Note 8 - Stock Options and Restricted Stock

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 8 – Stock Options and Restricted Stock

Stock Options

On July 27, 2010, the Company’s Board adopted the 2010 Stock Incentive Plan (the "2010 Plan"). The aggregate number of shares of Company 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 Company common stock then outstanding. As such, on January 1, 2016, the number of shares of Company common stock available under the 2010 Plan was reset to 381,272 shares based upon 2,541,809 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 to three years and a contractual term of five years. As discussed below, the 2010 Plan has been replaced by a new stock option plan and no additional stock option grants will be granted under the 2010 Plan. As of December 31, 2021, there were no options available for issuance under the 2010 Plan.

On July 18, 2016, the Board 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 Company common stock that may be granted under the 2016 Plan is 533,334 shares, plus authorized and unissued shares from the 2010 Plan totaling 159,448, for a total reserve of 692,782 shares. As of December 31, 2021, there were outstanding options to purchase 1,334 shares and we had granted restricted stock shares of 181,221 that remained outstanding under the 2016 Plan.

During the years ended December 31, 2021 and 2020, no options were granted or exercised. 

The following is a summary of stock options activity for all equity plans for the years ended December 31, 2021 and 2020:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)
Outstanding as of January 1, 2020		129,689		$	8.45		1.95
Forfeited or expired		(118,120	)		8.54		-
Outstanding as of December 31, 2020		11,569		$	5.87		0.53
Forfeited or expired		(10,235	)		5.91		-
Outstanding as of December 31, 2021		1,334		$	5.55		0.42
Vested as of December 31, 2021		1,334		$	5.55		0.42
Exercisable as of December 31, 2021		1,334		$	5.55		0.42

There was no aggregate intrinsic value (the difference between the estimated fair value of the Company’s common stock on December 31, 2021 and the exercise price, multiplied by the number of in-the-money options) of our outstanding options.

During the years ended December 31, 2021 and 2020, the Company recognized stock-based compensation costs for stock options of $0 and $3,000, respectively, in the line item "Sales, general and administrative expenses" in the consolidated statements of operations. 

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

	Shares			Weighted Average Grant Date Fair Value
Non-vested as of January 1, 2020		3,533		$	3.30
Vested		(1,755	)		3.36
Forfeited		(1,778	)		19.29
Non-vested as of December 31, 2020		-		$	-
Vested		-			-
Forfeited		-			-
Non-vested as of December 31, 2021		-		$	-

As of December 31, 2021, there were no remaining unrecognized compensation costs related to non-vested shares under the Company's stock option plans.

Restricted Stock

Restricted shares issued pursuant to restricted stock awards under the 2016 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:

	Shares			Weighted Average Grant Date Fair Value
Restricted shares as of January 1, 2020		133,756			8.25
Granted		10,001			2.49
Vested		(69,777	)		6.56
Forfeited		(49,587	)		8.05
Restricted shares as of December 31, 2020		24,393			7.32
Granted		165,000			1.05
Vested		(6,505	)		7.94
Forfeited		(1,667	)		8.92
Restricted shares as of December 31, 2021		181,221			1.58

During the years ended December 31, 2021 and 2020, the Company recognized stock-based compensation costs for restricted stock of $130,000 and $389,000 in the line item "Sales, general and administrative expenses" in the consolidated statements of operations, of which $301,000 was related to severance compensation in connection with a separation agreement with the Company's former CEO during the second quarter of 2020. In addition, of the 69,777 shares that vested during 2020, 59,667 shares were related to the former CEO's separation agreement, as were 6,667 of the 10,001 shares that were granted during 2020. 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, 2021 and 2020:

	For the Year Ended December 31,
	2021		2020
Stock options		3,621		93,747
Restricted stock		179,351		58,220
Warrants		1,175,719		314,158
Weighted average		1,358,691		466,125