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 May 31, 2003          Commission File Number 000-17249

                               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 August 20, 2003

Common Stock, par value $0.005 per share              430,923,150 Shares

<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 May 31, 2003
          (Unaudited)and February 28, 2003                                     3

          Condensed  Consolidated  Statements of Operations for the Three
          Months Ended May 31, 2003 (Unaudited) and 2002 (Unaudited)           4

          Condensed  Consolidated  Statements of Cash Flows for the Three
          Months Ended May 31, 2003 (Unaudited) and 2002 (Unaudited)           5

          Notes to Condensed Consolidated Financial Statements (Unaudited)     6

     ITEM 2.  Management's  Discussion  and Analysis of Financial  Condition
              and Results of Operations                                       11

     ITEM 4. Controls and Procedures                                          15

PART II. OTHER INFORMATION

     ITEM 1. Legal Proceedings                                                16

     ITEM 2. Changes in Securities                                            16

     ITEM 6. Exhibits and Reports on Form 8-K                                 16

SIGNATURES AND CERTIFICATIONS                                                 17


<PAGE>

                       AURA SYSTEMS, INC. AND SUBSIDIARIES

                           QUARTER ENDED MAY 31, 2003






PART I.  FINANCIAL INFORMATION

The consolidated 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
consolidated   financial  statements  and  footnotes  have  been  condensed  and
therefore  do not contain all  disclosures  required  by  accounting  principles
generally  accepted  in the  United  States of  America.  However,  the  Company
believes that the disclosures are adequate to make the information presented not
misleading.   These  consolidated   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, 2003 as filed with the SEC
(file number 000-17249).



<PAGE>


                       AURA SYSTEMS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<S>                                                                           <C>                  <C>
                                                                               May 31. 2003         February 28,
Assets                                                                          (Unaudited)             2003
------                                                                        ---------------      ----------------
Current assets:
Cash and cash equivalents                                                     $       125,489      $        163,693
Receivables, net                                                                      175,213               410,717
Inventories, net                                                                    1,438,850             1,414,500
Notes receivable                                                                      214,505               210,272
Other current assets                                                                  595,043               166,589
                                                                              ---------------      ----------------
       Total current assets                                                         2,549,100             2,365,771

Property and equipment, at cost                                                    13,839,349            13,839,351
Less accumulated depreciation and amortization                                   (  6,615,215)           (6,495,840)
                                                                              ---------------      ----------------
Net property and equipment                                                          7,224,134             7,343,511

Non-current inventories                                                             7,573,225             7,573,225
Long term investments                                                                 697,500             1,000,000
Long term receivables                                                               1,950,880             2,006,121
Patents and trademarks, net                                                         2,676,522             2,753,603
Other assets                                                                          615,017               725,635
                                                                              ---------------      ----------------
      Total assets                                                              $  23,286,378           $23,767,866
                                                                              ===============      ================

Liabilities and Stockholder's Equity
Current liabilities:
Accounts payable                                                               $    3,085,449      $      2,753,503
Notes payable                                                                       9,610,335             9,542,786
Convertible notes                                                                     825,000             3,762,317
Accrued expenses                                                                    1,615,035             1,772,936
Deferred income                                                                       160,500               160,500
                                                                              ---------------      ----------------
Total current liabilities                                                          15,296,319            17,992,042

Notes payable and other liabilities                                                    38,491                40,275

Minority interest in consolidated subsidiary                                        1,058,847             1,023,373

COMMITMENTS AND CONTINGENCIES
Stockholders' equity
----------------------------------------------------------------------
    Series A Convertible,  Redeemable  Preferred stock par value $0.005
    per  share  and  additional  paid  in  capital.   1,500,000  shares
    authorized,  558,110 shares issued and outstanding at May 31, 2003;             3,937,176                    --
    none at February 28, 2003.

    Common stock par value $0.005 per share and additional paid in capital.
    500,000,000 shares authorized, 430,923,150 issued and outstanding at May
    31 and February 28, 2003.
                                                                                  305,898,468           305,429,815

    Committed common stock                                                          3,102,958             3,102,958

    Accumulated deficit                                                          (306,045,881)         (303,820,597)
                                                                              ---------------      ----------------
       Total stockholders' equity                                                   6,892,721             4,712,176
                                                                              ---------------      ----------------
       Total liabilities and stockholders' equity                               $  23,286,378           $23,767,866
                                                                              ===============      ================

</TABLE>


     See accompanying notes to condensed consolidated financial statements.


<PAGE>



                       AURA SYSTEMS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    THREE MONTHS ENDED MAY 31, 2003 AND 2002
                                   (Unaudited)


                                                            Three Months
                                                            ------------

                                                     2003                2002
                                                  -----------       ------------

Net Revenues                                     $    97,612          $ 183,739

     Cost of goods                                    66,783             80,985
                                                  -----------       ------------

Gross Profit                                          30,829            102,754

Expenses
     Engineering, research and
     development expenses
                                                     496,072          1,232,818
     Selling, general and administrative           1,177,768          2,160,475
                                                  -----------       ------------
     Total costs and expenses                      1,673,840          3,393,293
                                                  -----------       ------------

 Loss from operations                             (1,643,011)        (3,290,539)

Other (income) and expense
     Interest expense, net                           644,088             82,234
     Other (income) expense, net                     (31,695)           585,429
     Minority interest in net income of
       consolidated subsidiary                         5,474                 --
                                                  -----------       ------------

Loss before extraordinary item                    (2,290,878)        (3,958,201)
                                                  -----------       ------------

Extraordinary item
     Gain on extinguishment of debt obligations,
     net of income taxes of $0                        65,594                 --
                                                  -----------       ------------

Net loss                                         $(2,225,284)       $(3,958,201)
                                                 ============       ============

Basic and diluted loss per share
  Before extraordinary item                    $      (0.005)   $        (0.010)
                                                 ============       ============
  Extraordinary item                           $          --                 --
                                                 ============       ============
  Total basic and diluted loss per share       $      (0.005)   $        (0.010)
                                                 ============       ============
Weighted average shares used to
compute basic and diluted loss per share         430,923,150        398,236,320
                                                 ============       ============


     See accompanying notes to condensed consolidated financial statements.


<PAGE>


                       AURA SYSTEMS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE THREE MONTHS ENDED MAY 31, 2003 AND 2002
                                   (Unaudited)

                                                     2003                2002
                                                  -----------       ------------
Net cash used in operations                      $ (1,301,226)     $ (3,969,869)

Investing activities:

Proceeds from sale of investment                      302,500                --
Note receivable                                        51,008            40,944
                                                  -----------       ------------
Net cash provided by investing activities             353,508            40,944

Financing activities:

Issuance of debt                                      644,214                --
Repayment of debt                                     (44,198)         (250,000)
Issuance of convertible notes                         200.000                --
Net proceeds from sale of common stock                    --          4,135,000
Net proceeds from sale of Series A preferred stock                           --
                                                  -----------       ------------
                                                      109,500

Net cash provided by financing activities:            909,516          3,885,000
                                                  -----------       ------------

Net increase (decrease) in cash                       (38,202)          (43,925)

Cash and cash equivalents at beginning of period      163,693         1,143,396
                                                  -----------       ------------

Cash and cash equivalents at end of period        $   125,491        $1,099,471
                                                  ===========       ============


Supplemental disclosures of cash flow
       information Cash paid during
       the period for:
              Interest                            $   58,587         $   43,167



Unaudited supplemental disclosure of noncash investing and financing activities:

During the three months ended May 31, 2003, the Company:
         - exchanged $3,605,973 of convertible notes payable, plus accrued
         interest, for 534,020 shares of Series A Convertible, Redeemable
         Preferred Stock.


During the three months ended May 31, 2002, the Company:
         -    issued 292,508 shares of the Company's common stock in
              satisfaction of $92,140 in liabilities.





See  accompanying notes to condensed consolidated financial statements.


<PAGE>



                               AURA SYSTEMS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  May 31, 2003
                                   (Unaudited)


1)       Basis of Presentation

         The condensed consolidated financial statements include the accounts of
Aura Systems, Inc. and subsidiaries ("the Company"). All 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 normal recurring adjustments) and
reclassifications for comparability necessary to present fairly the financial
position of Aura Systems, Inc. and subsidiaries at May 31, 2003 and the results
of its operations for the three months ended May 31, 2003 and 2002.
         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amount of
assets and liabilities and disclosure of contingent assets and liabilities as of
the date of the financial statements and the reported amounts of revenues and
expenses during the reported period. Actual results could differ from those
estimates.

2)       Going Concern

         In connection with the audit of its consolidated financial statements
for the year ended February 28, 2003, the Company received a report from its
independent auditors that includes an explanatory paragraph describing
uncertainty as to the Company's ability to continue as a going concern. Except
as otherwise disclosed, the condensed consolidated financial statements have
been prepared on the basis that it is a going concern, which contemplates the
realization of assets and satisfaction of liabilities in the normal course of
business.

         The Company continues to experience acute liquidity challenges. The
Company had cash of approximately $100,000 and $200,000 at May 31 and February
28, 2003, respectively. For the three months ended May 31, 2003 and the year
ended February 28, 2003, the Company incurred a net loss of approximately
$2,200,000 and $16,100,000, respectively, on net revenues of approximately
$100,000 and $1,100,000, respectively. The Company had working capital
deficiencies at May 31 and February 28, 2003 of approximately $12,700,000 and
$15,600,000, respectively. These conditions, combined with the Company's
historical operating losses, raise substantial doubt as to the Company's ability
to continue as a going concern. At July 31, 2003, the Company had less than
$100,000 of cash.

         The Company requires additional debt or equity financing to fund
ongoing operations. The Company is seeking to raise additional capital; however,
there can be no assurance that the Company will raise sufficient capital to fund
ongoing operations. The issuance of additional shares of equity in connection
with such financing could dilute the interests of existing stockholders of the
Company and such dilution could be substantial. The Company must increase its
authorized shares in order to be able to sell common equity and intends to
propose to stockholders such action as well as a reverse stock split of its
common shares; there can be no assurance that either such action will be
approved. The inability to secure additional funding could result in the Company
having to cease operations.

         The cash flow generated from the Company's operations to date has not
been sufficient to fund its working capital needs, and the Company does not
expect that operating cash flow will be sufficient to fund its working capital
needs in its fiscal year ending February 28, 2004. In the past, in order to
maintain liquidity, the Company has relied upon external sources of financing,
principally equity financing and private and bank indebtedness. The Company
expects to fund any operating shortfall in the current fiscal year from cash on
hand, sales of non-core assets and external financings. Currently, the Company
has no firm commitments from third parties to provide additional financing and
there can be no assurance that financing will be available at the times or in
the amounts required. If future financing involves the issuance of equity
securities, existing stockholders may suffer dilution in net tangible book value
per share and such dilution may be significant. If financing cannot be arranged
in the amounts and at the times required, the Company will cease operations. The
Company has no bank line of credit.

3)       Capital

         In March 25, 2003, the Board of Directors of the Company authorized
1,500,000 shares of Series A convertible, redeemable preferred stock (the
"Series A Preferred") with a par value of $0.005. Each Series A Preferred share
is convertible into common stock at $0.08 per share. The Series A Preferred can
be converted at the option of the holder provided that the Company does not
exercise the mandatory conversion on any date on or after March 31, 2004. The
Company may exercise its right to mandatory conversion provided that the current
market value of the Company's common stock equal or exceeds 120% of the then
prevailing conversion price. As the redemption of the Series A Preferred is at
the option of the company, all preferred outstanding has been classified as
equity in the accompanying condensed consolidated financial statements. In the
event that circumstances occur which cause the Series A Preferred to be
redeemable at the option of the holder or manditorily redeemable on some future
event or date, the Series A Preferred would be reclassified out of equity.

         The Series A Preferred has liquidation preference of $10 per share. In
addition, the holders of the Series A Preferred are entitled to receive
cumulative dividends at a rate of 5% per annum. Dividends are payable in arrears
on the first day of each quarter, commencing on September 1, 2003. The shares
can be redeemed on or after March 31, 2004 in whole or in part at a redemption
price equal to $10 per share, plus the amount of any accumulated and unpaid
dividends.

         In the three months ended May 31, 2003, Series A Convertible,
Redeemable Preferred Stock ("Series A Preferred") outstanding increased by a
total of 558,110 shares as follows: 534,020 shares in exchange for convertible
notes payable, plus accrued interest, totaling approximately $3,700,000 and
24,090 shares for $109,500 cash proceeds. As of May 31, 2003 the cumulative
preferred dividends were not material the Company's financial statements.
Additionally, cumulative preferred dividends in future periods will be disclosed
as a reduction in the net loss available to common shareholders.

         The Company did not issue shares of Common Stock during the quarter
ended May 31, 2003.

4)       Inventories

         Inventories, stated at the lower of cost (first in, first out) or
market, consist of the following:

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

                                             May 31. 2003     February 28,
                                             (unaudited)        2003
                                             ----------      ------------

 Raw materials                               $3,886,841      $ 3,846,439
 Finished goods                               6,803,234        6,819,286
 Reserved for potential product obsolescence (1,678,000)      (1,678,000)
                                             -----------     ------------
                                              9,012,075        8,987,725
 Non-current portion                          7,573,225        7,573,225
                                             ===========     ------------
                                             $1,438,850      $ 1,414,500
                                             ===========     ============

</TABLE>
<PAGE>

         Inventories consist primarily of components and completed units for the
Company's AuraGen product.

         Management has analyzed its inventories based on its current business
plan, backlog, and pending proposals with perspective customers and has
determined that the Company does not expect to realize all of its inventories
within the 12-month period ending May 31, 2004. Because of this, the Company has
assessed the net realizability of these assets, the proper classification of the
inventory, and the potential obsolescence of inventory for the future if sales
do not materialize. In these evaluations, management has recorded a reserve of
$1,678,000 at May 31 and February 28, 2003. The net inventories as of May 31 and
February 28, 2003 which are not expected to be realized within a 12-month period
have been reclassified as long term.

5)       Significant Customers
         In the three months ended May 31, 2003, the Company sold AuraGen
related products to three significant customers for a total of approximately
$68,000 or 69% of net revenues. None of these customers are related to or
affiliated with the Company.

         At May 31, 2003, the Company held accounts receivable from two of these
significant customers for a total of approximately $56,000 or 18% of net
receivables. None of these customers are related to or affiliated with the
Company.

6)       Contingencies
         The Company is engaged in certain material legal proceedings as
described in Item 3 of the Company's Form 10-K for the year ended February 28,
2003 as filed with the SEC. In the case of a judgment or settlement, appropriate
provisions have been made in the financial statements.

7)       Notes Payable and Other Liabilities

         Notes payable and other liabilities consist of the following:
<TABLE>
        <S>                                 <C>                 <C>

                                             May 31, 2003        February 28,
                                             (unaudited)            2003
                                            ---------------     ----------------
         Notes payable-buildings (a)        $    5,030,572      $     5,058,774
         Convertible notes payable (b)                  --            2,012,320
         Convertible notes payable (c)             625,000            1,750,000
         Convertible notes payable (d)             200,000                   --
         Litigation payable (e)                  2,201,604            2,201,604
         Trade debt (f)                          1,204,144            1,308,533
         Note payable-related party (g)          1,000,000            1,000,000
         Note payable (h)                          200,000                   --
         Notes payable-equipment (i)               12,5077               14,147
                                            ---------------     ----------------
                                                10,473,826           13,345,378
         Less: current portion                  10,435,335           13,305,103
                                            ---------------     ----------------
         Long-term portion                  $       38,491      $        40,275
                                            ==================  ================

</TABLE>

<PAGE>


(a)            Notes payable-buildings consist of a 1st Trust Deed on two
               buildings in California bearing interest at the rate of 7.625%. A
               final balloon payment is due in Fiscal 2009. In April 2003, the
               Company defaulted on these notes payable and the notes remain in
               default at July 31, 2003. As such, these notes payable were
               classified as current liabilities at May 31 and February 28,
               2003.

(b)            The notes payable bear interest at 5% per annum, mature at
               various dates, and are convertible into shares of the Company's
               Series A Preferred at a rate of $1.00 principal amount of notes
               for each $2.20 of Series A Preferred. During the quarter ended
               May 31, 2003, the Company issued an additional $466,500 of these
               notes payable and recorded interest expense of $466,500 related
               to the conversion feature thereon. On March 31, 2003, the Company
               completed the conversion of these notes into Series A Preferred
               (see Note 3).

(c)            The notes carry an 8% interest rate and are convertible into
               common stock at various conversion rates. During the quarter
               ended May 31, 2003, the Company issued an additional $200,000 of
               these convertible notes payable. In March, 2003, the conversion
               of $1,125,000 of the notes was completed (see Note 3). The
               conversion feature on the notes approximated fair value of the
               underlying shares at the date of issuance.

(d)            The litigation payable represents the legal settlements entered
               into by Aura with various parties. These settlements call for
               payment terms with 8% interest rate to the plaintiffs through
               fiscal 2004.

(e)            On May 29, 2003, the Company received $200,000 of interim funding
               and issued term notes bearing interest at 5% per annum,
               convertible into shares of Series A Preferred. The conversion
               feature on the notes approximated fair value of the underlying
               shares at the date of issuance.

(f)      Trade debt was restructured  with payment terms over a three-year
               period with interest at 8% per annum commencing in January 2000.

               During the quarter ended May 31, 2003 and the year ended February
               28, 2003, the Company settled $59,818 and $1,456,213,
               respectively, of this trade debt, including accrued interest, for
               $14,356 and $385,142, respectively. The gains on the
               extinguishment of debt of $65,594 and $1,050,995, which are
               reflected as extraordinary items in the quarter ended May 31,
               2003 and the year ended February 28, 2003, respectively, resulted
               in extraordinary income per share of less than $0.01 in each
               period. To fund these transactions, the Company issued $307,862
               of the convertibles notes payable described in (b) above in the
               year ended February 28, 2003.

(g)            Note payable - related party consisted of a $1,000,000 note
               payable, which was entered into in connection with the sale of a
               minority interest in Aura Realty, as more fully described in the
               Company's Form 10-K for the year ended February 28, 2003 as filed
               with the SEC. The note bears interest at 12.3% per annum and is
               secured by a security interest in a certain note receivable. The
               Company is required to make interest only payments for the first
               17 months of the term, and the $1,000,000 principal is due on May
               31, 2004.

(h)      During the quarter ended May 31, 2003, the Company entered into a note
               payable  agreement for $200,000.  The note payable  bears
               interest at a fixed rate of  $10,000.  The note  payable  and the
               $10,000  fixed fee mature on June 7, 2003.  On the  maturity
               date of the note  payable,  the  Company  will  issue  warrants
               to  purchase 1,000,000  shares,  which was later  modified to
               3,000,000  shares,  of the  Company's  common  stock with an
               exercise  price of $0.05,  expiring on June 7, 2006.  The
               warrants are to be included in the next S-1 filing. The note is
               secured by  177,777  shares of one of the  Company's  long term
               investments.  As of July 8, 2003, the note was in default.  In
               August 2003, the Company issued warrants to purchase  3,000,000
               shares of common stock in  relation to this note.  The  Company
               is in  negotiations  to obtain new  financing  from a different
               investor to replace this note payable agreement.

(i)      Notes payable-equipment consists of a note maturing in February 2005
               with an interest rate of 8.45%.

8)       Subsequent Events

          Between May 29 and July 11, 2003, the Company received $600,000 of
interim funding from Koyah Leverage Partners, LLP to meet its immediate cash
needs and issued term notes bearing interest at 5% per annum, convertible into
shares of Series A Preferred (the "Term Notes"). From July 24, 2003 through
August 20, 2003, the Company has received an additional $646,086 of interim
funding. These amounts are evidenced by secured notes payable (the "Secured
Notes") on October 24, 2003, which date automatically extends to January 24,
2004 if the Company has not received $2,000,000 of additional funding by October
24, 2003. The Secured Notes bear interest at 10% per annum and are convertible
at the option of the holder into new debt or equity securities at of the Company
at a 20% discount to the best terms by which such new debt or equity is sold to
any new investor. The Secured Notes may be prepaid on notice at a 20% premium.
Repayment of the Secured Notes is secured by substantially all the assets of the
Company (with limited exceptions). The $600,000 of Term Notes were replaced with
Secured Notes as part of this transaction. Although the Company is in
discussions with the investor with regard to further financing, there can be no
assurance that additional financing will be obtained.

         On June 11, 2003, the Company sold a portion of one of its long-term
investments realizing net proceeds of approximately $112,500. The Company
intends to sell the remainder of this investment and is actively seeking buyers
but has no commitments from any buyers at this time.

         In June 2003, the Company received an order for over $1,000,000 of
AuraGen(R) units, including mounting brackets and installation, from an existing
customer. As of August 20, 2003, approximately $240,000 of this order has been
delivered. The remainder of this order will be delivered at the customer's
request through June 2006.



<PAGE>


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

Overview

         This Form 10-Q report may contain forward-looking statements which
involve risks and uncertainties. Such forward-looking statements include, but
are not limited to, statements regarding future events and the Company's plans
and expectations. The Company's actual results may differ significantly from the
results discussed in forward-looking statements as a result of certain factors,
including those discussed in the Company's Form 10-K for the period ended
February 28, 2003 and this report. The Company expressly disclaims any
obligations or undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change in the
Company's expectations or any events, conditions or circumstances on which any
such statement is based. This report includes product names, trade names and
marks of companies other than the Company. All such company or product names are
trademarks, registered trademarks, trade names or marks of their respective
owners and are not the property of the Company.

Results of Operations

         For the three month period ended May 31, 2003

         The Company's net loss for the three months ended May 31, 2003 (the
"First Quarter FY2004") was $2,225,284 compared to a net loss of $3,958,201 for
the three months ended May 31, 2002 (the "First Quarter FY2003"). Net operating
revenues and gross profit were $97,612 and $30,829, respectively, in the First
Quarter FY2004 and $183,739 and $102,754, respectively, in First Quarter FY2003.

         Net revenues for the First Quarter FY2004 decreased to $97,612 from
$183,739 in the First Quarter FY2003. This represents a decrease of $86,127
(47%) from the First Quarter FY2003. Revenues are lower in Fiscal 2004 due
largely to the Company's financial condition adversely impacting sales.

         Cost of goods decreased to $66,783 in the First Quarter FY2004 from
$80,985 in the First Quarter FY2003. This 18% decrease was smaller than the
change in net revenues (47%) resulting in a reduction in gross margin to 32% in
First Quarter FY2004 from 56% for First Quarter FY2003. This reduction in gross
margin results from a normal level of expense associated with warranty and demo
units against an unusually low amount of revenue. The Company's cost for the
goods included in revenue for the quarter was consistent with the historical
gross margins. Cost of goods includes only the direct material and labor costs
incurred.

         Engineering, research and development expenses decreased by $736,746
(60%) to $496,072 in the First Quarter FY2004 from $1,232,818 in the First
Quarter FY2003. The decrease was primarily due to the cost control efforts taken
throughout fiscal 2003 and into the First Quarter FY2004, most significantly,
reductions in headcount. Labor and labor related costs included in engineering
expense amounted to approximately $468,000 in the First Quarter FY2004, compared
to approximately $774,000 in the First Quarter FY2003. The Company also reduced
its research and development activities throughout fiscal 2003 and expects these
efforts to continue at or below this reduced level at least through the second
quarter of fiscal 2004.

         Selling, general and administrative ("SG&A") expenses decreased to
$1,177,768 in the First Quarter FY2004 from $2,160,475 in the First Quarter
FY2003; a reduction of $982,707 (45%). The SG&A expenses were lower due
primarily to cost control efforts taken throughout fiscal 2003 and into the
First Quarter FY2004, most significantly, reductions in headcount. Labor and
labor related costs included in SG&A amounted to approximately $618,000 in the
First Quarter FY2004, compared to approximately $1,252,000 in the First Quarter
FY2003.

         Other income was $31,695 in the First Quarter FY2004 compared to other
expense of $585,429 in First Quarter FY2003. Net interest expense for the First
Quarter FY2004 increased $561,854 to $644,088 from $82,234 in the First Quarter
FY2003 due principally to the recording of $466,500 of expense representing the
beneficial conversion feature related to the issuance of convertible notes
payable. Additional borrowing required in the First Quarter FY2004 caused the
remainder of the interest expense increase.

         Critical Accounting Policies and Estimates

         The Company's discussion and analysis of its financial conditions and
results of operations are based upon its consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of financial
statements requires management to make estimates and disclosures on the date of
the financial statements. On an on-going basis, the Company evaluates its
estimates, including, but not limited to, those related to revenue recognition.
The Company uses authoritative pronouncements, historical experience and other
assumptions as the basis for making judgments. Actual results could differ from
those estimates. The Company believes that the following critical accounting
policies affect its more significant judgments and estimates in the preparation
of its consolidated financial statements.

Revenue recognition
         The Company is required to make judgments based on historical
experience and future expectations, as to the reliability of shipments made to
its customers. These judgments are required to assess the propriety of the
recognition of revenue based on Staff Accounting Bulletin ("SAB") No. 101,
"Revenue Recognition," and related guidance. The Company makes these assessments
based on the following factors: i) customer-specific information, ii) return
policies, and iii) historical experience for issues not yet identified.

 Inventory
         The Company is required to make judgments based on historical
experience and future expectations as to the realizability of inventory. The
Company makes these assessments based on the following factors: i) existing
orders, ii) age of the inventory, and iii) historical experience.

Valuation of long-lived assets
         Long-lived assets, consisting primarily of property and equipment, and
patents and trademarks, comprise a significant portion of the Company's total
assets. Long-lived assets are reviewed for impairment whenever events or changes
in circumstances indicate that their carrying values may not be recoverable.
Recoverability of assets is measured by a comparison of the carrying value of an
asset to the future net cash flows expected to be generated by those assets. The
cash flow projections are based on historical experience, management's view of
growth rates within the industry, and the anticipated future economic
environment.

         Factors that the Company considers important that could trigger a
review for impairment include the following:

         (a)  significant underperformance relative to expected historical or
              projected future operating results,

         (b)  significant changes in the manner of its use of the acquired
              assets or the strategy of its overall business, and

         (c)  significant negative industry or economic trends.

         When the Company determines that the carrying value of patents and
trademarks, long-lived assets and related goodwill and enterprise-level goodwill
may not be recoverable based upon the existence of one or more of the above
indicators of impairment, it measures any impairment based on a projected
discounted cash flow method using a discount rate determined by its management
to be commensurate with the risk inherent in its current business model.

         Financial Position, Liquidity and Capital Resources
         The Company continues to experience acute liquidity challenges. The
Company had cash of approximately $100,000 and $200,000 at May 31 and February
28, 2003, respectively. For the three months ended May 31, 2003 and the year
ended February 28, 2003, the Company incurred a net loss of approximately
$2,200,000 and $16,100,000, respectively, on net revenues of approximately
$100,000 and $1,100,000, respectively. The Company had working capital
deficiencies at May 31 and February 28, 2003 of approximately $12,300,000 and
$15,600,000, respectively. These conditions, combined with the Company's
historical operating losses, raise substantial doubt as to the Company's ability
to continue as a going concern. At July 31, 2003, the Company had less than
$100,000 of cash.

         The Company requires additional debt or equity financing to fund
ongoing operations. The Company is seeking to raise additional capital; however,
there can be no assurance that the Company will raise sufficient capital to fund
ongoing operations. The issuance of additional shares of equity in connection
with such financing could dilute the interests of existing stockholders of the
Company and such dilution could be substantial. The Company must increase its
authorized shares in order to be able to sell common equity and intends to
propose to stockholders such action as well as a reverse stock split of its
common shares; there can be no assurance that either such action will be
approved. The inability to secure additional funding could result in the Company
having to cease operations.

         The cash flow generated from the Company's operations to date has not
been sufficient to fund its working capital needs, and the Company does not
expect that operating cash flow will be sufficient to fund its working capital
needs in its fiscal year ending February 28, 2004. In the past, in order to
maintain liquidity, the Company has relied upon external sources of financing,
principally equity financing and private and bank indebtedness. The Company
expects to fund any operating shortfall in the current fiscal year from cash on
hand, sales of non-core assets and external financings. Currently, the Company
has no firm commitments from third parties to provide additional financing and
there can be no assurance that financing will be available at the times or in
the amounts required. If future financing involves the issuance of equity
securities, existing stockholders may suffer dilution in net tangible book value
per share and such dilution may be significant. If financing cannot be arranged
in the amounts and at the times required, the Company will cease operations. The
Company has no bank line of credit.

         Due to the Company's acute liquidity challenges, it has defaulted in
payments under many of its financial obligations (see Note 7 in the Condensed
Consolidated Financial Statements). These defaults effectively render these
obligations payable on demand and the entire principal balance of each
obligation has been included in current liabilities in the accompanying
Consolidated Financial Statements. Actions by the parties to these obligations
to enforce their rights to collect the amounts due could require the Company to
cease operations.

         At May 31, 2003, the Company had accounts receivable, net of allowance
for doubtful accounts, of $175,213; $410,717 at February 28, 2003. As of July
31, 2003, the Company had net accounts receivable of approximately $320,000.

         From April 1 through June 11, 2003, the Company sold a portion of one
of its long-term investments realizing net proceeds of approximately $415,000.
The Company intends to sell the remainder of this investment and is actively
seeking buyers but has no commitments from any buyers at this time. In May 2003,
the Company borrowed $200,000, secured by a portion of the remainder of this
investment. This borrowing will be required to be repaid from the proceeds of
future sales of this investment.

         There was no spending for property and equipment in the First Quarter
FY2004 or the First Quarter FY2003. The Company has no material capital project
that would require funding. The Company's current plant and equipment is
sufficient to support its current level of sales.

         Debt repayments of $44,198 were made in First Quarter FY2004 as
compared to $250,000 in First Quarter FY2003.

         The Company leases warehouse space located in Rancho Dominguez,
California. Minimum monthly rent under the lease approximates $3,900. The
Company is currently in default of this lease and is negotiating a schedule of
payments to remedy this default. The status of the Company's lease of its
headquarters and manufacturing facility is discussed in the Company's Form 10-K
for the period ended February 28, 2003.

         Capital Transactions

         In March 2003, the Company issued approximately $400,000 of "5%
Discounted Notes". All of these notes (together with other 5% Discounted Notes
previously issued) were converted into Series A Preferred on March 31, 2003 as
discussed below.

         On March 25, 2003, the Company designated 1,500,000 shares of its
authorized preferred stock as Series A Convertible Redeemable Preferred Stock
(the "Series A Preferred"). Each share of Series A Preferred has a par value of
$.005, a liquidation preference of $10.00 plus accrued unpaid dividends and is
convertible into common stock at $.080 per share, based on the liquidation
preference. Dividends accrue on each share at the rate of 5% of the liquidation
preference per annum. The Company may call the Series A Preferred for redemption
on or after March 31, 2004 subject to certain conditions. As of May 31, 2003,
558,110 shares of Series A Preferred were outstanding, issued as set forth
below.

         On March 31, 2003, the Company exchanged $1,125,000 of 8% Notes and
converted $1,101,573 of 5% Notes and $1,342,900 of 5% Discounted Notes, plus
accrued interest in all cases, into 534,020 shares of Series A Preferred. The
average effective net acquisition price of the shares of Common Stock underlying
the conversion feature, based on the mounts paid for the notes, is $0.054 per
share.

         Between May 29 and July 11, 2003, the Company received $600,000 of
interim funding from Koyah Leverage Partners, LLP to meet its immediate cash
needs and issued term notes bearing interest at 5% per annum, convertible into
shares of Series A Preferred (the "Term Notes"). From July 24, 2003 through
August 20, 2003, the Company has received an additional $646,086 of interim
funding. These amounts are evidenced by secured notes payable (the "Secured
Notes") on October 24, 2003, which date automatically extends to January 24,
2004 if the Company has not received $2,000,000 of additional funding by October
24, 2003. The Secured Notes bear interest at 10% per annum and are convertible
at the option of the holder into new debt or equity securities at of the Company
at a 20% discount to the best terms by which such new debt or equity is sold to
any new investor. The Secured Notes may be prepaid on notice at a 20% premium.
Repayment of the Secured Notes is secured by substantially all the assets of the
Company (with limited exceptions). The $600,000 of Term Notes were replaced with
Secured Notes as part of this transaction. Although the Company is in
discussions with the investor with regard to further financing, there can be no
assurance that additional financing will be obtained.

         Also during the first quarter of fiscal 2004:

-          the Company issued 24,090 shares of Series A Preferred in a private
           placement for net cash proceeds of $109,500. The effective net
           acquisition price of the shares of Common Stock underlying the
           conversion feature, based on the amounts paid for the preferred stock
           is $0.036 per share.

-          the Company issued convertible notes payable to third party investors
           totaling $200,000. The notes bear interest at 5% per annum and are
           due on demand no later than August 29, 2003. The notes are
           convertible into Series A Preferred stock at $10.00 per share. The
           effective net acquisition price of the shares of Common Stock
           underlying the conversion feature, based on the amounts paid for the
           notes, is $0.080 per share.

-          the Company issued a $200,000 note in exchange for a loan. The note
           and $10,000 fixed fee interest became due on June 7, 2003. As part of
           this borrowing, the Company is obligated to issue warrants to
           purchase 1,000,000 shares of the Company's common stock at an
           exercise price of $0.050, expiring on June 7, 2006. The note is
           secured by 177,777 shares of one of the Company's long-term
           investments. The Company did not pay the note when due and is in
           default. The Company agreed to increase the warrants to be issued to
           3,000,000 to compensate the holder for this default, and in August
           2003, the Company issued warrants to purchase 3,000,000 shares of
           common stock at $0.050 per share. The Company is in negotiations to
           obtain new financing from a different inventor to replace this note
           payable agreement but there can be no assurance that such financing
           will be obtained.


ITEM 4        Controls and Procedures

         (a) The Company's chief executive officer and its chief financial
officer, after evaluating the effectiveness of the Company's disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14(c) and 15-d-14(c)) as of
a date within 90 days of the filing date of this quarterly report (the
"Evaluation Date") have concluded that as of the Evaluation Date, the Company's
disclosure controls and procedures were adequate and effective to ensure that
material information relating to the Company and its consolidated subsidiaries
would be made known to them timely by others within those entities.

         (b) There were no significant changes in the Company's internal
controls or in other factors that could significantly affect the Company's
disclosure controls and procedures subsequent to the Evaluation Date, nor were
there any significant deficiencies or material weaknesses in such disclosure
controls and procedures requiring corrective actions. As a result, no corrective
actions were taken.





<PAGE>


PART II - OTHER INFORMATION


ITEM 1        Legal Proceedings

         A group of former officers of the Company, who resigned on February 28,
2002 following the commencement of an SEC investigation into the Company's
accounting practices (as described on the company's Annual Report on Form 10-K)
filed a lawsuit against the Company, on July 24, 2003, seeking payment of
amounts owed under a consulting arrangement. The Company had renegotiated the
amounts payable under the consulting arrangement, but defaulted on such amounts.
The suit filed by these former officers seeks full payment based on their
original employment agreements. The accruals reflected on the Company's
financial statements were based on the revised agreements in place at the time
of their resignations and, should these former officers be awarded the full
amount sought in this suit, the Company would be required to record additional
expense of approximately $1,100,000.

         The Company intends to contest this action vigorously and may bring
counterclaims against the individuals.


ITEM 2        Changes in Securities

         For a discussion of recent sales of securities, see Management's
Discussion and Analysis.

         All of the noted sales of unregistered securities were exempt from
registration pursuant to Section 4(2) of the Securities Act of 1933 as these
offerings were a private placement to a limited number of accredited investors.


ITEM 6        Exhibits and Reports on Form 8-K

    a)  Exhibits:


       10.28 -      Form of convertible note

       10.29 -      Koyah Security Agreement

       10.30 -      Koyah Amendment Waiver

       10.31 -      Koyah Additional Advance Agreement

       99.1 -       Certification  Pursuant to 18 U.S.C.  Section 1350,  as
                    Adopted  Pursuant to Section 906 of the Sarbanes-Oxley Act
                    of 2002

       99.2 -       Certification  Pursuant to 18 U.S.C.  Section 1350,  as
                    Adopted  Pursuant to Section 906 of the Sarbanes-Oxley Act
                    of 2002




b)       Reports on Form 8-K:

                  None.



<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:  August 20, 2003                  By: /s/David A. Rescino
       ---------------                 ---------------------------
                                            David A. Rescino
                                     Interim Chief Financial Officer
                               (Principal Financial and Accounting Officer
                                     and Duly Authorized Officer)



<PAGE>





                                  CERTIFICATION

I, Neal F. Meehan, Chairman and Chief Executive Officer of Aura Systems, Inc.,
certify that:

1. I have reviewed this quarterly report on Form 10-Q of Aura Systems, Inc. and,

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a.   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities, particularly during the period in which this report is being
          prepared;

     b.   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c.   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
function):

     a.   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b.   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

                                 /s/ Neal F. Meehan
                                 -------------------
                                    Neal F. Meehan
                          Chairman & Chief Executive Officer
                                 August 20, 2003


                                  CERTIFICATION

I, David A. Rescino,  Interim  Chief  Financial  Officer of Aura Systems,  Inc.,
certify that:

1. I have reviewed this quarterly report on Form 10-Q of Aura Systems, Inc. and,

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a.   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities, particularly during the period in which this report is being
          prepared;

     b.   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c.   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
function):

     a.   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b.   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6. The registrant's other certifying officers and I have indicated in this
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

                                  /s/ David A. Rescino
                                 ---------------------
                                   David A. Rescino
                            Interim Chief Financial Officer
                                  August 20, 2003



<PAGE>


EXHIBIT 99.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Aura Systems, Inc. (the "Company") on
Form 10-Q for the period ending November 30, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Neal F. Meehan,
Chairman and Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, to my knowledge:

1.   The Report fully complies with the  requirements  of section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

2.   The information  contained in the Report fairly  presents,  in all material
     respects,  the financial condition and results of operations of the Company
     for the periods indicated.


                                 /s/ Neal F. Meehan
                                 -------------------
                                    Neal F. Meehan
                          Chairman & Chief Executive Officer
                                 August 20, 2003



EXHIBIT 99.2

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Aura Systems, Inc. (the "Company") on
Form 10-Q for the period ending November 30, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, David A. Rescino,
Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to
my knowledge:

1.   The Report fully complies with the  requirements  of section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

2.   The information  contained in the Report fairly  presents,  in all material
     respects,  the financial condition and results of operations of the Company
     for the periods indicated.

                                  /s/ David A. Rescino
                                 ---------------------
                                   David A. Rescino
                            Interim Chief Financial Officer
                                  August 20, 2003