Total share-based expense related to stock options, RSUs and common stock awards was approximately $0.5 million and $0.4 million for the years ended December 31, 2022 and 2021, respectively. Share-based expense is classified in the consolidated statements of comprehensive loss as follows: 

Stock Options

The Company grants stock option awards and RSUs to employees and non-employees with varying vesting terms under the Xenetic Biosciences, Inc. Amended and Restated Equity Incentive Plan (“Stock Plan”). The Company measures the fair value of stock option awards using the Black-Scholes option pricing model, which uses the assumptions noted in the tables below, including the risk-free interest rate, expected term, share price volatility, dividend yield and forfeiture rate. The risk-free interest rate is based upon the U.S. Treasury yield curve in effect at the time of grant, with a term that approximates the expected life of the option. For stock options issued in 2022 and 2021 that qualify as “plain vanilla” stock options, the expected term is based on the simplified method. The Company has a limited history of stock option exercises, which does not provide a reasonable basis for the Company to estimate the expected term of employee and non-employee stock options. For all other stock options, the Company estimates the expected life using judgment based on the anticipated research and development milestones of the Company’s clinical projects and behavior of the Company’s employees and non-employees. The expected life of non-employee options is the contractual life of the option. The expected volatility rates are estimated based on the actual volatility of the Company. To the extent Company data is not available for the full expected term of the awards the Company uses a price volatility based on a blended rate of the Company’s historical volatility with that of comparable publicly traded companies with drug candidates in similar therapeutic areas and stages of nonclinical and clinical development to the Company’s drug candidates. The Company has applied an expected dividend yield of 0% as the Company has not historically declared a dividend and does not anticipate declaring a dividend during the expected life of the options. The Company accounts for forfeitures as they occur.

Employee Stock Options

During the years ended December 31, 2022 and 2021, 350,000 and 325,000 total stock options to purchase shares of common stock were granted by the Company, respectively. The weighted average grant date fair value per option was $0.73 and $1.93, respectively. No stock options were exercised and none expired during the years ended December 31, 2022 and 2021.

During the years ended December 31, 2022 and 2021, 375,027 and 258,315 total stock options vested, respectively, with total fair values of approximately $0.6 million and $0.3 million, respectively. As of December 31, 2022, there was approximately $0.4 million of unrecognized share-based payments related to employee stock options that are expected to vest. The Company expects to recognize this expense over a weighted-average period of approximately 1.6 years.

Key assumptions used in the Black-Scholes option pricing model for options granted to employees during the years ending December 31, 2022 and 2021 are as follows: 

The following is a summary of employee stock option activity for the years ended December 31, 2022 and 2021: 

A summary of the status of the Company’s non-vested employee stock option shares as of December 31, 2022, and the changes during the year ended December 31, 2022, is as follows: 

Restricted Stock Units

There are 4,167 RSUs outstanding as of December 31, 2022 and 2021, respectively. The RSUs are fully vested and had a grant date fair value of $25.37 per share. No RSUs were granted or expired during the years ended December 31, 2022 and 2021.

Non-Employee Stock Options

Share-based expense related to stock options granted to non-employees is recognized as the services are rendered on a straight-line basis. The Company determined that the fair value of the stock options is more reliably measurable than the fair value of the services received. No stock options to purchase shares of common stock were granted by the Company to non-employees during the years ended December 31, 2022 and 2021. No non-employee stock options were exercised during the years ended December 31, 2022 and 2021. No compensation expense related to non-employee options during the years ended December 31, 2022 and December 31, 2021 as all non-employee stock options were fully vested as of December 31, 2020.

The following is a summary of non-employee stock option activity for the years ended December 31, 2022 and 2021:

Common Stock Awards

The Company granted common stock awards to non-employees in exchange for services provided. The Company measures the fair value of these awards using the fair value of the services provided or the fair value of the awards granted, whichever is more reliably measurable. The fair value measurement date of these awards is generally the date the performance of services is complete. The fair value of the awards is recognized as services are rendered on a straight-line basis. A summary of the Company’s common stock awards granted and issued during the years ended December 31, 2022 and 2021 are as follows:

No common stock awards were granted during the years ended December 31, 2022 and 2021. The balance of the common stock awards has not been issued as of December 31, 2022.

Joint Share Ownership Plan

As of December 31, 2022 and 2021, there were approximately 27,000 JSOP awards issued and outstanding to two former senior executives. Under the JSOP, shares in the Company are jointly purchased at fair market value by the participating executives and the trustees of the JSOP trust, with such shares held in the JSOP trust. For U.S. GAAP purposes the awards were valued as employee options and recorded as a reduction in equity as treasury shares until they are exercised by the employee. The JSOP awards are fully vested and have no expiration date. There were no compensation charges during the years ended December 31, 2022 and 2021.