FalconStor Software (FALC) 10-Q 29 Oct 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Oct. 28, 2015
Document And Entity Information
Entity Registrant Name	FALCONSTOR SOFTWARE INC
Entity Central Index Key	922,521
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
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		41,182,567
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,015

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 5,483,379	$ 10,873,891
Marketable securities	10,582,030	10,900,722
Accounts receivable, net of allowances of $184,009 and $119,530, respectively	5,051,870	8,898,680
Prepaid expenses and other current assets	1,644,379	1,596,916
Inventory	156,871	352,493
Deferred tax assets, net	300,343	316,586
Total current assets	23,218,872	32,939,288
Property and equipment, net of accumulated depreciation of $17,668,588 and $16,867,911, respectively	1,821,390	2,147,188
Deferred tax assets, net	7,503	7,503
Software development costs, net	1,128,553	1,508,517
Other assets	1,154,717	1,373,964
Goodwill	4,150,339	4,150,339
Other intangible assets, net	260,004	196,037
Total assets	31,741,378	42,322,836
Current liabilities:
Accounts payable	1,387,493	1,266,504
Accrued expenses	7,418,471	6,939,198
Deferred tax liabilities, net	23,307	23,307
Deferred revenue, net	15,502,480	23,380,012
Total current liabilities	24,331,751	31,609,021
Other long-term liabilities	717,200	630,444
Deferred tax liabilities, net	252,298	226,443
Deferred revenue, net	9,260,148	13,097,215
Total liabilities	$ 34,561,397	$ 45,563,123
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	$ 7,661,884	$ 7,230,941
Stockholders' deficit:
Common stock - $.001 par value, 100,000,000 shares authorized, 56,710,637 and 56,360,222 shares issued, respectively and 41,182,567 and 40,924,313 shares outstanding, respectively	56,711	56,360
Additional paid-in capital	167,165,710	166,933,291
Accumulated deficit	(119,042,274)	(119,054,530)
Common stock held in treasury, at cost (15,528,070 and 15,435,909 shares, respectively)	(57,032,917)	(56,895,059)
Accumulated other comprehensive loss, net	(1,629,133)	(1,511,290)
Total stockholders' deficit	(10,481,903)	(10,471,228)
Total liabilities and stockholders' deficit	$ 31,741,378	$ 42,322,836

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Allowances on accounts receivable	$ 184,009	$ 119,530
Accumulated depreciation	$ 17,668,588	$ 16,867,911
Series A Redeemable convertible preferred stock, par value	$ 0.001	$ 0.001
Series A Redeemable convertible preferred stock, shares authorized	2,000,000	2,000,000
Series A Redeemable convertible preferred stock, shares issued	900,000	900,000
Series A Redeemable convertible preferred stock, shares outstanding	900,000	900,000
Series A Redeemable convertible preferred stock, redemption value	$ 9,000,000	$ 9,000,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	56,710,637	56,360,222
Common stock, shares outstanding	41,182,567	40,924,313
Common Stock held in treasury, shares	15,528,070	15,435,909

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenue:
Product revenue	$ 3,756,579	$ 3,940,479	$ 21,377,450	$ 13,156,024
Support and services revenue	5,926,647	7,234,961	17,798,241	21,323,582
Total revenue	9,683,226	11,175,440	39,175,691	34,479,606
Cost of revenue:
Product	510,861	834,628	1,619,142	2,107,974
Support and service	1,915,090	1,757,716	5,875,837	5,866,408
Total cost of revenue	2,425,951	2,592,344	7,494,979	7,974,382
Gross profit	7,257,275	8,583,096	31,680,712	26,505,224
Operating expenses:
Research and development costs	3,454,128	2,995,150	9,727,727	9,487,169
Selling and marketing	4,128,814	5,776,558	13,805,689	18,016,971
General and administrative	2,132,665	2,140,460	7,209,499	6,896,250
Investigation, litigation, and settlement related (benefits) costs	0	(22,502)	8,842	(5,186,711)
Restructuring costs	15,024	259,078	172,995	1,045,564
Total operating expenses	9,730,631	11,148,744	30,924,752	30,259,243
Operating (loss) income	(2,473,356)	(2,565,648)	755,960	(3,754,019)
Interest and other income (loss), net	25,697	(504,124)	(339,968)	(484,998)
(Loss) income before income taxes	(2,447,659)	(3,069,772)	415,992	(4,239,017)
Provision for income taxes	134,280	162,627	403,736	464,233
Net (loss) income	(2,581,939)	(3,232,399)	12,256	(4,703,250)
Less: Accrual of Series A redeemable convertible preferred stock dividends	190,786	186,904	568,476	560,712
Less: Accretion to redemption value of Series A redeemable convertible preferred stock	149,969	125,915	430,943	361,822
Net loss attributable to common stockholders	$ (2,922,694)	$ (3,545,218)	$ (987,163)	$ (5,625,784)
Basic net loss per share attributable to common stockholders (in dollars per share)	$ (0.07)	$ (0.08)	$ (0.02)	$ (0.12)
Diluted net loss per share attributable to common stockholders (in dollars per share)	$ (0.07)	$ (0.08)	$ (0.02)	$ (0.12)
Weighted average basic shares outstanding (in shares)	41,113,431	45,158,184	41,004,976	47,025,887
Weighted average diluted shares outstanding (in shares)	41,113,431	45,158,184	41,004,976	47,025,887

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (2,581,939)	$ (3,232,399)	$ 12,256	$ (4,703,250)
Other comprehensive (loss) income, net of taxes:
Foreign currency translation	(93,045)	183,858	(124,023)	45,388
Net unrealized gain on marketable securities	1,429	(3,900)	6,105	(3,282)
Net minimum pension liability	(5,733)	(754)	75	3,350
Total other comprehensive loss, net of taxes:	(97,349)	179,204	(117,843)	45,456
Total comprehensive loss	(2,679,288)	(3,053,195)	(105,587)	(4,657,794)
Less: Accrual of Series A redeemable convertible preferred stock dividends	190,786	186,904	568,476	560,712
Less: Accretion to redemption value of Series A redeemable convertible preferred stock	149,969	125,915	430,943	361,822
Total comprehensive loss attributable to common stockholders	$ (3,020,043)	$ (3,366,014)	$ (1,105,006)	$ (5,580,328)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net income (loss)	$ 12,256	$ (4,703,250)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	1,511,147	1,968,810
Share-based payment compensation	1,098,305	1,205,476
Non-cash professional services expenses	74,642	297
Gain on Estate litigation settlement	0	(5,293,319)
Restructuring costs	172,995	832,149
Payment of restructuring costs	(469,247)	(1,004,799)
Loss on disposal of fixed assets	45,213	0
Benefit for returns and doubtful accounts	(20,004)	(68,838)
Deferred income tax provision (benefit)	41,208	(18,407)
Changes in operating assets and liabilities:
Accounts receivable	3,837,502	3,976,230
Prepaid expenses and other current assets	(73,428)	(188,627)
Inventory	195,622	604,967
Other assets	15,978	210,587
Accounts payable	144,828	(160,432)
Accrued expenses and other long-term liabilities	1,010,797	(1,733,806)
Deferred revenue	(11,623,998)	4,333,607
Net cash used in operating activities	(4,026,184)	(39,355)
Cash flows from investing activities:
Sales of marketable securities	11,116,000	31,901,030
Purchases of marketable securities	(10,916,401)	(35,967,458)
Purchases of property and equipment	(741,926)	(688,579)
Proceeds from sale of fixed assets	3,130	0
Capitalized software development costs	(14,100)	(100,885)
Security deposits	193,790	(44,247)
Purchase of intangible assets	(177,826)	(67,793)
Net cash used in investing activities	(537,333)	(4,967,932)
Cash flows from financing activities:
Proceeds from exercise of stock options	59,242	24,684
Repurchase of common stock	(137,859)	0
Dividends paid on Series A redeemable convertible preferred stock	(377,690)	(590,187)
Net cash used in financing activities	(456,307)	(565,503)
Effect of exchange rate changes on cash and cash equivalents	(370,688)	(18,489)
Net decrease in cash and cash equivalents	(5,390,512)	(5,591,279)
Cash and cash equivalents, beginning of period	10,873,891	19,288,340
Cash and cash equivalents, end of period	5,483,379	13,697,061
Supplemental disclosures:
Cash paid for income taxes, net	158,313	146,246
Non-cash financing activities:
Undistributed Series A redeemable convertible preferred stock dividends	$ 377,690	$ 186,904

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2015
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"), is a leading software-defined storage company offering a converged data services software platform that is hardware agnostic. 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, valuation of derivatives, capitalizable software development costs, valuation of 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 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, 2015 , and the results of its operations for the three and nine months ended September 30, 2015 and 2014 . 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, 2014 (" 2014 Form 10-K"). (e) Recently Issued Accounting Pronouncements In November 2014, the Financial Accounting Standards Board (the "FASB") issued new guidance which requires an entity to determine whether the host contract in a hybrid financial instrument issued in the form of a share is more akin to debt or to equity by considering the economic characteristics and risks of the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting from the host contract. The effects of initially adopting the amendments in this update should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, which for the Company will be the annual period ending December 31, 2016. Early adoption, including adoption in an interim period, 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 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 reporting or disclosures. 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 annual period ending after December 15, 2017, including interim reporting period within that period, which for the Company will be the annual period ending December 31, 2018. Early application as of January 1, 2017 is 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 financial reporting.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2015
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 2014 Form 10-K. There have been no significant changes in the Company's significant accounting policies since December 31, 2014 . The Company's revenue recognition accounting policy is included below. For a description of the Company's other significant accounting policies refer to the 2014 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, as stand-alone software applications or sold on a subscription or consumption basis. Depending on the nature of the arrangement revenue related to turn-key solutions and stand-alone software applications are generally recognized upon shipment and delivery of license keys. For certain arrangements revenue is recognized based on usage or ratably over the term of the arrangement. 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 when persuasive evidence of an arrangement exists, the fee is fixed or determinable, delivery has occurred, 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 and distributor customers typically send the Company a purchase order when they have 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, and (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. The Company provides an allowance for product returns as a reduction of revenue, based upon historical experience and known or expected trends. When more than one element, such as hardware, software and services are contained in a single arrangement, the Company will first allocate revenue based upon the relative selling price into two categories: (1) non-software components, such as hardware and any hardware-related items, as required system software that functions with the hardware to deliver the essential functionality of the hardware and related post-contract customer support, and software as service subscriptions and (2) software components and applications, such as post-contract customer support and other services. The Company will then allocate revenue within the non-software category to each element based upon their relative selling price using a hierarchy of VSOE, third-party evidence of selling price (“TPE”) or estimated selling prices (“ESP”), if VSOE or TPE does not exist. The Company will allocate revenue within the software category to the undelivered elements based upon their fair value using VSOE with the residual revenue allocated to the delivered elements. If the Company cannot objectively determine the VSOE of the fair value of any undelivered software element, the Company will defer revenue for all software components until all elements are delivered and services have been performed, until fair value can objectively be determined for any remaining undelivered elements, or until software maintenance is the only undelivered element which the Company has VSOE for, in which case revenue is recognized over the maintenance term for all software elements. 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. Certain arrangements, for which VSOE of fair value for the undelivered maintenance elements cannot be established, are accounted for as a single unit of account. The revenue recognized from single units of accounting are typically allocated and classified on the consolidated statements of operations as product revenue and support and services revenue. Since VSOE cannot be established, VSOE of similar maintenance offerings provides the basis for the support and services revenue classification, and the remaining residual consideration provides the basis for the product revenue classification. In 2013, the Company entered into a joint development agreement whereby final acceptance of the software delivered under the joint development agreement occurred on November 16, 2014. During 2014, the Company began to recognize the total committed fee as revenue ratably over a twenty-five and a half month period which began on November 16, 2014 which included a contractual twenty-four month maintenance period. During the first quarter of 2015, the customer elected to terminate its maintenance agreement and as such all unrecognized deferred revenue was accelerated and recognized as product revenue during the quarter. During the nine months ended September 30, 2015 , the Company recorded total product revenue of approximately $11.3 million related to this agreement. There was no product revenue recorded during the three months ended September 30, 2015 related to this agreement. As of September 30, 2015 , there is no deferred revenue or undelivered services remaining related to this agreement.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2015
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 the Series A 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, 2015 and 2014 : Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Stock options and restricted stock 7,948,021 8,453,854 7,948,021 8,453,854 Series A redeemable convertible preferred stock 8,781,516 8,781,516 8,781,516 8,781,516 Total anti-dilutive common stock equivalents 16,729,537 17,235,370 16,729,537 17,235,370 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, 2015 2014 2015 2014 Numerator Net (loss) income $ (2,581,939 ) $ (3,232,399 ) $ 12,256 $ (4,703,250 ) Effects of Series A redeemable convertible preferred stock: Less: Series A redeemable convertible preferred stock dividends 190,786 186,904 568,476 560,712 Less: Accretion to redemption value of Series A redeemable convertible preferred stock 149,969 125,915 430,943 361,822 Net loss attributable to common stockholders $ (2,922,694 ) $ (3,545,218 ) $ (987,163 ) $ (5,625,784 ) Denominator Weighted average basic shares outstanding 41,113,431 45,158,184 41,004,976 47,025,887 Effect of dilutive securities: Stock options and restricted stock — — — — Series A redeemable convertible preferred stock — — — — Weighted average diluted shares outstanding 41,113,431 45,158,184 41,004,976 47,025,887 EPS Basic net loss per share attributable to common stockholders $ (0.07 ) $ (0.08 ) $ (0.02 ) $ (0.12 ) Diluted net loss per share attributable to common stockholders $ (0.07 ) $ (0.08 ) $ (0.02 ) $ (0.12 )

Inventories

Inventories	9 Months Ended
	Sep. 30, 2015
Inventory Disclosure [Abstract]
Inventories	Inventories At September 30, 2015 and December 31, 2014 , inventories are as follows: September 30, 2015 December 31, 2014 Finished systems $ 156,871 $ 352,493 Total Inventory $ 156,871 $ 352,493 As of September 30, 2015 and December 31, 2014 , the Company has not recorded any reserve for excess and/or obsolete inventories in arriving at the estimated net realizable value of its inventory.

Property and Equipment

Property and Equipment	9 Months Ended
	Sep. 30, 2015
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, 2015 and December 31, 2014 are as follows: September 30, 2015 December 31, 2014 Property and Equipment: Gross carrying amount $ 19,489,978 $ 19,015,099 Accumulated depreciation (17,668,588 ) (16,867,911 ) Property and Equipment, net $ 1,821,390 $ 2,147,188 For the three months ended September 30, 2015 and 2014 , depreciation expense was $280,663 and $378,010 , respectively. For the nine months ended September 30, 2015 and 2014 , depreciation expense was $1,003,224 and $1,318,737 , respectively. During the three and nine months ended September 30, 2015 , the Company wrote-off gross property and equipment of $53,511 and $191,936 , respectively, and the associated accumulated depreciation of $19,374 and $144,614 , respectively, related to assets that were no longer in use. 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 a foreign facility. For further information, refer to Note (18) Restructuring Costs.

Software Development Costs

Software Development Costs	9 Months Ended
	Sep. 30, 2015
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, 2015 and December 31, 2014 are as follows: September 30, 2015 December 31, 2014 Software development costs: Gross carrying amount $ 2,917,215 $ 2,903,115 Accumulated amortization (1,788,662 ) (1,394,598 ) Software development costs, net $ 1,128,553 $ 1,508,517 During the three months ended September 30, 2015 and 2014 , the Company recorded $131,736 and $121,821 , respectively, of amortization expense related to capitalized software costs. During the nine months ended September 30, 2015 and 2014 , the Company recorded $394,064 and $345,945 , respectively, of amortization expense related to capitalized software costs.

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets	9 Months Ended
	Sep. 30, 2015
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, 2015 and December 31, 2014 are as follows: September 30, 2015 December 31, 2014 Goodwill $ 4,150,339 $ 4,150,339 Other intangible assets: Gross carrying amount $ 3,572,850 $ 3,395,024 Accumulated amortization (3,312,846 ) (3,198,987 ) Net carrying amount $ 260,004 $ 196,037 For the three months ended September 30, 2015 and 2014 , amortization expense was $40,167 and $29,897 , respectively. For the nine months ended September 30, 2015 and 2014 , amortization expense was $113,859 and $90,713 , respectively.

Share-Based Payment Arrangement

Share-Based Payment Arrangements	9 Months Ended
	Sep. 30, 2015
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, 2015 : 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 3,006,059 7,218,770 May 17, 2016 FalconStor Software, Inc., 2013 Outside Directors Equity Compensation Plan 400,000 210,000 137,200 May 9, 2016 On July 1, 2015, the total shares available for issuance under the FalconStor Software, Inc., 2006 Incentive Stock Plan (the “2006 Plan”) totaled 3,246,122 . Pursuant to the 2006 Plan, as amended, if, on July 1 st of any calendar year in which the 2006 Plan is in effect, the number of shares of stock as to which options, restricted shares and restricted stock units may be granted under the 2006 Plan is less than five percent (5%) of the number of outstanding shares of stock, then the number of shares of stock available for issuance under the 2006 Plan is automatically increased so that the number equals five percent (5%) of the shares of stock outstanding. In no event shall the number of shares of stock subject to the 2006 Plan in the aggregate exceed twenty million shares, subject to adjustment as provided in the 2006 Plan. On July 1, 2015, the total number of outstanding shares of the Company’s common stock totaled 40,920,192 . Pursuant to the 2006 Plan, as amended, the total shares available for issuance under the 2006 Plan were not increased as of July 1, 2015. The following table summarizes the Company’s equity plans that have expired but that still have equity awards outstanding as of September 30, 2015 : Name of Plan Shares Available for Grant Shares Outstanding FalconStor Software, Inc., 2000 Stock Option Plan — 392,051 2004 Outside Directors Stock Option Plan — 40,000 FalconStor Software, Inc., 2007 Outside Directors Equity Compensation Plan — 160,000 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, 2015 and 2014 : Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Cost of revenue - Product $ — $ — $ — $ — Cost of revenue - Support and Service 26,653 20,563 80,357 74,900 Research and development costs 57,478 47,085 228,993 222,492 Selling and marketing 73,575 67,214 225,155 280,188 General and administrative 214,467 236,196 638,442 628,193 $ 372,173 $ 371,058 $ 1,172,947 $ 1,205,773 On July 28, 2015 the Company granted 500,000 shares of restricted stock to the President and Chief Executive Officer of the Company. The restricted shares have terms of ten years. The restrictions of the restricted stock lapse upon the Company's achievement of performance criteria related to the Company's Common Stock closing trading price. 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 $1.05 per share. Share-based compensation expense for the common stock price market condition is being recorded straight-line over the service period derived from the Monte Carlo simulation since the awards exercisability depends entirely on achieving a market condition. 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, 2015
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, 2015 and 2014 , the Company recorded an income tax provision of $403,736 and $464,233 , respectively, consisting primarily of state and local and foreign taxes. The effective tax rate for the nine months ended September 30, 2015 and September 30, 2014 was 97.1% and (11.0%) , respectively. The change in the effective tax rate is attributable to the mix of foreign and domestic earnings as no tax expense or benefit is being recognized on domestic earnings or losses. As of September 30, 2015 , 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 2015 estimated annual effective tax rate. As of September 30, 2015 , the valuation allowance totaled approximately $35.2 million . The Company’s total unrecognized tax benefits, excluding interest, at both September 30, 2015 and December 31, 2014 were $224,637 . At September 30, 2015 , $326,436 of unrecognized tax benefits, including interest, if recognized, would reduce the Company’s effective tax rate. As of September 30, 2015 and December 31, 2014 , the Company had $101,798 and $87,960 , respectively, of accrued interest.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2015
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, 2015 and December 31, 2014 , the Level 1 category included money market funds, 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, 2015 and December 31, 2014 , 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, 2015 and December 31, 2014 , 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, 2015 or December 31, 2014 . The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2015 : Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets Significant other Inputs Significant Unobservable Inputs Cash equivalents: Money market funds $ 1,894,384 $ 1,894,384 $ — $ — Corporate debt and government securities 549,915 — 549,915 — Total cash equivalents 2,444,299 1,894,384 549,915 — Marketable securities: Corporate debt and government securities 10,582,030 — 10,582,030 — Total marketable securities 10,582,030 — 10,582,030 — Derivative liabilities: Derivative Instruments 59,693 — — 59,693 Total derivative liabilities 59,693 — — 59,693 Total assets and liabilities measured at fair value $ 13,086,022 $ 1,894,384 $ 11,131,945 $ 59,693 The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2014 : Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets Significant other Inputs Significant Unobservable Inputs Cash equivalents: Money market funds $ 2,049,972 $ 2,049,972 $ — $ — Total cash equivalents 2,049,972 2,049,972 — — Marketable securities: Corporate debt and government securities 10,900,722 — 10,900,722 — Total marketable securities 10,900,722 — 10,900,722 — Derivative liabilities: Derivative Instruments 137,171 — — 137,171 Total derivative liabilities 137,171 — — 137,171 Total assets and liabilities measured at fair value $ 13,087,865 $ 2,049,972 $ 10,900,722 $ 137,171 The fair value of the Company’s investments in corporate debt and government securities have been determined utilizing third party pricing services and reviewed 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, 2015 and September 30, 2014 : Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Beginning Balance $ 100,561 $ 111,470 $ 137,171 $ 159,134 Total (gain) loss recognized in earnings (40,868 ) 66,727 (77,478 ) 19,063 Ending Balance $ 59,693 $ 178,197 $ 59,693 $ 178,197

Marketable Securities

Marketable Securities	9 Months Ended
	Sep. 30, 2015
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 (loss), 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, 2015 , are as follows: Aggregate Cost or Amortized Net Unrealized Government securities $ 8,100,285 $ 8,095,408 $ 4,877 Corporate debt securities 2,481,745 2,481,925 (180 ) Marketable Securities $ 10,582,030 $ 10,577,333 $ 4,697 The cost and fair values of the Company’s available-for-sale marketable securities as of December 31, 2014 , are as follows: Aggregate Cost or Amortized Net Unrealized Government securities $ 6,740,825 $ 6,741,466 $ (641 ) Corporate debt securities 4,159,897 4,160,664 (767 ) Marketable Securities $ 10,900,722 $ 10,902,130 $ (1,408 )

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2015
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 2015 through 2017. The following is a schedule of future minimum lease payments for all operating leases as of September 30, 2015 : 2015 $ 575,858 2016 1,919,397 2017 1,572,262 2018 1,361,341 2019 1,402,181 Thereafter 1,935,267 $ 8,766,306 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, 2015 , 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 Series A redeemable convertible preferred stock in accordance with its obligations, the Series A redeemable convertible preferred stockholders may require the Company to redeem all or some of the Series A 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 Series A redeemable convertible preferred stock and the closing price as of the occurrence of the triggering event. On or after August 5, 2017, each Series A redeemable convertible preferred stockholder can require the Company to redeem its Series A 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, 2015 , there were no triggering events that would allow the Series A redeemable convertible preferred stockholders to require the Company to redeem any of the Series A redeemable convertible preferred stock and the Company does not expect to incur any triggering events in fiscal 2015. As of September 30, 2015 , the Company did not fail any financial or non-financial covenants related to the Company's Series A redeemable convertible preferred stock, though the Company did not meet certain required targets for the three months ended September 30, 2015. If the Company does not meet these required targets for the fourth quarter of 2015, the Company will not be in compliance with the financial covenants of the Series A redeemable convertible preferred stock. In such event, the Company would attempt to remedy the failed covenants and obtain waivers from the holders of the Series A redeemable convertible preferred stock. As described under Note (13) Series A Redeemable Convertible Preferred Stock , the Company obtained a waiver on April 20, 2015 to enable it to pay the required quarterly dividends on the Series A redeemable convertible preferred stock in cash for the fourth quarter of 2014 and the first quarter of 2015. The fourth quarter of 2014 and the first quarter of 2015 dividends were paid in cash in April 2015. In addition, as described below, the Company accrued its dividend payments for the required quarterly dividends on the Series A redeemable convertible preferred stock for the second and third quarters of 2015. On July 24, 2015, the Company renewed its Employment Agreement (“Quinn Employment Agreement”) with Gary Quinn. Pursuant to the Quinn Employment Agreement, the Company agreed to continue to employ Mr. Quinn as President and Chief Executive Officer of the Company effective July 24, 2015, at an annual salary of $475,000 per annum, which will automatically renew every twelve (12) months unless either party gives notice to the other that it will not renew at least sixty (60) days prior to the end of the term. Among other items, The Quinn Employment Agreement also provided for the grant of 500,000 restricted shares which vest 50% and 50% based upon the achievement of two predetermined milestones of the Company’s Common Stock closing trading price for ninety (90) consecutive trading days. The 500,000 restricted shares were granted to Mr. Quinn by the Company’s Compensation Committee on July 28, 2015. On July 23, 2013, the Company entered into an Employment Agreement (“2013 Quinn Employment Agreement”) with Gary Quinn. The 2013 Quinn Employment Agreement provided for the grant of 500,000 restricted shares which vested over a two -year period at 50% and 50% annually. On July 23, 2015, the final 250,000 restricted shares vested. 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, 2015 the restructuring accrual totaled $0.7 million . The 2013 Plan was substantially completed by December 31, 2014; however, the Company expects the majority of the remaining accrued severance related costs to be paid once final settlement litigation is completed, which can be at various times over the next three to twenty-four months. In addition, as of September 30, 2015 , our liability for uncertain tax positions totaled $326,436 . At this time, the settlement period for the positions, including related accrued interest, cannot be determined.

Series A Redeemable Convertible

Series A Redeemable Convertible Preferred Stock	9 Months Ended
	Sep. 30, 2015
Equity [Abstract]
Series A Redeemable Convertible Preferred Stock	Series A Redeemable Convertible Preferred Stock On September 16, 2013, the Company issued to Hale Capital Partners, LP (“Hale”) 900,000 shares of the Company’s Series A 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 , which was subsequently transferred to HCP-FVA LLC. Each share of Series A 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 $8.7 million 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 sale able 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 Series A redeemable convertible preferred stock in accordance with its obligations, the Series A redeemable convertible preferred stockholders may require the Company to redeem all or some of the Series A 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 Series A redeemable convertible preferred stock and the closing price as of the occurrence of the triggering event. On or after August 5, 2017, each Series A redeemable convertible preferred stockholder can require the Company to redeem its Series A 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 Series A redeemable convertible preferred stock would be considered a “Breach Event” under the agreements with the holders of the Series A redeemable convertible preferred stock. If a Breach Event were to occur and the Company is in default under or has breached any provision in respect of its obligations to redeem the Series A redeemable convertible preferred stock, then, under the agreements with the holders of our Series A redeemable convertible preferred stock, the Company's Board of Directors would automatically be increased, with the holders of the Series A redeemable convertible preferred stock having the right to appoint the new directors, so that the holders of the Series A 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, 2015 , there were no triggering events that would allow the Series A redeemable convertible preferred stockholders to require the Company to redeem any of the Series A redeemable convertible preferred stock and the Company does not expect to incur any triggering events in fiscal 2015. As of September 30, 2015 , the Company did not fail any financial or non-financial covenants related to the Company's Series A redeemable convertible preferred stock, though the Company did not meet certain required targets for the three months ended September 30, 2015. If the Company does not meet these required targets for the fourth quarter of 2015, the Company will not be in compliance with the financial covenants of the Series A redeemable convertible preferred stock. In such event, the Company would attempt to remedy the failed covenants and obtain waivers from the holders of the Series A redeemable convertible preferred stock. As described below, the Company obtained a waiver on April 20, 2015 to enable it to pay the required quarterly dividends on the Series A redeemable convertible preferred stock in cash for the fourth quarter of 2014 and the first quarter of 2015 and accrued its dividend payments for the required quarterly dividends on the Series A redeemable convertible preferred stock for the second and third quarters of 2015. Holders of the Series A 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 December 31, 2014, due to the lack of sufficient surplus to pay dividends as required by the Delaware General Business Corporation Law, the Company was not permitted to pay the fourth quarter dividend in cash and accrued its fourth quarter 2014 dividend. As of March 31, 2015, the Company had sufficient surplus to pay dividends as required by the Delaware General Business Corporation law; however, the Company was not in compliance with the positive cash flow requirement to pay dividends in cash which would have required the Company to pay these dividends in kind through additional shares of this Series A redeemable convertible preferred stock. As a result, on April 20, 2015, the Company obtained a waiver from the holders to allow the Company to pay the fourth quarter 2014 and first quarter 2015 quarterly dividends in cash. These dividends were paid in cash in April 2015. As of June 30, 2015 and September 30, 2015, due to the lack of sufficient surplus to pay dividends as required by the Delaware General Business Corporation Law, the Company was not permitted to pay the second and third quarter dividends in cash and accrued its second and third quarter dividends. Each share of Series A 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 an aggregate of 7,317,073 shares. In addition, holders of a majority of the Series A 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 Series A 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 Series A redeemable convertible preferred stock as to dividend rights, redemption rights, liquidation preference and other rights; issuances of equity below the conversion price; incur 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 Series A 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 Series A redeemable convertible preferred stock, the contingent redemption put options in the Series A 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 Series A redeemable convertible preferred stock and recorded as a liability. As of September 30, 2015 and December 31, 2014 , the fair value of these derivative instruments was $59,693 and $137,171 , respectively. The (gain) loss on the change in fair values of these derivative instruments for the three months ended September 30, 2015 and 2014 , of ($40,868) and $66,727 , respectively, and for the nine months ended September 30, 2015 and 2014 , of ($77,478) and $19,063 , respectively, was included in “Interest and other income (loss), net” within the consolidated statement of operations. At the time of issuance the Company recorded transaction costs of $268,323 , the beneficial conversion feature of $2.0 million and fair value allocated to the embedded derivatives of $170,337 . These amounts were recorded as discounts to the Series A redeemable convertible preferred stock and are being accreted to the Series A 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 $149,969 and $125,915 for the three months ended September 30, 2015 and 2014 , respectively, and $430,943 and $361,822 for the nine months ended September 30, 2015 and 2014 , respectively, as accretion adjustments to net loss attributable to common stockholders on the statement of operations and in determining loss per share for each period. The Company also included deductions of $190,786 and $186,904 for the three months ended September 30, 2015 and 2014 , respectively, and $568,476 and $560,712 for the nine months ended September 30, 2015 and 2014 , respectively, as adjustments to net loss attributable to common shareholders on the statement of operations and in determining loss per share for each period for accrued dividends on the Series A redeemable convertible preferred stock during the period. The fourth quarter of 2014 and the first quarter of 2015 dividends were paid in cash in April 2015 and the second and third quarters of 2015 dividends were accrued.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Loss	9 Months Ended
	Sep. 30, 2015
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, 2015 are as follows: Foreign Currency Net Unrealized Net Minimum Total Accumulated other comprehensive (loss) income at June 30, 2015 $ (1,567,473 ) $ 3,268 $ 32,421 $ (1,531,784 ) Other comprehensive (loss) income Other comprehensive (loss) income before reclassifications (93,045 ) 1,511 (7,348 ) (98,882 ) Amounts reclassified from accumulated other comprehensive (loss) income — (82 ) 1,615 1,533 Total other comprehensive (loss) income (93,045 ) 1,429 (5,733 ) (97,349 ) Accumulated other comprehensive (loss) income at September 30, 2015 $ (1,660,518 ) $ 4,697 $ 26,688 $ (1,629,133 ) The changes in Accumulated Other Comprehensive (Loss) Income, net of tax, for the nine months ended September 30, 2015 are as follows: Foreign Currency Net Unrealized Net Minimum Total Accumulated other comprehensive (loss) income at December 31, 2014 $ (1,536,495 ) $ (1,408 ) $ 26,613 $ (1,511,290 ) Other comprehensive (loss) income Other comprehensive (loss) income before reclassifications (124,023 ) 6,536 (4,898 ) (122,385 ) Amounts reclassified from accumulated other comprehensive (loss) income — (431 ) 4,973 4,542 Total other comprehensive (loss) income (124,023 ) 6,105 75 (117,843 ) Accumulated other comprehensive (loss) income at September 30, 2015 $ (1,660,518 ) $ 4,697 $ 26,688 $ (1,629,133 ) 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 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 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 ) For the three and nine months ended September 30, 2015 and 2014 , 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) income ” within the condensed consolidated statements of operations.

Stockholders' Equity

Stockholders' Equity	9 Months Ended
	Sep. 30, 2015
Equity [Abstract]
Stockholders' Equity	Stockholders' Equity Stock Repurchase Activity On April 22, 2015, the Company’s Board of Directors (the "Board") approved a new stock buy-back program (the "Repurchase Program"). The Repurchase Program authorizes management to repurchase in the aggregate up to five million shares of the Company's common stock. Repurchases may be made by the Company from time to time in open-market or privately-negotiated transactions as permitted by securities laws and other legal requirements, and subject to market conditions and other factors. The Repurchase Program superseded and replaced the Company's prior stock buy-back program. The Repurchase Program does not obligate the Company to make repurchases at any specific time or situation. The Company was required to obtain approvals from the Series A redeemable convertible preferred stockholders for the Repurchase Program. The Repurchase Program does not have an expiration date and may be amended or terminated by the Board at any time without prior notice. During the three months ended September 30, 2015 , the Company did not repurchase any shares of its common stock. During the nine months ended September 30, 2015 , the Company repurchased 92,161 shares of its common stock at an aggregate purchase price of $137,859 or $1.50 per share. During the three and nine months ended September 30, 2014 , the Company did not repurchase any shares of its common stock. As of September 30, 2015 , the Company had the authorization to repurchase 4,907,839 shares of its common stock based upon its judgment and market conditions. On July 24, 2015, the Company entered into an Independent Marketing Agreement with RFN Prime Marketing Inc., to provide among other items, certain sales and marketing deliverables to the Company in exchange for up to 2.55 million shares of restricted Company common stock which will be issued based on certain milestone achievements and/or transactions over a twenty-four month period. The issuance of the restricted Company common stock will be made pursuant to the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended, and the rules promulgated there under.

Litigation

Litigation	9 Months Ended
	Sep. 30, 2015
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 appealed the dismissal of the Derivative Action and on March 18, 2015, the Appellate Division, Second Department unanimously affirmed the New York Supreme Court’s decision dismissing the Derivative Action. The Plaintiffs have not timely sought leave to appeal the Appellate Division’s decision to the New York Court of Appeals, and thus the Company believes this matter has been finally resolved. 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. 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 $5.7 million since October 1, 2012 of which $5.7 million have been reimbursed by the Company's insurance carriers as of September 30, 2015 . During the three months ended September 30, 2015 , the Company did not record any expense and for the nine months ended September 30, 2015 the Company recorded expense of $8,842 , of investigation, litigation and settlement related legal costs, net of expected recoveries, related to expenses related to the Class Action and Derivative Action lawsuits and other settlement related activities that are not recoverable through insurance. During the three and nine months ended September 30, 2014 , the Company recorded benefits of $22,502 and $5.2 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, 2015
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, 2015 and 2014 , and the location of long-lived assets as of September 30, 2015 and December 31, 2014 , are summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Revenue: Americas $ 2,980,427 $ 3,814,197 $ 20,613,518 $ 12,693,541 Asia Pacific 3,441,168 3,537,043 9,547,455 10,676,928 Europe, Middle East, Africa and Other 3,261,631 3,824,200 9,014,718 11,109,137 Total Revenue $ 9,683,226 $ 11,175,440 $ 39,175,691 $ 34,479,606 September 30, 2015 December 31, 2014 Long-lived assets: Americas $ 7,717,111 $ 8,327,602 Asia Pacific 600,267 822,277 Europe, Middle East, Africa and Other 205,128 233,669 Total long-lived assets $ 8,522,506 $ 9,383,548 For the three months ended September 30, 2015 , the Company had one customer that accounted for 15% of total revenue. For the three months ended September 30, 2014 , the Company did not have any customers that accounted for 10% or more of total revenue. As of September 30, 2015 , the Company had two customers that accounted for 10% or more of the gross accounts receivable balance. As of December 31, 2014 , the Company had one customer that accounted for 11% of the gross accounts receivable balance.

Restructuring Costs

Restructuring Costs	9 Months Ended
	Sep. 30, 2015
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 was substantially completed by December 31, 2014; however, we expect the majority of the severance related costs to be paid once final settlement litigation is completed, which can be at various times over the next three to twenty-four months. 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 365,174 770,136 1,135,310 Utilized/Paid (653,325 ) (759,563 ) (1,412,888 ) Balance at December 31, 2014 $ 823,426 $ 205,489 $ 1,028,915 Provisions/Additions 58,755 75,721 134,476 Utilized/Paid (33,688 ) (147,967 ) (181,655 ) Balance at March 31, 2015 $ 848,493 $ 133,243 $ 981,736 Provisions/Additions (3,228 ) 26,723 23,495 Utilized/Paid (102,159 ) (139,054 ) (241,213 ) Balance at June 30, 2015 $ 743,106 $ 20,912 $ 764,018 Provisions/Additions — 15,024 15,024 Utilized/Paid (25,466 ) (20,913 ) (46,379 ) Balance at September 30, 2015 $ 717,640 $ 15,023 $ 732,663 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, 2015
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"), is a leading software-defined storage company offering a converged data services software platform that is hardware agnostic. 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, valuation of derivatives, capitalizable software development costs, valuation of 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 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, 2015 , and the results of its operations for the three and nine months ended September 30, 2015 and 2014 . 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, 2014 (" 2014 Form 10-K").
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In November 2014, the Financial Accounting Standards Board (the "FASB") issued new guidance which requires an entity to determine whether the host contract in a hybrid financial instrument issued in the form of a share is more akin to debt or to equity by considering the economic characteristics and risks of the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting from the host contract. The effects of initially adopting the amendments in this update should be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, which for the Company will be the annual period ending December 31, 2016. Early adoption, including adoption in an interim period, 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 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 reporting or disclosures. 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 annual period ending after December 15, 2017, including interim reporting period within that period, which for the Company will be the annual period ending December 31, 2018. Early application as of January 1, 2017 is 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 financial reporting.
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, as stand-alone software applications or sold on a subscription or consumption basis. Depending on the nature of the arrangement revenue related to turn-key solutions and stand-alone software applications are generally recognized upon shipment and delivery of license keys. For certain arrangements revenue is recognized based on usage or ratably over the term of the arrangement. 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 when persuasive evidence of an arrangement exists, the fee is fixed or determinable, delivery has occurred, 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 and distributor customers typically send the Company a purchase order when they have 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, and (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. The Company provides an allowance for product returns as a reduction of revenue, based upon historical experience and known or expected trends. When more than one element, such as hardware, software and services are contained in a single arrangement, the Company will first allocate revenue based upon the relative selling price into two categories: (1) non-software components, such as hardware and any hardware-related items, as required system software that functions with the hardware to deliver the essential functionality of the hardware and related post-contract customer support, and software as service subscriptions and (2) software components and applications, such as post-contract customer support and other services. The Company will then allocate revenue within the non-software category to each element based upon their relative selling price using a hierarchy of VSOE, third-party evidence of selling price (“TPE”) or estimated selling prices (“ESP”), if VSOE or TPE does not exist. The Company will allocate revenue within the software category to the undelivered elements based upon their fair value using VSOE with the residual revenue allocated to the delivered elements. If the Company cannot objectively determine the VSOE of the fair value of any undelivered software element, the Company will defer revenue for all software components until all elements are delivered and services have been performed, until fair value can objectively be determined for any remaining undelivered elements, or until software maintenance is the only undelivered element which the Company has VSOE for, in which case revenue is recognized over the maintenance term for all software elements. 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. Certain arrangements, for which VSOE of fair value for the undelivered maintenance elements cannot be established, are accounted for as a single unit of account. The revenue recognized from single units of accounting are typically allocated and classified on the consolidated statements of operations as product revenue and support and services revenue. Since VSOE cannot be established, VSOE of similar maintenance offerings provides the basis for the support and services revenue classification, and the remaining residual consideration provides the basis for the product revenue classification. In 2013, the Company entered into a joint development agreement whereby final acceptance of the software delivered under the joint development agreement occurred on November 16, 2014. During 2014, the Company began to recognize the total committed fee as revenue ratably over a twenty-five and a half month period which began on November 16, 2014 which included a contractual twenty-four month maintenance period. During the first quarter of 2015, the customer elected to terminate its maintenance agreement and as such all unrecognized deferred revenue was accelerated and recognized as product revenue during the quarter. During the nine months ended September 30, 2015 , the Company recorded total product revenue of approximately $11.3 million related to this agreement. There was no product revenue recorded during the three months ended September 30, 2015 related to this agreement. As of September 30, 2015 , there is no deferred revenue or undelivered services remaining related to this agreement.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2015
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, 2015 and 2014 : Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Stock options and restricted stock 7,948,021 8,453,854 7,948,021 8,453,854 Series A redeemable convertible preferred stock 8,781,516 8,781,516 8,781,516 8,781,516 Total anti-dilutive common stock equivalents 16,729,537 17,235,370 16,729,537 17,235,370
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, 2015 2014 2015 2014 Numerator Net (loss) income $ (2,581,939 ) $ (3,232,399 ) $ 12,256 $ (4,703,250 ) Effects of Series A redeemable convertible preferred stock: Less: Series A redeemable convertible preferred stock dividends 190,786 186,904 568,476 560,712 Less: Accretion to redemption value of Series A redeemable convertible preferred stock 149,969 125,915 430,943 361,822 Net loss attributable to common stockholders $ (2,922,694 ) $ (3,545,218 ) $ (987,163 ) $ (5,625,784 ) Denominator Weighted average basic shares outstanding 41,113,431 45,158,184 41,004,976 47,025,887 Effect of dilutive securities: Stock options and restricted stock — — — — Series A redeemable convertible preferred stock — — — — Weighted average diluted shares outstanding 41,113,431 45,158,184 41,004,976 47,025,887 EPS Basic net loss per share attributable to common stockholders $ (0.07 ) $ (0.08 ) $ (0.02 ) $ (0.12 ) Diluted net loss per share attributable to common stockholders $ (0.07 ) $ (0.08 ) $ (0.02 ) $ (0.12 )

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2015
Inventory Disclosure [Abstract]
Schedule of Inventory	At September 30, 2015 and December 31, 2014 , inventories are as follows: September 30, 2015 December 31, 2014 Finished systems $ 156,871 $ 352,493 Total Inventory $ 156,871 $ 352,493

Property and Equipment (Tables)

Property and Equipment (Tables)	9 Months Ended
	Sep. 30, 2015
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, 2015 and December 31, 2014 are as follows: September 30, 2015 December 31, 2014 Property and Equipment: Gross carrying amount $ 19,489,978 $ 19,015,099 Accumulated depreciation (17,668,588 ) (16,867,911 ) Property and Equipment, net $ 1,821,390 $ 2,147,188

Software Development Costs (Tab

Software Development Costs (Tables)	9 Months Ended
	Sep. 30, 2015
Research and Development [Abstract]
Summary of Software Development Costs	The gross carrying amount and accumulated amortization of software development costs as of September 30, 2015 and December 31, 2014 are as follows: September 30, 2015 December 31, 2014 Software development costs: Gross carrying amount $ 2,917,215 $ 2,903,115 Accumulated amortization (1,788,662 ) (1,394,598 ) Software development costs, net $ 1,128,553 $ 1,508,517

Goodwill and Other Intangible30

Goodwill and Other Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2015
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, 2015 and December 31, 2014 are as follows: September 30, 2015 December 31, 2014 Goodwill $ 4,150,339 $ 4,150,339 Other intangible assets: Gross carrying amount $ 3,572,850 $ 3,395,024 Accumulated amortization (3,312,846 ) (3,198,987 ) Net carrying amount $ 260,004 $ 196,037

Share-Based Payment Arrangeme31

Share-Based Payment Arrangements (Tables)	9 Months Ended
	Sep. 30, 2015
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, 2015 : 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 3,006,059 7,218,770 May 17, 2016 FalconStor Software, Inc., 2013 Outside Directors Equity Compensation Plan 400,000 210,000 137,200 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, 2015 : Name of Plan Shares Available for Grant Shares Outstanding FalconStor Software, Inc., 2000 Stock Option Plan — 392,051 2004 Outside Directors Stock Option Plan — 40,000 FalconStor Software, Inc., 2007 Outside Directors Equity Compensation Plan — 160,000
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, 2015 and 2014 : Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Cost of revenue - Product $ — $ — $ — $ — Cost of revenue - Support and Service 26,653 20,563 80,357 74,900 Research and development costs 57,478 47,085 228,993 222,492 Selling and marketing 73,575 67,214 225,155 280,188 General and administrative 214,467 236,196 638,442 628,193 $ 372,173 $ 371,058 $ 1,172,947 $ 1,205,773

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2015
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, 2015 : Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets Significant other Inputs Significant Unobservable Inputs Cash equivalents: Money market funds $ 1,894,384 $ 1,894,384 $ — $ — Corporate debt and government securities 549,915 — 549,915 — Total cash equivalents 2,444,299 1,894,384 549,915 — Marketable securities: Corporate debt and government securities 10,582,030 — 10,582,030 — Total marketable securities 10,582,030 — 10,582,030 — Derivative liabilities: Derivative Instruments 59,693 — — 59,693 Total derivative liabilities 59,693 — — 59,693 Total assets and liabilities measured at fair value $ 13,086,022 $ 1,894,384 $ 11,131,945 $ 59,693 The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2014 : Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets Significant other Inputs Significant Unobservable Inputs Cash equivalents: Money market funds $ 2,049,972 $ 2,049,972 $ — $ — Total cash equivalents 2,049,972 2,049,972 — — Marketable securities: Corporate debt and government securities 10,900,722 — 10,900,722 — Total marketable securities 10,900,722 — 10,900,722 — Derivative liabilities: Derivative Instruments 137,171 — — 137,171 Total derivative liabilities 137,171 — — 137,171 Total assets and liabilities measured at fair value $ 13,087,865 $ 2,049,972 $ 10,900,722 $ 137,171
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, 2015 and September 30, 2014 : Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Beginning Balance $ 100,561 $ 111,470 $ 137,171 $ 159,134 Total (gain) loss recognized in earnings (40,868 ) 66,727 (77,478 ) 19,063 Ending Balance $ 59,693 $ 178,197 $ 59,693 $ 178,197

Marketable Securities (Tables)

Marketable Securities (Tables)	9 Months Ended
	Sep. 30, 2015
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, 2015 , are as follows: Aggregate Cost or Amortized Net Unrealized Government securities $ 8,100,285 $ 8,095,408 $ 4,877 Corporate debt securities 2,481,745 2,481,925 (180 ) Marketable Securities $ 10,582,030 $ 10,577,333 $ 4,697 The cost and fair values of the Company’s available-for-sale marketable securities as of December 31, 2014 , are as follows: Aggregate Cost or Amortized Net Unrealized Government securities $ 6,740,825 $ 6,741,466 $ (641 ) Corporate debt securities 4,159,897 4,160,664 (767 ) Marketable Securities $ 10,900,722 $ 10,902,130 $ (1,408 )

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2015
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, 2015 : 2015 $ 575,858 2016 1,919,397 2017 1,572,262 2018 1,361,341 2019 1,402,181 Thereafter 1,935,267 $ 8,766,306

Accumulated Other Comprehensi35

Accumulated Other Comprehensive Loss (Tables)	9 Months Ended
	Sep. 30, 2015
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, 2015 are as follows: Foreign Currency Net Unrealized Net Minimum Total Accumulated other comprehensive (loss) income at June 30, 2015 $ (1,567,473 ) $ 3,268 $ 32,421 $ (1,531,784 ) Other comprehensive (loss) income Other comprehensive (loss) income before reclassifications (93,045 ) 1,511 (7,348 ) (98,882 ) Amounts reclassified from accumulated other comprehensive (loss) income — (82 ) 1,615 1,533 Total other comprehensive (loss) income (93,045 ) 1,429 (5,733 ) (97,349 ) Accumulated other comprehensive (loss) income at September 30, 2015 $ (1,660,518 ) $ 4,697 $ 26,688 $ (1,629,133 ) The changes in Accumulated Other Comprehensive (Loss) Income, net of tax, for the nine months ended September 30, 2015 are as follows: Foreign Currency Net Unrealized Net Minimum Total Accumulated other comprehensive (loss) income at December 31, 2014 $ (1,536,495 ) $ (1,408 ) $ 26,613 $ (1,511,290 ) Other comprehensive (loss) income Other comprehensive (loss) income before reclassifications (124,023 ) 6,536 (4,898 ) (122,385 ) Amounts reclassified from accumulated other comprehensive (loss) income — (431 ) 4,973 4,542 Total other comprehensive (loss) income (124,023 ) 6,105 75 (117,843 ) Accumulated other comprehensive (loss) income at September 30, 2015 $ (1,660,518 ) $ 4,697 $ 26,688 $ (1,629,133 ) 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 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 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 )

Segment Reporting (Tables)

Segment Reporting (Tables)	9 Months Ended
	Sep. 30, 2015
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, 2015 and 2014 , and the location of long-lived assets as of September 30, 2015 and December 31, 2014 , are summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Revenue: Americas $ 2,980,427 $ 3,814,197 $ 20,613,518 $ 12,693,541 Asia Pacific 3,441,168 3,537,043 9,547,455 10,676,928 Europe, Middle East, Africa and Other 3,261,631 3,824,200 9,014,718 11,109,137 Total Revenue $ 9,683,226 $ 11,175,440 $ 39,175,691 $ 34,479,606 September 30, 2015 December 31, 2014 Long-lived assets: Americas $ 7,717,111 $ 8,327,602 Asia Pacific 600,267 822,277 Europe, Middle East, Africa and Other 205,128 233,669 Total long-lived assets $ 8,522,506 $ 9,383,548

Restructuring Costs (Tables)

Restructuring Costs (Tables)	9 Months Ended
	Sep. 30, 2015
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 365,174 770,136 1,135,310 Utilized/Paid (653,325 ) (759,563 ) (1,412,888 ) Balance at December 31, 2014 $ 823,426 $ 205,489 $ 1,028,915 Provisions/Additions 58,755 75,721 134,476 Utilized/Paid (33,688 ) (147,967 ) (181,655 ) Balance at March 31, 2015 $ 848,493 $ 133,243 $ 981,736 Provisions/Additions (3,228 ) 26,723 23,495 Utilized/Paid (102,159 ) (139,054 ) (241,213 ) Balance at June 30, 2015 $ 743,106 $ 20,912 $ 764,018 Provisions/Additions — 15,024 15,024 Utilized/Paid (25,466 ) (20,913 ) (46,379 ) Balance at September 30, 2015 $ 717,640 $ 15,023 $ 732,663

Summary of Significant Accoun38

Summary of Significant Accounting Policies (Details Narrative)	3 Months Ended	9 Months Ended
	Sep. 30, 2015USD ($)	Sep. 30, 2015USD ($)
Summary of Significant Accounting Policies [Abstract]
Product revenue from license agreement	$ 0	$ 11,300,000
Deferred revenue remaining from license agreement	$ 0	$ 0

Earnings Per Share (Details)

Earnings Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common stock equivalents	16,729,537	17,235,370	16,729,537	17,235,370
Stock options and restricted stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common stock equivalents	7,948,021	8,453,854	7,948,021	8,453,854
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, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Numerator
Net (loss) income	$ (2,581,939)	$ (3,232,399)	$ 12,256	$ (4,703,250)
Effects of Series A redeemable convertible preferred stock:
Less: Series A redeemable convertible preferred stock dividends	190,786	186,904	568,476	560,712
Less: Accretion to redemption value of Series A redeemable convertible preferred stock	149,969	125,915	430,943	361,822
Net loss attributable to common stockholders	$ (2,922,694)	$ (3,545,218)	$ (987,163)	$ (5,625,784)
Denominator
Weighted average basic shares outstanding (in shares)	41,113,431	45,158,184	41,004,976	47,025,887
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)	41,113,431	45,158,184	41,004,976	47,025,887
Basic net loss per share attributable to common stockholders (in dollars per share)	$ (0.07)	$ (0.08)	$ (0.02)	$ (0.12)
Diluted net loss per share attributable to common stockholders (in dollars per share)	$ (0.07)	$ (0.08)	$ (0.02)	$ (0.12)

Inventories (Details)

Inventories (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
Inventory Disclosure [Abstract]
Finished systems	$ 156,871	$ 352,493
Total Inventory	$ 156,871	$ 352,493

Property and Equipment (Details

Property and Equipment (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Property, Plant and Equipment [Abstract]
Gross carrying amount	$ 19,489,978		$ 19,489,978		$ 19,015,099
Accumulated depreciation	(17,668,588)		(17,668,588)		(16,867,911)
Property and Equipment, net	1,821,390		1,821,390		$ 2,147,188
Depreciation expense	280,663	$ 378,010	1,003,224	$ 1,318,737
Property, Plant and Equipment, Disposals	53,511	318,757	191,936	559,674
Accumulated depreciation, disposals	$ 19,374	$ 203,351	$ 144,614	$ 346,259

Software Development Costs (Det

Software Development Costs (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Research and Development [Abstract]
Gross carrying amount	$ 2,917,215		$ 2,917,215		$ 2,903,115
Accumulated amortization	(1,788,662)		(1,788,662)		(1,394,598)
Software development costs, net	1,128,553		1,128,553		$ 1,508,517
Capitalized computer software amortization	$ 131,736	$ 121,821	$ 394,064	$ 345,945

Goodwill and Other Intangible44

Goodwill and Other Intangible Assets (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 4,150,339		$ 4,150,339		$ 4,150,339
Other intangible assets:
Gross carrying amount	3,572,850		3,572,850		3,395,024
Accumulated amortization	(3,312,846)		(3,312,846)		(3,198,987)
Net carrying amount	260,004		260,004		$ 196,037
Amortization of intangible assets	$ 40,167	$ 29,897	$ 113,859	$ 90,713

Share-Based Payment Arrangeme45

Share-Based Payment Arrangements (Details) - shares	9 Months Ended
	Sep. 30, 2015	Jul. 01, 2015
FalconStor Software, Inc., 2006 Incentive Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Authorized	13,455,546	20,000,000
Shares Available for Grant	3,006,059	3,246,122
Shares Outstanding	7,218,770
Last date for grant of shares	May 17, 2016
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	210,000
Shares Outstanding	137,200
Last date for grant of shares	May 9, 2016

Share-Based Payment Arrangeme46

Share-Based Payment Arrangements (Details 1)	Sep. 30, 2015shares
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	392,051
2004 Outside Directors Stock Option Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Available for Grant	0
Shares Outstanding	40,000
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

Share-Based Payment Arrangeme47

Share-Based Payment Arrangements (Details 2) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 372,173	$ 371,058	$ 1,172,947	$ 1,205,773
Cost of revenue - Product
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	0	0	0	0
Cost of revenue - Support and Service
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	26,653	20,563	80,357	74,900
Research and development costs
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	57,478	47,085	228,993	222,492
Selling and marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	73,575	67,214	225,155	280,188
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 214,467	$ 236,196	$ 638,442	$ 628,193

Share-Based Payment Arrangeme48

Share-Based Payment Arrangements Share-Based Payment Arrangements (Detail Narrative) - $ / shares	Jul. 28, 2015	Jul. 01, 2015	Sep. 30, 2015	Jul. 24, 2015	Dec. 31, 2014	Jul. 23, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, shares outstanding			41,182,567		40,924,313
Term of share based payment award	10 years
Weighted average fair value (in dollars per share)	$ 1.05
President and Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted Shares Grants	500,000			500,000		500,000
FalconStor Software, Inc., 2006 Incentive Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Available for Grant		3,246,122	3,006,059
Maximum Shares Outstanding Under Plan, Percentage		5.00%
Shares Authorized		20,000,000	13,455,546
Common stock, shares outstanding		40,920,192

Income Taxes (Details Narrative

Income Taxes (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Income tax provision	$ 134,280	$ 162,627	$ 403,736	$ 464,233
Effective income tax rate			97.10%	(11.00%)
Valuation allowance	35,200,000		$ 35,200,000
Unrecognized tax benefits	224,637		224,637		$ 224,637
Unrecognized tax benefits impact on effective tax rate	326,436		326,436
Unrecognized tax benefits, interest on income taxes accrued	$ 101,798		$ 101,798		$ 87,960

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014	Sep. 16, 2013
Derivative liabilities:
Derivative Instruments	$ 59,693	$ 137,171	$ 170,337
Recurring
Cash equivalents:
Total cash equivalents	2,444,299	2,049,972
Marketable securities:
Total marketable securities	10,582,030	10,900,722
Derivative liabilities:
Derivative Instruments	59,693	137,171
Total derivative liabilities	59,693	137,171
Total assets and liabilities measured at fair value	13,086,022	13,087,865
Fair Value, Inputs, Level 1 | Recurring
Cash equivalents:
Total cash equivalents	1,894,384	2,049,972
Marketable securities:
Total marketable securities	0	0
Derivative liabilities:
Derivative Instruments	0	0
Total derivative liabilities	0	0
Total assets and liabilities measured at fair value	1,894,384	2,049,972
Fair Value, Inputs, Level 2 | Recurring
Cash equivalents:
Total cash equivalents	549,915	0
Marketable securities:
Total marketable securities	10,582,030	10,900,722
Derivative liabilities:
Derivative Instruments	0	0
Total derivative liabilities	0	0
Total assets and liabilities measured at fair value	11,131,945	10,900,722
Fair Value, Inputs, Level 3 | Recurring
Cash equivalents:
Total cash equivalents	0	0
Marketable securities:
Total marketable securities	0	0
Derivative liabilities:
Derivative Instruments	59,693	137,171
Total derivative liabilities	59,693	137,171
Total assets and liabilities measured at fair value	59,693	137,171
Corporate debt and government securities | Recurring
Marketable securities:
Total marketable securities	10,582,030	10,900,722
Corporate debt and government securities | Fair Value, Inputs, Level 1 | Recurring
Marketable securities:
Total marketable securities	0	0
Corporate debt and government securities | Fair Value, Inputs, Level 2 | Recurring
Marketable securities:
Total marketable securities	10,582,030	10,900,722
Corporate debt and government securities | Fair Value, Inputs, Level 3 | Recurring
Marketable securities:
Total marketable securities	0	0
Money market funds | Recurring
Cash equivalents:
Total cash equivalents	1,894,384	2,049,972
Money market funds | Fair Value, Inputs, Level 1 | Recurring
Cash equivalents:
Total cash equivalents	1,894,384	2,049,972
Money market funds | Fair Value, Inputs, Level 2 | Recurring
Cash equivalents:
Total cash equivalents	0	0
Money market funds | Fair Value, Inputs, Level 3 | Recurring
Cash equivalents:
Total cash equivalents	0	$ 0
Corporate debt and government securities | Recurring
Cash equivalents:
Total cash equivalents	549,915
Corporate debt and government securities | Fair Value, Inputs, Level 1 | Recurring
Cash equivalents:
Total cash equivalents	0
Corporate debt and government securities | Fair Value, Inputs, Level 2 | Recurring
Cash equivalents:
Total cash equivalents	549,915
Corporate debt and government securities | Fair Value, Inputs, Level 3 | Recurring
Cash equivalents:
Total cash equivalents	$ 0

Fair Value Measurements (Deta51

Fair Value Measurements (Details 1) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	$ 100,561	$ 111,470	$ 137,171	$ 159,134
Total (gain) loss recognized in earnings	(40,868)	66,727	(77,478)	19,063
Ending Balance	$ 59,693	$ 178,197	$ 59,693	$ 178,197

Marketable Securities (Details)

Marketable Securities (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Aggregate Fair Value	$ 10,582,030	$ 10,900,722
Cost or Amortized Cost	10,577,333	10,902,130
Net Unrealized Gains (losses)	4,697	(1,408)
Government securities
Schedule of Available-for-sale Securities [Line Items]
Aggregate Fair Value	8,100,285	6,740,825
Cost or Amortized Cost	8,095,408	6,741,466
Net Unrealized Gains (losses)	4,877	(641)
Corporate debt securities
Schedule of Available-for-sale Securities [Line Items]
Aggregate Fair Value	2,481,745	4,159,897
Cost or Amortized Cost	2,481,925	4,160,664
Net Unrealized Gains (losses)	$ (180)	$ (767)

Commitments and Contingencies53

Commitments and Contingencies (Details)	Sep. 30, 2015USD ($)
Operating Lease Payment
2,015	$ 575,858
2,016	1,919,397
2,017	1,572,262
2,018	1,361,341
2,019	1,402,181
Thereafter	1,935,267
Total Future Minimum Lease Payments Due	$ 8,766,306

Commitments and Contingencies54

Commitments and Contingencies (Details Narrative)	Jul. 24, 2015USD ($)milestoneshares	Jul. 23, 2013shares	Sep. 30, 2015USD ($)position	Jul. 28, 2015shares	Jul. 23, 2015shares	Jun. 30, 2015USD ($)	Mar. 31, 2015USD ($)	Dec. 31, 2014USD ($)	Dec. 31, 2013USD ($)
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%
Number of positions eliminated, worldwide (over 100) | position			100
Unrecognized tax benefits impact on effective tax rate			$ 326,436
Restructuring Costs Under the 2013 Plan
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Number of positions eliminated, worldwide (over 100) | position			100
Restructuring reserve			$ 732,663			$ 764,018	$ 981,736	$ 1,028,915	$ 1,306,493
President and Chief Executive Officer
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Annual salary President and Chief Executive Officer of the Company	$ 475,000
Employment Agreement Renewal Period	12 months
Employment Agreement Termination Notice Period	60 days
Restricted shares grants | shares	500,000	500,000		500,000
Percentage Of Shares Vested Upon Achievement Of First Milestone	50.00%
Percentage Of Shares Vested Upon Achievement Of Second Milestone	50.00%
Restricted shares vesting milestones | milestone	2
Consecutive trading days for closing trading price to achieve restricted stock milestones	90 days
Restricted shares vesting period		2 years
Percentage of shares vested in Year 1		50.00%
Percentage of shares vested in Year 2		50.00%
Restricted Shares Vested | shares					250,000
Severance related costs | Restructuring Costs Under the 2013 Plan
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Restructuring reserve			$ 717,640			$ 743,106	$ 848,493	$ 823,426	$ 1,111,577
Severance related costs | Minimum
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Restructuring and Related Cost, Expected Period for Cost to be Paid			3 months
Severance related costs | Maximum
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Restructuring and Related Cost, Expected Period for Cost to be Paid			24 months

Series A Redeemable Convertib55

Series A Redeemable Convertible Preferred Stock (Details Narrative) - USD ($)	Sep. 16, 2013	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014	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		$ 0.001		$ 0.001		$ 0.001
Series A redeemable convertible preferred stock, purchase consideration (in millions)		$ 9,000,000		$ 9,000,000		$ 9,000,000
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 Series A 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							$ 1.23
Voting power		7,317,073		7,317,073
Percentage of accounts receivable				80.00%
Accounting treatment for temporary equity				The Company has classified the Series A 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	$ 170,337	$ 59,693		$ 59,693		$ 137,171
Transaction costs associated with the Series A redeemable convertible preferred stock issuance	268,323
Beneficial conversion feature	$ 2,000,000
Accretion to redemption value of Series A redeemable convertible preferred stock		149,969	$ 125,915	430,943	$ 361,822
Series A redeemable convertible preferred stock dividends		190,786	186,904	568,476	560,712
Interest and other loss, net
Class of Stock [Line Items]
Gain (loss) on the change in fair value of derivatives		$ (40,868)	$ 66,727	$ (77,478)	$ 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	$ 0.001
Series A redeemable preferred stock price per share	$ 10
Series A redeemable convertible preferred stock, purchase consideration (in millions)	$ 9,000,000
Series A redeemable convertible preferred stock conversion price	$ 1.02488
Net proceeds from issuance of Series A redeemable convertible preferred stock	$ 8,700,000
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 Comprehensi56

Accumulated Other Comprehensive Loss (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance	$ (1,531,784)	$ (1,896,135)	$ (1,511,290)	$ (1,762,387)
Other comprehensive (loss) income
Other comprehensive (loss) income before reclassifications	(98,882)	175,972	(122,385)	35,803
Amounts reclassified from accumulated other comprehensive (loss) income	1,533	3,232	4,542	9,653
Total other comprehensive loss, net of taxes:	(97,349)	179,204	(117,843)	45,456
Accumulated other comprehensive (loss) income, ending balance	(1,629,133)	(1,716,931)	(1,629,133)	(1,716,931)
Foreign Currency Translation
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance	(1,567,473)	(1,832,375)	(1,536,495)	(1,693,905)
Other comprehensive (loss) income
Other comprehensive (loss) income before reclassifications	(93,045)	183,858	(124,023)	45,388
Amounts reclassified from accumulated other comprehensive (loss) income	0	0	0	0
Total other comprehensive loss, net of taxes:	(93,045)	183,858	(124,023)	45,388
Accumulated other comprehensive (loss) income, ending balance	(1,660,518)	(1,648,517)	(1,660,518)	(1,648,517)
Net Unrealized Gains (Losses) on Marketable Securities
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance	3,268	4,028	(1,408)	3,410
Other comprehensive (loss) income
Other comprehensive (loss) income before reclassifications	1,511	(3,900)	6,536	(3,282)
Amounts reclassified from accumulated other comprehensive (loss) income	(82)	0	(431)	0
Total other comprehensive loss, net of taxes:	1,429	(3,900)	6,105	(3,282)
Accumulated other comprehensive (loss) income, ending balance	4,697	128	4,697	128
Net Minimum Pension Liability
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance	32,421	(67,788)	26,613	(71,892)
Other comprehensive (loss) income
Other comprehensive (loss) income before reclassifications	(7,348)	(3,986)	(4,898)	(6,303)
Amounts reclassified from accumulated other comprehensive (loss) income	1,615	3,232	4,973	9,653
Total other comprehensive loss, net of taxes:	(5,733)	(754)	75	3,350
Accumulated other comprehensive (loss) income, ending balance	$ 26,688	$ (68,542)	$ 26,688	$ (68,542)

Stockholders' Equity (Details N

Stockholders' Equity (Details Narrative) - USD ($)	Jul. 24, 2015	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Apr. 22, 2015
Share-based Goods and Nonemployee Services Transaction [Line Items]
Number of shares authorized for repurchase						5,000,000
Stock repurchased during period, shares		0	0	92,161	0
Stock repurchased during period, value				$ 137,859
Stock repurchased during period, average cost per share				$ 1.50
Remaining number of shares authorized for repurchased		4,907,839		4,907,839
Restricted Common Stock [Domain]
Share-based Goods and Nonemployee Services Transaction [Line Items]
Common Stock, Capital Shares Reserved for Future Issuance	2,550,000
Share Agreement, Shares Approved for Issuance, Expected Period for Shares to be Issued	24 months

Litigation (Details Narrative)

Litigation (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended		36 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015
Loss Contingencies [Line Items]
Investigation, litigation, and settlement related (benefits) costs	$ 0	$ (22,502)	$ 8,842	$ (5,186,711)
Stockholder Litigation
Loss Contingencies [Line Items]
Legal fees					$ 7,300,000
Insurance recoveries recorded since inception					5,700,000
Insurance recoveries reimbursed since inception					$ 5,700,000

Segment Reporting - Schedule Of

Segment Reporting - Schedule Of Segment Reporting By Geographical Areas (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Revenue:
Total revenue	$ 9,683,226	$ 11,175,440	$ 39,175,691	$ 34,479,606
Long-lived assets:
Total long-lived assets	8,522,506		8,522,506		$ 9,383,548
Americas
Revenue:
Total revenue	2,980,427	3,814,197	20,613,518	12,693,541
Long-lived assets:
Total long-lived assets	7,717,111		7,717,111		8,327,602
Asia Pacific
Revenue:
Total revenue	3,441,168	3,537,043	9,547,455	10,676,928
Long-lived assets:
Total long-lived assets	600,267		600,267		822,277
Europe, Middle East, Africa and Other
Revenue:
Total revenue	3,261,631	$ 3,824,200	9,014,718	$ 11,109,137
Long-lived assets:
Total long-lived assets	$ 205,128		$ 205,128		$ 233,669

Segment Reporting (Details Narr

Segment Reporting (Details Narrative) - customer	3 Months Ended		9 Months Ended	12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Dec. 31, 2014
Revenue
Revenue, Major Customer [Line Items]
Number of customers accounting for greater than 10% of accounts receivable or revenues	1	0
Accounts receivable
Revenue, Major Customer [Line Items]
Number of customers accounting for greater than 10% of accounts receivable or revenues			2	1
Customer concentration risk | Revenue
Revenue, Major Customer [Line Items]
Percentage accounted for by one customer	15.00%	10.00%
Customer concentration risk | Accounts receivable
Revenue, Major Customer [Line Items]
Percentage accounted for by one customer			10.00%	11.00%

Restructuring Costs - Schedule

Restructuring Costs - Schedule Of Restructuring Costs (Details) - USD ($)	3 Months Ended				9 Months Ended		12 Months Ended
	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014	Dec. 31, 2013
Restructuring Reserve [Roll Forward]
Provisions/Additions	$ 15,024			$ 259,078	$ 172,995	$ 1,045,564
Utilized/Paid					(469,247)	(1,004,799)
Restructuring Costs Under the 2013 Plan
Restructuring Reserve [Roll Forward]
Beginning Balance	764,018	$ 981,736	$ 1,028,915		1,028,915	1,306,493	$ 1,306,493
Provisions/Additions	15,024	23,495	134,476				1,135,310	$ 3,606,020
Utilized/Paid	(46,379)	(241,213)	(181,655)				(1,412,888)	(2,299,527)
Ending Balance	732,663	764,018	981,736		732,663		1,028,915	1,306,493
Severance related costs | Restructuring Costs Under the 2013 Plan
Restructuring Reserve [Roll Forward]
Beginning Balance	743,106	848,493	823,426		823,426	1,111,577	1,111,577
Provisions/Additions	0	(3,228)	58,755				365,174	3,179,131
Utilized/Paid	(25,466)	(102,159)	(33,688)				(653,325)	(2,067,554)
Ending Balance	717,640	743,106	848,493		717,640		823,426	1,111,577
Facility and other costs | Restructuring Costs Under the 2013 Plan
Restructuring Reserve [Roll Forward]
Beginning Balance	20,912	133,243	205,489		205,489	$ 194,916	194,916
Provisions/Additions	15,024	26,723	75,721				770,136	426,889
Utilized/Paid	(20,913)	(139,054)	(147,967)				(759,563)	(231,973)
Ending Balance	$ 15,023	$ 20,912	$ 133,243		$ 15,023		$ 205,489	$ 194,916

Restructuring Costs (Details Na

Restructuring Costs (Details Narrative)	9 Months Ended
	Sep. 30, 2015position
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
Minimum | Severance related costs
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Period for Cost to be Paid	3 months
Maximum | Severance related costs
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Period for Cost to be Paid	24 months