FalconStor Software (FALC) 10-Q 3 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 31, 2016
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, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		43,650,930
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,016

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 5,643,610	$ 6,013,382
Marketable securities	500,040	7,420,042
Accounts receivable, net of allowances of $199,853 and $191,285, respectively	3,253,257	6,635,262
Prepaid expenses and other current assets	1,357,254	1,742,668
Inventory	6,181	70,534
Deferred tax assets, net	533,589	205,816
Total current assets	11,293,931	22,087,704
Property and equipment, net of accumulated depreciation of $18,536,559 and $17,947,675, respectively	1,129,565	1,565,932
Deferred tax assets, net	128,990	110,060
Software development costs, net	636,799	1,116,816
Other assets	1,037,763	1,139,377
Goodwill	4,150,339	4,150,339
Other intangible assets, net	227,883	256,137
Total assets	18,605,270	30,426,365
Current liabilities:
Accounts payable	716,709	1,005,944
Accrued expenses	5,069,086	6,783,514
Deferred tax liabilities, net	89,662	89,343
Deferred revenue, net	14,589,751	16,553,519
Total current liabilities	20,465,208	24,432,320
Other long-term liabilities	1,008,067	735,089
Deferred tax liabilities, net	46,938	27,069
Deferred revenue, net	8,887,015	9,122,289
Total liabilities	30,407,228	34,316,767
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	8,331,823	7,818,554
Stockholders' deficit:
Common stock - $.001 par value, 100,000,000 shares authorized, 59,083,743 and 57,194,817 shares issued, respectively and 43,555,673 and 41,666,747 shares outstanding, respectively	59,082	57,195
Additional paid-in capital	169,825,670	167,953,871
Accumulated deficit	(130,791,558)	(120,983,891)
Common stock held in treasury, at cost (15,528,070 and 15,528,070 shares, respectively)	(57,032,917)	(57,032,917)
Accumulated other comprehensive loss, net	(2,194,058)	(1,703,214)
Total stockholders' deficit	(20,133,781)	(11,708,956)
Total liabilities and stockholders' deficit	$ 18,605,270	$ 30,426,365

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Allowances on accounts receivable	$ 199,853	$ 191,285
Accumulated depreciation	$ 18,536,559	$ 17,947,675
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	59,083,743	57,194,817
Common stock, shares outstanding	43,555,673	41,666,747
Common Stock held in treasury, shares	15,528,070	15,528,070

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenue:
Product revenue	$ 2,245,544	$ 3,756,579	$ 7,465,996	$ 21,377,450
Support and services revenue	5,081,266	5,926,647	15,361,096	17,798,241
Total revenue	7,326,810	9,683,226	22,827,092	39,175,691
Cost of revenue:
Product	145,986	510,861	710,233	1,619,142
Support and service	1,914,383	1,915,090	5,675,728	5,875,837
Total cost of revenue	2,060,369	2,425,951	6,385,961	7,494,979
Gross profit	5,266,441	7,257,275	16,441,131	31,680,712
Operating expenses:
Research and development costs	2,514,822	3,454,128	9,475,678	9,727,727
Selling and marketing	2,991,901	4,128,814	11,385,051	13,805,689
General and administrative	1,561,335	2,132,665	5,100,739	7,209,499
Investigation, litigation, and settlement related costs	0	0	0	8,842
Restructuring costs	0	15,024	177,389	172,995
Total operating expenses	7,068,058	9,730,631	26,138,857	30,924,752
Operating (loss) income	(1,801,617)	(2,473,356)	(9,697,726)	755,960
Interest and other (loss) income, net	(90,037)	25,697	265,397	(339,968)
(Loss) income before income taxes	(1,891,654)	(2,447,659)	(9,432,329)	415,992
Provision for income taxes	84,519	134,280	375,338	403,736
Net (loss) income	(1,976,173)	(2,581,939)	(9,807,667)	12,256
Less: Accrual of Series A redeemable convertible preferred stock dividends	194,012	190,786	581,986	568,476
Less: Accretion to redemption value of Series A redeemable convertible preferred stock	178,619	149,969	513,269	430,943
Net loss attributable to common stockholders	$ (2,348,804)	$ (2,922,694)	$ (10,902,922)	$ (987,163)
Basic net (loss) income per share attributable to common stockholders (in dollars per share)	$ (0.05)	$ (0.07)	$ (0.25)	$ (0.02)
Diluted net (loss) income per share attributable to common stockholders (in dollars per share)	$ (0.05)	$ (0.07)	$ (0.25)	$ (0.02)
Weighted average basic shares outstanding (in shares)	43,488,448	41,113,431	42,847,038	41,004,976
Weighted average diluted shares outstanding (in shares)	43,488,448	41,113,431	42,847,038	41,004,976

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (1,976,173)	$ (2,581,939)	$ (9,807,667)	$ 12,256
Other comprehensive income (loss), net of applicable taxes:
Foreign currency translation	59,527	(93,045)	(502,049)	(124,023)
Net unrealized (loss) gain on marketable securities	(279)	1,429	3,477	6,105
Net minimum pension liability	3,874	(5,733)	7,728	75
Total other comprehensive income (loss), net of applicable taxes:	63,122	(97,349)	(490,844)	(117,843)
Total comprehensive loss	(1,913,051)	(2,679,288)	(10,298,511)	(105,587)
Less: Accrual of Series A redeemable convertible preferred stock dividends	194,012	190,786	581,986	568,476
Less: Accretion to redemption value of Series A redeemable convertible preferred stock	178,619	149,969	513,269	430,943
Total comprehensive loss attributable to common stockholders	$ (2,285,682)	$ (3,020,043)	$ (11,393,766)	$ (1,105,006)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Cash flows from operating activities:
Net (loss) income	$ (1,976,173)	$ (2,581,939)	$ (9,807,667)	$ 12,256
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization			1,041,762	1,511,147
Share-based payment compensation			851,449	1,098,305
Non-cash professional services expenses			1,540,713	74,642
Restructuring costs			177,389	172,995
Payment of restructuring costs			(63,714)	(469,247)
Loss on disposal of fixed assets			0	45,213
Provision for returns and doubtful accounts			41,970	(20,004)
Deferred income tax (benefit) provision			(273,648)	41,208
Changes in operating assets and liabilities:
Accounts receivable			3,170,149	3,837,502
Prepaid expenses and other current assets			425,663	(73,428)
Inventory			64,353	195,622
Other assets			32,587	15,978
Accounts payable			(271,992)	144,828
Accrued expenses and other long-term liabilities			(1,539,956)	1,010,797
Deferred revenue			(2,517,096)	(11,623,998)
Net cash used in operating activities			(7,128,038)	(4,026,184)
Cash flows from investing activities:
Sales of marketable securities			7,066,000	11,116,000
Purchases of marketable securities			(150,000)	(10,916,401)
Purchases of property and equipment			(132,268)	(741,926)
Proceeds from sale of fixed assets			0	3,130
Capitalized software development costs			0	(14,100)
Security deposits			82,633	193,790
Purchase of intangible assets			(93,167)	(177,826)
Net cash provided by (used in) investing activities			6,773,198	(537,333)
Cash flows from financing activities:
Proceeds from exercise of stock options			0	59,242
Repurchase of common stock			0	(137,859)
Dividends paid on Series A redeemable convertible preferred stock			0	(377,690)
Net cash used in financing activities			0	(456,307)
Effect of exchange rate changes on cash and cash equivalents			(14,932)	(370,688)
Net decrease in cash and cash equivalents			(369,772)	(5,390,512)
Cash and cash equivalents, beginning of period			6,013,382	10,873,891	$ 10,873,891
Cash and cash equivalents, end of period	5,643,610	5,483,379	5,643,610	5,483,379	$ 6,013,382
Supplemental disclosures:
Cash paid for income taxes, net			549,289	158,313
Non-cash investing and financing activities:
Undistributed Series A redeemable convertible preferred stock dividends	$ 194,012	$ 377,690	194,012	377,690
Series A redeemable convertible preferred stock dividend payment			$ 576,779	$ 0

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Statement of Cash Flows [Abstract]
Interest Paid	$ 0	$ 0	$ 0	$ 0

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2016
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. As a global company, our vision is to deliver enterprise class, software-defined, intelligent data services combined with predictive analytics across any primary or secondary storage hardware, in the cloud or on premise. The Company mission is to help IT organizations realize more economic value out of existing environments and any future storage investments while reducing complexity, maximizing flexibility and improving operational efficiency. Our award-winning solutions are available and supported worldwide by OEMs as well as leading service providers, system integrators, resellers and the Company. The Company has incurred operating losses in twenty-six of the previous twenty-nine quarters. The Company currently has a working capital deficiency of $9.2 million , which is inclusive of current deferred revenue of $14.6 million , a stockholders' deficit and covenants associated with its Series A redeemable convertible preferred stock that are mutually agreed to annually. The Company believes it continues to have sufficient liquidity to meet its operating requirements which includes marketing its new product offering FreeStor, and expanding its existing suite of software offerings. The Company failed to meet certain targets required by the terms of the Series A redeemable convertible preferred stock for the period ended September 30, 2016 and also expects to fail to meet such targets for the period ended December 31, 2016. If this failure to meet the targets occurs, the Company will be in breach of its covenants. In such event and absent a waiver, the holder, under the terms of the Series A redeemable convertible preferred stock may request that the Company redeem the Series A redeemable convertible preferred stock. In addition, the holder has the right to request a redemption of the Series A redeemable convertible preferred stock on or after August 5, 2017. If the holder requests that the Series A redeemable convertible preferred stock be redeemed, the Company may not have sufficient liquidity or have sufficient surplus as such term is defined under the Delaware General Corporation Law to undertake the redemption. If the Company does not redeem the Series A redeemable convertible preferred stock, the holder of the Series A redeemable convertible preferred stock can pursue other remedies. Refer to Note (13) Series A Redeemable Convertible Preferred Stock for further discussion regarding these other remedies. In the event of a redemption request by the holder, the Company’s ability to redeem the Series A redeemable convertible preferred stock depends on its ability to execute its business plan, increase revenue and billings and reduce expenditures. During 2016 the Company has focused on aligning its expense structure with revenue expectations which has included tighter expense controls and overall operational efficiencies which better align the Company's current business plan on a run-rate basis. These efficiencies include among other items, stream-lined personnel related costs and global overhead costs and efficiencies realized on the Company's redesigned go-to-market coverage models. The Company has reduced its worldwide headcount to 185 employees as of September 30, 2016 , compared with 226 employees as of December 31, 2015 . There is no assurance that the Company will be successful in generating sufficient revenue or reducing operating costs. (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 accounting principles generally accepted in the United States of America ("GAAP") 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 on 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 GAAP 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, 2016 , and the results of its operations for the three and nine months ended September 30, 2016 and 2015 . 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, 2015 (" 2015 Form 10-K"). (e) Recently Adopted 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 amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, which for the Company was the first quarter of 2016. The adoption of this new accounting guidance by Company has not had any impact on the Company's consolidated financial position, results of operations or cash flows. 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 amendments in this update are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter, which for the Company is the annual period ending December 31, 2016. The adoption of this new accounting guidance by Company has not had any impact on the Company's consolidated financial position, results of operations or cash flows. (f) Recently Issued Accounting Pronouncements In August 2016, the FASB issued new guidance on presentation and classification of eight specific items within the statement of cash flows, including (i) debt prepayment or debt extinguishment costs, (ii) settlement of zero-coupon debt instruments or other debt instruments with coupon rates that are insignificant in relation to the effective interest rate of the borrowing, (iii) contingent consideration payments made after a business combination, (iv) proceeds from the settlement of insurance claims, (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (vi) distributions received from equity method investees, (vii) beneficial interests in securitization transactions, and (viii) separately identifiable cash flows and application of the predominance principle. This update is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017, which for the Company will be the annual period ending December 31, 2018. Early adoption, including adoption in an interim period, is permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements and related disclosures. In March 2016, the FASB issued new guidance on accounting for employee share-based payment awards to simplify the accounting related to several aspects of accounting for share-based payment transactions, including income tax consequences of share-based payment transactions, classification of awards as either equity or liabilities, forfeitures, and classification on the statement of cash flows. The new standard is effective for the annual period beginning after December 15, 2016, including interim reporting periods within that period, which for the Company will be the annual period ending December 31, 2017. Early adoption, including adoption in an interim period, is permitted. The standard requires the use of several transition methods including a modified retrospective transition method, retrospective method and prospective method. The Company is evaluating the effect that this new guidance will have on its consolidated financial statements and related disclosures. In February 2016, the FASB issued new guidance on leases to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This new guidance will replace existing guidance on leases in accounting principles generally accepted in the United States when it becomes effective. The new standard is effective for the annual period beginning after December 15, 2018, including interim reporting periods within that period, which for the Company will be the annual period ending December 31, 2019. Early application is permitted. The standard requires the use of a modified retrospective transition method; however, certain optional practical expedients may be applied. The Company is evaluating the effect that this new guidance will have on its consolidated financial statements and related disclosures. In January 2016, the FASB issued new guidance on the recognition, measurement, presentation and disclosure of financial assets and financial liabilities. The standard (i) requires an entity to measure equity investments, except those accounted for under the equity method of accounting or those that result in consolidation of the investee, at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring an entity to perform a qualitative assessment to identify impairment, (iii) changes certain presentation and disclosure requirements related to financial assets and financial liabilities, and (iv) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, which for the Company will be the annual period ending December 31, 2018. Early adoption, including adoption in an interim period, is not permitted except for certain amendments in this update. 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 the Company's financial results. In November 2015, the FASB issued new guidance which requires an entity to classify deferred tax liabilities and assets, along with any related valuation allowance, as non-current in its consolidated balance sheet. The amendments in this update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, which for the Company will be the annual period ending December 31, 2017. 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 the Company's financial results. In May 2014, the FASB issued new guidance which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This new guidance will replace most existing revenue recognition guidance in Generally Accepted Accounting Principles in the United States when it becomes effective. The new standard is effective for the annual period beginning after December 15, 2017, including interim reporting periods 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, 2016
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 2015 Form 10-K. There have been no significant changes in the Company's significant accounting policies since December 31, 2015 . The Company's revenue recognition accounting policy is included below. For a description of the Company's other significant accounting policies refer to the 2015 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 does not have 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 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 and included a contractual twenty-four month maintenance period. During 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 first quarter of 2015. 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 nine months ended September 30, 2016 related to this agreement.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2016
Earnings Per Share [Abstract]
Earnings Per Share	Earnings Per Share Basic earnings per share ("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, 2016 and 2015 : Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Stock options and restricted stock 6,677,895 7,948,021 6,677,895 7,948,021 Series A redeemable convertible preferred stock 8,781,516 8,781,516 8,781,516 8,781,516 Total anti-dilutive common stock equivalents 15,459,411 16,729,537 15,459,411 16,729,537 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, 2016 2015 2016 2015 Numerator Net (loss) income $ (1,976,173 ) $ (2,581,939 ) $ (9,807,667 ) $ 12,256 Effects of Series A redeemable convertible preferred stock: Less: Series A redeemable convertible preferred stock dividends 194,012 190,786 581,986 568,476 Less: Accretion to redemption value of Series A redeemable convertible preferred stock 178,619 149,969 513,269 430,943 Net loss attributable to common stockholders $ (2,348,804 ) $ (2,922,694 ) $ (10,902,922 ) $ (987,163 ) Denominator Weighted average basic shares outstanding 43,488,448 41,113,431 42,847,038 41,004,976 Effect of dilutive securities: Stock options and restricted stock — — — — Series A redeemable convertible preferred stock — — — — Weighted average diluted shares outstanding 43,488,448 41,113,431 42,847,038 41,004,976 EPS Basic net loss per share attributable to common stockholders $ (0.05 ) $ (0.07 ) $ (0.25 ) $ (0.02 ) Diluted net loss per share attributable to common stockholders $ (0.05 ) $ (0.07 ) $ (0.25 ) $ (0.02 )

Inventories

Inventories	9 Months Ended
	Sep. 30, 2016
Inventory Disclosure [Abstract]
Inventories	Inventories At September 30, 2016 and December 31, 2015 , inventories are as follows: September 30, 2016 December 31, 2015 Finished systems $ 6,181 $ 70,534 Total Inventory $ 6,181 $ 70,534 As of September 30, 2016 and December 31, 2015 , the Company had 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, 2016
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, 2016 and December 31, 2015 are as follows: September 30, 2016 December 31, 2015 Property and Equipment: Gross carrying amount $ 19,666,124 $ 19,513,607 Accumulated depreciation (18,536,559 ) (17,947,675 ) Property and Equipment, net $ 1,129,565 $ 1,565,932 For the three months ended September 30, 2016 and 2015 , depreciation expense was $154,948 and $280,663 , respectively. For the nine months ended September 30, 2016 and 2015 , depreciation expense was $560,324 and $1,003,224 , respectively.

Software Development Costs

Software Development Costs	9 Months Ended
	Sep. 30, 2016
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, 2016 and December 31, 2015 are as follows: September 30, 2016 December 31, 2015 Software development costs: Gross carrying amount $ 2,917,215 $ 3,037,215 Accumulated amortization (2,280,416 ) (1,920,399 ) Software development costs, net $ 636,799 $ 1,116,816 During the three months ended September 30, 2016 and 2015 , the Company recorded $99,654 and $131,736 , respectively, of amortization expense related to capitalized software costs. During the nine months ended September 30, 2016 and 2015 , the Company recorded $360,017 and $394,064 , respectively, of amortization expense related to capitalized software costs.

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets	9 Months Ended
	Sep. 30, 2016
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, 2016 and December 31, 2015 are as follows: September 30, 2016 December 31, 2015 Goodwill $ 4,150,339 $ 4,150,339 Other intangible assets: Gross carrying amount $ 3,702,691 $ 3,609,524 Accumulated amortization (3,474,808 ) (3,353,387 ) Net carrying amount $ 227,883 $ 256,137 For the three months ended September 30, 2016 and 2015 , amortization expense was $39,186 and $40,167 , respectively. For the nine months ended September 30, 2016 and 2015 , amortization expense was $121,421 and $113,859 , respectively.

Share-Based Payment Arrangement

Share-Based Payment Arrangements	9 Months Ended
	Sep. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-Based Payment Arrangements	Share-Based Payment Arrangements On April 27, 2016, the Company’s stockholders adopted the FalconStor Software, Inc. 2016 Incentive Stock Plan (the "2016 Plan"). The 2016 Plan is administered by the Compensation Committee and initially provided for the issuance of up to 1,500,000 shares of the Company’s common stock upon the exercise of options or upon the grant of shares with such restrictions as determined by the Compensation Committee to the employees, consultants and non-employee directors of the Company. Exercise prices of the options must be equal to the fair market value of the common stock on the date of grant. Options granted have terms of ten years . Shares of restricted stock have the terms and conditions set by the Board of Directors and are forfeitable until the terms of the grant have been satisfied. The 2016 Plan replaces the Company's 2006 Incentive Stock Plan. On April 27, 2016, the Company’s stockholders adopted the FalconStor Software, Inc. 2016 Outside Directors Equity Compensation Plan (the “2016 Director Plan”). The 2016 Director Plan is administered by the Board of Directors and provides for the issuance of up to 400,000 shares of the Company’s common stock upon the exercise of options or upon the grant of shares with such restrictions as determined by the Board of Directors to the non-employee directors of the Company. Exercise prices of the options must be equal to the fair market value of the common stock on the date of grant. Options granted have terms of ten years . Shares of restricted stock have the terms and conditions set by the Board of Directors and are forfeitable until the terms of the grant have been satisfied. The 2016 Director Plan replaces the 2013 Outside Directors Equity Compensation Plan. The following table summarizes the plans under which the Company was able to grant equity compensation as of September 30, 2016 : Shares Shares Available Shares Last Date for Grant Name of Plan Authorized for Grant Outstanding of Shares FalconStor Software, Inc., 2016 Incentive Stock Plan 2,166,606 2,166,606 — April 27, 2026 FalconStor Software, Inc., 2016 Outside Directors Equity Compensation Plan 400,000 330,000 70,000 April 27, 2019 On June 30, 2016, the total shares available for issuance under the 2016 Plan totaled 1,500,000 . Pursuant to the 2016 Plan, if, on July 1 st of any calendar year in which the 2016 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 2016 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 2016 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 2016 Plan in the aggregate exceed twenty million shares, subject to adjustment as provided in the 2016 Plan. On July 1, 2016, the total number of outstanding shares of the Company’s common stock totaled 43,332,111 . Pursuant to the 2016 Plan, the total shares available for issuance under the 2016 Plan thus increased 666,606 to 2,166,606 shares available for issuance as of July 1, 2016. The following table summarizes the Company’s equity plans that have expired but that still have equity awards outstanding as of September 30, 2016 : Name of Plan Shares Available for Grant Shares Outstanding FalconStor Software, Inc., 2006 Incentive Stock Plan — 6,226,395 FalconStor Software, Inc., 2013 Outside Directors Equity Compensation Plan — 74,000 FalconStor Software, Inc., 2007 Outside Directors Equity Compensation Plan — 160,000 FalconStor Software, Inc., 2000 Stock Option Plan — 147,500 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, 2016 and 2015 : Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Cost of revenue - Product $ — $ — $ — $ — Cost of revenue - Support and Service 16,684 26,653 85,521 80,357 Research and development costs 80,310 57,478 1,652,107 228,993 Selling and marketing 88,907 73,575 231,979 225,155 General and administrative 88,305 214,467 422,555 638,442 $ 274,206 $ 372,173 $ 2,392,162 $ 1,172,947 On March 7, 2016, the Company issued an aggregate of 507,070 shares of the Company's common stock to Cumulus Logic, LLC, as a milestone payment pursuant to the terms of a Software License and Development Agreement between the Company and Cumulus Logic, LLC. The shares have an aggregate value of $765,000 based on the 30 day trading day average of the Company's common stock immediately prior to July 29, 2015, the date that the License and Development Agreement was executed. The Company recognized share-based compensation expense of $699,757 related to this transaction based on the fair value of the common stock on the date of issue of $1.38 . This expense was included in "research and development costs" in the accompanying consolidated statements of operations. On April 1, 2016, the Company issued an aggregate of 591,582 shares of the Company's common stock to Cumulus Logic, LLC, as the final milestone payment pursuant to the terms of a Software License and Development Agreement between the Company and Cumulus Logic, LLC. The shares have an aggregate value of $892,500 based on the 30 day trading day average of the Company's common stock immediately prior to July 29, 2015, the date that the License and Development Agreement was executed. On April 1, 2016, the Company recognized share-based compensation expense of $786,804 related to this transaction based on the fair value of the common stock on the date of issue of $1.33 . This expense was included in "research and development costs" in the accompanying consolidated statements of operations.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2016
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, 2016 and 2015 , the Company recorded an income tax provision of $375,338 and $403,736 , respectively, consisting primarily of state and local and foreign taxes. The effective tax rate for the nine months ended September 30, 2016 and September 30, 2015 was (4.0%) and 97.1% , 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, 2016 , 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 2016 estimated annual effective tax rate. As of September 30, 2016 , the valuation allowance totaled approximately $39.5 million . The Company’s total unrecognized tax benefits, excluding interest, at both September 30, 2016 and December 31, 2015 were $217,289 . At September 30, 2016 , $331,762 of unrecognized tax benefits, including interest, if recognized, would reduce the Company’s effective tax rate. As of September 30, 2016 and December 31, 2015 , the Company had $114,473 and $100,202 , respectively, of accrued interest.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2016
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, 2016 and December 31, 2015 , the Level 1 category included money market funds and commercial paper, which are included within cash and cash equivalents in the condensed consolidated balance sheets. • Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly. At September 30, 2016 and December 31, 2015 , 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, 2016 and December 31, 2015 , 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, 2016 or December 31, 2015 . The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2016 : 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 $ 3,430,911 $ 3,430,911 $ — $ — Total cash equivalents 3,430,911 3,430,911 — — Marketable securities: Corporate debt and government securities 500,040 — 500,040 — Total marketable securities 500,040 — 500,040 — Derivative liabilities: Derivative Instruments 173,667 — — 173,667 Total derivative liabilities 173,667 — — 173,667 Total assets and liabilities measured at fair value $ 4,104,618 $ 3,430,911 $ 500,040 $ 173,667 The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 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 and commercial paper $ 2,725,094 $ 2,725,094 $ — $ — Total cash equivalents 2,725,094 2,725,094 — — Marketable securities: Corporate debt and government securities 7,420,042 — 7,420,042 — Total marketable securities 7,420,042 — 7,420,042 — Derivative liabilities: Derivative Instruments 82,024 — — 82,024 Total derivative liabilities 82,024 — — 82,024 Total assets and liabilities measured at fair value $ 10,227,160 $ 2,725,094 $ 7,420,042 $ 82,024 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, 2016 and September 30, 2015 : Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Beginning Balance $ 164,670 $ 100,561 $ 82,024 $ 137,171 Total loss (gain) recognized in earnings 8,997 (40,868 ) 91,643 (77,478 ) Ending Balance $ 173,667 $ 59,693 $ 173,667 $ 59,693

Marketable Securities

Marketable Securities	9 Months Ended
	Sep. 30, 2016
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, 2016 , were as follows: Aggregate Cost or Amortized Net Unrealized Government securities $ 500,040 $ 499,969 $ 71 Corporate debt securities — — — Marketable Securities $ 500,040 $ 499,969 $ 71 The cost and fair values of the Company’s available-for-sale marketable securities as of December 31, 2015 , were as follows: Aggregate Cost or Amortized Net Unrealized Government securities $ 6,560,303 $ 6,562,792 $ (2,489 ) Corporate debt securities 859,739 860,656 (917 ) Marketable Securities $ 7,420,042 $ 7,423,448 $ (3,406 ) The cost and fair values of available-for-sale securities by contractual maturity as of September 30, 2016 , were as follows: Fair Value Cost Due within one year $ 500,040 $ 499,969 Due after one year — — $ 500,040 $ 499,969

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2016
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 with expiration dates ranging from 2016 through 2018. The following is a schedule of future minimum lease payments for all operating leases as of September 30, 2016 : 2016 $ 538,561 2017 1,682,631 2018 1,400,649 2019 1,402,181 2020 1,444,247 Thereafter 491,020 $ 6,959,289 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, 2016 , the Company has not incurred any costs related to warranty obligations. Under the terms of substantially all of its software license agreements, the Company indemnifies 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, 2016 , there were no triggering events that would allow the holders of the Series A redeemable convertible preferred stock to require the Company to redeem any of the Series A redeemable convertible preferred stock. As of September 30, 2016 , we did not fail any financial or non-financial covenants related to our Series A redeemable convertible preferred stock, though the Company did not meet certain required targets for the three months ended September 30, 2016. Based on the Company's financial projections, the Company does not expect to meet certain of these required targets for the fourth quarter of 2016, which will result in the Company not being in compliance with the financial covenants of the Series A redeemable convertible preferred stock as of December 31, 2016. 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. If the Company is unable to obtain waivers, the Company may not have sufficient liquidity or have sufficient surplus as such term is defined under the Delaware General Corporation Law to undertake the redemption. If the Company does not redeem the Series A redeemable convertible preferred stock, the holder of the Series A redeemable convertible preferred stock can pursue other remedies. 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 restricted Company common stock will be valued as it is earned, and the resulting value will be recorded as an expense in the period in which the performance milestone is met and the stock is earned. As of September 30, 2016 , none of the performance milestones have been met, and therefore no restricted Company common stock has been issued. 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. As of September 30, 2016 , neither of the milestones related to this award have been met. 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, 2016 the restructuring accrual totaled $846,337 . 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, 2016 , our liability for uncertain tax positions totaled $331,762 . 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, 2016
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 salable 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. The holders of the Series A redeemable convertible preferred stock have veto power over certain future financings, and certain rights to participate in any subsequent financing, whether through debt or equity (subject to certain exclusions). In addition, the Company's agreements with the holders of the Series A redeemable convertible preferred stock provide that if, at the time of certain future debt or equity financings, the proceeds of which exceed $5.0 million , the holders of the Series A redeemable convertible preferred stock still have outstanding Series A redeemable convertible preferred stock, then the Company must offer to repurchase their Series A redeemable convertible preferred stock. The holders of the Series A redeemable convertible preferred stock have the right to accept the offer or to retain their Series A redeemable convertible preferred stock. If the Company does a financing, and the holders of the Series A redeemable convertible preferred stock elect to have their Series A redeemable convertible preferred stock repurchased, then the capital raised in excess of $5.0 million will go to repurchase the holders’ Series A redeemable convertible preferred stock, instead of being able to be used for our business. The Company cannot consummate a fundamental sale transaction in which the consideration is stock or a combination of cash and stock without the consent of the holder of the Series A redeemable convertible preferred stock. In addition to the veto rights set forth in the preceding paragraph, upon consummation of a fundamental sale transaction in which the consideration is cash and is not approved by the holder of the Series A redeemable convertible preferred stock, the Series A redeemable convertible preferred stock shall be redeemed at a per share redemption price equal to the greater of (i) 250% of the stated value of the Series A redeemable convertible preferred stock (which is currently equal to $22.5 million or $2.56 per share of common stock held by the holder of the Series A redeemable convertible preferred stock on an as converted basis as of September 30, 2016 ) and (ii) the price such holder would receive in the transaction on an as converted basis. 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, 2016 , there were no triggering events that would allow the holders of the Series A redeemable convertible preferred stock to require the Company to redeem any of the Series A redeemable convertible preferred stock. As of September 30, 2016 , we did not fail any financial or non-financial covenants related to our Series A redeemable convertible preferred stock, though the Company did not meet certain required targets for the three months ended September 30, 2016. Based on the Company's financial projections, the Company does not expect to meet certain of these required targets for the fourth quarter of 2016, which will result in the Company not being in compliance with the financial covenants of the Series A redeemable convertible preferred stock as of December 31, 2016. 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. If the Company is unable to obtain waivers, the Company may not have sufficient liquidity or have sufficient surplus as such term is defined under the Delaware General Corporation Law to undertake the redemption. If the Company does not redeem the Series A redeemable convertible preferred stock, the holder of the Series A redeemable convertible preferred stock can pursue other remedies. 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. The Company issued 103,200 , 143,737 and 186,062 shares of the Company's common stock to the holder of the Series A redeemable convertible preferred stock in January, May and July 2016, respectively, as payment for the fourth quarter 2015 and the first and second quarter 2016 dividends, respectively. As of September 30, 2016 , the Company's liability for dividends to the holders of the Series A redeemable convertible preferred stock totaled $194,012 . The Company intends to pay this dividend through the issuance of its common stock during the fourth quarter of 2016. 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, other than as set forth above; 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. The fair value of these derivative instruments and the loss (gain) recorded on the change in the fair value of these derivative instruments, which was included in “Interest and other (loss) income, net” within the condensed consolidated statement of operations, for the three months ended September 30, 2016 and 2015 , were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Beginning Balance $ 164,670 $ 100,561 $ 82,024 $ 137,171 Total loss (gain) recognized in earnings 8,997 (40,868 ) 91,643 (77,478 ) Ending Balance $ 173,667 $ 59,693 $ 173,667 $ 59,693 At the time of issuance the Company recorded transaction costs, a beneficial conversion feature and the fair value allocated to the embedded derivatives as discounts to the Series A redeemable convertible preferred stock. These costs 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 for accretion and accrued dividends as adjustments to net loss attributable to common stockholders on the condensed consolidated statement of operations for the three and nine months ended September 30, 2016 and 2015 . The following represents a reconciliation of net loss attributable to common stockholders for the three and nine months ended September 30, 2016 and 2015 : Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net (loss) income $ (1,976,173 ) $ (2,581,939 ) $ (9,807,667 ) $ 12,256 Effects of Series A redeemable convertible preferred stock: Less: Series A redeemable convertible preferred stock dividends 194,012 190,786 581,986 568,476 Less: Accretion to redemption value of Series A redeemable convertible preferred stock 178,619 149,969 513,269 430,943 Net loss attributable to common stockholders $ (2,348,804 ) $ (2,922,694 ) $ (10,902,922 ) $ (987,163 )

Accumulated Other Comprehensive

Accumulated Other Comprehensive Loss	9 Months Ended
	Sep. 30, 2016
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, 2016 are as follows: Foreign Currency Net Unrealized Gains (Losses) on Marketable Net Minimum Total Accumulated other comprehensive (loss) income at June 30, 2016 $ (2,288,570 ) $ 350 $ 31,040 $ (2,257,180 ) Other comprehensive income (loss) Other comprehensive income (loss) before reclassifications 59,527 (1,289 ) 2,616 60,854 Amounts reclassified from accumulated other comprehensive income (loss) — 1,010 1,258 2,268 Total other comprehensive income (loss) 59,527 (279 ) 3,874 63,122 Accumulated other comprehensive (loss) income at September 30, 2016 $ (2,229,043 ) $ 71 $ 34,914 $ (2,194,058 ) The changes in Accumulated Other Comprehensive (Loss) Income, net of tax, for the nine months ended September 30, 2016 are as follows: Foreign Currency Net Unrealized (Losses) Gains on Marketable Net Minimum Total Accumulated other comprehensive (loss) income at December 31, 2015 $ (1,726,994 ) $ (3,406 ) $ 27,186 $ (1,703,214 ) Other comprehensive (loss) income Other comprehensive (loss) income before reclassifications (502,049 ) 1,224 4,039 (496,786 ) Amounts reclassified from accumulated other comprehensive (loss) income — 2,253 3,689 5,942 Total other comprehensive (loss) income (502,049 ) 3,477 7,728 (490,844 ) Accumulated other comprehensive (loss) income at September 30, 2016 $ (2,229,043 ) $ 71 $ 34,914 $ (2,194,058 ) 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 (Losses) Gains on Marketable 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 ) For the three and nine months ended September 30, 2016 and 2015 , the amounts reclassified to net loss related to the Company’s defined benefit plan and maturity 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, 2016
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 and nine months ended September 30, 2016 and 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. As of September 30, 2016 , the Company had the authorization to repurchase 4,907,839 shares of its common stock based upon its judgment and market conditions. Independent Marketing Agreement 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 restricted Company common stock will be valued as it is earned, and the resulting value will be recorded as an expense in the period in which the performance milestone is met and the stock is earned. As of September 30, 2016 , none of the performance milestones have been met, and therefore no restricted Company common stock has been issued.

Litigation

Litigation	9 Months Ended
	Sep. 30, 2016
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. 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, 2016
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. Revenue from the United States to customers in the following geographical areas for the three and nine months ended September 30, 2016 and 2015 , and the location of long-lived assets as of September 30, 2016 and December 31, 2015 , are summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenue: Americas $ 1,856,175 $ 2,980,427 $ 6,909,801 $ 20,613,518 Asia Pacific 2,958,989 3,441,168 8,645,233 9,547,455 Europe, Middle East, Africa and Other 2,511,646 3,261,631 7,272,058 9,014,718 Total Revenue $ 7,326,810 $ 9,683,226 $ 22,827,092 $ 39,175,691 September 30, 2016 December 31, 2015 Long-lived assets: Americas $ 6,570,271 $ 7,519,787 Asia Pacific 622,935 650,633 Europe, Middle East, Africa and Other 118,133 168,241 Total long-lived assets $ 7,311,339 $ 8,338,661 For both the three and nine months ended September 30, 2016 , the Company had one customer, Hitachi Data Systems, that accounted for 11% of total revenue. For the three months ended September 30, 2015 , the Company had one customer, Hitachi Data Systems, that accounted for 15% of total revenue. For the nine months ended September 30, 2015, the Company had one customer, Violin Memory, Inc., that accounted for 29% of total revenue. As of September 30, 2016 , the Company had two customers, Datang Telecom International Technology Co., Ltd and Huawei Technologies Co., Ltd that accounted for 18% and 11% , respectively, of the gross accounts receivable balance. As of December 31, 2015 , the Company had two customers, Datang Telecom International Technology Co., Ltd and Hitachi Data Systems, that accounted for 11% and 10% , respectively, of the gross accounts receivable balance.

Restructuring Costs

Restructuring Costs	9 Months Ended
	Sep. 30, 2016
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 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 55,527 117,468 172,995 Utilized/Paid (161,313 ) (307,935 ) (469,248 ) Balance at December 31, 2015 $ 717,640 $ 15,022 $ 732,662 Provisions/Additions 76,030 7,954 83,984 Utilized/Paid (36,531 ) (18,315 ) (54,846 ) Balance at March 31, 2016 $ 757,139 $ 4,661 $ 761,800 Provisions/Additions 89,198 4,207 93,405 Utilized/Paid — (4,664 ) (4,664 ) Balance at June 30, 2016 $ 846,337 $ 4,204 $ 850,541 Provisions/Additions — — — Utilized/Paid — (4,204 ) (4,204 ) Balance at September 30, 2016 $ 846,337 $ — $ 846,337 The severance related liabilities are included within “accrued expenses” 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, 2016
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. As a global company, our vision is to deliver enterprise class, software-defined, intelligent data services combined with predictive analytics across any primary or secondary storage hardware, in the cloud or on premise. The Company mission is to help IT organizations realize more economic value out of existing environments and any future storage investments while reducing complexity, maximizing flexibility and improving operational efficiency. Our award-winning solutions are available and supported worldwide by OEMs as well as leading service providers, system integrators, resellers and the Company.
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 accounting principles generally accepted in the United States of America ("GAAP") 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 on 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 GAAP 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, 2016 , and the results of its operations for the three and nine months ended September 30, 2016 and 2015 . 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, 2015 (" 2015 Form 10-K").
Recently Adopted and Issued Accounting Pronouncements	Recently Adopted 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 amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, which for the Company was the first quarter of 2016. The adoption of this new accounting guidance by Company has not had any impact on the Company's consolidated financial position, results of operations or cash flows. 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 amendments in this update are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter, which for the Company is the annual period ending December 31, 2016. The adoption of this new accounting guidance by Company has not had any impact on the Company's consolidated financial position, results of operations or cash flows. (f) Recently Issued Accounting Pronouncements In August 2016, the FASB issued new guidance on presentation and classification of eight specific items within the statement of cash flows, including (i) debt prepayment or debt extinguishment costs, (ii) settlement of zero-coupon debt instruments or other debt instruments with coupon rates that are insignificant in relation to the effective interest rate of the borrowing, (iii) contingent consideration payments made after a business combination, (iv) proceeds from the settlement of insurance claims, (v) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, (vi) distributions received from equity method investees, (vii) beneficial interests in securitization transactions, and (viii) separately identifiable cash flows and application of the predominance principle. This update is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2017, which for the Company will be the annual period ending December 31, 2018. Early adoption, including adoption in an interim period, is permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements and related disclosures. In March 2016, the FASB issued new guidance on accounting for employee share-based payment awards to simplify the accounting related to several aspects of accounting for share-based payment transactions, including income tax consequences of share-based payment transactions, classification of awards as either equity or liabilities, forfeitures, and classification on the statement of cash flows. The new standard is effective for the annual period beginning after December 15, 2016, including interim reporting periods within that period, which for the Company will be the annual period ending December 31, 2017. Early adoption, including adoption in an interim period, is permitted. The standard requires the use of several transition methods including a modified retrospective transition method, retrospective method and prospective method. The Company is evaluating the effect that this new guidance will have on its consolidated financial statements and related disclosures. In February 2016, the FASB issued new guidance on leases to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This new guidance will replace existing guidance on leases in accounting principles generally accepted in the United States when it becomes effective. The new standard is effective for the annual period beginning after December 15, 2018, including interim reporting periods within that period, which for the Company will be the annual period ending December 31, 2019. Early application is permitted. The standard requires the use of a modified retrospective transition method; however, certain optional practical expedients may be applied. The Company is evaluating the effect that this new guidance will have on its consolidated financial statements and related disclosures. In January 2016, the FASB issued new guidance on the recognition, measurement, presentation and disclosure of financial assets and financial liabilities. The standard (i) requires an entity to measure equity investments, except those accounted for under the equity method of accounting or those that result in consolidation of the investee, at fair value with changes in fair value recognized in net income, (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring an entity to perform a qualitative assessment to identify impairment, (iii) changes certain presentation and disclosure requirements related to financial assets and financial liabilities, and (iv) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, which for the Company will be the annual period ending December 31, 2018. Early adoption, including adoption in an interim period, is not permitted except for certain amendments in this update. 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 the Company's financial results. In November 2015, the FASB issued new guidance which requires an entity to classify deferred tax liabilities and assets, along with any related valuation allowance, as non-current in its consolidated balance sheet. The amendments in this update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016, which for the Company will be the annual period ending December 31, 2017. 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 the Company's financial results. In May 2014, the FASB issued new guidance which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This new guidance will replace most existing revenue recognition guidance in Generally Accepted Accounting Principles in the United States when it becomes effective. The new standard is effective for the annual period beginning after December 15, 2017, including interim reporting periods 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 does not have 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 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.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2016
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, 2016 and 2015 : Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Stock options and restricted stock 6,677,895 7,948,021 6,677,895 7,948,021 Series A redeemable convertible preferred stock 8,781,516 8,781,516 8,781,516 8,781,516 Total anti-dilutive common stock equivalents 15,459,411 16,729,537 15,459,411 16,729,537
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, 2016 2015 2016 2015 Numerator Net (loss) income $ (1,976,173 ) $ (2,581,939 ) $ (9,807,667 ) $ 12,256 Effects of Series A redeemable convertible preferred stock: Less: Series A redeemable convertible preferred stock dividends 194,012 190,786 581,986 568,476 Less: Accretion to redemption value of Series A redeemable convertible preferred stock 178,619 149,969 513,269 430,943 Net loss attributable to common stockholders $ (2,348,804 ) $ (2,922,694 ) $ (10,902,922 ) $ (987,163 ) Denominator Weighted average basic shares outstanding 43,488,448 41,113,431 42,847,038 41,004,976 Effect of dilutive securities: Stock options and restricted stock — — — — Series A redeemable convertible preferred stock — — — — Weighted average diluted shares outstanding 43,488,448 41,113,431 42,847,038 41,004,976 EPS Basic net loss per share attributable to common stockholders $ (0.05 ) $ (0.07 ) $ (0.25 ) $ (0.02 ) Diluted net loss per share attributable to common stockholders $ (0.05 ) $ (0.07 ) $ (0.25 ) $ (0.02 )

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2016
Inventory Disclosure [Abstract]
Schedule of Inventory	At September 30, 2016 and December 31, 2015 , inventories are as follows: September 30, 2016 December 31, 2015 Finished systems $ 6,181 $ 70,534 Total Inventory $ 6,181 $ 70,534

Property and Equipment (Tables)

Property and Equipment (Tables)	9 Months Ended
	Sep. 30, 2016
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, 2016 and December 31, 2015 are as follows: September 30, 2016 December 31, 2015 Property and Equipment: Gross carrying amount $ 19,666,124 $ 19,513,607 Accumulated depreciation (18,536,559 ) (17,947,675 ) Property and Equipment, net $ 1,129,565 $ 1,565,932

Software Development Costs (Tab

Software Development Costs (Tables)	9 Months Ended
	Sep. 30, 2016
Research and Development [Abstract]
Summary of Software Development Costs	The gross carrying amount and accumulated amortization of software development costs as of September 30, 2016 and December 31, 2015 are as follows: September 30, 2016 December 31, 2015 Software development costs: Gross carrying amount $ 2,917,215 $ 3,037,215 Accumulated amortization (2,280,416 ) (1,920,399 ) Software development costs, net $ 636,799 $ 1,116,816

Goodwill and Other Intangible31

Goodwill and Other Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2016
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, 2016 and December 31, 2015 are as follows: September 30, 2016 December 31, 2015 Goodwill $ 4,150,339 $ 4,150,339 Other intangible assets: Gross carrying amount $ 3,702,691 $ 3,609,524 Accumulated amortization (3,474,808 ) (3,353,387 ) Net carrying amount $ 227,883 $ 256,137

Share-Based Payment Arrangeme32

Share-Based Payment Arrangements (Tables)	9 Months Ended
	Sep. 30, 2016
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, 2016 : Shares Shares Available Shares Last Date for Grant Name of Plan Authorized for Grant Outstanding of Shares FalconStor Software, Inc., 2016 Incentive Stock Plan 2,166,606 2,166,606 — April 27, 2026 FalconStor Software, Inc., 2016 Outside Directors Equity Compensation Plan 400,000 330,000 70,000 April 27, 2019
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, 2016 : Name of Plan Shares Available for Grant Shares Outstanding FalconStor Software, Inc., 2006 Incentive Stock Plan — 6,226,395 FalconStor Software, Inc., 2013 Outside Directors Equity Compensation Plan — 74,000 FalconStor Software, Inc., 2007 Outside Directors Equity Compensation Plan — 160,000 FalconStor Software, Inc., 2000 Stock Option Plan — 147,500
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, 2016 and 2015 : Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Cost of revenue - Product $ — $ — $ — $ — Cost of revenue - Support and Service 16,684 26,653 85,521 80,357 Research and development costs 80,310 57,478 1,652,107 228,993 Selling and marketing 88,907 73,575 231,979 225,155 General and administrative 88,305 214,467 422,555 638,442 $ 274,206 $ 372,173 $ 2,392,162 $ 1,172,947

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2016
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, 2016 : 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 $ 3,430,911 $ 3,430,911 $ — $ — Total cash equivalents 3,430,911 3,430,911 — — Marketable securities: Corporate debt and government securities 500,040 — 500,040 — Total marketable securities 500,040 — 500,040 — Derivative liabilities: Derivative Instruments 173,667 — — 173,667 Total derivative liabilities 173,667 — — 173,667 Total assets and liabilities measured at fair value $ 4,104,618 $ 3,430,911 $ 500,040 $ 173,667 The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 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 and commercial paper $ 2,725,094 $ 2,725,094 $ — $ — Total cash equivalents 2,725,094 2,725,094 — — Marketable securities: Corporate debt and government securities 7,420,042 — 7,420,042 — Total marketable securities 7,420,042 — 7,420,042 — Derivative liabilities: Derivative Instruments 82,024 — — 82,024 Total derivative liabilities 82,024 — — 82,024 Total assets and liabilities measured at fair value $ 10,227,160 $ 2,725,094 $ 7,420,042 $ 82,024
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, 2016 and September 30, 2015 : Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Beginning Balance $ 164,670 $ 100,561 $ 82,024 $ 137,171 Total loss (gain) recognized in earnings 8,997 (40,868 ) 91,643 (77,478 ) Ending Balance $ 173,667 $ 59,693 $ 173,667 $ 59,693

Marketable Securities (Tables)

Marketable Securities (Tables)	9 Months Ended
	Sep. 30, 2016
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, 2016 , were as follows: Aggregate Cost or Amortized Net Unrealized Government securities $ 500,040 $ 499,969 $ 71 Corporate debt securities — — — Marketable Securities $ 500,040 $ 499,969 $ 71 The cost and fair values of the Company’s available-for-sale marketable securities as of December 31, 2015 , were as follows: Aggregate Cost or Amortized Net Unrealized Government securities $ 6,560,303 $ 6,562,792 $ (2,489 ) Corporate debt securities 859,739 860,656 (917 ) Marketable Securities $ 7,420,042 $ 7,423,448 $ (3,406 )
Schedule of cost basis and fair value of available-for-sale securities by contractual maturity	The cost and fair values of available-for-sale securities by contractual maturity as of September 30, 2016 , were as follows: Fair Value Cost Due within one year $ 500,040 $ 499,969 Due after one year — — $ 500,040 $ 499,969

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2016
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, 2016 : 2016 $ 538,561 2017 1,682,631 2018 1,400,649 2019 1,402,181 2020 1,444,247 Thereafter 491,020 $ 6,959,289

Series A Redeemable Convertib36

Series A Redeemable Convertible Preferred Stock (Tables)	9 Months Ended
	Sep. 30, 2016
Equity [Abstract]
Embedded Derivative Instruments Rollforward	The fair value of these derivative instruments and the loss (gain) recorded on the change in the fair value of these derivative instruments, which was included in “Interest and other (loss) income, net” within the condensed consolidated statement of operations, for the three months ended September 30, 2016 and 2015 , were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Beginning Balance $ 164,670 $ 100,561 $ 82,024 $ 137,171 Total loss (gain) recognized in earnings 8,997 (40,868 ) 91,643 (77,478 ) Ending Balance $ 173,667 $ 59,693 $ 173,667 $ 59,693
Reconciliation of net (loss) income attributable to common stockholders	The following represents a reconciliation of net loss attributable to common stockholders for the three and nine months ended September 30, 2016 and 2015 : Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net (loss) income $ (1,976,173 ) $ (2,581,939 ) $ (9,807,667 ) $ 12,256 Effects of Series A redeemable convertible preferred stock: Less: Series A redeemable convertible preferred stock dividends 194,012 190,786 581,986 568,476 Less: Accretion to redemption value of Series A redeemable convertible preferred stock 178,619 149,969 513,269 430,943 Net loss attributable to common stockholders $ (2,348,804 ) $ (2,922,694 ) $ (10,902,922 ) $ (987,163 )

Accumulated Other Comprehensi37

Accumulated Other Comprehensive Loss (Tables)	9 Months Ended
	Sep. 30, 2016
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, 2016 are as follows: Foreign Currency Net Unrealized Gains (Losses) on Marketable Net Minimum Total Accumulated other comprehensive (loss) income at June 30, 2016 $ (2,288,570 ) $ 350 $ 31,040 $ (2,257,180 ) Other comprehensive income (loss) Other comprehensive income (loss) before reclassifications 59,527 (1,289 ) 2,616 60,854 Amounts reclassified from accumulated other comprehensive income (loss) — 1,010 1,258 2,268 Total other comprehensive income (loss) 59,527 (279 ) 3,874 63,122 Accumulated other comprehensive (loss) income at September 30, 2016 $ (2,229,043 ) $ 71 $ 34,914 $ (2,194,058 ) The changes in Accumulated Other Comprehensive (Loss) Income, net of tax, for the nine months ended September 30, 2016 are as follows: Foreign Currency Net Unrealized (Losses) Gains on Marketable Net Minimum Total Accumulated other comprehensive (loss) income at December 31, 2015 $ (1,726,994 ) $ (3,406 ) $ 27,186 $ (1,703,214 ) Other comprehensive (loss) income Other comprehensive (loss) income before reclassifications (502,049 ) 1,224 4,039 (496,786 ) Amounts reclassified from accumulated other comprehensive (loss) income — 2,253 3,689 5,942 Total other comprehensive (loss) income (502,049 ) 3,477 7,728 (490,844 ) Accumulated other comprehensive (loss) income at September 30, 2016 $ (2,229,043 ) $ 71 $ 34,914 $ (2,194,058 ) 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 (Losses) Gains on Marketable 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 )

Segment Reporting (Tables)

Segment Reporting (Tables)	9 Months Ended
	Sep. 30, 2016
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. Revenue from the United States to customers in the following geographical areas for the three and nine months ended September 30, 2016 and 2015 , and the location of long-lived assets as of September 30, 2016 and December 31, 2015 , are summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Revenue: Americas $ 1,856,175 $ 2,980,427 $ 6,909,801 $ 20,613,518 Asia Pacific 2,958,989 3,441,168 8,645,233 9,547,455 Europe, Middle East, Africa and Other 2,511,646 3,261,631 7,272,058 9,014,718 Total Revenue $ 7,326,810 $ 9,683,226 $ 22,827,092 $ 39,175,691 September 30, 2016 December 31, 2015 Long-lived assets: Americas $ 6,570,271 $ 7,519,787 Asia Pacific 622,935 650,633 Europe, Middle East, Africa and Other 118,133 168,241 Total long-lived assets $ 7,311,339 $ 8,338,661

Restructuring Costs (Tables)

Restructuring Costs (Tables)	9 Months Ended
	Sep. 30, 2016
Restructuring and Related Activities [Abstract]
Schedule Of Restructuring Costs	The following table summarizes the activity related to restructuring liabilities recorded in connection with the 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 55,527 117,468 172,995 Utilized/Paid (161,313 ) (307,935 ) (469,248 ) Balance at December 31, 2015 $ 717,640 $ 15,022 $ 732,662 Provisions/Additions 76,030 7,954 83,984 Utilized/Paid (36,531 ) (18,315 ) (54,846 ) Balance at March 31, 2016 $ 757,139 $ 4,661 $ 761,800 Provisions/Additions 89,198 4,207 93,405 Utilized/Paid — (4,664 ) (4,664 ) Balance at June 30, 2016 $ 846,337 $ 4,204 $ 850,541 Provisions/Additions — — — Utilized/Paid — (4,204 ) (4,204 ) Balance at September 30, 2016 $ 846,337 $ — $ 846,337

Basis of Presentation Basis of

Basis of Presentation Basis of Presentation (Detail Narrative)	Sep. 30, 2016USD ($)	Dec. 31, 2015USD ($)
Basis of Presentation [Abstract]
Working Capital Deficiency	$ 9,200,000
Deferred revenue, net	$ 14,589,751	$ 16,553,519
Number of Employees	185	226

Summary of Significant Accoun41

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Summary of Significant Accounting Policies [Abstract]
Product revenue from license agreement	$ 0	$ 11,300,000

Earnings Per Share (Details)

Earnings Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common stock equivalents	15,459,411	16,729,537	15,459,411	16,729,537
Stock options and restricted stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common stock equivalents	6,677,895	7,948,021	6,677,895	7,948,021
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, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Numerator
Net (loss) income	$ (1,976,173)	$ (2,581,939)	$ (9,807,667)	$ 12,256
Effects of Series A redeemable convertible preferred stock:
Less: Series A redeemable convertible preferred stock dividends	194,012	190,786	581,986	568,476
Less: Accretion to redemption value of Series A redeemable convertible preferred stock	178,619	149,969	513,269	430,943
Net loss attributable to common stockholders	$ (2,348,804)	$ (2,922,694)	$ (10,902,922)	$ (987,163)
Denominator
Weighted average basic shares outstanding (in shares)	43,488,448	41,113,431	42,847,038	41,004,976
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)	43,488,448	41,113,431	42,847,038	41,004,976
Basic net (loss) income per share attributable to common stockholders (in dollars per share)	$ (0.05)	$ (0.07)	$ (0.25)	$ (0.02)
Diluted net (loss) income per share attributable to common stockholders (in dollars per share)	$ (0.05)	$ (0.07)	$ (0.25)	$ (0.02)

Inventories (Details)

Inventories (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Finished systems	$ 6,181	$ 70,534
Total Inventory	$ 6,181	$ 70,534

Property and Equipment (Details

Property and Equipment (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Property, Plant and Equipment [Abstract]
Gross carrying amount	$ 19,666,124		$ 19,666,124		$ 19,513,607
Accumulated depreciation	(18,536,559)		(18,536,559)		(17,947,675)
Property and Equipment, net	1,129,565		1,129,565		$ 1,565,932
Depreciation expense	$ 154,948	$ 280,663	$ 560,324	$ 1,003,224

Software Development Costs (Det

Software Development Costs (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Research and Development [Abstract]
Gross carrying amount	$ 2,917,215		$ 2,917,215		$ 3,037,215
Accumulated amortization	(2,280,416)		(2,280,416)		(1,920,399)
Software development costs, net	636,799		636,799		$ 1,116,816
Capitalized computer software amortization	$ 99,654	$ 131,736	$ 360,017	$ 394,064

Goodwill and Other Intangible47

Goodwill and Other Intangible Assets (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 4,150,339		$ 4,150,339		$ 4,150,339
Other intangible assets:
Gross carrying amount	3,702,691		3,702,691		3,609,524
Accumulated amortization	(3,474,808)		(3,474,808)		(3,353,387)
Net carrying amount	227,883		227,883		$ 256,137
Amortization of intangible assets	$ 39,186	$ 40,167	$ 121,421	$ 113,859

Share-Based Payment Arrangeme48

Share-Based Payment Arrangements (Details) - shares	9 Months Ended
	Sep. 30, 2016	Jul. 01, 2016	Jun. 30, 2016	Apr. 27, 2016
FalconStor Software, Inc., 2016 Incentive Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Authorized	2,166,606	20,000,000		1,500,000
Shares Available for Grant	2,166,606	2,166,606	1,500,000
Shares Outstanding	0
Last date for grant of shares	Apr. 27, 2026
FalconStor Software, Inc., 2016 Outside Directors Equity Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Authorized	400,000			400,000
Shares Available for Grant	330,000
Shares Outstanding	70,000
Last date for grant of shares	Apr. 27, 2019

Share-Based Payment Arrangeme49

Share-Based Payment Arrangements (Details 1)	Sep. 30, 2016shares
FalconStor Software, Inc., 2006 Incentive Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Available for Grant	0
Shares Outstanding	6,226,395
FalconStor Software, Inc., 2013 Outside Directors Equity Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Available for Grant	0
Shares Outstanding	74,000
FalconStor Software, Inc., 2007 Outside Directors Equity Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Available for Grant	0
Shares Outstanding	160,000
FalconStor Software, Inc., 2000 Stock Option Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Available for Grant	0
Shares Outstanding	147,500

Share-Based Payment Arrangeme50

Share-Based Payment Arrangements (Details 2) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 274,206	$ 372,173	$ 2,392,162	$ 1,172,947
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	16,684	26,653	85,521	80,357
Research and development costs
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	80,310	57,478	1,652,107	228,993
Selling and marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	88,907	73,575	231,979	225,155
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 88,305	$ 214,467	$ 422,555	$ 638,442

Share-Based Payment Arrangeme51

Share-Based Payment Arrangements (Detail Narrative) - USD ($)	Jul. 01, 2016	Apr. 27, 2016	Apr. 01, 2016	Mar. 07, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Jun. 30, 2016	Dec. 31, 2015	Sep. 13, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, shares outstanding	43,332,111				43,555,673		43,555,673			41,666,747
Share-based compensation expense					$ 274,206	$ 372,173	$ 2,392,162	$ 1,172,947
Stock Price (in dollars per share)											$ 1.23
FalconStor Software, Inc., 2016 Incentive Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Authorized	20,000,000	1,500,000			2,166,606		2,166,606
Expiration period		10 years
Shares Available for Grant	2,166,606				2,166,606		2,166,606		1,500,000
Maximum Shares Outstanding Under Plan, Percentage	5.00%
Increase in shares authorized	666,606
FalconStor Software, Inc., 2016 Outside Directors Equity Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Authorized		400,000			400,000		400,000
Expiration period		10 years
Shares Available for Grant					330,000		330,000
Cumulus Logic, LLC | Non-Employee Consultants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock issued for services			$ 892,500	$ 765,000
Stock Price (in dollars per share)			$ 1.33	$ 1.38
Cumulus Logic, LLC | Non-Employee Consultants | Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock issued for services (in shares)			591,582	507,070
Research and development costs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense					$ 80,310	$ 57,478	$ 1,652,107	$ 228,993
Research and development costs | Cumulus Logic, LLC | Non-Employee Consultants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense			$ 786,804	$ 699,757

Income Taxes (Details Narrative

Income Taxes (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Income tax provision	$ 84,519	$ 134,280	$ 375,338	$ 403,736
Effective income tax rate			(4.00%)	97.10%
Valuation allowance	39,500,000		$ 39,500,000
Unrecognized tax benefits	217,289		217,289		$ 217,289
Unrecognized tax benefits, impact on effective tax rate	331,762		331,762
Unrecognized tax benefits, interest on income taxes accrued	$ 114,473		$ 114,473		$ 100,202

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($)	Sep. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Derivative liabilities:
Derivative Instruments	$ 173,667	$ 164,670	$ 82,024	$ 59,693	$ 100,561	$ 137,171
Recurring
Cash equivalents:
Total cash equivalents	3,430,911		2,725,094
Marketable securities:
Total marketable securities	500,040		7,420,042
Derivative liabilities:
Derivative Instruments	173,667		82,024
Total derivative liabilities	173,667		82,024
Total assets and liabilities measured at fair value	4,104,618		10,227,160
Fair Value, Inputs, Level 1 | Recurring
Cash equivalents:
Total cash equivalents	3,430,911		2,725,094
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	3,430,911		2,725,094
Fair Value, Inputs, Level 2 | Recurring
Cash equivalents:
Total cash equivalents	0		0
Marketable securities:
Total marketable securities	500,040		7,420,042
Derivative liabilities:
Derivative Instruments	0		0
Total derivative liabilities	0		0
Total assets and liabilities measured at fair value	500,040		7,420,042
Fair Value, Inputs, Level 3 | Recurring
Cash equivalents:
Total cash equivalents	0		0
Marketable securities:
Total marketable securities	0		0
Derivative liabilities:
Derivative Instruments	173,667		82,024
Total derivative liabilities	173,667		82,024
Total assets and liabilities measured at fair value	173,667		82,024
Corporate debt and government securities | Recurring
Marketable securities:
Total marketable securities	500,040		7,420,042
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	500,040		7,420,042
Corporate debt and government securities | Fair Value, Inputs, Level 3 | Recurring
Marketable securities:
Total marketable securities	0		0
Money Market Funds and Commercial Paper [Domain] | Recurring
Cash equivalents:
Total cash equivalents	3,430,911		2,725,094
Money Market Funds and Commercial Paper [Domain] | Fair Value, Inputs, Level 1 | Recurring
Cash equivalents:
Total cash equivalents	3,430,911		2,725,094
Money Market Funds and Commercial Paper [Domain] | Fair Value, Inputs, Level 2 | Recurring
Cash equivalents:
Total cash equivalents	0		0
Money Market Funds and Commercial Paper [Domain] | Fair Value, Inputs, Level 3 | Recurring
Cash equivalents:
Total cash equivalents	$ 0		$ 0

Fair Value Measurements (Deta54

Fair Value Measurements (Details 1) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	$ 164,670	$ 100,561	$ 82,024	$ 137,171
Total loss (gain) recognized in earnings	8,997	(40,868)	91,643	(77,478)
Ending Balance	$ 173,667	$ 59,693	$ 173,667	$ 59,693

Marketable Securities (Details)

Marketable Securities (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Aggregate Fair Value	$ 500,040	$ 7,420,042
Cost or Amortized Cost	499,969	7,423,448
Net Unrealized Gains (losses)	71	(3,406)
Government securities
Schedule of Available-for-sale Securities [Line Items]
Aggregate Fair Value	500,040	6,560,303
Cost or Amortized Cost	499,969	6,562,792
Net Unrealized Gains (losses)	71	(2,489)
Corporate debt securities
Schedule of Available-for-sale Securities [Line Items]
Aggregate Fair Value	0	859,739
Cost or Amortized Cost	0	860,656
Net Unrealized Gains (losses)	$ 0	$ (917)

Marketable Securities (Details

Marketable Securities (Details 1) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Fair Value	$ 500,040	$ 7,420,042
Cost	499,969	$ 7,423,448
Due within one year
Schedule of Available-for-sale Securities [Line Items]
Fair Value	500,040
Cost	499,969
Due after one year
Schedule of Available-for-sale Securities [Line Items]
Fair Value	0
Cost	$ 0

Commitments and Contingencies57

Commitments and Contingencies (Details)	Sep. 30, 2016USD ($)
Operating Lease Payment
2,016	$ 538,561
2,017	1,682,631
2,018	1,400,649
2,019	1,402,181
2,020	1,444,247
Thereafter	491,020
Total Future Minimum Lease Payments Due	$ 6,959,289

Commitments and Contingencies58

Commitments and Contingencies (Details Narrative)	Jul. 24, 2015USD ($)milestoneshares	Sep. 30, 2016USD ($)positionshares	Jun. 30, 2016USD ($)	Mar. 31, 2016USD ($)	Dec. 31, 2015USD ($)	Jul. 28, 2015shares	Dec. 31, 2014USD ($)	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		$ 331,762
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		$ 846,337	$ 850,541	$ 761,800	$ 732,662		$ 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
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
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		$ 846,337	$ 846,337	$ 757,139	$ 717,640		$ 823,426	$ 1,111,577
Severance related costs | Minimum
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Expected period for restructuring costs to be paid		3 months
Severance related costs | Maximum
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Expected period for restructuring costs to be paid		24 months
Restricted Common Stock
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Shares approved for issuance | shares	2,550,000
Expected period for shares to be issued as part of Share Agreement	24 months
Share Agreement, Shares Issued | shares		0

Series A Redeemable Convertib59

Series A Redeemable Convertible Preferred Stock (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Embedded Derivative [Roll Forward]
Derivative instruments, fair value			$ 82,024	$ 137,171
Derivative instruments, fair value	$ 173,667	$ 59,693	173,667	59,693
Interest and other loss, net
Embedded Derivative [Roll Forward]
Total loss (gain) recognized in earnings	$ 8,997	$ (40,868)	$ 91,643	$ (77,478)

Series A Redeemable Convertib60

Series A Redeemable Convertible Preferred Stock (Details 1) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Equity [Abstract]
Net (loss) income	$ (1,976,173)	$ (2,581,939)	$ (9,807,667)	$ 12,256
Less: Accrual of Series A redeemable convertible preferred stock dividends	194,012	190,786	581,986	568,476
Less: Accretion to redemption value of Series A redeemable convertible preferred stock	178,619	149,969	513,269	430,943
Net loss attributable to common stockholders	$ (2,348,804)	$ (2,922,694)	$ (10,902,922)	$ (987,163)

Series A Redeemable Convertib61

Series A Redeemable Convertible Preferred Stock (Details Narrative) - USD ($)	Sep. 16, 2013	Jul. 31, 2016	May 31, 2016	Jan. 31, 2016	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Sep. 13, 2013
Class of Stock [Line Items]
Series A redeemable convertible preferred stock issued					900,000	900,000
Series A redeemable convertible preferred stock, par value					$ 0.001	$ 0.001
Series A redeemable convertible preferred stock, purchase consideration (in millions)					$ 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
Series A redeemable convertible preferred stock, financing proceeds threshold					$ 5,000,000
Redeemable Convertible Preferred Stock Redemption Price Upon Fundamental Sale, Percentage of Per Share Purchase Price					250.00%
Redeemable Convertible Preferred Stock, Redemption Price Upon Fundamental Sale, Value					$ 22,500,000
Redeemable Convertible Preferred Stock, Redemption Price Upon Fundamental Sale, Per Share Purchase Price					$ 2.56
Upon certain triggering events holders can redeem					100.00%
Basis spread on Series A redeemable convertible preferred stock dividend, percentage					5.00%
Series A redeemable convertible 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%)
Series A redeemable convertible preferred stock dividend, minimum cash flow requirement					$ 1,000,000
Shares issued for Series A redeemable convertible preferred stock dividends		186,062	143,737	103,200
Undistributed Series A redeemable convertible preferred stock dividends					$ 194,012		$ 377,690
Stock Price (in dollars per share)								$ 1.23
Voting power								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.
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]
Series A redeemable convertible preferred stock, basis spread of dividend					10.00%
Basis spread on Series A redeemable convertible 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 Comprehensi62

Accumulated Other Comprehensive Loss (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance			$ (11,708,956)
Other comprehensive (loss) income
Other comprehensive (loss) income before reclassifications	$ 60,854	$ (98,882)	(496,786)	$ (122,385)
Amounts reclassified from accumulated other comprehensive (loss) income	2,268	1,533	5,942	4,542
Total other comprehensive income (loss), net of applicable taxes:	63,122	(97,349)	(490,844)	(117,843)
Accumulated other comprehensive (loss) income, ending balance	(20,133,781)		(20,133,781)
Accumulated Other Comprehensive loss, net
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance	(2,257,180)	(1,531,784)	(1,703,214)	(1,511,290)
Other comprehensive (loss) income
Accumulated other comprehensive (loss) income, ending balance	(2,194,058)	(1,629,133)	(2,194,058)	(1,629,133)
Foreign Currency Translation
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance	(2,288,570)	(1,567,473)	(1,726,994)	(1,536,495)
Other comprehensive (loss) income
Other comprehensive (loss) income before reclassifications	59,527	(93,045)	(502,049)	(124,023)
Amounts reclassified from accumulated other comprehensive (loss) income	0	0	0	0
Total other comprehensive income (loss), net of applicable taxes:	59,527	(93,045)	(502,049)	(124,023)
Accumulated other comprehensive (loss) income, ending balance	(2,229,043)	(1,660,518)	(2,229,043)	(1,660,518)
Net Unrealized Gains (Losses) on Marketable Securities
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance	350	3,268	(3,406)	(1,408)
Other comprehensive (loss) income
Other comprehensive (loss) income before reclassifications	(1,289)	1,511	1,224	6,536
Amounts reclassified from accumulated other comprehensive (loss) income	1,010	(82)	2,253	(431)
Total other comprehensive income (loss), net of applicable taxes:	(279)	1,429	3,477	6,105
Accumulated other comprehensive (loss) income, ending balance	71	4,697	71	4,697
Net Minimum Pension Liability
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance	31,040	32,421	27,186	26,613
Other comprehensive (loss) income
Other comprehensive (loss) income before reclassifications	2,616	(7,348)	4,039	(4,898)
Amounts reclassified from accumulated other comprehensive (loss) income	1,258	1,615	3,689	4,973
Total other comprehensive income (loss), net of applicable taxes:	3,874	(5,733)	7,728	75
Accumulated other comprehensive (loss) income, ending balance	$ 34,914	$ 26,688	$ 34,914	$ 26,688

Stockholders' Equity (Details N

Stockholders' Equity (Details Narrative) - USD ($)	Jul. 24, 2015	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	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	0	92,161
Stock repurchased during period, value			$ 0		$ 137,859
Stock repurchased during period, average cost per share (in dollars per share)			$ 0		$ 1.50
Remaining number of shares authorized for repurchased		4,907,839		4,907,839
Restricted Common Stock
Share-based Goods and Nonemployee Services Transaction [Line Items]
Shares approved for issuance	2,550,000
Expected period for shares to be issued as part of Share Agreement	24 months
Share Agreement, Shares Issued				0

Segment Reporting - Schedule Of

Segment Reporting - Schedule Of Segment Reporting By Geographical Areas (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Revenue:
Total revenue	$ 7,326,810	$ 9,683,226	$ 22,827,092	$ 39,175,691
Long-lived assets:
Total long-lived assets	7,311,339		7,311,339		$ 8,338,661
Americas
Revenue:
Total revenue	1,856,175	2,980,427	6,909,801	20,613,518
Long-lived assets:
Total long-lived assets	6,570,271		6,570,271		7,519,787
Asia Pacific
Revenue:
Total revenue	2,958,989	3,441,168	8,645,233	9,547,455
Long-lived assets:
Total long-lived assets	622,935		622,935		650,633
Europe, Middle East, Africa and Other
Revenue:
Total revenue	2,511,646	$ 3,261,631	7,272,058	$ 9,014,718
Long-lived assets:
Total long-lived assets	$ 118,133		$ 118,133		$ 168,241

Segment Reporting (Details Narr

Segment Reporting (Details Narrative) - customer	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Revenue
Revenue, Major Customer [Line Items]
Number of customers accounting for greater than 10% of accounts receivable or revenues	1	1	1	1
Accounts receivable
Revenue, Major Customer [Line Items]
Number of customers accounting for greater than 10% of accounts receivable or revenues			2		2
Datang Telecom International Technology Co., Ltd [Member] | Customer concentration risk | Accounts receivable
Revenue, Major Customer [Line Items]
Percentage accounted for by one customer			18.00%		11.00%
Huawei Technologies Co., Ltd [Member] | Customer concentration risk | Accounts receivable
Revenue, Major Customer [Line Items]
Percentage accounted for by one customer			11.00%
Hitachi Data Systems [Member] | Customer concentration risk | Revenue
Revenue, Major Customer [Line Items]
Percentage accounted for by one customer	11.00%	15.00%	11.00%
Hitachi Data Systems [Member] | Customer concentration risk | Accounts receivable
Revenue, Major Customer [Line Items]
Percentage accounted for by one customer					10.00%
Violin Memory Inc. [Member] | Customer concentration risk | Revenue
Revenue, Major Customer [Line Items]
Percentage accounted for by one customer				29.00%

Restructuring Costs - Schedule

Restructuring Costs - Schedule Of Restructuring Costs (Details) - USD ($)	3 Months Ended				9 Months Ended		12 Months Ended
	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Restructuring Reserve [Roll Forward]
Provisions/Additions	$ 0			$ 15,024	$ 177,389	$ 172,995
Utilized/Paid					(63,714)	(469,247)
Restructuring Costs Under the 2013 Plan
Restructuring Reserve [Roll Forward]
Beginning Balance	850,541	$ 761,800	$ 732,662		732,662	1,028,915	$ 1,028,915	$ 1,306,493
Provisions/Additions	0	93,405	83,984				172,995	1,135,310	$ 3,606,020
Utilized/Paid	(4,204)	(4,664)	(54,846)				(469,248)	(1,412,888)	(2,299,527)
Ending Balance	846,337	850,541	761,800		846,337		732,662	1,028,915	1,306,493
Severance related costs | Restructuring Costs Under the 2013 Plan
Restructuring Reserve [Roll Forward]
Beginning Balance	846,337	757,139	717,640		717,640	823,426	823,426	1,111,577
Provisions/Additions	0	89,198	76,030				55,527	365,174	3,179,131
Utilized/Paid	0	0	(36,531)				(161,313)	(653,325)	(2,067,554)
Ending Balance	846,337	846,337	757,139		846,337		717,640	823,426	1,111,577
Facility and other costs | Restructuring Costs Under the 2013 Plan
Restructuring Reserve [Roll Forward]
Beginning Balance	4,204	4,661	15,022		15,022	$ 205,489	205,489	194,916
Provisions/Additions	0	4,207	7,954				117,468	770,136	426,889
Utilized/Paid	(4,204)	(4,664)	(18,315)				(307,935)	(759,563)	(231,973)
Ending Balance	$ 0	$ 4,204	$ 4,661		$ 0		$ 15,022	$ 205,489	$ 194,916

Restructuring Costs (Details Na

Restructuring Costs (Details Narrative)	9 Months Ended
	Sep. 30, 2016position
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]
Expected period for restructuring costs to be paid	3 months
Maximum | Severance related costs
Restructuring Cost and Reserve [Line Items]
Expected period for restructuring costs to be paid	24 months