COMMON STOCK

12 Months Ended

Sep. 30, 2016

COMMON STOCK [Abstract]

COMMON STOCK

NOTE 11: COMMON STOCK

Common Stock

The Company did not issue any common shares during the years ended September 30, 2016 and 2015.

Stock Options

On April 25, 2007, Arkanova adopted a stock option plan named the 2007 Stock Option Plan (the “Plan”), the purpose of which is to attract and retain the best available personnel and to provide incentives to employees, officers, directors and consultants, all in an effort to promote the success of Arkanova. Prior to the grant of options under the 2007 Stock Option Plan, there were 5,000,000 shares of Arkanova’s common stock available for issuance under the plan.

On July 17, 2010, Arkanova amended and restated the 2008 Amended Stock Option Plan to revise the termination provision for vested Non-Qualified Stock Options. The termination date of vested Non-Qualified Stock Options was extended from a period of three months to a period of one year.

On November 1, 2014, Arkanova granted 100,000 stock options valued at $3,871 with immediate vesting to an employee to acquire 100,000 stock options at an exercise price of $0.10 per share expiring in 5 years. The grant date fair value of the options using the Black-Scholes option pricing model was $0.04 per share.

On May 1, 2015, Arkanova granted 225,000 stock options valued at $4,133 with immediate vesting to an employee to acquire 225,000 stock options at an exercise price of $0.05 per share expiring in 5 years. The grant date fair value of the options using the Black-Scholes option pricing model was $0.02 per share.

On June 1, 2015, Arkanova granted 100,000 stock options valued at $1,738 with immediate vesting to an employee to acquire 100,000 stock options at an exercise price of $0.05 per share expiring in 5 years. The grant date fair value of the options using the Black-Scholes option pricing model was $0.02 per share.

The following assumptions were used to value the options:

	November 1, 2014	May 1, 2015	June 1, 2015
Expected dividend yield	0.00%	0.00%	0.00%
Expected volatility	206%	206%	205%
Expected life (in years)	5.00	5.00	5.00
Risk-free interest rate	1.62%	1.50%	1.55%

During the year ended September 30, 2016, Arkanova did not grant any stock options. During the year ended September 30, 2016, no stock options were exercised (2015 – nil), no stock options expired unexercised (2015 – nil) and no stock options were forfeited (2015 – 250,000 options cancelled).

During the year ended September 30, 2016, no stock-based compensation was recorded. During the year ended September 30, 2015, stock-based compensation of $11,261 was recorded.

A summary of Arkanova’s stock option activity is as follows:

						Weighted
						Average		Aggregate
	Number of			Weighted Average		Remaining		Intrinsic
	Options			Exercise Price		Contractual Term		Value
Outstanding, September 30, 2014	4,800,000		$	0.05*
Granted	425,000			0.05*
Cancelled	(250,000	)		(0.10	)*
Outstanding, September 30, 2015	4,975,000		$	0.05*
Expired	–
Outstanding, September 30, 2016	4,975,000		$	0.05*
Exercisable, September 30, 2016	4,975,000		$	0.05*		2.41	$	–

* On February 25, 2015, Arkanova amended the terms of the outstanding stock options to decrease the exercise prices from $0.10 to $0.05. The weighted average grant date fair value of the modified stock options was $0.02 and Arkanova recognized an additional stock-based compensation expense of $1,519 related to the modification.

The fair value of each option amendment was estimated on the date of the amendment using the Black-Scholes option pricing model with the following weighted average assumptions:

	Pre -	Post -
	Amendment	Amendment
Expected dividend yield	0.00%	0.00%
Expected volatility	220%	220%
Expected life (in years)	3.92	3.92
Risk-free interest rate	1.20%	1.20%

At September 30, 2016, there was $0 of unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the Plan. There was $0 intrinsic value associated with the outstanding options at September 30, 2016.