Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Oct. 31, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'FALCONSTOR SOFTWARE INC | ' |
Entity Central Index Key | '0000922521 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 45,222,846 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents | $13,697,061 | $19,288,340 |
Restricted cash | 750,000 | 750,000 |
Marketable securities | 12,136,254 | 8,073,108 |
Accounts receivable, net of allowances of $146,108 and $276,302, respectively | 7,259,882 | 11,150,323 |
Prepaid expenses and other current assets | 1,827,244 | 1,636,891 |
Inventory | 314,423 | 919,390 |
Deferred tax assets, net | 358,092 | 358,092 |
Total current assets | 36,342,956 | 42,176,144 |
Property and equipment, net of accumulated depreciation of $16,550,400 and $16,022,230, respectively | 2,377,106 | 3,317,344 |
Deferred tax assets, net | 35,984 | 49,651 |
Software development costs, net | 1,551,015 | 1,796,075 |
Other assets | 1,363,695 | 1,549,255 |
Goodwill | 4,150,339 | 4,150,339 |
Other intangible assets, net | 156,676 | 179,596 |
Total assets | 45,977,771 | 53,218,404 |
Current liabilities: | ' | ' |
Accounts payable | 846,847 | 1,024,180 |
Accrued expenses | 6,515,932 | 8,658,863 |
Deferred tax liabilities, net | 18,005 | 18,005 |
Deferred revenue, net | 16,803,671 | 18,148,268 |
Total current liabilities | 24,184,455 | 27,849,316 |
Other long-term liabilities | 734,615 | 617,300 |
Deferred tax liabilities, net | 212,028 | 193,705 |
Deferred revenue, net | 17,172,135 | 11,602,177 |
Total liabilities | 42,303,233 | 40,262,498 |
Commitments and contingencies | ' | ' |
Series A redeemable convertible preferred stock, $.001 par value, 2,000,000 shares authorized, 900,000 shares issued and outstanding, redemption value of $9,000,000 | 7,099,400 | 6,737,578 |
Stockholders' equity: | ' | ' |
Common stock - $.001 par value, 100,000,000 shares authorized, 56,360,222 and 56,036,972 shares issued, respectively and 45,222,846 and 48,031,737 shares outstanding, respectively | 56,360 | 56,037 |
Additional paid-in capital | 166,991,326 | 166,683,726 |
Accumulated deficit | -116,545,959 | -111,842,709 |
Common stock held in treasury, at cost (11,137,376 and 8,005,235 shares, respectively) | -52,209,658 | -46,916,339 |
Accumulated other comprehensive loss, net | -1,716,931 | -1,762,387 |
Total stockholders' (deficit) equity | -3,424,862 | 6,218,328 |
Total liabilities and stockholders' (deficit) equity | $45,977,771 | $53,218,404 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Allowances on accounts receivable | $146,108 | $276,302 |
Accumulated depreciation on Property and equipment | 16,550,400 | 16,022,230 |
Redeemable convertible preferred stock, par value | $0.00 | $0.00 |
Redeemable convertible preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Redeemable convertible preferred stock, shares issued | 900,000 | 900,000 |
Redeemable convertible preferred stock, shares outstanding | 900,000 | 900,000 |
Redeemable convertible preferred stock, redemption value | $9,000,000 | $9,000,000 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 56,360,222 | 56,036,972 |
Common stock, shares outstanding | 45,222,846 | 48,031,737 |
Common Stock held in treasury, shares | 11,137,376 | 8,005,235 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Revenues: | ' | ' | ' | ' |
Product revenues | $3,940,479 | $6,584,876 | $13,156,024 | $20,886,761 |
Support and services revenues | 7,234,961 | 8,145,162 | 21,323,582 | 23,102,233 |
Total revenues | 11,175,440 | 14,730,038 | 34,479,606 | 43,988,994 |
Cost of revenues: | ' | ' | ' | ' |
Product | 834,628 | 1,202,489 | 2,107,974 | 3,465,245 |
Support and service | 1,757,716 | 2,566,471 | 5,866,408 | 8,436,866 |
Total cost of revenues | 2,592,344 | 3,768,960 | 7,974,382 | 11,902,111 |
Gross profit | 8,583,096 | 10,961,078 | 26,505,224 | 32,086,883 |
Operating expenses: | ' | ' | ' | ' |
Research and development costs | 2,995,150 | 3,645,283 | 9,487,169 | 12,689,715 |
Selling and marketing | 5,776,558 | 6,070,697 | 18,016,971 | 19,790,583 |
General and administrative | 2,140,460 | 3,018,091 | 6,896,250 | 9,627,039 |
Investigation, litigation, and settlement related costs | -22,502 | 99,316 | -5,186,711 | 275,774 |
Restructuring costs | 259,078 | 2,290,831 | 1,045,564 | 2,290,831 |
Total operating expenses | 11,148,744 | 15,124,218 | 30,259,243 | 44,673,942 |
Operating loss | -2,565,648 | -4,163,140 | -3,754,019 | -12,587,059 |
Interest and other loss, net | -504,124 | -3,212 | -484,998 | -821,178 |
Loss before income taxes | -3,069,772 | -4,166,352 | -4,239,017 | -13,408,237 |
Provision (Benefit) for income taxes | 162,627 | -1,946,689 | 464,233 | -1,600,836 |
Net loss | -3,232,399 | -2,219,663 | -4,703,250 | -11,807,401 |
Less: Accrual of Series A redeemable convertible preferred stock dividends | 186,904 | 28,875 | 560,712 | 28,875 |
Less: Accretion to redemption value of Series A redeemable convertible preferred stock | 125,915 | 17,061 | 361,822 | 17,061 |
Net loss attributable to common stockholders | ($3,545,218) | ($2,265,599) | ($5,625,784) | ($11,853,337) |
Basic net loss per share attributable to common stockholders (in dollars per share) | ($0.08) | ($0.05) | ($0.12) | ($0.25) |
Diluted net loss per share attributable to common stockholders (in dollars per share) | ($0.08) | ($0.05) | ($0.12) | ($0.25) |
Weighted average basic shares outstanding (in shares) | 45,158,184 | 48,024,916 | 47,025,887 | 47,961,853 |
Weighted average diluted shares outstanding (in shares) | 45,158,184 | 48,024,916 | 47,025,887 | 47,961,853 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net loss | ($3,232,399) | ($2,219,663) | ($4,703,250) | ($11,807,401) |
Other comprehensive income (loss), net of taxes: | ' | ' | ' | ' |
Foreign currency translation | 183,858 | -932 | 45,388 | 13,858 |
Net unrealized loss on marketable securities | -3,900 | -2,307 | -3,282 | -3,757 |
Net minimum pension liability | -754 | 2,965 | 3,350 | 2,019 |
Total other comprehensive income (loss), net of taxes: | 179,204 | -274 | 45,456 | 12,120 |
Total comprehensive loss | -3,053,195 | -2,219,937 | -4,657,794 | -11,795,281 |
Less: Accrual of Series A redeemable convertible preferred stock dividends | 186,904 | 28,875 | 560,712 | 28,875 |
Less: Accretion to redemption value of Series A redeemable convertible preferred stock | 125,915 | 17,061 | 361,822 | 17,061 |
Total comprehensive loss attributable to common stockholders | ($3,366,014) | ($2,265,873) | ($5,580,328) | ($11,841,217) |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash flows from operating activities: | ' | ' |
Net loss | ($4,703,250) | ($11,807,401) |
Adjustments to reconcile net loss to net cash from operating activities: | ' | ' |
Depreciation and amortization | 1,968,810 | 2,081,953 |
Share-based payment compensation | 1,205,476 | 1,258,000 |
Non-cash professional services expenses | 297 | 36,942 |
Gain on Estate litigation settlement | -5,293,319 | 0 |
Restructuring costs | 832,149 | 2,265,542 |
Payment of restructuring costs | -1,004,799 | -1,346,693 |
Realized gain on marketable securities | 0 | -3,545 |
Provision for returns and doubtful accounts | -68,838 | -391,371 |
Deferred income tax provision | -18,407 | -11,737 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 3,976,230 | 5,851,286 |
Prepaid expenses and other current assets | -188,627 | 663,592 |
Inventory | 604,967 | -109,621 |
Other assets | 210,587 | -32,900 |
Accounts payable | -160,432 | -1,075,552 |
Accrued expenses and other long-term liabilities | -1,733,806 | -6,211,327 |
Deferred revenue | 4,333,607 | 1,339,297 |
Net cash used in operating activities | -39,355 | -7,493,535 |
Cash flows from investing activities: | ' | ' |
Sales of marketable securities | 31,901,030 | 20,806,642 |
Purchases of marketable securities | -35,967,458 | -16,044,295 |
Purchases of property and equipment | -688,579 | -1,124,170 |
Capitalized software development costs | -100,885 | -830,301 |
Security deposits | -44,247 | -250,000 |
Purchase of intangible assets | -67,793 | -100,556 |
Net cash (used in) provided by investing activities | -4,967,932 | 2,457,320 |
Cash flows from financing activities: | ' | ' |
Proceeds from exercise of stock options | 24,684 | 697,500 |
Dividends paid on Series A redeemable convertible preferred stock | -590,187 | 0 |
Proceeds from issuance of Series A redeemable convertible preferred stock, net of issuance costs | 0 | 8,731,677 |
Net cash (used in) provided by financing activities | -565,503 | 9,429,177 |
Effect of exchange rate changes on cash and cash equivalents | -18,489 | -93,787 |
Net (decrease) increase in cash and cash equivalents | -5,591,279 | 4,299,175 |
Cash and cash equivalents, beginning of period | 19,288,340 | 18,651,468 |
Cash and cash equivalents, end of period | 13,697,061 | 22,950,643 |
Supplemental disclosures: | ' | ' |
Cash paid for income taxes, net | 146,246 | 59,023 |
Non-cash financing activities: | ' | ' |
Undistributed Series A redeemable convertible preferred stock dividends | $186,904 | $28,875 |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
(a) The Company and Nature of Operations | |
FalconStor Software, Inc., a Delaware Corporation (the "Company"), develops, manufactures and sells data migration, business continuity, disaster recovery, optimized backup and de-duplication solutions and provides the related maintenance, implementation and engineering services. | |
(b) Principles of Consolidation | |
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. | |
(c) Use of Estimates | |
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s significant estimates include those related to revenue recognition, accounts receivable allowances, share-based payment compensation, marketable securities, valuation of embedded derivatives, software development costs, goodwill and other intangible assets and income taxes. Actual results could differ from those estimates. | |
The financial market volatility in many countries where the Company operates has impacted and may continue to impact the Company’s business. Such conditions could have a material impact to the Company’s significant accounting estimates discussed above. | |
(d) Unaudited Interim Financial Information | |
The accompanying unaudited interim condensed consolidated financial statements have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements. | |
In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of the Company at September 30, 2014, and the results of its operations for the three and nine months ended September 30, 2014 and 2013. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 ("2013 Form 10-K"). | |
(e) Reclassifications | |
Certain reclassifications were made to the prior period amounts to conform to the current period presentation. | |
(f) Recently Adopted Accounting Pronouncements | |
In July 2013, the Financial Accounting Standards Board ("FASB") issued new guidance which requires the netting of an unrecognized tax benefit, or a portion of an unrecognized tax benefit, against a deferred tax asset for a net operating loss carry forward, a similar tax loss, or a tax credit carry forward if such settlement is required or expected in the event the uncertain tax position is disallowed. The new guidance is effective prospectively to all existing unrecognized tax benefits, but entities can choose to apply it retrospectively. The adoption of this new accounting guidance in the first quarter of 2014 did not have any impact on the Company's consolidated financial position, results of operations or cash flows. | |
(g) Recently Issued Accounting Pronouncements | |
In August 2014, the FASB issued new guidance which requires an entity to evaluate whether there are conditions or events, in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the financial statements are available to be issued when applicable), and to provide related footnote disclosures in certain circumstances. The new standard is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter, which for the Company will be the annual period ending December 31, 2016. Early application is permitted. The Company has not yet adopted this guidance and currently does not expect the adoption of the new guidance by the Company to have a significant impact on our financial results. | |
In May 2014, the FASB issued new guidance which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This new guidance will replace most existing revenue recognition guidance in Generally Accepted Accounting Principles in the United States when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that this new guidance will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
Summary of Significant Accounting Policies | |
The Company's significant accounting policies were described in Note (1) "Summary of Significant Accounting Policies" of the 2013 Form 10-K. There have been no significant changes in the Company's significant accounting policies since December 31, 2013. The Company's revenue recognition accounting policy is included below. For a description of the Company's other significant accounting policies refer to the 2013 Form 10-K. | |
Revenue Recognition | |
The Company derives its revenue from sales of its products, support and services. Product revenue consists of the Company’s software integrated with industry standard hardware and sold as complete turn-key integrated solutions and as stand-alone software applications. Support and services revenue consists of both maintenance revenues and professional services revenues. Revenue is recorded net of applicable sales taxes. | |
In accordance with the authoritative guidance issued by the FASB on revenue recognition, the Company recognizes revenue from product sales when persuasive evidence of an arrangement exists, the fee is fixed and determinable, the product is delivered, and collection of the resulting receivable is deemed probable. Products delivered to a customer on a trial basis are not recognized as revenue until the trial period has ended and acceptance has occurred by the customer. Reseller customers typically send the Company a purchase order when they have an end user identified. Distributor customers typically send the Company a purchase order when they have a reseller and an end user identified. For bundled arrangements that include either maintenance or both maintenance and professional services, the Company uses the residual method to determine the amount of product revenue to be recognized. Under the residual method, consideration is allocated to the undelivered elements based upon vendor-specific objective evidence (“VSOE”) of the fair value of those elements, with the residual of the arrangement fee allocated to and recognized as product revenue. If VSOE does not exist for all undelivered elements of an arrangement, the Company recognizes total revenue from the arrangement ratably over the term of the maintenance agreement. The Company's long-term portion of deferred revenue consists of (i) payments received for maintenance contracts with terms in excess of one year as of the balance sheet date, (ii) payments received for product sales bundled with multiple years of maintenance but for which VSOE did not exist for all undelivered elements of the arrangement, and (iii) payments received in connection with a joint development agreement entered into by the Company in 2013 pursuant to which certain revenue is being deferred until final delivery, acceptance and notification of first customer shipment of the software product being developed and which the Company anticipates will be recognized ratably over the contractual twenty-four month maintenance period. If at any time, the customer elects to terminate their maintenance agreement, any unrecognized deferred revenue would be accelerated and recognized as revenue during the period in which the termination becomes effective. The Company provides an allowance for product returns as a reduction of revenue, based upon historical experience and known or expected trends. | |
Revenues associated with maintenance services are deferred and recognized as revenue ratably over the term of the contract. Revenues associated with software implementation and software engineering services are recognized when the services are performed. Costs of providing these services are included in cost of support and services. | |
The Company has entered into various distribution, licensing and joint promotion agreements with OEMs, whereby the Company has provided to the OEM a non-exclusive software license to install the Company’s software on certain hardware or to resell the Company’s software in exchange for payments based on the products distributed by these OEMs. Such payments from the OEM or distributor are recognized as revenue in the period reported by the OEM. | |
From time to time the Company will enter into funded software development arrangements. Under such arrangements, revenue recognition will not commence until final delivery and/or acceptance of the product. For arrangements where the Company has VSOE for the undelivered elements, the Company will follow the residual method and recognize product revenue upon final delivery and/or acceptance of the product. For arrangements where the Company does not have VSOE for the undelivered elements, the Company will recognize the entire arrangement fee ratably commencing at the time of final delivery and/or acceptance through the end of the service period in the arrangement. |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||
Earnings Per Share | |||||||||||||||||
Basic EPS is computed based on the weighted average number of shares of common stock outstanding. Diluted EPS is computed based on the weighted average number of common shares outstanding increased by dilutive common stock equivalents, attributable to stock option awards, restricted stock awards and redeemable convertible preferred stock outstanding. | |||||||||||||||||
The following represents the common stock equivalents that were excluded from the computation of diluted shares outstanding because their effect would have been anti-dilutive for the three and nine months ended September 30, 2014 and 2013: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Stock options and restricted stock | 8,453,854 | 9,337,725 | 8,453,854 | 9,337,725 | |||||||||||||
Series A redeemable convertible preferred stock | 8,781,516 | 8,781,516 | 8,781,516 | 8,781,516 | |||||||||||||
Total anti-dilutive common stock equivalents | 17,235,370 | 18,119,241 | 17,235,370 | 18,119,241 | |||||||||||||
The following represents a reconciliation of the numerators and denominators of the basic and diluted EPS computation: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Numerator | |||||||||||||||||
Net loss | $ | (3,232,399 | ) | $ | (2,219,663 | ) | $ | (4,703,250 | ) | $ | (11,807,401 | ) | |||||
Effects of redeemable convertible preferred stock: | |||||||||||||||||
Less: Series A redeemable convertible preferred stock dividends | 186,904 | 28,875 | 560,712 | 28,875 | |||||||||||||
Less: Accretion to redemption value of Series A redeemable convertible preferred stock | 125,915 | 17,061 | 361,822 | 17,061 | |||||||||||||
Net loss attributable to common stockholders | $ | (3,545,218 | ) | $ | (2,265,599 | ) | $ | (5,625,784 | ) | $ | (11,853,337 | ) | |||||
Denominator | |||||||||||||||||
Weighted average basic shares outstanding | 45,158,184 | 48,024,916 | 47,025,887 | 47,961,853 | |||||||||||||
Effect of dilutive securities: | |||||||||||||||||
Stock options and restricted stock | — | — | — | — | |||||||||||||
Series A redeemable convertible preferred stock | — | — | — | — | |||||||||||||
Weighted average diluted shares outstanding | 45,158,184 | 48,024,916 | 47,025,887 | 47,961,853 | |||||||||||||
EPS | |||||||||||||||||
Basic net loss per share attributable to common stockholders | $ | (0.08 | ) | $ | (0.05 | ) | $ | (0.12 | ) | $ | (0.25 | ) | |||||
Diluted net loss per share attributable to common stockholders | $ | (0.08 | ) | $ | (0.05 | ) | $ | (0.12 | ) | $ | (0.25 | ) |
Inventories
Inventories | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
Inventories | |||||||||
At September 30, 2014 and December 31, 2013 inventories are as follows: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Component materials | $ | 11,330 | $ | 10,073 | |||||
Finished systems | 303,093 | 909,317 | |||||||
Total Inventory | $ | 314,423 | $ | 919,390 | |||||
As of September 30, 2014 and December 31, 2013, the Company has not recorded any reserve for excess and/or obsolete inventories in arriving at estimated net realizable value of its inventory. |
Property_and_Equipment
Property and Equipment | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Property and Equipment | ' | ||||||||
Property and Equipment | |||||||||
The gross carrying amount and accumulated depreciation of property and equipment as of September 30, 2014 and December 31, 2013 are as follows: | |||||||||
September 30, 2014 | December 31, 2013 | ||||||||
Property and Equipment: | |||||||||
Gross carrying amount | $ | 18,927,506 | $ | 19,339,574 | |||||
Accumulated depreciation | (16,550,400 | ) | (16,022,230 | ) | |||||
Property and Equipment, net | $ | 2,377,106 | $ | 3,317,344 | |||||
For the three months ended September 30, 2014 and 2013, depreciation expense was $378,010 and $570,711, respectively. For the nine months ended September 30, 2014 and 2013, depreciation expense was $1,318,737 and $1,719,139, respectively. During the three and nine months ended September 30, 2014, in connection with the Company's 2013 restructuring plan, the Company wrote-off gross property and equipment of $318,757 and $559,674, respectively, and the associated accumulated depreciation of $203,351, and $346,259, respectively, related to assets that were no longer in use as a result of the closure of foreign facilities. During the three and nine months ended September 30, 2013, in connection with the Company's 2013 restructuring plan, the Company wrote-off gross property and equipment of $51,070 and $51,070, respectively, and the associated accumulated depreciation of $25,781 and $25,781, respectively, related to assets that were no longer in use as a result of the closure of foreign facilities. For further information, refer to Note (18) Restructuring Costs. |
Software_Development_Costs
Software Development Costs | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Research and Development [Abstract] | ' | ||||||||
Software Development Costs | ' | ||||||||
Software Development Costs | |||||||||
The gross carrying amount and accumulated amortization of software development costs as of September 30, 2014 and December 31, 2013 are as follows: | |||||||||
September 30, 2014 | December 31, 2013 | ||||||||
Software development costs: | |||||||||
Gross carrying amount | $ | 2,819,785 | $ | 2,718,900 | |||||
Accumulated amortization | (1,268,770 | ) | (922,825 | ) | |||||
Software development costs, net | $ | 1,551,015 | $ | 1,796,075 | |||||
During the three months ended September 30, 2014 and 2013, the Company recorded $121,821 and $82,063, respectively, of amortization expense related to capitalized software costs. During the nine months ended September 30, 2014 and 2013, the Company recorded $345,945 and $246,188, respectively, of amortization expense related to capitalized software costs. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||
Goodwill and Other Intangible Assets | ' | ||||||||
Goodwill and Other Intangible Assets | |||||||||
The gross carrying amount and accumulated amortization of goodwill and other intangible assets as of September 30, 2014 and December 31, 2013 are as follows: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Goodwill | $ | 4,150,339 | $ | 4,150,339 | |||||
Other intangible assets: | |||||||||
Gross carrying amount | $ | 3,324,502 | $ | 3,256,709 | |||||
Accumulated amortization | (3,167,826 | ) | (3,077,113 | ) | |||||
Net carrying amount | $ | 156,676 | $ | 179,596 | |||||
For the three months ended September 30, 2014 and 2013, amortization expense was $29,897 and $34,108, respectively. For the nine months ended September 30, 2014 and 2013, amortization expense was $90,713 and $91,337, respectively. |
ShareBased_Payment_Arrangement
Share-Based Payment Arrangements | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Share-Based Payment Arrangements | ' | ||||||||||||||||
Share-Based Payment Arrangements | |||||||||||||||||
The following table summarizes the plans under which the Company was able to grant equity compensation as of September 30, 2014: | |||||||||||||||||
Shares | Shares Available | Shares | Last Date for Grant | ||||||||||||||
Name of Plan | Authorized | for Grant | Outstanding | of Shares | |||||||||||||
FalconStor Software, Inc., 2006 Incentive Stock Plan | 13,455,546 | 3,237,347 | 7,284,597 | May 17, 2016 | |||||||||||||
FalconStor Software, Inc., 2013 Outside Directors Equity Compensation Plan | 400,000 | 290,000 | 93,500 | May 9, 2016 | |||||||||||||
The following table summarizes the Company’s equity plans that have expired but that still have equity awards outstanding as of September 30, 2014: | |||||||||||||||||
Name of Plan | Shares Available for Grant | Shares Outstanding | |||||||||||||||
FalconStor Software, Inc., 2000 Stock Option Plan | — | 778,757 | |||||||||||||||
2004 Outside Directors Stock Option Plan | — | 120,000 | |||||||||||||||
FalconStor Software, Inc., 2007 Outside Directors Equity Compensation Plan | — | 160,000 | |||||||||||||||
FalconStor Software, Inc., 2010 Outside Directors Equity Compensation Plan | — | 17,000 | |||||||||||||||
The Company recognized share-based compensation expense for all awards issued under the Company’s stock equity plans in the following line items in the condensed consolidated statements of operations for the three and nine months ended September 30, 2014 and 2013: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Cost of revenues - Product | $ | — | $ | 82 | $ | — | $ | 181 | |||||||||
Cost of revenues - Support and Service | 20,563 | 7,990 | 74,900 | 112,182 | |||||||||||||
Research and development costs | 47,085 | 69,542 | 222,492 | 291,480 | |||||||||||||
Selling and marketing | 67,214 | (56,838 | ) | 280,188 | 215,352 | ||||||||||||
General and administrative | 236,196 | 142,636 | 628,193 | 675,747 | |||||||||||||
$ | 371,058 | $ | 163,412 | $ | 1,205,773 | $ | 1,294,942 | ||||||||||
On April 1, 2014 the Company granted 2,037,857 shares of restricted stock to certain Company officers and employees. The restricted shares have terms of four years. The restrictions on various portions of the restricted stock lapse upon the Company's achievement of performance criteria related to: Common Stock price; GAAP earnings per share; non-GAAP earnings per share; cash related targets; and revenue/billings related targets. The restricted stock agreement contained a clause that provided the Company with discretion to recover the awards in certain circumstances. This discretion clause was amended on July 30, 2014 and as a result the grant date was determined to be July 30, 2014 in accordance with U.S. GAAP. | |||||||||||||||||
The fair value for awards related to the earnings per share, cash and revenue performance criteria is the closing stock price of the Company's common stock on the date of grant of $1.58. Share-based compensation expense for the performance criteria is recorded when the achievement of the performance condition is considered probable of achievement and is recorded straight-line over the requisite service period. The fair value of the common stock price market condition was calculated using the Monte Carlo simulation model resulting in a weighted average fair value of $0.80. Share-based compensation expense for the common stock price market condition is recorded straight-line over the longer of the explicit service period or the service period derived from the Monte Carlo simulation. The explicit service period and the service period derived from the Monte Carlo simulation were the same for the grant. |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
Income Taxes | |
The Company’s provision for income taxes consists of state and local, and foreign taxes, as applicable, in amounts necessary to align the Company’s year-to-date tax provision with the effective rate that it expects to achieve for the full year. | |
For the nine months ended September 30, 2014, the Company recorded an income tax provision of $464,233, consisting primarily of state and local and foreign taxes. For the nine months ended September 30, 2013, the Company recorded an income tax benefit of $1.6 million, consisting of a $2.1 million reversal of unrecognized tax benefits due to the expiration of applicable statutes of limitations partly offset by state and local and foreign taxes. The effective tax rate for the nine months ended September 30, 2014 and September 30, 2013 was (11.0%) and 11.9%, respectively. As of September 30, 2014, the Company’s conclusion did not change with respect to the realizability of its domestic deferred tax assets and, therefore, the Company has not recorded any benefit for its expected net domestic deferred tax assets for the full year 2014 estimated annual effective tax rate. As of September 30, 2014, the valuation allowance totaled approximately $35.8 million. | |
The Company’s total unrecognized tax benefits, excluding interest, at both September 30, 2014 and December 31, 2013 were $217,237. At September 30, 2014, $296,675 of unrecognized tax benefits, including interest, if recognized, would reduce the Company’s effective tax rate. As of September 30, 2014 and December 31, 2013, the Company had $79,438 and $66,875, respectively, of accrued interest. |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
Fair Value Measurements | |||||||||||||||||
The Company measures its cash equivalents, marketable securities and derivative instruments at fair value. Fair value is an exit price, representing the amount that would be received on the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants. As a basis for considering such assumptions, the Company utilizes a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value. | |||||||||||||||||
The methodology for measuring fair value specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs) or reflect the Company’s own assumptions of market participant valuation (unobservable inputs). As a result, observable and unobservable inputs have created the following fair value hierarchy: | |||||||||||||||||
• | Level 1 – Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities. At September 30, 2014 and December 31, 2013, the Level 1 category included money market funds and commercial paper, which are included within cash and cash equivalents in the condensed consolidated balance sheets. | ||||||||||||||||
• | Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly. At September 30, 2014 and December 31, 2013, the Level 2 category included government securities and corporate debt securities, which are included within cash and cash equivalents and marketable securities in the condensed consolidated balance sheets. | ||||||||||||||||
• | Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. At September 30, 2014 and December 31, 2013, the Level 3 category included derivatives, which are included within other long-term liabilities in the condensed consolidated balance sheets. The Company did not hold any cash, cash equivalents or marketable securities categorized as Level 3 as of September 30, 2014 or December 31, 2013. | ||||||||||||||||
The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2014: | |||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets | Significant other | Significant | ||||||||||||||
(Level 1) | Inputs | Unobservable | |||||||||||||||
(Level 2) | Inputs | ||||||||||||||||
(Level 3) | |||||||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 4,905,462 | $ | 4,905,462 | $ | — | $ | — | |||||||||
Corporate debt and government securities | 543,435 | — | 543,435 | — | |||||||||||||
Total cash equivalents | 5,448,897 | 4,905,462 | 543,435 | — | |||||||||||||
Marketable securities: | |||||||||||||||||
Corporate debt and government securities | 12,136,254 | — | 12,136,254 | — | |||||||||||||
Total marketable securities | 12,136,254 | — | 12,136,254 | — | |||||||||||||
Derivative liabilities: | |||||||||||||||||
Derivative Instruments | 178,197 | — | — | 178,197 | |||||||||||||
Total derivative liabilities | 178,197 | — | — | 178,197 | |||||||||||||
Total assets and liabilities measured at fair value | $ | 17,763,348 | $ | 4,905,462 | $ | 12,679,689 | $ | 178,197 | |||||||||
The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2013: | |||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets | Significant other | Significant | ||||||||||||||
(Level 1) | Inputs | Unobservable | |||||||||||||||
(Level 2) | Inputs | ||||||||||||||||
(Level 3) | |||||||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds and commercial paper | $ | 8,486,633 | $ | 8,486,633 | $ | — | $ | — | |||||||||
Total cash equivalents | 8,486,633 | 8,486,633 | — | — | |||||||||||||
Marketable securities: | |||||||||||||||||
Corporate debt and government securities | 8,073,108 | — | 8,073,108 | — | |||||||||||||
Total marketable securities | 8,073,108 | — | 8,073,108 | — | |||||||||||||
Derivative liabilities: | |||||||||||||||||
Derivative Instruments | 159,134 | — | — | 159,134 | |||||||||||||
Total derivative liabilities | 159,134 | — | — | 159,134 | |||||||||||||
Total assets and liabilities measured at fair value | $ | 16,718,875 | $ | 8,486,633 | $ | 8,073,108 | $ | 159,134 | |||||||||
The fair value of the Company’s investments in corporate debt and government securities have been determined utilizing third party pricing services and verified by the Company. The pricing services use inputs to determine fair value which are derived from observable market sources including reportable trades, benchmark curves, credit spreads, broker/dealer quotes, bids, offers, and other industry and economic events. These investments are included in Level 2 of the fair value hierarchy. | |||||||||||||||||
The fair value of the Company’s derivatives were valued using the Black-Scholes pricing model adjusted for probability assumptions, with all significant inputs, except for the probability and volatility assumptions, derived from or corroborated by observable market data such as stock price and interest rates. The probability and volatility assumptions are both significant to the fair value measurement and unobservable. These embedded derivatives are included in Level 3 of the fair value hierarchy. | |||||||||||||||||
The following table presents a reconciliation of the beginning and ending balances of the Company's liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2014 and September 30, 2013: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Beginning Balance | $ | 111,470 | $ | — | $ | 159,134 | $ | — | |||||||||
Issuance of Derivative Instruments | — | 170,337 | — | 170,337 | |||||||||||||
Total loss recognized in earnings | 66,727 | — | 19,063 | — | |||||||||||||
Ending Balance | $ | 178,197 | $ | 170,337 | $ | 178,197 | $ | 170,337 | |||||||||
Marketable_Securities
Marketable Securities | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | ||||||||||||
Marketable Securities | ' | ||||||||||||
Marketable Securities | |||||||||||||
The Company’s marketable securities consist of available-for-sale securities, which are carried at fair value, with unrealized gains and losses reported as a separate component of stockholders’ equity. Unrealized gains and losses are computed on the specific identification method. Realized gains, realized losses and declines in value judged to be other-than-temporary, are included in interest and other income, net. The cost of available-for-sale securities sold is based on the specific identification method and interest earned is included in interest and other income. | |||||||||||||
The cost and fair values of the Company’s available-for-sale marketable securities as of September 30, 2014, are as follows: | |||||||||||||
Aggregate | Cost or Amortized | Net Unrealized | |||||||||||
Fair Value | Cost | Gains/(losses) | |||||||||||
Government securities | $ | 7,577,349 | $ | 7,576,249 | $ | 1,100 | |||||||
Corporate debt securities | 4,558,905 | 4,559,877 | (972 | ) | |||||||||
Marketable Securities | $ | 12,136,254 | $ | 12,136,126 | $ | 128 | |||||||
The cost and fair values of the Company’s available-for-sale marketable securities as of December 31, 2013, are as follows: | |||||||||||||
Aggregate | Cost or Amortized | Net Unrealized | |||||||||||
Fair Value | Cost | Gains | |||||||||||
Government securities | $ | 6,252,339 | $ | 6,249,483 | $ | 2,856 | |||||||
Corporate debt securities | 1,820,769 | 1,820,215 | 554 | ||||||||||
Marketable Securities | $ | 8,073,108 | $ | 8,069,698 | $ | 3,410 | |||||||
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
Commitments and Contingencies | ' | |||
Commitments and Contingencies | ||||
The Company has an operating lease covering its corporate office facility that expires in April 2021. The Company also has several additional operating leases related to offices in foreign countries. The expiration dates for these leases range from 2014 through 2017. The following is a schedule of future minimum lease payments for all operating leases as of September 30, 2014: | ||||
2014 | $ | 715,210 | ||
2015 | 2,144,155 | |||
2016 | 1,708,468 | |||
2017 | 1,591,012 | |||
2018 | 1,459,190 | |||
Thereafter | 3,577,335 | |||
$ | 11,195,370 | |||
The Company typically provides its customers a warranty on its software products for a period of no more than 90 days. Such warranties are accounted for in accordance with the authoritative guidance issued by the FASB on contingencies. For the three and nine months ended September 30, 2014, the Company has not incurred any costs related to warranty obligations. | ||||
Under the terms of substantially all of its software license agreements, the Company has agreed to indemnify its customers for all costs and damages arising from claims against such customers based on, among other things, allegations that the Company’s software infringes the intellectual property rights of a third party. In most cases, in the event of an infringement claim, the Company retains the right to (i) procure for the customer the right to continue using the software; (ii) replace or modify the software to eliminate the infringement while providing substantially equivalent functionality; or (iii) if neither (i) nor (ii) can be reasonably achieved, the Company may terminate the license agreement and refund to the customer a pro-rata portion of the license fee paid to the Company. Such indemnification provisions are accounted for in accordance with the authoritative guidance issued by the FASB on guarantees. From time to time, in the ordinary course of business, the Company receives claims for indemnification, typically from OEMs. The Company is not currently aware of any material claims for indemnification. | ||||
Upon certain triggering events, such as bankruptcy, insolvency or a material adverse effect, failure to achieve minimum financial covenants or failure of the Company to issue shares upon conversion of the redeemable convertible preferred stock in accordance with its obligations, the redeemable convertible preferred stockholders may require the Company to redeem all or some of the redeemable convertible preferred stock at a price equal to the greater of 100% of the stated value plus accrued and unpaid dividends or the product of the number of shares of common stock underlying the redeemable convertible preferred stock and the closing price as of the occurrence of the triggering event. On or after August 5, 2017, each redeemable convertible preferred stockholder can require the Company to redeem its redeemable convertible preferred stock in cash at a price equal to 100% of the stated value being redeemed plus accrued and unpaid dividends. As of September 30, 2014, the Company was not in compliance with the financial covenant based on earnings before interest, taxes, depreciation and amortization ("EBITDA") for two consecutive quarters which, provided the redeemable convertible preferred stockholders the right to require the Company to redeem any of the redeemable convertible preferred stock for the greater of 100% of the stated value plus accrued and unpaid dividends or the product of the number of shares of common stock underlying the Series A redeemable convertible preferred stock and the closing price as of September 30, 2014. On October 20, 2014 the Company obtained a waiver from the holders of the Series A redeemable convertible preferred stock waiving the holders' rights arising from the EBITDA covenant violation as of September 30, 2014. The Company is working on addressing financial measures needed to pass the quarterly EBITDA covenant for the fourth quarter of fiscal 2014. However, there can be no assurance that the Company will be successful in these efforts and in the event the Company is unable to maintain compliance with the covenant in the future, the Company intends to work with the holders of the Series A redeemable convertible preferred stock to obtain additional waivers, as necessary. As of September 30, 2014, the Company did not fail any other financial or non-financial covenants related to the Company's Series A redeemable convertible preferred stock. However, as described under Note (13), Redeemable Convertible Preferred Stock, the Company was also required to obtain a waiver to enable it to pay the required quarterly dividends on the Series A redeemable convertible preferred stock in cash for the third quarter of 2014. | ||||
On July 23, 2013, the Company entered into an Employment Agreement (“Quinn Employment Agreement”) with Gary Quinn. Pursuant to the Quinn Employment Agreement, the Company agreed to employ Mr. Quinn as President and Chief Executive Officer of the Company effective July 23, 2013 through July 22, 2015, at an annual salary of $400,000 per annum. The Quinn Employment Agreement also provided for the grant of 500,000 restricted shares which vest over a two-year period at 50% and 50% annually. The 500,000 restricted shares were granted to Mr. Quinn by the Company’s Compensation Committee on August 5, 2013. | ||||
In July, 2013, the Company signed a joint development agreement with Violin Memory under which Violin will pay the Company $12.0 million for licenses to certain of the Company's software and for further development of that software. The first two milestones under the contract were met during 2013 and as a result the Company received $6.0 million under the agreement during 2013. During the nine months ended September 30, 2014, the Company met additional milestones under the contract and billed an additional $4.5 million, of which $3.0 million has been collected as of September 30, 2014, with the full amount of the billings reflected as long term deferred revenue as of September 30, 2014. The final $3.0 million to be collected is broken into two remaining milestone payments with receipt contingent upon delivery and acceptance of the final two milestones for the software product by December 31, 2014. The Company delivered, and Violin accepted, one part of the final software milestone during the third quarter, and delivered the second part of the final software milestone on October 16, 2014. As of September 30, 2014, the Company has recorded $10.5 million as long term deferred revenue and has received $9.0 million in payments, with the remaining balance reflected in accounts receivable. While we believe that the software we have delivered as of October 16, 2014 meets the specifications set forth in the agreement with Violin, Violin is entitled to test the software before it accepts it. If the software is not accepted, and the Company is unable to remediate any software problems identified by Violin, the Company will not receive the additional payments and could be required to refund up to $0.5 million of the payments received as of September 30, 2014. | ||||
From time to time, the Company has undertaken restructuring and expense control measures to support its business performance and to align the Company’s cost structure with its resources. During the third quarter of 2013, the Company adopted a restructuring plan intended to better align the Company’s cost structure with the skills and resources required to more effectively execute the Company’s long-term growth strategy and to support revenue levels the Company expects to achieve on a go forward basis (the “2013 Plan”). In connection with the 2013 Plan, the Company eliminated over 100 positions worldwide, implemented tighter expense controls, ceased non-core activities and closed or downsized several facilities. As of September 30, 2014 the restructuring accrual totaled $1.1 million. The remaining payments under the 2013 Plan are expected to be paid through the first half of 2015; however, there can be no assurance that all payments will be completed by that time. | ||||
On December 1, 2005, the Company adopted the 2005 FalconStor Software, Inc., Key Executive Severance Protection Plan, which was amended April 1, 2014 (“Severance Plan”). Pursuant to the Severance Plan, the Company’s Chief Executive Officer, Chief Financial Officer and certain other key personnel are entitled to receive certain contingent benefits, as set forth in the Severance Plan, including lump sum payments and acceleration of stock option vesting, each in certain circumstances. |
Redeemable_Convertible_Preferr
Redeemable Convertible Preferred Stock | 9 Months Ended |
Sep. 30, 2014 | |
Equity [Abstract] | ' |
Redeemable Convertible Preferred Stock | ' |
Redeemable Convertible Preferred Stock | |
On September 16, 2013, the Company issued to Hale Capital Partners, LP (“Hale”) 900,000 shares of the Company’s newly created Series A redeemable convertible preferred stock (the "redeemable convertible preferred stock"), par value $0.001 per share, at a price of $10 per share, for an aggregate purchase consideration of $9.0 million. Hale subsequently assigned and transferred all of its shares of the redeemable convertible preferred stock to HCP-FVA LLC. Each share of redeemable convertible preferred stock is convertible into common stock equivalents, at the option of the holder and upon certain mandatory conversion events described below, at a conversion rate of $1.02488 (as adjusted for stock splits, stock dividends, reverse stock splits, stock combinations, reclassifications and similar events). The Company received net proceeds of approximately $8,731,677 from the issuance of the redeemable convertible preferred stock in 2013, net of transaction costs. | |
If the volume weighted average price of common stock for each trading day of any 60 consecutive trading days exceeds 250% of the conversion price and exceeds 225% of the conversion price through the conversion date, and certain equity conditions are met such that shares of common stock issued upon conversion can be immediately saleable by the redeemable convertible preferred stockholders, the Company can convert the redeemable convertible preferred stock up to an amount equal to the greater of 25% of the daily trading volume for the 20 consecutive trading days immediately preceding the conversion date or the amount of an identified bona fide block trade at a price reasonably acceptable to the applicable redeemable convertible preferred stockholder, but which price is not less than the arithmetic average of the weighted average prices of the common stock for the five trading days immediately preceding such sale. | |
Upon certain triggering events, such as bankruptcy, insolvency or a material adverse effect, failure to achieve minimum financial covenants or failure of the Company to issue shares upon conversion of the redeemable convertible preferred stock in accordance with its obligations, the redeemable convertible preferred stockholders may require the Company to redeem all or some of the redeemable convertible preferred stock at a price equal to the greater of 100% of the stated value plus accrued and unpaid dividends or the product of the number of shares of common stock underlying the redeemable convertible preferred stock and the closing price as of the occurrence of the triggering event. On or after August 5, 2017, each redeemable convertible preferred stockholder can require the Company to redeem its redeemable convertible preferred stock in cash at a price equal to 100% of the stated value being redeemed plus accrued and unpaid dividends. If the Company does not have the funds necessary to redeem the Series A redeemable convertible preferred stock, the dividends accruing on any outstanding Series A redeemable convertible preferred stock will increase to prime plus 10% (from prime plus 5%). For each six months that the Series A redeemable convertible preferred stock remains unredeemed, the dividend rate increases by 1%, subject to a maximum dividend rate of 19%. In addition, the Company's failure to redeem the redeemable convertible preferred stock would be considered a “Breach Event” under the agreements with the holders of the redeemable convertible preferred stock. If a Breach Event were to occur, then, under the agreements with the holders of our redeemable convertible preferred stock, the Company's Board of Directors would automatically be increased, with the holders of the redeemable convertible preferred stock having the right to appoint the new directors, so that the holders of the redeemable convertible preferred stock would have appointed a majority of the Board of Directors. This would give the holders of the Series A redeemable convertible preferred stock control of the Company. As of September 30, 2014, the Company was not in compliance with the financial covenant based on EBITDA for two consecutive quarters, which provided the redeemable convertible preferred stockholders the right to require the Company to redeem any of the redeemable convertible preferred stock waiving the holders' rights arising from the greater of 100% of the stated value plus accrued and unpaid dividends or the product of the number of shares of common stock underlying the Series A redeemable convertible preferred stock and the closing price as of September 30, 2014. On October 20, 2014 the Company obtained a waiver from the holders of the Series A redeemable convertible preferred stock for the EBITDA covenant violation as of September 30, 2014. The Company is working on addressing financial measures needed to pass the quarterly EBITDA covenant for the fourth quarter of fiscal 2014. However, there can be no assurance that the Company will be successful in their efforts and in the event the Company is unable to maintain compliance with the covenant in the future, the Company intends to work with the holders of the Series A redeemable convertible preferred stock to obtain additional waivers, as necessary. As of September 30, 2014, the Company did not fail any other financial or non-financial covenants related to the Company's Series A redeemable convertible preferred stock. However, as described below, the Company was also required to obtain a waiver to enable it to pay the required quarterly dividends on the Series A redeemable convertible preferred stock in cash for the third quarter of 2014. | |
The Purchase Agreement for the redeemable convertible preferred stock provided that the Company would use commercially reasonable efforts to file a registration statement with the SEC within 90 days for the resale of all of the common stock issuable on the conversion of the Preferred Stock and as dividends. On December 2, 2013 the registration statement was declared effective by the Securities and Exchange Commission. The Purchase Agreement also contained other representations, warranties and financial and non-financial covenants, customary for an issuance of Preferred Stock in a private placement of this nature. | |
Holders of the redeemable convertible preferred stock are entitled to receive quarterly dividends at the Prime Rate (Wall Street Journal Eastern Edition) plus 5% (up to a maximum amount of 10%), payable in cash, provided, that if the Company will not have at least $1.0 million in positive cash flow for any calendar quarter after giving effect to the payment of such dividends, the Company, at its election, can pay such dividends in whole or in part in cash, provided that cash flow from operations is not negative, and the remainder can be accrued or paid in common stock to the extent certain equity conditions are satisfied. As of September 30, 2014, the Company was not in compliance with the cash flow requirement to pay dividends in cash. On October 20, 2014, the Company obtained a waiver from the holders to pay the third quarter 2014 quarterly dividend in cash. The Company paid the 2014 quarterly dividends in cash on April 16, 2014, July 17, 2014 and October 21, 2014. | |
Each share of redeemable convertible preferred stock has a vote equal to the number of shares of common stock into which the redeemable convertible preferred stock would be convertible as of the record date of September 13, 2013. The Company’s closing stock price on the record date was $1.23 per share, which results in voting power of 7,317,073 shares. In addition, holders of a majority of the redeemable convertible preferred stock must approve certain actions, including any amendments to the Company's charter or bylaws that adversely affects the voting powers, preferences or other rights of the redeemable convertible preferred stock; payment of dividends or distributions; any liquidation, capitalization, reorganization or any other fundamental transaction of the Company; issuance of certain equity securities senior to or in parity with the redeemable convertible preferred stock as to dividend rights, redemption rights, liquidation preference and other rights; issuances of equity below the conversion price; any liens or borrowings other than non-convertible indebtedness from standard commercial lenders which does not exceed 80% of the company’s accounts receivable; and the redemption or purchase of any capital stock of the Company. | |
The Company has classified the redeemable convertible preferred stock as temporary equity in the financial statements as it is subject to redemption at the option of the holder under certain circumstances. As a result of the Company’s analysis of all the embedded conversion and put features within the preferred stock, the contingent redemption put options in the redeemable convertible preferred stock were determined to not be clearly and closely related to the debt-type host and also did not meet any other scope exceptions for derivative accounting. Therefore the contingent redemption put options are being accounted for as derivative instruments and the fair value of these derivative instruments were bifurcated from the redeemable convertible preferred stock and recorded as a liability. These derivative instruments were determined, in the aggregate, to have a fair value of $170,337 at the time of issuance of the preferred stock and were recorded as a reduction to preferred stock. This discount is being accreted to the redeemable convertible preferred stock using the effective interest method through the stated redemption date of August 5, 2017, which represents the earliest redemption date of the instrument. As of September 30, 2014, the fair value of these derivative instruments was $178,197. The change in fair value of these derivative instruments for the three and nine months ended September 30, 2014 of $66,727 and $19,063, respectively, was included in “Interest and other loss, net” within the consolidated statement of operations. | |
A beneficial conversion feature (“BCF”) is recorded when the consideration allocated to a convertible security, divided by the number of common shares into which the security converts, is below the fair value of the common stock at the commitment date. The Company’s common stock price on the date one day prior to the closing of the Preferred Stock Agreement (the commitment date) was $1.23 per share, which was $0.21 greater than the conversion price of the redeemable convertible preferred stock. As the closing stock price on the commitment date was greater than the conversion price, the Company recognized a BCF at the time of issuance. The Company allocated $1,951,266 to the BCF through an increase to additional paid-in capital and a corresponding decrease to the preferred stock. The resulting additional discount to the preferred stock is also being accreted to the redeemable convertible preferred stock using the effective interest method through the stated redemption date of August 5, 2017, which represents the earliest redemption date of the instrument. | |
The Company included deductions of $125,915 and $361,822 as adjustments to net loss attributable to common stockholders on the statement of operations and in determining loss per share for the three and nine months ended September 30, 2014, respectively. This represents the accretion for the three and nine months ended September 30, 2014 of the transaction costs of $268,323, BCF of $1,951,266 and fair value allocated to the embedded derivatives of $170,337 recorded at the time of the issuance. The Company also included deductions of $186,904 and $560,712 as adjustments to net loss attributable to common shareholders on the statement of operations and in determining loss per share for the three and nine months ended September 30, 2014, respectively, for accrued dividends on the redeemable convertible preferred stock during the period. The 2014 quarterly dividends were paid in cash in April 2014, July 2014 and October 2014. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||
Accumulated Other Comprehensive Loss | ' | ||||||||||||||||
Accumulated Other Comprehensive Loss | |||||||||||||||||
The changes in Accumulated Other Comprehensive (Loss) income, net of tax, for the three months ended September 30, 2014 are as follows: | |||||||||||||||||
Foreign Currency | Net Unrealized | Net Minimum | Total | ||||||||||||||
Translation | Gains on Marketable | Pension Liability | |||||||||||||||
Securities | |||||||||||||||||
Accumulated other comprehensive (loss) income at June 30, 2014 | $ | (1,832,375 | ) | $ | 4,028 | $ | (67,788 | ) | $ | (1,896,135 | ) | ||||||
Other comprehensive (loss) income | |||||||||||||||||
Other comprehensive (loss) income before reclassifications | 183,858 | (3,900 | ) | (3,986 | ) | 175,972 | |||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | — | — | 3,232 | 3,232 | |||||||||||||
Total other comprehensive (loss) income | 183,858 | (3,900 | ) | (754 | ) | 179,204 | |||||||||||
Accumulated other comprehensive (loss) income at September 30, 2014 | $ | (1,648,517 | ) | $ | 128 | $ | (68,542 | ) | $ | (1,716,931 | ) | ||||||
The changes in Accumulated Other Comprehensive (Loss) Income, net of tax, for the nine months ended September 30, 2014 are as follows: | |||||||||||||||||
Foreign Currency | Net Unrealized | Net Minimum | Total | ||||||||||||||
Translation | Gains on Marketable | Pension Liability | |||||||||||||||
Securities | |||||||||||||||||
Accumulated other comprehensive (loss) income at December 31, 2013 | $ | (1,693,905 | ) | $ | 3,410 | $ | (71,892 | ) | $ | (1,762,387 | ) | ||||||
Other comprehensive (loss) income | |||||||||||||||||
Other comprehensive (loss) income before reclassifications | 45,388 | (3,282 | ) | (6,303 | ) | 35,803 | |||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | — | — | 9,653 | 9,653 | |||||||||||||
Total other comprehensive (loss) income | 45,388 | (3,282 | ) | 3,350 | 45,456 | ||||||||||||
Accumulated other comprehensive (loss) income at September 30, 2014 | $ | (1,648,517 | ) | $ | 128 | $ | (68,542 | ) | $ | (1,716,931 | ) | ||||||
The changes in Accumulated Other Comprehensive (Loss) Income, net of tax, for the three months ended September 30, 2013 are as follows: | |||||||||||||||||
Foreign Currency | Net Unrealized | Net Minimum | Total | ||||||||||||||
Translation | Gains on Marketable | Pension Liability | |||||||||||||||
Securities | |||||||||||||||||
Accumulated other comprehensive (loss) income at June 30, 2013 | $ | (1,586,348 | ) | $ | 4,760 | $ | (56,068 | ) | $ | (1,637,656 | ) | ||||||
Other comprehensive (loss) income | |||||||||||||||||
Other comprehensive (loss) income before reclassifications | (932 | ) | (1,961 | ) | 829 | (2,064 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | — | (346 | ) | 2,136 | 1,790 | ||||||||||||
Total other comprehensive (loss) income | (932 | ) | (2,307 | ) | 2,965 | (274 | ) | ||||||||||
Accumulated other comprehensive (loss) income at September 30, 2013 | $ | (1,587,280 | ) | $ | 2,453 | $ | (53,103 | ) | $ | (1,637,930 | ) | ||||||
The changes in Accumulated Other Comprehensive (Loss) Income, net of tax, for the nine months ended September 30, 2013 are as follows: | |||||||||||||||||
Foreign Currency | Net Unrealized | Net Minimum | Total | ||||||||||||||
Translation | Gains on Marketable | Pension Liability | |||||||||||||||
Securities | |||||||||||||||||
Accumulated other comprehensive (loss) income at December 31, 2012 | $ | (1,601,138 | ) | $ | 6,210 | $ | (55,122 | ) | $ | (1,650,050 | ) | ||||||
Other comprehensive (loss) income | |||||||||||||||||
Other comprehensive (loss) income before reclassifications | 13,858 | (212 | ) | (4,388 | ) | 9,258 | |||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | — | (3,545 | ) | 6,407 | 2,862 | ||||||||||||
Total other comprehensive (loss) income | 13,858 | (3,757 | ) | 2,019 | 12,120 | ||||||||||||
Accumulated other comprehensive (loss) income at September 30, 2013 | $ | (1,587,280 | ) | $ | 2,453 | $ | (53,103 | ) | $ | (1,637,930 | ) | ||||||
For the three and nine months ended September 30, 2014 and 2013, the amounts reclassified to net loss related to the Company’s defined benefit plan and sale of marketable securities. These amounts are included within “Operating loss” within the condensed consolidated statements of operations. |
Stockholders_Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2014 | |
Equity [Abstract] | ' |
Stockholders' Equity | ' |
Stockholders' Equity | |
Stock Repurchase Activity | |
At various times from October 2001 through February 2009, the Company’s Board of Directors has authorized the repurchase of up to 14 million shares of the Company’s outstanding common stock in the aggregate. The repurchases may be made from time to time in open market transactions in such amounts as determined at the discretion of the Company’s management. The terms of the stock repurchases are determined by management based on market conditions. | |
During the three and nine months ended September 30, 2014 and 2013, the Company did not repurchase any shares of its common stock. Since October 2001, the Company has repurchased a total of 8,005,235 shares of its common stock at an aggregate purchase price of $46,916,339. As of September 30, 2014, the Company had the authorization to repurchase 5,994,765 shares of its common stock based upon its judgment and market conditions. The Company is required to get approval from the Series A redeemable convertible preferred stockholders prior to repurchasing its common stock. | |
On June 12, 2014, the Company entered into an agreement to settle the action it filed against the Estate of ReiJane Huai (the “Estate”) in Surrogates Court, Nassau County, State of New York. Mr. Huai was the former Chairman, President and Chief Executive Officer of the Company. Effective June 27, 2014, pursuant to the settlement agreement, the Estate transferred 3,132,141 shares of FalconStor common stock to the Company. The Company has recorded these shares within treasury and recorded a gain of $5,293,319 within "Investigation, litigation, and settlement related costs" in the condensed consolidated statement of operations based upon the closing price of the Company's stock price on June 26, 2014 of $1.69 per share. |
Litigation
Litigation | 9 Months Ended | |
Sep. 30, 2014 | ||
Commitments and Contingencies Disclosure [Abstract] | ' | |
Litigation | ' | |
Litigation | ||
In view of the inherent difficulty of predicting the outcome of litigation, particularly where the claimants seek very large or indeterminate damages, the Company generally cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss, fines or penalties related to each pending matter may be. | ||
In accordance with the authoritative guidance issued by the FASB on contingencies, the Company accrues anticipated costs of settlement, damages and losses for claims to the extent specific losses are probable and estimable. The Company records a receivable for insurance recoveries when such amounts are probable and collectable. In such cases, there may be an exposure to loss in excess of any amounts accrued. If, at the time of evaluation, the loss contingency related to a litigation is not both probable and estimable, the matter will continue to be monitored for further developments that would make such loss contingency both probable and estimable and, the Company will expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, the Company will accrue the minimum amount of the range. | ||
Stockholder Litigation | ||
Company stockholders filed actions in the Suffolk County Division of the Supreme Court of the State of New York, putatively derivatively on behalf of the Company, against the Company, each of the Company’s Directors, Mr. Weber, the former Chief Financial Officer and Vice President of Operations of the Company, Wayne Lam, a former Vice president of the Company, the estate of Mr. Huai, the former Chairman, President and Chief Executive Officer of the Company, and Jason Lin, a former employee of the Company (the “Derivative Action”). The consolidated amended Derivative Action complaint alleged that the defendants breached their duties to the Company by: (1) causing or allowing the dissemination of false and misleading information; (2) failing to maintain internal controls; (3) failing to manage the Company properly; (4) unjustly enriching themselves; (5) abusing their control of the Company; and (6) wasting Company assets. | ||
On March 5, 2013, the Suffolk County Division of the Supreme Court of the State of New York granted a motion made by all of the defendants in the Derivative Action, except Mr. Lin, and dismissed the Derivative Action as to all defendants other than Mr. Lin. The stockholders have appealed the dismissal of the Derivative Action. All documents relating to the appeal have been filed with the court and the parties are awaiting a date for oral argument. The Company cannot predict when the appeal will be resolved or the ultimate outcome of the matter. Certain of the defendants may be entitled to indemnification by the Company under the laws of Delaware and/or the Company’s by-laws. | ||
The Company has insurance policies that were purchased to cover, among other things, lawsuits like the Derivative Action and a class action lawsuit that has been settled by the Company (the "Class Action"). The Company’s Directors and Officers (“D&O”) Insurance, is composed of more than one layer, with each layer written by a different insurance company. However, the events that gave rise to the claims in the Derivative Action and the Class Action caused the Company’s insurers to reserve their rights to disclaim, rescind, or otherwise not be obligated to provide coverage to the Company and certain other insureds under the policies. In light of these uncertainties, the Company entered into settlements with two of its insurers. Pursuant to these settlements, the Company will not receive repayment of all amounts it might otherwise have received. | ||
In October 2012 the Company entered into an agreement with the carrier of the first $5.0 million layer of the Company’s D&O insurance. Pursuant to this agreement, the Company accepted a payment of $3.9 million from the first layer insurance carrier in satisfaction of the carrier’s obligations to the Company under the first layer D&O insurance policy. | ||
Because the carrier of the next layer of insurance would not be obligated to make payment to the Company until the full $5.0 million first layer limit had been exhausted, this means that the Company was responsible for $1.1 million out of pocket before it could again seek reimbursement from its insurers. The Company accrued for the $1.1 million during 2012. | ||
On July 31, 2013 the Company entered into an agreement with the carrier of the second $5.0 million layer of the Company’s D&O insurance. Pursuant to the agreement, the insurer agreed to pay seventy five percent (75%) of the Company’s losses attributable to the Class Action and the Derivative Action above the first $5.25 million of such losses. | ||
While, at present, the Company does not believe that the amounts it will pay in connection with the Class Action and the Derivative Action will exceed the limits of the first two layers of its coverage, there can be no assurance that if the Company seeks recovery from the additional layers, the recovery the Company makes on the remainder of its insurance will be adequate to cover the costs of its defense or settlement of the Derivative Action, or any damages that might ultimately be awarded against the Company or anyone to whom the Company might owe indemnification if the appeal is successful. | ||
The Company’s remaining insurers may deny coverage under the policies. If the plaintiffs are awarded damages and the Company’s insurance is not adequate to cover the amounts, or its insurers deny coverage, the amounts to be paid by the Company could have a significant negative impact on its financial results, cash flow and cash balances. | ||
Since October 1, 2012, the Company has recorded $7.3 million of total costs associated with the Class Action and the Derivative Actions. As a result of the agreement reached with the insurer carriers of the Company’s D&O insurance, the Company recorded insurance recoveries of $5.4 million since October 1, 2012 of which $5.3 million have been reimbursed by the Company's insurance carriers and the remaining $0.1 million is recorded as a receivable in “prepaid expenses and other current assets” in the consolidated balance sheet as of September 30, 2014. | ||
The Estate of ReiJane Huai | ||
On June 12, 2014, the Company entered into an agreement to settle the action it filed against the Estate of ReiJane Huai (the “Estate”) in Surrogates Court, Nassau County, State of New York. Mr. Huai was the former Chairman, President and Chief Executive Officer of the Company. The Company believes that prior to entering into the settlement agreement, the Estate owned more than 10% of the voting stock of the Company. | ||
Effective June 27, 2014, pursuant to the settlement agreement, the Estate transferred 3,132,141 shares of the Company's common stock to the Company. The Company has recorded these shares within treasury. On July 16, 2014, in accordance with the settlement agreement, the Company’s action against the Estate was voluntarily discontinued. The settlement agreement also contained various other terms and conditions. Among the other terms of the agreement were the following: | ||
• | The Company agreed to register for resale, by the Estate, the remaining shares of the Company's common stock formerly registered in the name of Mr. Huai. | |
• | The Company has a right of first refusal to purchase the remaining shares of the Company's common stock held by the Estate if the Estate proposes to dispose of such shares in any private transactions. | |
• | Any shares of FalconStor stock held by the Estate are subject to a five-year voting agreement that requires the Estate to vote the shares in accordance with the recommendations of the Company’s Board of Directors. | |
In September 2014, the Estate informed the Company that it had an agreement for the sale of 600,000 shares of the Company's common stock in a private transaction. In accordance with its rights under the Settlement Agreement, the Company assigned its right of first refusal to purchase those shares to an unrelated third party. | ||
During the three months ended September 30, 2014 and 2013, the Company recorded a benefit of $22,502 and an expense of $99,316, respectively, of investigation, litigation and settlement related legal costs, net of expected recoveries, related to expenses related to the Class Action and Derivative Action lawsuits, the Estate settlement and other settlement related activities that are not recoverable through insurance. During the nine months ended September 30, 2014 and 2013, the Company recorded a benefit of $5.2 million and expense of $0.3 million, respectively, of investigation, litigation and settlement related legal costs, net of expected recoveries, related to expenses related to the Class Action and Derivative Action lawsuits, the Estate settlement and other settlement related activities that are not recoverable through insurance. | ||
Other Claims | ||
The Company is subject to various legal proceedings and claims, asserted or unasserted, which arise in the ordinary course of business. While the outcome of any such matters cannot be predicted with certainty, such matters are not expected to have a material adverse effect on the Company’s financial condition or operating results. | ||
The Company continues to assess certain litigation and claims to determine the amounts, if any, that the Company believes may be paid as a result of such claims and litigation and, therefore, additional losses may be accrued and paid in the future, which could materially adversely impact the Company’s financial results, its cash flows and its cash reserves. |
Segment_Reporting
Segment Reporting | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Segment Reporting | ' | ||||||||||||||||
Segment Reporting | |||||||||||||||||
The Company is organized in a single operating segment for purposes of making operating decisions and assessing performance. Revenues from the United States to customers in the following geographical areas for the three and nine months ended September 30, 2014 and 2013, and the location of long-lived assets as of September 30, 2014 and December 31, 2013, are summarized as follows: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Revenues: | |||||||||||||||||
Americas | $ | 3,814,197 | $ | 5,973,198 | $ | 12,693,541 | $ | 17,604,779 | |||||||||
Asia Pacific | 3,537,043 | 3,983,078 | 10,676,928 | 13,094,120 | |||||||||||||
Europe, Middle East, Africa and Other | 3,824,200 | 4,773,762 | 11,109,137 | 13,290,095 | |||||||||||||
Total Revenues | $ | 11,175,440 | $ | 14,730,038 | $ | 34,479,606 | $ | 43,988,994 | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||||||
Long-lived assets: | |||||||||||||||||
Americas | $ | 8,500,093 | $ | 9,447,517 | |||||||||||||
Asia Pacific | 871,942 | 982,685 | |||||||||||||||
Europe, Middle East, Africa and Other | 262,780 | 612,058 | |||||||||||||||
Total long-lived assets | $ | 9,634,815 | $ | 11,042,260 | |||||||||||||
For the three months ended September 30, 2014 the Company did not have any customers that accounted for 10% or more of total revenues. For the three months ended September 30, 2013 the Company had one customer that accounted for 10% or more of total revenues. As of September 30, 2014, the Company had one customer that accounted for 20% of the accounts receivable balance. As of December 31, 2013, the Company had one customer that accounted for 12% of the accounts receivable balance. | |||||||||||||||||
Due to cash collections of previously reserved accounts receivable balances, the Company recorded benefits of $45,308 and $12,448 during the three months ended September 30, 2014 and 2013, respectively, and $68,838 and $118,671 during the nine months ended September 30, 2014 and 2013, respectively. These amounts are included within revenues in the accompanying condensed consolidated statement of operations. |
Restructuring_Costs
Restructuring Costs | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||
Restructuring Costs | ' | ||||||||||||
Restructuring Costs | |||||||||||||
From time to time, the Company has undertaken restructuring and expense control measures to support its business performance and to align the Company’s cost structure with its resources. In the third quarter of 2013, the Company adopted the 2013 Plan to better align the Company’s cost structure with the skills and resources required to more effectively execute the Company’s long-term growth strategy and to support revenue levels the Company expects to achieve on a go forward basis. In connection with the 2013 Plan, the Company eliminated over 100 positions worldwide, implemented tighter expense controls, ceased non-core activities and closed or downsized several facilities. The 2013 Plan is expected to be completed by December 31, 2014, except for certain payments under the 2013 Plan that are expected to be paid through the first six months of 2015. There can be no assurance that all payments will be completed by that time. The following table summarizes the activity related to restructuring liabilities recorded in connection with the Company's 2013 Plan: | |||||||||||||
Severance related costs | Facility and other costs | Total | |||||||||||
Original charge | $ | 3,179,131 | $ | 426,889 | $ | 3,606,020 | |||||||
Utilized/Paid | (2,067,554 | ) | (231,973 | ) | (2,299,527 | ) | |||||||
Balance at December 31, 2013 | $ | 1,111,577 | $ | 194,916 | $ | 1,306,493 | |||||||
Provisions/Additions | 59,279 | 164,294 | 223,573 | ||||||||||
Utilized/Paid | (450,650 | ) | (104,866 | ) | (555,516 | ) | |||||||
Balance at March 31, 2014 | $ | 720,206 | $ | 254,344 | $ | 974,550 | |||||||
Provisions/Additions | 147,525 | 415,388 | 562,913 | ||||||||||
Utilized/Paid | (52,170 | ) | (240,046 | ) | (292,216 | ) | |||||||
Balance at June 30, 2014 | $ | 815,561 | $ | 429,686 | $ | 1,245,247 | |||||||
Provisions/Additions | 91,451 | 167,627 | 259,078 | ||||||||||
Utilized/Paid | (36,513 | ) | (333,968 | ) | (370,481 | ) | |||||||
Balance at September 30, 2014 | $ | 870,499 | $ | 263,345 | $ | 1,133,844 | |||||||
Included in facility and other costs for the three and nine months ended September 30, 2014, is a charge of $115,406 and $213,415, respectively, related to the write-off of property and equipment that were no longer in use due to the closure of two of the Company's foreign facilities. Included in facility and other costs for the three and nine months ended September 30, 2013, is a charge of $25,289 and $25,289, respectively, related to the write-off of property and equipment that were no longer in use due to the closure of one of the Company's foreign facilities. The severance related liabilities and facility and other liabilities are included within “accrued expenses” and "accounts payable" in the accompanying condensed consolidated balance sheets. The expenses under the 2013 Plan are included within “restructuring costs” in the accompanying condensed consolidated statements of operations. |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
The Company and Nature of Operations | ' |
The Company and Nature of Operations | |
FalconStor Software, Inc., a Delaware Corporation (the "Company"), develops, manufactures and sells data migration, business continuity, disaster recovery, optimized backup and de-duplication solutions and provides the related maintenance, implementation and engineering services. | |
Principles of Consolidation | ' |
Principles of Consolidation | |
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s significant estimates include those related to revenue recognition, accounts receivable allowances, share-based payment compensation, marketable securities, valuation of embedded derivatives, software development costs, goodwill and other intangible assets and income taxes. Actual results could differ from those estimates. | |
The financial market volatility in many countries where the Company operates has impacted and may continue to impact the Company’s business. Such conditions could have a material impact to the Company’s significant accounting estimates discussed above. | |
Unaudited Interim Financial Information | ' |
Unaudited Interim Financial Information | |
The accompanying unaudited interim condensed consolidated financial statements have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements. | |
In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of the Company at September 30, 2014, and the results of its operations for the three and nine months ended September 30, 2014 and 2013. The results of operations of any interim period are not necessarily indicative of the results of operations to be expected for the full fiscal year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 ("2013 Form 10-K"). | |
Reclassifications | ' |
Reclassifications | |
Certain reclassifications were made to the prior period amounts to conform to the current period presentation. | |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements | ' |
Recently Adopted Accounting Pronouncements | |
In July 2013, the Financial Accounting Standards Board ("FASB") issued new guidance which requires the netting of an unrecognized tax benefit, or a portion of an unrecognized tax benefit, against a deferred tax asset for a net operating loss carry forward, a similar tax loss, or a tax credit carry forward if such settlement is required or expected in the event the uncertain tax position is disallowed. The new guidance is effective prospectively to all existing unrecognized tax benefits, but entities can choose to apply it retrospectively. The adoption of this new accounting guidance in the first quarter of 2014 did not have any impact on the Company's consolidated financial position, results of operations or cash flows. | |
(g) Recently Issued Accounting Pronouncements | |
In August 2014, the FASB issued new guidance which requires an entity to evaluate whether there are conditions or events, in the aggregate, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the financial statements are available to be issued when applicable), and to provide related footnote disclosures in certain circumstances. The new standard is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter, which for the Company will be the annual period ending December 31, 2016. Early application is permitted. The Company has not yet adopted this guidance and currently does not expect the adoption of the new guidance by the Company to have a significant impact on our financial results. | |
In May 2014, the FASB issued new guidance which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This new guidance will replace most existing revenue recognition guidance in Generally Accepted Accounting Principles in the United States when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that this new guidance will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Revenue Recognition | ' |
Revenue Recognition | |
The Company derives its revenue from sales of its products, support and services. Product revenue consists of the Company’s software integrated with industry standard hardware and sold as complete turn-key integrated solutions and as stand-alone software applications. Support and services revenue consists of both maintenance revenues and professional services revenues. Revenue is recorded net of applicable sales taxes. | |
In accordance with the authoritative guidance issued by the FASB on revenue recognition, the Company recognizes revenue from product sales when persuasive evidence of an arrangement exists, the fee is fixed and determinable, the product is delivered, and collection of the resulting receivable is deemed probable. Products delivered to a customer on a trial basis are not recognized as revenue until the trial period has ended and acceptance has occurred by the customer. Reseller customers typically send the Company a purchase order when they have an end user identified. Distributor customers typically send the Company a purchase order when they have a reseller and an end user identified. For bundled arrangements that include either maintenance or both maintenance and professional services, the Company uses the residual method to determine the amount of product revenue to be recognized. Under the residual method, consideration is allocated to the undelivered elements based upon vendor-specific objective evidence (“VSOE”) of the fair value of those elements, with the residual of the arrangement fee allocated to and recognized as product revenue. If VSOE does not exist for all undelivered elements of an arrangement, the Company recognizes total revenue from the arrangement ratably over the term of the maintenance agreement. The Company's long-term portion of deferred revenue consists of (i) payments received for maintenance contracts with terms in excess of one year as of the balance sheet date, (ii) payments received for product sales bundled with multiple years of maintenance but for which VSOE did not exist for all undelivered elements of the arrangement, and (iii) payments received in connection with a joint development agreement entered into by the Company in 2013 pursuant to which certain revenue is being deferred until final delivery, acceptance and notification of first customer shipment of the software product being developed and which the Company anticipates will be recognized ratably over the contractual twenty-four month maintenance period. If at any time, the customer elects to terminate their maintenance agreement, any unrecognized deferred revenue would be accelerated and recognized as revenue during the period in which the termination becomes effective. The Company provides an allowance for product returns as a reduction of revenue, based upon historical experience and known or expected trends. | |
Revenues associated with maintenance services are deferred and recognized as revenue ratably over the term of the contract. Revenues associated with software implementation and software engineering services are recognized when the services are performed. Costs of providing these services are included in cost of support and services. | |
The Company has entered into various distribution, licensing and joint promotion agreements with OEMs, whereby the Company has provided to the OEM a non-exclusive software license to install the Company’s software on certain hardware or to resell the Company’s software in exchange for payments based on the products distributed by these OEMs. Such payments from the OEM or distributor are recognized as revenue in the period reported by the OEM. | |
From time to time the Company will enter into funded software development arrangements. Under such arrangements, revenue recognition will not commence until final delivery and/or acceptance of the product. For arrangements where the Company has VSOE for the undelivered elements, the Company will follow the residual method and recognize product revenue upon final delivery and/or acceptance of the product. For arrangements where the Company does not have VSOE for the undelivered elements, the Company will recognize the entire arrangement fee ratably commencing at the time of final delivery and/or acceptance through the end of the service period in the arrangement. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | ' | ||||||||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | ' | ||||||||||||||||
The following represents the common stock equivalents that were excluded from the computation of diluted shares outstanding because their effect would have been anti-dilutive for the three and nine months ended September 30, 2014 and 2013: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Stock options and restricted stock | 8,453,854 | 9,337,725 | 8,453,854 | 9,337,725 | |||||||||||||
Series A redeemable convertible preferred stock | 8,781,516 | 8,781,516 | 8,781,516 | 8,781,516 | |||||||||||||
Total anti-dilutive common stock equivalents | 17,235,370 | 18,119,241 | 17,235,370 | 18,119,241 | |||||||||||||
Computation of Earnings Per Share | ' | ||||||||||||||||
The following represents a reconciliation of the numerators and denominators of the basic and diluted EPS computation: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Numerator | |||||||||||||||||
Net loss | $ | (3,232,399 | ) | $ | (2,219,663 | ) | $ | (4,703,250 | ) | $ | (11,807,401 | ) | |||||
Effects of redeemable convertible preferred stock: | |||||||||||||||||
Less: Series A redeemable convertible preferred stock dividends | 186,904 | 28,875 | 560,712 | 28,875 | |||||||||||||
Less: Accretion to redemption value of Series A redeemable convertible preferred stock | 125,915 | 17,061 | 361,822 | 17,061 | |||||||||||||
Net loss attributable to common stockholders | $ | (3,545,218 | ) | $ | (2,265,599 | ) | $ | (5,625,784 | ) | $ | (11,853,337 | ) | |||||
Denominator | |||||||||||||||||
Weighted average basic shares outstanding | 45,158,184 | 48,024,916 | 47,025,887 | 47,961,853 | |||||||||||||
Effect of dilutive securities: | |||||||||||||||||
Stock options and restricted stock | — | — | — | — | |||||||||||||
Series A redeemable convertible preferred stock | — | — | — | — | |||||||||||||
Weighted average diluted shares outstanding | 45,158,184 | 48,024,916 | 47,025,887 | 47,961,853 | |||||||||||||
EPS | |||||||||||||||||
Basic net loss per share attributable to common stockholders | $ | (0.08 | ) | $ | (0.05 | ) | $ | (0.12 | ) | $ | (0.25 | ) | |||||
Diluted net loss per share attributable to common stockholders | $ | (0.08 | ) | $ | (0.05 | ) | $ | (0.12 | ) | $ | (0.25 | ) |
Inventories_Tables
Inventories (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Schedule of Inventory | ' | ||||||||
At September 30, 2014 and December 31, 2013 inventories are as follows: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Component materials | $ | 11,330 | $ | 10,073 | |||||
Finished systems | 303,093 | 909,317 | |||||||
Total Inventory | $ | 314,423 | $ | 919,390 | |||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Schedule of Property and Equipment | ' | ||||||||
The gross carrying amount and accumulated depreciation of property and equipment as of September 30, 2014 and December 31, 2013 are as follows: | |||||||||
September 30, 2014 | December 31, 2013 | ||||||||
Property and Equipment: | |||||||||
Gross carrying amount | $ | 18,927,506 | $ | 19,339,574 | |||||
Accumulated depreciation | (16,550,400 | ) | (16,022,230 | ) | |||||
Property and Equipment, net | $ | 2,377,106 | $ | 3,317,344 | |||||
Software_Development_Costs_Tab
Software Development Costs (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Research and Development [Abstract] | ' | ||||||||
Summary of Software Development Costs | ' | ||||||||
The gross carrying amount and accumulated amortization of software development costs as of September 30, 2014 and December 31, 2013 are as follows: | |||||||||
September 30, 2014 | December 31, 2013 | ||||||||
Software development costs: | |||||||||
Gross carrying amount | $ | 2,819,785 | $ | 2,718,900 | |||||
Accumulated amortization | (1,268,770 | ) | (922,825 | ) | |||||
Software development costs, net | $ | 1,551,015 | $ | 1,796,075 | |||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||
Schedule of Intangible Assets and Goodwill | ' | ||||||||
The gross carrying amount and accumulated amortization of goodwill and other intangible assets as of September 30, 2014 and December 31, 2013 are as follows: | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||
Goodwill | $ | 4,150,339 | $ | 4,150,339 | |||||
Other intangible assets: | |||||||||
Gross carrying amount | $ | 3,324,502 | $ | 3,256,709 | |||||
Accumulated amortization | (3,167,826 | ) | (3,077,113 | ) | |||||
Net carrying amount | $ | 156,676 | $ | 179,596 | |||||
ShareBased_Payment_Arrangement1
Share-Based Payment Arrangements (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Details of Stock Option Plan | ' | ||||||||||||||||
The following table summarizes the plans under which the Company was able to grant equity compensation as of September 30, 2014: | |||||||||||||||||
Shares | Shares Available | Shares | Last Date for Grant | ||||||||||||||
Name of Plan | Authorized | for Grant | Outstanding | of Shares | |||||||||||||
FalconStor Software, Inc., 2006 Incentive Stock Plan | 13,455,546 | 3,237,347 | 7,284,597 | May 17, 2016 | |||||||||||||
FalconStor Software, Inc., 2013 Outside Directors Equity Compensation Plan | 400,000 | 290,000 | 93,500 | May 9, 2016 | |||||||||||||
Schedule of Equity Awards Outstanding | ' | ||||||||||||||||
The following table summarizes the Company’s equity plans that have expired but that still have equity awards outstanding as of September 30, 2014: | |||||||||||||||||
Name of Plan | Shares Available for Grant | Shares Outstanding | |||||||||||||||
FalconStor Software, Inc., 2000 Stock Option Plan | — | 778,757 | |||||||||||||||
2004 Outside Directors Stock Option Plan | — | 120,000 | |||||||||||||||
FalconStor Software, Inc., 2007 Outside Directors Equity Compensation Plan | — | 160,000 | |||||||||||||||
FalconStor Software, Inc., 2010 Outside Directors Equity Compensation Plan | — | 17,000 | |||||||||||||||
Schedule Of Share Based Compensation Recognized | ' | ||||||||||||||||
The Company recognized share-based compensation expense for all awards issued under the Company’s stock equity plans in the following line items in the condensed consolidated statements of operations for the three and nine months ended September 30, 2014 and 2013: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Cost of revenues - Product | $ | — | $ | 82 | $ | — | $ | 181 | |||||||||
Cost of revenues - Support and Service | 20,563 | 7,990 | 74,900 | 112,182 | |||||||||||||
Research and development costs | 47,085 | 69,542 | 222,492 | 291,480 | |||||||||||||
Selling and marketing | 67,214 | (56,838 | ) | 280,188 | 215,352 | ||||||||||||
General and administrative | 236,196 | 142,636 | 628,193 | 675,747 | |||||||||||||
$ | 371,058 | $ | 163,412 | $ | 1,205,773 | $ | 1,294,942 | ||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||
Schedule of Fair Value Assets Measured On Recurring Basis | ' | ||||||||||||||||
The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2014: | |||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets | Significant other | Significant | ||||||||||||||
(Level 1) | Inputs | Unobservable | |||||||||||||||
(Level 2) | Inputs | ||||||||||||||||
(Level 3) | |||||||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 4,905,462 | $ | 4,905,462 | $ | — | $ | — | |||||||||
Corporate debt and government securities | 543,435 | — | 543,435 | — | |||||||||||||
Total cash equivalents | 5,448,897 | 4,905,462 | 543,435 | — | |||||||||||||
Marketable securities: | |||||||||||||||||
Corporate debt and government securities | 12,136,254 | — | 12,136,254 | — | |||||||||||||
Total marketable securities | 12,136,254 | — | 12,136,254 | — | |||||||||||||
Derivative liabilities: | |||||||||||||||||
Derivative Instruments | 178,197 | — | — | 178,197 | |||||||||||||
Total derivative liabilities | 178,197 | — | — | 178,197 | |||||||||||||
Total assets and liabilities measured at fair value | $ | 17,763,348 | $ | 4,905,462 | $ | 12,679,689 | $ | 178,197 | |||||||||
The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2013: | |||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||
Total | Quoted Prices in Active Markets for Identical Assets | Significant other | Significant | ||||||||||||||
(Level 1) | Inputs | Unobservable | |||||||||||||||
(Level 2) | Inputs | ||||||||||||||||
(Level 3) | |||||||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds and commercial paper | $ | 8,486,633 | $ | 8,486,633 | $ | — | $ | — | |||||||||
Total cash equivalents | 8,486,633 | 8,486,633 | — | — | |||||||||||||
Marketable securities: | |||||||||||||||||
Corporate debt and government securities | 8,073,108 | — | 8,073,108 | — | |||||||||||||
Total marketable securities | 8,073,108 | — | 8,073,108 | — | |||||||||||||
Derivative liabilities: | |||||||||||||||||
Derivative Instruments | 159,134 | — | — | 159,134 | |||||||||||||
Total derivative liabilities | 159,134 | — | — | 159,134 | |||||||||||||
Total assets and liabilities measured at fair value | $ | 16,718,875 | $ | 8,486,633 | $ | 8,073,108 | $ | 159,134 | |||||||||
Fair Value Measurements using Significant Unobservable Inputs | ' | ||||||||||||||||
The following table presents a reconciliation of the beginning and ending balances of the Company's liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2014 and September 30, 2013: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Beginning Balance | $ | 111,470 | $ | — | $ | 159,134 | $ | — | |||||||||
Issuance of Derivative Instruments | — | 170,337 | — | 170,337 | |||||||||||||
Total loss recognized in earnings | 66,727 | — | 19,063 | — | |||||||||||||
Ending Balance | $ | 178,197 | $ | 170,337 | $ | 178,197 | $ | 170,337 | |||||||||
Marketable_Securities_Tables
Marketable Securities (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Investments, Debt and Equity Securities [Abstract] | ' | ||||||||||||
Schedule Of Available For Sale Securities | ' | ||||||||||||
The cost and fair values of the Company’s available-for-sale marketable securities as of September 30, 2014, are as follows: | |||||||||||||
Aggregate | Cost or Amortized | Net Unrealized | |||||||||||
Fair Value | Cost | Gains/(losses) | |||||||||||
Government securities | $ | 7,577,349 | $ | 7,576,249 | $ | 1,100 | |||||||
Corporate debt securities | 4,558,905 | 4,559,877 | (972 | ) | |||||||||
Marketable Securities | $ | 12,136,254 | $ | 12,136,126 | $ | 128 | |||||||
The cost and fair values of the Company’s available-for-sale marketable securities as of December 31, 2013, are as follows: | |||||||||||||
Aggregate | Cost or Amortized | Net Unrealized | |||||||||||
Fair Value | Cost | Gains | |||||||||||
Government securities | $ | 6,252,339 | $ | 6,249,483 | $ | 2,856 | |||||||
Corporate debt securities | 1,820,769 | 1,820,215 | 554 | ||||||||||
Marketable Securities | $ | 8,073,108 | $ | 8,069,698 | $ | 3,410 | |||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
Schedule of Future Minimum Payments for Operating Leases | ' | |||
The following is a schedule of future minimum lease payments for all operating leases as of September 30, 2014: | ||||
2014 | $ | 715,210 | ||
2015 | 2,144,155 | |||
2016 | 1,708,468 | |||
2017 | 1,591,012 | |||
2018 | 1,459,190 | |||
Thereafter | 3,577,335 | |||
$ | 11,195,370 | |||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||
Schedule of accumulated other comprehensive loss | ' | ||||||||||||||||
The changes in Accumulated Other Comprehensive (Loss) income, net of tax, for the three months ended September 30, 2014 are as follows: | |||||||||||||||||
Foreign Currency | Net Unrealized | Net Minimum | Total | ||||||||||||||
Translation | Gains on Marketable | Pension Liability | |||||||||||||||
Securities | |||||||||||||||||
Accumulated other comprehensive (loss) income at June 30, 2014 | $ | (1,832,375 | ) | $ | 4,028 | $ | (67,788 | ) | $ | (1,896,135 | ) | ||||||
Other comprehensive (loss) income | |||||||||||||||||
Other comprehensive (loss) income before reclassifications | 183,858 | (3,900 | ) | (3,986 | ) | 175,972 | |||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | — | — | 3,232 | 3,232 | |||||||||||||
Total other comprehensive (loss) income | 183,858 | (3,900 | ) | (754 | ) | 179,204 | |||||||||||
Accumulated other comprehensive (loss) income at September 30, 2014 | $ | (1,648,517 | ) | $ | 128 | $ | (68,542 | ) | $ | (1,716,931 | ) | ||||||
The changes in Accumulated Other Comprehensive (Loss) Income, net of tax, for the nine months ended September 30, 2014 are as follows: | |||||||||||||||||
Foreign Currency | Net Unrealized | Net Minimum | Total | ||||||||||||||
Translation | Gains on Marketable | Pension Liability | |||||||||||||||
Securities | |||||||||||||||||
Accumulated other comprehensive (loss) income at December 31, 2013 | $ | (1,693,905 | ) | $ | 3,410 | $ | (71,892 | ) | $ | (1,762,387 | ) | ||||||
Other comprehensive (loss) income | |||||||||||||||||
Other comprehensive (loss) income before reclassifications | 45,388 | (3,282 | ) | (6,303 | ) | 35,803 | |||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | — | — | 9,653 | 9,653 | |||||||||||||
Total other comprehensive (loss) income | 45,388 | (3,282 | ) | 3,350 | 45,456 | ||||||||||||
Accumulated other comprehensive (loss) income at September 30, 2014 | $ | (1,648,517 | ) | $ | 128 | $ | (68,542 | ) | $ | (1,716,931 | ) | ||||||
The changes in Accumulated Other Comprehensive (Loss) Income, net of tax, for the three months ended September 30, 2013 are as follows: | |||||||||||||||||
Foreign Currency | Net Unrealized | Net Minimum | Total | ||||||||||||||
Translation | Gains on Marketable | Pension Liability | |||||||||||||||
Securities | |||||||||||||||||
Accumulated other comprehensive (loss) income at June 30, 2013 | $ | (1,586,348 | ) | $ | 4,760 | $ | (56,068 | ) | $ | (1,637,656 | ) | ||||||
Other comprehensive (loss) income | |||||||||||||||||
Other comprehensive (loss) income before reclassifications | (932 | ) | (1,961 | ) | 829 | (2,064 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | — | (346 | ) | 2,136 | 1,790 | ||||||||||||
Total other comprehensive (loss) income | (932 | ) | (2,307 | ) | 2,965 | (274 | ) | ||||||||||
Accumulated other comprehensive (loss) income at September 30, 2013 | $ | (1,587,280 | ) | $ | 2,453 | $ | (53,103 | ) | $ | (1,637,930 | ) | ||||||
The changes in Accumulated Other Comprehensive (Loss) Income, net of tax, for the nine months ended September 30, 2013 are as follows: | |||||||||||||||||
Foreign Currency | Net Unrealized | Net Minimum | Total | ||||||||||||||
Translation | Gains on Marketable | Pension Liability | |||||||||||||||
Securities | |||||||||||||||||
Accumulated other comprehensive (loss) income at December 31, 2012 | $ | (1,601,138 | ) | $ | 6,210 | $ | (55,122 | ) | $ | (1,650,050 | ) | ||||||
Other comprehensive (loss) income | |||||||||||||||||
Other comprehensive (loss) income before reclassifications | 13,858 | (212 | ) | (4,388 | ) | 9,258 | |||||||||||
Amounts reclassified from accumulated other comprehensive (loss) income | — | (3,545 | ) | 6,407 | 2,862 | ||||||||||||
Total other comprehensive (loss) income | 13,858 | (3,757 | ) | 2,019 | 12,120 | ||||||||||||
Accumulated other comprehensive (loss) income at September 30, 2013 | $ | (1,587,280 | ) | $ | 2,453 | $ | (53,103 | ) | $ | (1,637,930 | ) | ||||||
Segment_Reporting_Tables
Segment Reporting (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||
Schedule of Revenues And Long Lived Assets By Geographical Areas | ' | ||||||||||||||||
The Company is organized in a single operating segment for purposes of making operating decisions and assessing performance. Revenues from the United States to customers in the following geographical areas for the three and nine months ended September 30, 2014 and 2013, and the location of long-lived assets as of September 30, 2014 and December 31, 2013, are summarized as follows: | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Revenues: | |||||||||||||||||
Americas | $ | 3,814,197 | $ | 5,973,198 | $ | 12,693,541 | $ | 17,604,779 | |||||||||
Asia Pacific | 3,537,043 | 3,983,078 | 10,676,928 | 13,094,120 | |||||||||||||
Europe, Middle East, Africa and Other | 3,824,200 | 4,773,762 | 11,109,137 | 13,290,095 | |||||||||||||
Total Revenues | $ | 11,175,440 | $ | 14,730,038 | $ | 34,479,606 | $ | 43,988,994 | |||||||||
30-Sep-14 | 31-Dec-13 | ||||||||||||||||
Long-lived assets: | |||||||||||||||||
Americas | $ | 8,500,093 | $ | 9,447,517 | |||||||||||||
Asia Pacific | 871,942 | 982,685 | |||||||||||||||
Europe, Middle East, Africa and Other | 262,780 | 612,058 | |||||||||||||||
Total long-lived assets | $ | 9,634,815 | $ | 11,042,260 | |||||||||||||
Restructuring_Costs_Tables
Restructuring Costs (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Restructuring and Related Activities [Abstract] | ' | ||||||||||||
Schedule Of Restructuring Costs | ' | ||||||||||||
The following table summarizes the activity related to restructuring liabilities recorded in connection with the Company's 2013 Plan: | |||||||||||||
Severance related costs | Facility and other costs | Total | |||||||||||
Original charge | $ | 3,179,131 | $ | 426,889 | $ | 3,606,020 | |||||||
Utilized/Paid | (2,067,554 | ) | (231,973 | ) | (2,299,527 | ) | |||||||
Balance at December 31, 2013 | $ | 1,111,577 | $ | 194,916 | $ | 1,306,493 | |||||||
Provisions/Additions | 59,279 | 164,294 | 223,573 | ||||||||||
Utilized/Paid | (450,650 | ) | (104,866 | ) | (555,516 | ) | |||||||
Balance at March 31, 2014 | $ | 720,206 | $ | 254,344 | $ | 974,550 | |||||||
Provisions/Additions | 147,525 | 415,388 | 562,913 | ||||||||||
Utilized/Paid | (52,170 | ) | (240,046 | ) | (292,216 | ) | |||||||
Balance at June 30, 2014 | $ | 815,561 | $ | 429,686 | $ | 1,245,247 | |||||||
Provisions/Additions | 91,451 | 167,627 | 259,078 | ||||||||||
Utilized/Paid | (36,513 | ) | (333,968 | ) | (370,481 | ) | |||||||
Balance at September 30, 2014 | $ | 870,499 | $ | 263,345 | $ | 1,133,844 | |||||||
Earnings_Per_Share_Details
Earnings Per Share (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Antidilutive common stock equivalents | 17,235,370 | 18,119,241 | 17,235,370 | 18,119,241 |
Stock options and restricted stock | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Antidilutive common stock equivalents | 8,453,854 | 9,337,725 | 8,453,854 | 9,337,725 |
Series A redeemable convertible preferred stock | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Antidilutive common stock equivalents | 8,781,516 | 8,781,516 | 8,781,516 | 8,781,516 |
Earnings_Per_Share_Details_1
Earnings Per Share (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Numerator | ' | ' | ' | ' |
Net loss | ($3,232,399) | ($2,219,663) | ($4,703,250) | ($11,807,401) |
Preferred Stock Dividends and Other Adjustments [Abstract] | ' | ' | ' | ' |
Less: Series A redeemable convertible preferred stock dividends | 186,904 | 28,875 | 560,712 | 28,875 |
Less: Accretion to redemption value of Series A redeemable convertible preferred stock | 125,915 | 17,061 | 361,822 | 17,061 |
Net loss attributable to common stockholders | ($3,545,218) | ($2,265,599) | ($5,625,784) | ($11,853,337) |
Denominator | ' | ' | ' | ' |
Weighted average basic shares outstanding (in shares) | 45,158,184 | 48,024,916 | 47,025,887 | 47,961,853 |
Effect of dilutive securities: | ' | ' | ' | ' |
Stock options and restricted stock | 0 | 0 | 0 | 0 |
Series A redeemable convertible preferred stock | 0 | 0 | 0 | 0 |
Weighted average diluted shares outstanding (in shares) | 45,158,184 | 48,024,916 | 47,025,887 | 47,961,853 |
Basic net loss per share attributable to common stockholders (in dollars per share) | ($0.08) | ($0.05) | ($0.12) | ($0.25) |
Diluted net loss per share attributable to common stockholders (in dollars per share) | ($0.08) | ($0.05) | ($0.12) | ($0.25) |
Inventories_Details
Inventories (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Inventory Disclosure [Abstract] | ' | ' |
Component materials | $11,330 | $10,073 |
Finished systems | 303,093 | 909,317 |
Total Inventory | $314,423 | $919,390 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Property, Plant and Equipment [Abstract] | ' | ' | ' | ' | ' |
Gross carrying amount | $18,927,506 | ' | $18,927,506 | ' | $19,339,574 |
Accumulated depreciation | -16,550,400 | ' | -16,550,400 | ' | -16,022,230 |
Property and Equipment, net | 2,377,106 | ' | 2,377,106 | ' | 3,317,344 |
Depreciation expense | 378,010 | 570,711 | 1,318,737 | 1,719,139 | ' |
Property and Equipment, Disposals | 318,757 | 51,070 | 559,674 | 51,070 | ' |
Accumulated Depreciation, Disposal of Property and Equipment | $203,351 | $25,781 | $346,259 | $25,781 | ' |
Software_Development_Costs_Det
Software Development Costs (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Research and Development [Abstract] | ' | ' | ' | ' | ' |
Gross carrying amount | $2,819,785 | ' | $2,819,785 | ' | $2,718,900 |
Accumulated amortization | -1,268,770 | ' | -1,268,770 | ' | -922,825 |
Software development costs, net | 1,551,015 | ' | 1,551,015 | ' | 1,796,075 |
Capitalized computer software amortization | $121,821 | $82,063 | $345,945 | $246,188 | ' |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' | ' | ' | ' |
Goodwill | $4,150,339 | ' | $4,150,339 | ' | $4,150,339 |
Other intangible assets: | ' | ' | ' | ' | ' |
Gross carrying amount | 3,324,502 | ' | 3,324,502 | ' | 3,256,709 |
Accumulated amortization | -3,167,826 | ' | -3,167,826 | ' | -3,077,113 |
Net carrying amount | 156,676 | ' | 156,676 | ' | 179,596 |
Amortization of intangible assets | $29,897 | $34,108 | $90,713 | $91,337 | ' |
ShareBased_Payment_Arrangement2
Share-Based Payment Arrangements (Details) | 9 Months Ended |
Sep. 30, 2014 | |
FalconStor Software, Inc., 2006 Incentive Stock Plan | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Shares Authorized | 13,455,546 |
Shares Available for Grant | 3,237,347 |
Shares Outstanding | 7,284,597 |
Last Date for Grant of Shares | 17-May-16 |
FalconStor Software, Inc., 2013 Outside Directors Equity Compensation Plan | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Shares Authorized | 400,000 |
Shares Available for Grant | 290,000 |
Shares Outstanding | 93,500 |
Last Date for Grant of Shares | 9-May-16 |
ShareBased_Payment_Arrangement3
Share-Based Payment Arrangements (Details 1) | Sep. 30, 2014 |
FalconStor Software, Inc., 2000 Stock Option Plan | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Shares Available for Grant | 0 |
Shares Outstanding | 778,757 |
2004 Outside Directors Stock Option Plan | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Shares Available for Grant | 0 |
Shares Outstanding | 120,000 |
FalconStor Software, Inc., 2007 Outside Directors Equity Compensation Plan | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Shares Available for Grant | 0 |
Shares Outstanding | 160,000 |
FalconStor Software, Inc., 2010 Outside Directors Equity Compensation Plan | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Shares Available for Grant | 0 |
Shares Outstanding | 17,000 |
ShareBased_Payment_Arrangement4
Share-Based Payment Arrangements (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share-based compensation expense | $371,058 | $163,412 | $1,205,773 | $1,294,942 |
Cost of revenues - Product | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share-based compensation expense | 0 | 82 | 0 | 181 |
Cost of revenues - Support and Service | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share-based compensation expense | 20,563 | 7,990 | 74,900 | 112,182 |
Research and development costs | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share-based compensation expense | 47,085 | 69,542 | 222,492 | 291,480 |
Selling and marketing | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share-based compensation expense | 67,214 | -56,838 | 280,188 | 215,352 |
General and administrative | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share-based compensation expense | $236,196 | $142,636 | $628,193 | $675,747 |
ShareBased_Payment_Arrangement5
Share-Based Payment Arrangements (Details Narrative) (USD $) | Jul. 30, 2014 | Jun. 26, 2014 | Sep. 13, 2013 | Jul. 30, 2014 | Apr. 01, 2014 |
Restricted stock | Certain officers and employees | ||||
Restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Number of restricted stock shares granted (in shares) | ' | ' | ' | ' | 2,037,857 |
Restricted stock terms (in years) | ' | ' | ' | ' | '4 years |
Closing Stock Price | $1.58 | $1.69 | $1.23 | ' | ' |
Market Condition Weighted Average Grant Date Fair Value | ' | ' | ' | $0.80 | ' |
Income_Taxes_Details_Narrative
Income Taxes (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' | ' |
Income tax provision (benefit) | $162,627 | ($1,946,689) | $464,233 | ($1,600,836) | ' |
Unrecognized Tax Benefits, Reduction Resulting from Lapse of Applicable Statute of Limitations | ' | ' | ' | 2,100,000 | ' |
Effective income tax rate | ' | ' | -11.00% | 11.90% | ' |
Valuation allowance | 35,800,000 | ' | 35,800,000 | ' | ' |
Unrecognized tax benefits | 217,237 | ' | 217,237 | ' | 217,237 |
Unrecognized tax benefits impact on effective tax rate | 296,675 | ' | 296,675 | ' | ' |
Unrecognized tax benefits, interest on income taxes accrued | $79,438 | ' | $79,438 | ' | $66,875 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Sep. 30, 2014 | Sep. 16, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
Recurring | Recurring | Fair Value, Inputs, Level 1 | Fair Value, Inputs, Level 1 | Fair Value, Inputs, Level 2 | Fair Value, Inputs, Level 2 | Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 3 | Corporate debt and government securities | Corporate debt and government securities | Corporate debt and government securities | Corporate debt and government securities | Corporate debt and government securities | Corporate debt and government securities | Corporate debt and government securities | Corporate debt and government securities | Money market funds and commercial paper | Money market funds and commercial paper | Money market funds and commercial paper | Money market funds and commercial paper | Money market funds and commercial paper | Money market funds and commercial paper | Money market funds and commercial paper | Money market funds and commercial paper | Corporate debt and government securities | Corporate debt and government securities | Corporate debt and government securities | Corporate debt and government securities | |||
Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Fair Value, Inputs, Level 1 | Fair Value, Inputs, Level 1 | Fair Value, Inputs, Level 2 | Fair Value, Inputs, Level 2 | Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 3 | Recurring | Recurring | Fair Value, Inputs, Level 1 | Fair Value, Inputs, Level 1 | Fair Value, Inputs, Level 2 | Fair Value, Inputs, Level 2 | Fair Value, Inputs, Level 3 | Fair Value, Inputs, Level 3 | Recurring | Fair Value, Inputs, Level 1 | Fair Value, Inputs, Level 2 | Fair Value, Inputs, Level 3 | |||||
Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | Recurring | ||||||||||||||||
Cash equivalents: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total cash equivalents | ' | ' | $5,448,897 | $8,486,633 | $4,905,462 | $8,486,633 | $543,435 | $0 | $0 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | $4,905,462 | $8,486,633 | $4,905,462 | $8,486,633 | $0 | $0 | $0 | $0 | $543,435 | $0 | $543,435 | $0 |
Marketable securities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total marketable securities | ' | ' | 12,136,254 | 8,073,108 | 0 | 0 | 12,136,254 | 8,073,108 | 0 | 0 | 12,136,254 | 8,073,108 | 0 | 0 | 12,136,254 | 8,073,108 | 0 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative liabilities: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative Instruments | 178,197 | 170,337 | 178,197 | 159,134 | 0 | 0 | 0 | 0 | 178,197 | 159,134 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total derivative liabilities | ' | ' | 178,197 | 159,134 | 0 | 0 | 0 | 0 | 178,197 | 159,134 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total assets and liabilities measured at fair value | ' | ' | $17,763,348 | $16,718,875 | $4,905,462 | $8,486,633 | $12,679,689 | $8,073,108 | $178,197 | $159,134 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' |
Beginning Balance | $111,470 | $0 | $159,134 | $0 |
Issuance of Derivative Instruments | 0 | 170,337 | 0 | 170,337 |
Total loss recognized in earnings | 66,727 | 0 | 19,063 | 0 |
Ending Balance | $178,197 | $170,337 | $178,197 | $170,337 |
Marketable_Securities_Details
Marketable Securities (Details) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Aggregate Fair Value | $12,136,254 | $8,073,108 |
Cost or Amortized Cost | 12,136,126 | 8,069,698 |
Net Unrealized Gains | 128 | 3,410 |
Government securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Aggregate Fair Value | 7,577,349 | 6,252,339 |
Cost or Amortized Cost | 7,576,249 | 6,249,483 |
Net Unrealized Gains | 1,100 | 2,856 |
Corporate debt securities | ' | ' |
Schedule of Available-for-sale Securities [Line Items] | ' | ' |
Aggregate Fair Value | 4,558,905 | 1,820,769 |
Cost or Amortized Cost | 4,559,877 | 1,820,215 |
Net Unrealized Gains | ($972) | $554 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | Sep. 30, 2014 |
Operating Lease Payment | ' |
2014 | $715,210 |
2015 | 2,144,155 |
2016 | 1,708,468 |
2017 | 1,591,012 |
2018 | 1,459,190 |
Thereafter | 3,577,335 |
Total Future Minimum Lease Payments Due | $11,195,370 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details Narrative) (USD $) | 1 Months Ended | 6 Months Ended | 9 Months Ended | 15 Months Ended | 9 Months Ended | 0 Months Ended | |||||
Jul. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Jul. 23, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Jul. 23, 2013 | Jul. 23, 2013 | |
position | Restructuring Costs Under the 2013 Plan | Restructuring Costs Under the 2013 Plan | Restructuring Costs Under the 2013 Plan | Restructuring Costs Under the 2013 Plan | President and Chief Executive Officer | President and Chief Executive Officer | |||||
position | |||||||||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum length of warranty on software products | ' | ' | '90 days | ' | ' | ' | ' | ' | ' | ' | ' |
Upon certain triggering events holders can redeem | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' |
Annual salary President and Chief Executive Officer of the Company effective July 23, 2013 through July 22, 2015 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $400,000 |
Restricted shares grants | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' |
Restricted shares vesting period | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | ' |
Percentage of shares vested in Year 1 | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' |
Percentage of shares vested in Year 2 | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' |
Licensing agreement with Violin Memory | 12,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds received from licensing agreement | ' | 6,000,000 | 3,000,000 | 9,000,000 | ' | ' | ' | ' | ' | ' | ' |
Potential Refund of License Fees Received | ' | ' | 500,000 | 500,000 | ' | ' | ' | ' | ' | ' | ' |
License Fees Receivable | ' | ' | 4,500,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Remaining proceeds contingent on successful development | ' | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred revenue from license agreement with Violin Memory | ' | ' | 10,500,000 | 10,500,000 | ' | ' | ' | ' | ' | ' | ' |
Number of positions eliminated, worldwide (over 100) | ' | ' | 100 | ' | ' | 100 | ' | ' | ' | ' | ' |
Restructuring reserve | ' | ' | ' | ' | ' | $1,133,844 | $1,245,247 | $974,550 | $1,306,493 | ' | ' |
Redeemable_Convertible_Preferr1
Redeemable Convertible Preferred Stock (Details Narrative) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Sep. 16, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jul. 30, 2014 | Jun. 26, 2014 | Dec. 31, 2013 | Sep. 16, 2013 | Sep. 13, 2013 | |
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Series A redeemable convertible preferred stock issued | ' | 900,000 | ' | 900,000 | ' | ' | ' | 900,000 | ' | ' |
Series A redeemable convertible preferred stock, par value | ' | $0.00 | ' | $0.00 | ' | ' | ' | $0.00 | ' | ' |
Series A redeemable convertible preferred stock, purchase consideration (in millions) | ' | $9,000,000 | ' | $9,000,000 | ' | ' | ' | $9,000,000 | ' | ' |
Net proceeds from issuance of redeemable convertible preferred stock | ' | ' | ' | 0 | 8,731,677 | ' | ' | ' | ' | ' |
Consecutive trading days, convertible debt threshold | ' | ' | ' | '60 days | ' | ' | ' | ' | ' | ' |
Minimum percentage of common stock price to conversion price to determine eligibility of conversion through 60 consecutive trading days | ' | ' | ' | 250.00% | ' | ' | ' | ' | ' | ' |
Threshold of stock price trigger, percentage | ' | ' | ' | 225.00% | ' | ' | ' | ' | ' | ' |
Daily trading volume | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' |
Consecutive days | ' | ' | ' | '20 days | ' | ' | ' | ' | ' | ' |
Upon certain triggering events holders can redeem | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' |
Basis spread on preferred stock dividend, percentage | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' |
Preferred stock dividend rate description | ' | ' | ' | 'Holders of the redeemable convertible preferred stock are entitled to receive quarterly dividends at the Prime Rate (Wall Street Journal Eastern Edition) plus 5% (up to a maximum amount of 10%) | ' | ' | ' | ' | ' | ' |
Preferred stock dividend, minimum cash flow requirement | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' |
Closing Stock Price | ' | ' | ' | ' | ' | $1.58 | $1.69 | ' | ' | $1.23 |
Voting power | ' | 7,317,073 | ' | 7,317,073 | ' | ' | ' | ' | ' | ' |
Percentage of accounts receivable | ' | ' | ' | 80.00% | ' | ' | ' | ' | ' | ' |
Accounting treatment for temporary equity | ' | ' | ' | 'The Company has classified the redeemable convertible preferred stock as temporary equity in the financial statements as it is subject to redemption at the option of the holder under certain circumstances. | ' | ' | ' | ' | ' | ' |
Derivative instruments, fair value | ' | 178,197 | ' | 178,197 | ' | ' | ' | ' | 170,337 | ' |
Stock price on the date one day prior to the closing of the Preferred Stock Agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1.23 |
Stock price greater than conversion price of preferred stock | $0.21 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beneficial conversion feature | 1,951,266 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accretion to redemption value of Series A redeemable convertible preferred stock | ' | 125,915 | 17,061 | 361,822 | 17,061 | ' | ' | ' | ' | ' |
Transaction costs associated with the preferred stock issuance | ' | ' | ' | 268,323 | ' | ' | ' | ' | ' | ' |
Series A redeemable convertible preferred stock dividends | ' | 186,904 | 28,875 | 560,712 | 28,875 | ' | ' | ' | ' | ' |
Interest and other loss, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Embedded Derivative, Gain (Loss) on Embedded Derivative, Net | ' | -66,727 | ' | -19,063 | ' | ' | ' | ' | ' | ' |
Series A redeemable convertible preferred stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Series A redeemable convertible preferred stock issued | ' | ' | ' | ' | ' | ' | ' | ' | 900,000 | ' |
Series A redeemable convertible preferred stock, par value | ' | ' | ' | ' | ' | ' | ' | ' | $0.00 | ' |
Redeemable preferred stock price per share | ' | ' | ' | ' | ' | ' | ' | ' | $10 | ' |
Series A redeemable convertible preferred stock, purchase consideration (in millions) | ' | ' | ' | ' | ' | ' | ' | ' | 9,000,000 | ' |
Redeemable convertible preferred stock conversion price | ' | ' | ' | ' | ' | ' | ' | ' | $1.02 | ' |
Net proceeds from issuance of redeemable convertible preferred stock | $8,731,677 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Series A redeemable convertible preferred stock | Prime rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Preferred stock basis spread of dividend | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' |
Basis spread on preferred stock dividend, percentage | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' |
Increase of dividend rate each six months stock remains unredeemed | ' | ' | ' | 1.00% | ' | ' | ' | ' | ' | ' |
Maximum | Prime rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum dividend rate | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' |
Maximum | Series A redeemable convertible preferred stock | Prime rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum dividend rate | ' | ' | ' | 19.00% | ' | ' | ' | ' | ' | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ' | ' | ' | ' |
Accumulated other comprehensive (loss) income, beginning balance | ($1,896,135) | ($1,637,656) | ($1,762,387) | ($1,650,050) |
Other comprehensive (loss) income | ' | ' | ' | ' |
Other comprehensive (loss) income before reclassifications | 175,972 | -2,064 | 35,803 | 9,258 |
Amounts reclassified from accumulated other comprehensive (loss) income | 3,232 | 1,790 | 9,653 | 2,862 |
Total other comprehensive income (loss), net of taxes: | 179,204 | -274 | 45,456 | 12,120 |
Accumulated other comprehensive (loss) income, ending balance | -1,716,931 | -1,637,930 | -1,716,931 | -1,637,930 |
Foreign Currency Translation | ' | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ' | ' | ' | ' |
Accumulated other comprehensive (loss) income, beginning balance | -1,832,375 | -1,586,348 | -1,693,905 | -1,601,138 |
Other comprehensive (loss) income | ' | ' | ' | ' |
Other comprehensive (loss) income before reclassifications | 183,858 | -932 | 45,388 | 13,858 |
Amounts reclassified from accumulated other comprehensive (loss) income | 0 | 0 | 0 | 0 |
Total other comprehensive income (loss), net of taxes: | 183,858 | -932 | 45,388 | 13,858 |
Accumulated other comprehensive (loss) income, ending balance | -1,648,517 | -1,587,280 | -1,648,517 | -1,587,280 |
Net Unrealized Gains On Marketable Securities | ' | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ' | ' | ' | ' |
Accumulated other comprehensive (loss) income, beginning balance | 4,028 | 4,760 | 3,410 | 6,210 |
Other comprehensive (loss) income | ' | ' | ' | ' |
Other comprehensive (loss) income before reclassifications | -3,900 | -1,961 | -3,282 | -212 |
Amounts reclassified from accumulated other comprehensive (loss) income | 0 | -346 | 0 | -3,545 |
Total other comprehensive income (loss), net of taxes: | -3,900 | -2,307 | -3,282 | -3,757 |
Accumulated other comprehensive (loss) income, ending balance | 128 | 2,453 | 128 | 2,453 |
Net Minimum Pension Liability | ' | ' | ' | ' |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ' | ' | ' | ' |
Accumulated other comprehensive (loss) income, beginning balance | -67,788 | -56,068 | -71,892 | -55,122 |
Other comprehensive (loss) income | ' | ' | ' | ' |
Other comprehensive (loss) income before reclassifications | -3,986 | 829 | -6,303 | -4,388 |
Amounts reclassified from accumulated other comprehensive (loss) income | 3,232 | 2,136 | 9,653 | 6,407 |
Total other comprehensive income (loss), net of taxes: | -754 | 2,965 | 3,350 | 2,019 |
Accumulated other comprehensive (loss) income, ending balance | ($68,542) | ($53,103) | ($68,542) | ($53,103) |
Stockholders_Equity_Details_Na
Stockholders' Equity (Details Narrative) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 156 Months Ended | ||||||
Jun. 27, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Jul. 30, 2014 | Jun. 26, 2014 | Sep. 13, 2013 | Feb. 28, 2009 | |
Equity [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares authorized for repurchase | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,000,000 |
Stock repurchased during period, shares | ' | 0 | 0 | 0 | 0 | 8,005,235 | ' | ' | ' | ' |
Stock repurchased during period, value | ' | ' | ' | ' | ' | $46,916,339 | ' | ' | ' | ' |
Number of shares authorized to be repurchased based on judgment and market conditions | ' | 5,994,765 | ' | 5,994,765 | ' | 5,994,765 | ' | ' | ' | ' |
Shares received for Estate settlement and retired during period | 3,132,141 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gain on Estate litigation settlement | ' | ' | ' | $5,293,319 | $0 | ' | ' | ' | ' | ' |
Closing Stock Price | ' | ' | ' | ' | ' | ' | $1.58 | $1.69 | $1.23 | ' |
Litigation_Details_Narrative
Litigation (Details Narrative) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 21 Months Ended | 24 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 0 Months Ended | ||||||
Jun. 27, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 27, 2014 | Oct. 24, 2013 | Sep. 30, 2014 | Oct. 31, 2012 | Dec. 31, 2012 | Jul. 31, 2013 | |
Stockholder Litigation | Stockholder Litigation | Stockholder Litigation | Stockholder Litigation | The Estate of ReiJane Huai | The Estate of ReiJane Huai | The Estate of ReiJane Huai | Directors and officers liability insurance, layer 1 | Directors and officers liability insurance, layer 1 | Directors and officers liability insurance, layer 2 | ||||||
Prepaid expenses and other current assets | Stockholder Litigation | Stockholder Litigation | Stockholder Litigation | ||||||||||||
Loss Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Companybs Directors and Officers (bD&Ob) Insurance Agreement | ' | ' | ' | ' | ' | 'Company entered into an agreement with the carrier of the first $5.0 million layer of the Companybs D&O insurance. Pursuant to this agreement, the Company accepted a payment of $3.9 million from the first layer insurance carrier in satisfaction of the carrierbs obligations to the Company under the first layer D&O insurance policy. | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Insurance arrangement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $5,000,000 | ' | $5,000,000 |
Litigation settlement costs the company is responsible for | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,100,000 | ' |
Accrual for the settlement of the class action and derivative lawsuits | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,100,000 | ' |
Percentage of losses insurer agreed to pay (maximum) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75.00% |
Insurance coverage floor | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,250,000 |
Legal fees | ' | ' | ' | ' | ' | ' | ' | 7,300,000 | ' | ' | ' | ' | ' | ' | ' |
Insurance recoveries recorded since inception | ' | ' | ' | ' | ' | ' | 5,400,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Insurance recoveries reimbursed since inception | ' | ' | ' | ' | ' | ' | ' | 5,300,000 | ' | ' | ' | ' | 3,900,000 | ' | ' |
Insurance settlement receivable | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' |
Voting stock the Company believes to be owned by the Estate (more than 10%) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' |
Shares received for Estate settlement and retired during period | 3,132,141 | ' | ' | ' | ' | ' | ' | ' | ' | 3,132,141 | ' | ' | ' | ' | ' |
Proposed number of shares to be sold in a private transaction as part of litigation settlement (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' | ' | ' |
Investigation, litigation, and settlement related costs | ' | ($22,502) | $99,316 | ($5,186,711) | $275,774 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Segment_Reporting_Schedule_Of_
Segment Reporting - Schedule Of Segment Reporting By Geographical Areas (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Revenues: | ' | ' | ' | ' | ' |
Total revenues | $11,175,440 | $14,730,038 | $34,479,606 | $43,988,994 | ' |
Long-lived assets: | ' | ' | ' | ' | ' |
Total long-lived assets | 9,634,815 | ' | 9,634,815 | ' | 11,042,260 |
Americas | ' | ' | ' | ' | ' |
Revenues: | ' | ' | ' | ' | ' |
Total revenues | 3,814,197 | 5,973,198 | 12,693,541 | 17,604,779 | ' |
Long-lived assets: | ' | ' | ' | ' | ' |
Total long-lived assets | 8,500,093 | ' | 8,500,093 | ' | 9,447,517 |
Asia Pacific | ' | ' | ' | ' | ' |
Revenues: | ' | ' | ' | ' | ' |
Total revenues | 3,537,043 | 3,983,078 | 10,676,928 | 13,094,120 | ' |
Long-lived assets: | ' | ' | ' | ' | ' |
Total long-lived assets | 871,942 | ' | 871,942 | ' | 982,685 |
Europe, Middle East, Africa and Other | ' | ' | ' | ' | ' |
Revenues: | ' | ' | ' | ' | ' |
Total revenues | 3,824,200 | 4,773,762 | 11,109,137 | 13,290,095 | ' |
Long-lived assets: | ' | ' | ' | ' | ' |
Total long-lived assets | $262,780 | ' | $262,780 | ' | $612,058 |
Segment_Reporting_Details_Narr
Segment Reporting (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Dec. 31, 2013 | |
Revenue | Revenue | Accounts receivable | Accounts receivable | Customer concentration risk | Customer concentration risk | Customer concentration risk | Customer concentration risk | |||||
customer | customer | customer | customer | Revenue | Revenue | Accounts receivable | Accounts receivable | |||||
Revenue, Major Customer [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage accounted for by one customer | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | 10.00% | 20.00% | 12.00% |
Number of customers accounting for greater than 10% of accounts receivable or revenues | ' | ' | ' | ' | 0 | 1 | 1 | 1 | ' | ' | ' | ' |
Sales return reserve (benefit) expense | ($45,308) | ($12,448) | ($68,838) | ($118,671) | ' | ' | ' | ' | ' | ' | ' | ' |
Restructuring_Costs_Schedule_O
Restructuring Costs - Schedule Of Restructuring Costs (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | |
Restructuring Costs Under the 2013 Plan | Restructuring Costs Under the 2013 Plan | Restructuring Costs Under the 2013 Plan | Restructuring Costs Under the 2013 Plan | Severance related costs | Severance related costs | Severance related costs | Severance related costs | Facility and other costs | Facility and other costs | Facility and other costs | Facility and other costs | |||||
Restructuring Costs Under the 2013 Plan | Restructuring Costs Under the 2013 Plan | Restructuring Costs Under the 2013 Plan | Restructuring Costs Under the 2013 Plan | Restructuring Costs Under the 2013 Plan | Restructuring Costs Under the 2013 Plan | Restructuring Costs Under the 2013 Plan | Restructuring Costs Under the 2013 Plan | |||||||||
Restructuring Reserve [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning Balance | ' | ' | ' | ' | $1,245,247 | $974,550 | $1,306,493 | ' | $815,561 | $720,206 | $1,111,577 | ' | $429,686 | $254,344 | $194,916 | ' |
Restructuring costs | 259,078 | 2,290,831 | 1,045,564 | 2,290,831 | 259,078 | 562,913 | 223,573 | 3,606,020 | 91,451 | 147,525 | 59,279 | 3,179,131 | 167,627 | 415,388 | 164,294 | 426,889 |
Utilized/Paid | ' | ' | -1,004,799 | -1,346,693 | -370,481 | -292,216 | -555,516 | -2,299,527 | -36,513 | -52,170 | -450,650 | -2,067,554 | -333,968 | -240,046 | -104,866 | -231,973 |
Ending Balance | ' | ' | ' | ' | $1,133,844 | $1,245,247 | $974,550 | $1,306,493 | $870,499 | $815,561 | $720,206 | $1,111,577 | $263,345 | $429,686 | $254,344 | $194,916 |
Restructuring_Costs_Details_Na
Restructuring Costs (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Number of positions eliminated, worldwide (over 100) | ' | ' | 100 | ' |
Restructuring Costs Under the 2013 Plan | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Number of positions eliminated, worldwide (over 100) | ' | ' | 100 | ' |
Facility and other costs | Restructuring Costs Under the 2013 Plan | ' | ' | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' |
Restructuring and Related Cost, Accelerated Depreciation | $115,406 | $25,289 | $213,415 | $25,289 |