Note

– Stock Options and Restricted Stock

Stock Options

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Plan has been replaced by a new stock option plan and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

December 31, 2019,

there were options to purchase

474,666

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

December 31, 2019,

there were options to purchase

1,470,667

shares and we had granted restricted stock shares of

2,006,333

that remained outstanding under the

2016

Plan.

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

December 31,

2017

are

as follows:

	For the Year Ended December 31,
		2017

Expected volatility		89	-	93%
Risk-free interest rate		1.4	–	1.5%
Dividend yield		-	-	-
Expected term (in years)		3.0	–	3.5

During the year ended

December 31, 2019,

options were granted or exercised. During the year ended

December 31, 2018,

stock options were granted. During the year ended

December 31, 2018,

1,230,002

options were exercised resulting in the issuance of

663,938

shares.

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

years ended

December 31, 2019

and

2018

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

Outstanding at January 1, 2018		4,814,434		$	0.71		3.46	$	1,007
Granted		-			,
Exercised		(1,230,002	)		0.44		-		-
Forfeited or Expired		(1,039,767	)		0.71		-		-

Outstanding at December 31, 2018		2,544,665		$	0.85		2.54	$	93
Granted		-			-		-		-
Exercised		-			-		-		-
Forfeited or Expired		(599,332	)		1.78		-		-
Outstanding at December 31, 2019		1,945,333		$	0.55		1.95	$	-
Vested at December 31, 2019		1,892,332		$	0.56		1.94	$	-
Exercisable at December 31, 2019		1,892,332		$	0.56		1.94	$	-

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 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

December 31, 2019.

During the years ended

December 31, 2019

and

2018,

the Company recog

nized stock-based compensation costs for stock options of approximately

$77

,000

and

$241,000,

respectively, in sales, 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 January 1, 2018		2,531,599		$	0.24
Granted		-			-
Vested		(1,284,666	)		0.27
Forfeited		(653,100	)		0.22
Non-vested at December 31, 2018		593,833		$	0.20
Granted		-			-
Vested		(485,999	)		0.19
Forfeited		(54,833	)		0.22
Non-vested at December 31, 2019		53,001		$	0.22

As of

December 31, 2019,

there was approximately

$4,000

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

0.42

years.

Restricted Stock

Restricted shares issued pursuant to restricted stock awards under the

2016

Stock Plan are restricted as to sale or disposition. These restrictions lapse periodically generally over a period of

three

years. Restrictions

may

also lapse for early retirement and other conditions in accordance with our established policies. Upon termination of employment, shares on which restrictions have

not

lapsed must be returned to us, resulting in restricted stock forfeitures. The fair market value on the date of the grant of the stock with a service condition is amortized and charged to income on a straight-line basis over the requisite service period for the entire award. The fair market value on the date of the grant of the stock with a performance condition shall be accrued and recognized when it becomes probable that the performance condition will be achieved. Restricted shares that contain a market condition are amortized and charged over the life of the award.

A summary of the restricted stock activity is presented below:

	Number of Shares			Weighted Average Grant- Date Fair Value
Restricted shares at January 1, 2018		-			-
Granted		1,042,500			1.07
Vested		(58,333	)		1.11
Forfeited		(147,500	)		0.72
Restricted shares at December 31, 2018		836,667			0.98
Granted		1,473,000			0.27
Vested		(43,334	)		1.28
Forfeited		(260,000	)		1.12
Restricted shares at December 31, 2019		2,006,333			0.55

During the years ended

December 31, 2019

and

2018,

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

$199,000

and

$153,000

in sales, general, and administrative expenses. Compensation cost is revised if subsequent information indicates that the actual number of restricted stock vested due to service is likely to differ from previous estimates.

The following table sets forth the weighted average outstanding of potentially dilutive instruments for the years ended

December 31, 2019

and

2018:

	Year Ended December 31,
	2019	2018
Stock options	2,146,409	3,199,877
Warrants	113,904	668,071
Weighted average	2,260,313	3,867,948