How did Aura Air go from $60 million valuation to bankruptcy
How did Aura Air go from $60 million valuation to bankruptcy
The District Court in Tel Aviv has approved the Israeli air filtration company’s request for bankruptcy due to debt of approximately $13 million
The District Court in Tel Aviv has approved Israeli air filtration company Aura Air’s request for bankruptcy. The company appealed to the court after amassing debts amounting to NIS 49 million (approximately $13 million). Additionally, the court appointed two trustees to oversee the company. The judge, Noa Grossman, jointly designated the company's CFO, Ofer Bluemenfeld, and attorney Yoel Freilich from Gisin & Co. to act as the temporary trustees for the company.
Judge Noa Grossman stated, "Upon reviewing the case, I have come to the conclusion that the company should be granted the opportunity, as it has requested. It appears that given the unique circumstances at hand, allowing the company to operate for a limited period, even if it results in an operating deficit, is more favorable than the alternative of liquidation."
Aura, which currently employs 12 people, reached insolvency due to debts totaling approximately $13 million, including NIS 370,000 (approximately $100,000) to employees.
The company has developed a smart data-driven air purification system that cleanses indoor air while monitoring its quality in real-time. The company’s technology filters and disinfects indoor air through a four-stage purification process that captures and kills 99.99% of viruses (including SARS-CoV-2), bacteria, germs, and allergens.
Aura announced earlier this year that it was set to be acquired by U.S. competitor Molekule in an all-stock deal, which ultimately fell through. Aura shareholders were meant to receive 10.37% of the shares of Molekule, which at the time was traded at a valuation of $74 million. This meant that the Israeli company’s stockholders would have gotten around just $8 million worth of shares, significantly below the NIS 167 million (approximately $44 million) valuation at which the company went public on the Tel Aviv Stock Exchange in June 2021.
Going public at the peak of the Covid-19 pandemic was the perfect timing for Aura, but the end of the pandemic combined with the economic downturn hit the company hard, and insolvency became imminent once its deal with Molekule fell through.
