EXHIBIT 99.2
FalconStor Extends Lock-Up Period Of Shares To April 30, 2003, With Substantial
Agreement From Shareholders And Principal Stockholders of the Former FalconStor,
Inc.
MELVILLE, N.Y.--(BUSINESS WIRE)--Jan. 14, 2002--FalconStor Software, Inc.
(Nasdaq: FALC - news) announced today that substantially all of the holders of
shares of common stock issued to the former shareholders of FalconStor, Inc., in
connection with its reverse merger with Network Peripherals, Inc. in August 2001
(a total of 31,316,599 shares of common stock were issued in the merger) have
agreed to extend the lock-up period for their shares of FalconStor's common
stock from August 22, 2002 until April 30, 2003. The shares subject to the
lock-up include approximately 22,188,671 shares held by ReiJane Huai, the
Chairman, President and Chief Executive Officer of FalconStor, Irwin Lieber,
Barry Rubenstein and certain investment partnerships affiliated with them and
certain other large stockholders (the "Principal Stockholders").
The lock-up agreement continues to provide that the Board of Directors of the
Company may, in its sole discretion, release any and all of the shares from the
lock-up restrictions. The Principal Stockholders have further agreed, in the
event that the Board releases shares of common stock from the lock-up prior to
April 30, 2003, that none of their shares will be released from the lock-up
until all other stockholders subject to the extended lock-up have been given the
opportunity to have all their shares subject to the lock-up freed up for sale.
The Company further announced that the Board of Directors has decided to
immediately release approximately 10% of the shares of common stock subject to
lock-up agreements. This release of shares does not apply to the 22,188,671
shares held by the Principal Stockholders.
Commenting on these actions, ReiJane Huai said that "the Board of Directors
believes that the foregoing actions address concerns in the market relating to
the overhang of the August 22, 2002 lock-up expiration date and will hopefully
provide an orderly release of shares onto the open market. The Board of
Directors will continue to evaluate the release of shares subject to the lock-up
based upon various factors including market conditions, advice of its investment
bankers and market makers and the Company's operating performance."
Mr. Huai further stated that "the Board of Directors was particularly
appreciative of the Principal Stockholders for agreeing to extend their lock-up
until April 30, 2003 and reconfirming their belief in the success of the Company
and commitment to being long term stockholders of the Company." In addition, Mr.
Huai said, "the Board of Directors believe that this 10% release of the lock-up
is appropriate at this time due to, among other things, current market
conditions. This release also allows those investors who provided much needed
capital to the Company in its early stages to have the opportunity to benefit
from the success of the Company."
About FalconStor
FalconStor Software, Inc. (Nasdaq: FALC - news) helps enterprises rise above
ever-expanding storage complexities and costs by providing a state-of-the-art
software-only storage networking solution, consolidating storage management
while drastically improving storage efficiency and quality of service. With
unprecedented manageability, performance, security, and flexibility,
FalconStor's flagship product, IPStor(TM) transcends the limitations that have
historically confined SANs to local data centers.
Founded in 2000, FalconStor is headquartered in Melville, NY. International
offices include Paris, Tokyo and Taichung, Taiwan. FalconStor is a voting member
of the Storage Networking Industry Association (SNIA).
This press release includes forward-looking statements that involve risk and
uncertainties that could cause actual results to differ materially from the
forward-looking statements. These risks and uncertainties include: the early
stage of FalconStor's business; delays in product development; market acceptance
of FalconStor's products and services; technological change in the storage and
networking industries; competition in the storage networking software market;
the ability to achieve profitability; intellectual property issues and other
disputes; and other risk factors discussed in FalconStor's reports on Forms
10-K, 10-Q and other reports filed with the Securities and Exchange Commission.
FalconStor and IPStor are trademarks of FalconStor Software, Inc. All other
company and product names contained herein are trademarks of the respective
holders.
CONTACT:
FalconStor, Melville
Public Relations: Herman Chin, 631/962-1163
Investor Relations: Christine Rogers, 631/962-1160
