Note

– Stock Options

Stock Option Plans

July 27, 2010,

the Company’s Board of Directors adopted the

2010

Stock Incentive Plan (the

“2010

Plan”). The aggregate number of shares of common stock that could be granted under the

2010

Plan was reset at the beginning of each year based on

15%

of the number of shares of common stock then outstanding. As such, on

January 1, 2016

the number of shares of common stock available under the

2010

Plan was reset to

5,719,069

shares based upon

38,127,129

shares outstanding on that date.

Options were typically granted with an exercise price equal to the estimated fair value of the Company's common stock at the date of grant with a vesting schedule of

one

three

years and a contractual term of

years. As discussed below, the

2010

Plan has been replaced by a new stock option plan and

additional stock option grants will be granted under the

2010

Plan. As of

June 30, 2016,

there were options to purchase

2,251,168

shares outstanding under the

2010

Plan.

July 18, 2016,

the Board of Directors unanimously approved the adoption of the Enservco Corporation

2016

Stock Incentive Plan (the

“2016

Plan”), which was approved by the stockholders on

September 29, 2016.

The aggregate number of shares of common stock that

may

be granted under the

2016

Plan is

8,000,000

shares plus authorized and unissued shares from the

2010

Plan totaling

2,391,711

for a total reserve of

10,391,711

shares. As of

June 30, 2016,

there were options to purchase

1,960,000

shares outstanding under the

2016

Plan.

A summary of the range of assumptions used to value stock options granted for the

three

and

six

months ended

June 30, 2017

and

2016

are as follows:

	For the Three Months Ended								For the Six Months Ended
	June 30,								June 30,
	2017				2016				2017				2016

Expected volatility		89%	-	93%		81%	-	84%		89%	-	93%		81%	-	102%
Risk-free interest rate			1.4%				0.9%				1.4%			0.9%	-	1.2%
Forfeiture rate			0%				0%				0%				0%
Dividend yield			0%				0%				0%				0%
Expected term (in years)		3.0	-	3.5		3.1	-	3.5		3.0		3.5		3.1	-	3.5

During the

six

months ended

June 30, 2017,

the Company granted options to acquire

2,171,600

shares of common stock with a weighted-average grant-date fair value of

$0.18

per share. During the

six

months ended

June 30, 2017,

options were exercised. During the

six

months ended

June 30, 2016,

the Company granted options to acquire

1,565,000

shares of common stock with a weighted-average grant-date fair value of

$0.33

per share. On

July 18, 2016,

the Company cancelled

875,000

of these stock option grants pursuant to letter agreements between the Company and option holders. The Company subsequently granted

875,000

of New Options under the

2016

Plan.

The following is a summary of stock option activity for all equity plans for the

six

months ended

June 30, 2017:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value

Outstanding at December 31 , 2016		4,211,168		$	1.09		2.85	$	46,233
Granted		2,171,600			0.31		4.93		24,000
Exercised		-			-		-		-
Forfeited or Expired		(533,335	)		1.38		1.55
Outstanding at June 30, 2017		5,849,433		$	0.78		2.81		24,000

Vested or Expected to Vest at June 30, 2017		3,732,666		$	0.99		1.82		8,333
Exercisable at June 30, 2017		3,732,666		$	0.99		1.82	$	8,333

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the estimated fair value of the Company’s common stock on

June 30, 2017,

and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they exercised their options on

June 30, 2017.

During the

three

and

six

months ended

June 30, 2017,

the Company recognized stock-based compensation costs for stock options of approximately

$311,000

and

$446,000

respectively, in general and administrative expenses. During the

three

and

six

months ended

June 30, 2016,

the Company recognized stock-based compensation costs for stock options of approximately

$167,000

and

$318,000,

respectively, in general and administrative expenses. The Company currently expects all outstanding options to vest. Compensation cost is revised if subsequent information indicates that the actual number of options vested due to service is likely to differ from previous estimates.

A summary of the status of non-vested shares underlying the options are presented below:

	Number of Shares			Weighted-Average Grant- Date Fair Value

Non-vested at December 31, 2016		1,659,834		$	0.58
Granted		2,171,600			0.18
Vested		(1,651,333	)		0.45
Forfeited		(70,001	)		0.35
Non-vested at June 30, 2017		2,110,100		$	0.26

As of

June 30, 2017,

there was approximately

$492,000

of total unrecognized compensation costs related to non-vested shares under the Company’s stock option plans which will be recognized over the remaining weighted-average period of

1.87

years.