,411
                                    -----------    -----------    -----------    -----------
 
NET INCOME (LOSS)                   $   868,246    $  (287,621)   $ 1,998,908    $(2,022,571)
                                    ===========    ===========    ===========    ===========
 
NET INCOME (LOSS) PER SHARE         $       .01    $     (.005)   $       .03    $      (.04)
                                    ===========    ===========    ===========    ===========
 
WEIGHTED AVERAGE SHARES USED
 TO COMPUTE NET INCOME (LOSS)
 PER SHARE                           68,698,838     58,043,251     65,818,905     51,374,076
                                    ===========    ===========    ===========    ===========
</TABLE>



     See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>
 
                      AURA SYSTEMS, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED NOVEMBER 30, 1996 AND 1995
                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                                           1996            1995
                                                       -------------   -------------
<S>                                                    <C>             <C>
NET CASH (USED) IN OPERATIONS                          $(29,187,319)   $(31,351,791)
 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
  Purchase of property and equipment                     (2,866,851)     (4,366,141)
  Equity investments                                     (1,000,000)     (3,020,000)
                                                       ------------    ------------
 
  NET CASH PROVIDED BY (USED) IN INVESTING
     ACTIVITIES                                          (3,866,851)     (7,386,141)
                                                       ------------    ------------
 
CASH FLOWS FROM FINANCING ACTIVITIES:
 
  Net borrowings on line of credit                          833,878       1,674,967
  Proceeds from issuance of convertible debt             18,850,000       1,174,830
  Proceeds from long term debt                                   --         338,322
  Repayment of debt                                        (767,603)       (492,855)
  Proceeds from warrant exercises                           600,000         100,000
  Proceeds from exercise of stock options                    35,000         647,860
  Proceeds from issuance of common stock                  1,501,500      51,200,298
  Legal and other financing fees paid                            --         (75,170)
                                                       ------------    ------------
 
  NET CASH PROVIDED BY FINANCING ACTIVITIES              21,052,775      54,568,252
                                                       ------------    ------------
 
NET INCREASE (DECREASE) IN CASH                         (12,001,395)     15,830,320
 
Cash and cash equivalents at beginning of year           21,900,364       3,827,500
                                                       ------------    ------------
 
CASH AND CASH EQUIVALENTS AT END OF PERIOD             $  9,898,969    $ 19,657,820
                                                       ============    ============
 
Supplemental disclosures of cash flow information
     Cash paid during the period for:
          Interest                                     $    519,545    $    325,349
          Income tax                                          6,400           6,400
                                                       ============    ============
 
</TABLE>
Supplemental disclosure of noncash investing and financing activities:

In the nine months ended November 30, 1996, $22,510,000 of convertible notes
payable were converted into common stock.  In the nine months ended November 30,
1996, the Company issued 640,000 shares of common stock for the acquisition of
MYS Corp.

In the nine months ended November 30, 1995, the company entered into financing
arrangements whereby it acquired equipment in exchange for the three notes
payable in the amount of $178,343.  In the nine months ended November 30, 1995
the Company issued 49,046 shares of common stock to its 401-K plan.  The Company
also issued 1,032,314 shares at market in settlement of previously recorded
liabilities, and 315,000 shares of common stock were issued for the acquisition
of assets.  In the nine months ended November 30, 1995, 260,960 shares of common
stock were issued for the conversion of $1,125,000 of 9% convertible debt and
the payment of $33,094 in associated interest.


    See accompanying notes to condensed consolidated financial statements.

                                       5
<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, 1996.

2)   MYS CORPORATION

     On February 20, 1996 the Company entered into a Memorandum of Understanding
("MOU") with the principal shareholders of MYS Corporation of Japan setting
forth the Company's intent to purchase and the shareholder's intent to sell 100%
of the outstanding shares of MYS, in exchange for shares of Aura common stock in
an amount and number to be determined.  The MOU established a framework in which
the Company could conduct its due diligence and negotiate a definitive sale and
purchase agreement.

     In the quarter ended May 31, 1996, the Company concluded its due diligence
and executed a definitive Stock and Investment Purchase Agreement with all the
MYS shareholders.  The principal terms of the Stock and Investment Purchase
Agreement required the Company to issue common stock in such number of shares as
would equal Two Million Dollars in exchange for all outstanding shares of MYS
and its subsidiaries.  In addition, the Company would assume existing long term
liabilities not to exceed Four Million Dollars and all assets of MYS and its
subsidiaries.  MYS Corp. now operates as a wholly owned subsidiary and its
results of operations have been consolidated with the Company effective March 1,
1996 which is the date the company effectively obtained operating control of
MYS.

     In addition to its corporate offices in Japan, MYS has manufacturing
operations in Malaysia and the U.S.A.  MYS provides speakers to an OEM customer
base which includes Radio Shack as its most significant customer.

3)   CAPITAL

     In the nine months ended November 30, 1996, options to purchase 10,000
shares of common stock and warrants to purchase 300,000 shares of common stock
were exercised resulting in proceeds of $635,000.  Additionally the Company
received proceeds of $1,501,500 from the sale of 385,000 shares of common stock
which occurred and was reported in the quarter ended May 31, 1996.

4)   SIGNIFICANT CUSTOMERS

     Sales of computer monitors to a single unrelated party in the nine months
ended November 30, 1996 totalled $12,908,367 or 16.1% of revenues as compared to
$17,695,366 or 32% of sales to three unrelated parties in the comparable prior
year period. These customers are not related or affiliated with any other
customer of the Company. Although no long term agreement exists with these
customers, the Company does not believe that sales to these customers will be
abruptly curtailed. The Company anticipates that these sales will decrease as a

                                       6
<PAGE>
 
percentage of sales in the upcoming quarters. Sales to Micro Computer
Distributing Company in the current fiscal year totalled $264,842 compared to
$3,783,613 in the prior year period.

     Sales of speakers to a single unrelated customer totalled approximately
$14.5 million in the nine months ended November 30, 1996.  There were no sales
to this customer in the prior year period.  This customer is not related to or
affiliated with any other customer of the Company.  Based upon existing
contracts and delivery schedules, the Company expects sales to this customer to
continue to increase over the remainder of the current fiscal year.  Sales to
two customers of computer related products totalled $7,477,332 or 9.3% of
revenues in the current year nine months.  There were no sales to these
customers in the prior year period.

5)   RELATED PARTY TRANSACTIONS

     During the nine months ended November 30, 1996, the Company advanced an
aggregate of $1,572,341.50 to certain of its officers.  $1,200,341.50 of these
amounts were advanced during the Company's fiscal third quarter with the
remaining $372,000 having been advanced in the Company's fiscal second quarter.
The advances accrue interest at 9% and are collateralized by approximately
1,000,000 shares of the Company's stock.  At November 30, 1996, $1,008,000.00 of
these advances had been repaid.  The total remaining advances and accrued
interest were repaid by January 8, 1997.

6)   CONTINGENCIES

     The Company is engaged in various legal actions listed below.  To the
extent that judgment has been rendered, appropriate provision has been made in
the financial statements.

     Shareholder Litigation
     ----------------------

     On May 17, 1995 two lawsuits naming Aura, certain of its directors and
executive officers and a former executive officer as defendants, were filed in
the United States District Court for the Central District of California (Case
Nos. CV-95-3296).  Both complaints (the "Complaints") purport to be class
actions on behalf of all persons who purchased common stock of Aura during the
period from May 28, 1993 through January 17, 1995, inclusive (the "Class
Period").  The Complaints allege that as a result of false and misleading
information disseminated by the defendants, the market price of Aura's common
stock was artificially inflated during the Class Period.  Specifically, the
Complaints allege that (i) in its periodic reports filed with the SEC during the
Class Period and/or certain public announcements made during that period, the
Company increased its reported revenues by overstating products sales and
certain licensing fees and (ii) the Company misstated the sophistication and
quality of, and commitments for the Company's "Interactor Vest."  The Complaints
request damages in an unspecified amount under certain federal securities laws.
The Company believes that this action is frivolous and that it has meritorious
defenses to all these claims.  The Company filed motions to dismiss the
complaints on August 4, 1995.  The plaintiffs did not oppose the motions to
dismiss but instead filed a consolidated amended complaint on September 1, 1995.
On October 2, 1995, the Company filed its motion to dismiss the consolidated
amended complaint.  On November 20, 1995, the court dismissed the consolidated
amended complaint without prejudice and granted plaintiffs 10 days leave to
amend.  Plaintiff's filed their second amended complaint on December 5, 1995.
The Company filed motion to dismiss the second amended complaint on December 22,
1995.  At a hearing on the defendant's motion on January 16, 1996, the Court
denied the motion.

     On February 16, 1996, the Company filed its motion for summary judgment.
At a hearing on the summary judgment motion on April 15, 1996, the court granted
the Company's motion.  Judgment dismissing the action was entered on April 16,
1996.  Plaintiffs filed a Notice of Appeal to the judgment on May 16, 1996, and
the appeal is now pending before the federal appeals court.

                                       7
<PAGE>
 
     SEC Proceedings
     ---------------

     On October 2, 1996, the Securities and Exchange Commission ("Commission")
issued an order (Securities Act Release No. 7352) instituting an administrative
proceeding against Aura Systems, Zvi Kurtzman, Aura's former chief financial
officer, and one other person, which proceeding was settled on consent of all
the parties, without admitting or denying any of the Commission's findings.  In
its order, the Commission found that Aura and the others violated the reporting,
recordkeeping and anti-fraud provisions of the securities laws in 1993 and 1994
in connection with its reporting on two transactions in reports previously filed
with the Commission.  The Commission's order directs that each party cease and
desist from committing or causing any future violation of these provisions.  The
transactions in question involved (1) the purchase and sale of computer monitors
by Aura to a company called Micro Computer Distribution Power ("MCDP") and (2)
Aura's reporting on its agreement with a company called John Jory Corporation
("Jory").  The Commission found that, in addition to disclosing that MCDP was a
significant customer of Aura's, Aura should have disclosed more details about
the nature of the transactions.  The Commission found that Aura's disclosures
were misleading in not discussing further the nature of the transactions and
that the revenues did not involve sales of Aura's products or technologies.  The
MCDP transactions had no material impact on Aura's reported losses.  As
disclosed in later filings, the MCDP transactions, which generated little or no
profit, were part of Aura's long range strategy to develop relationships with
manufacturers, suppliers and distributors for a series of computer-related
applications that Aura has since introduced into the market.

     The Jory transaction relates to Aura's original reporting on this
transaction in its Form 10-Q for the nine months ending November 30, 1993. The
Commission found that the Jory transaction as originally reported was used to
improperly recognize $1.1 million in revenue during Aura's third quarter for
fiscal 1994. Most of the revenue and expenses originally reported from the Jory
transaction were excluded from Aura's financial statements for the year ended
February 28, 1994. In 1994, Aura's Form 10-Q for November 30, 1993, was amended
with respect to the Jory transaction. This adjustment had no material impact on
Aura's reported losses.

     The Commission did not require Aura to restate any of the previously issued
financial statements or otherwise amend any of its prior reports filed with the
Commission.  Also, the Commission did not seek any monetary penalties from Aura,
Mr. Kurtzman or anyone else.  Neither Mr. Kurtzman nor anyone else personally
benefited in any way from these events.

     Other Litigation
     ----------------

     The Company is also engaged in other legal actions arising in the ordinary
course of business.  In the opinion of management based in part upon the advice
of counsel, the ultimate resolution of these matters will not have a material
adverse effect.  Therefore, no provision for these matters has been made in the
Company's consolidated financial statements.

                                       8
<PAGE>
 
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     RESULTS OF OPERATIONS

     For the three months ended November 30, 1996, the Company earned $868,246
on revenues of $34,343,027 compared to a loss of $287,621 on revenues of
$27,998,869 for the comparable period of Fiscal 1995.  For the nine months ended
November 30, 1996, the Company earned $1,998,908 on revenues of $80,322,923,
compared to a loss of $2,022,571 on revenues of $55,213,242 in the prior year
nine months.

     Revenue for the three and nine month periods ended November 30, 1996
increased by $6,344,158 and $25,109,689 respectively, from the corresponding
periods in the prior year. The increased revenues resulted primarily from sales
from the Company's NewCom subsidiary and sales of speaker products including the
Company's new subsidiary MYS Corporation.

     Sales of computer monitors to a single unrelated party in the nine months
ended November 30, 1996, totaled $12,908,367 or 16.1% of revenues compared to
$17,695,366 or 32% of revenues to three unrelated customers in the comparable
prior year period. Sales to Micro Computer Distributing Company in the current
year nine months totalled $264,842 as compared to $3,783,613 in the prior year.
Additionally, the two largest customers of the Company's computer related multi-
media products, major U.S. electronics retailers, accounted for approximately
$7.5 million or 9.3% of sales. There were no sales to these customers in the
prior year period.

     Sales of speakers to a single unrelated customer totalled approximately
$14.5 million in the nine months ended November 30, 1996.  There were no sales
to this customer in the prior year period.  This customer is not related to or
affiliated with any other customer of the Company.  Based upon existing
contracts and delivery schedules, the Company expects sales to this customer to
continue to increase over the remainder of the current fiscal year.

     Cost of revenues for the three and nine months ended November 30, 1996
increased by $3,676,186 and $15,113,417 in comparison with the corresponding
periods in the prior year as a result of the increase in purchased parts
associated with the increase in sales of the variety of products sold by the
Company.

     Research and development costs for the three and nine months ended November
30, 1996 increased by $1,322,484 or approximately 242% and $3,797,794 or
approximately 298% as the Company continued to expand its efforts in refining
its patented technologies into products it is preparing to bring to market
primarily relating to the Company's AuraGen.

     General and administrative costs decreased for the three months and
increased for the nine month period by $28,166 and $1,764,149 respectively
primarily due to the Company's continued expansion of its facilities and staff
including the acquisition of MYS Corp.  The Company expects that with its
continued expansion, general and administrative expenses will continue to
increase.

     Depreciation and amortization for the three and nine months ended November
30, 1996 decreased to $932,880 and $2,598,640 compared to $1,273,280 and
$3,192,599 in the prior year periods due to the write offs taken in the prior
fiscal year.

     The Company had net interest expense of $111,390 and $363,639 for the three
and nine months ended November 30, 1996, compared with net interest income of
$106,397 and $49,203 for the prior year periods.

                                       9
<PAGE>
 
     LIQUIDITY AND CAPITAL RESOURCES

     In the nine months ended November 30, 1996, cash decreased by $12,001,395
to $9,898,969 from $21,900,364, at February 29, 1996.  Accounts payable and
accrued expenses increased by $5,792,237 from February 29, 1996.  Inventories
increased by $11,544,612 due partially to the Company's new subsidiary MYS
Corp., and partially due to the need to increase inventories available for the
fall selling season.

     The increase in receivables of $20,083,109 is due partially to the
acquisition of MYS Corp. and partially to the increase in sales volume which was
concentrated in the last month of the quarter as sales began to increase for the
holiday selling season, primarily by the Company's Newcom subsidiary.

     Cash flows used in operations decreased by $2,164,472 compared to the prior
year nine months.  Working capital increased to $86,800,774 from $71,362,882
over the fiscal year end level, with the current ratio decreasing to 4:1 from
4.4:1.

     In the nine months ended November 30, 1996, financing activities
contributed $635,000 from the exercise of options to purchase 10,000 shares of
common stock and the exercise of warrants to purchase 300,000 shares of common
stock. Proceeds during the nine month period from the sales of convertible debt
totalled $18,850,000. Additionally, the Company received proceeds of $1,501,500
from the sale of 385,000 shares of common stock which occurred and was reported
in the quarter ended May 31, 1996. In the nine months ended November 30, 1995,
financing activities contributed $744,332 from the exercise of options and
warrants to purchase 204,165 shares of common stock and $51,200,298 from the
sale of 15,051,280 shares of common stock.

     Subsequent to the end of the third quarter, the Company issued $7,500,000
in convertible notes due in 1998.  In December 1996, the Company was granted a
line of credit by a major financial institution in the amount of $12,000,000,
secured by a portion of the Company's receivables and inventory.

     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, principally private and bank indebtedness and equity financing.  No
assurances can be provided that these funding sources will be available in the
future.  The Company expects that, with the increasing shipments of the Bass
Shakers, speakers, multimedia kits, modems and sound cards, cash flows and
results of operations should be favorably impacted in the future.

                                       10
<PAGE>
 
PART II - OTHER INFORMATION



ITEM 1   Legal Proceedings

         For information regarding pending legal proceedings, see Note 5 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:

         The Company filed a report on Form 8-K dated September 20, 1996,
         regarding the acquisition of all of the outstanding stock of MYS
         Corporation.
 

                                       11
<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:   January 14, 1996               By:  /s/ Steven C. Veen
        ----------------                  --------------------------------------
                                                       STEVEN C. VEEN
                                                   Senior Vice President
                                                  Chief Financial Officer
                                           (Principal Financial and Accounting
                                                          Officer)

                                       12
<PAGE>
 
                               INDEX TO EXHIBITS
<TABLE>
<CAPTION>
 
 
 Exhibit                                                              Sequential
  Number                                                               Page No.
<S>          <C>                                                      <C>
 
EX-27        Financial Data Schedule
 
</TABLE>

                                       13