FalconStor Software (FALC) 10-Q 11 Aug 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Jul. 31, 2017
Document And Entity Information
Entity Registrant Name	FALCONSTOR SOFTWARE INC
Entity Central Index Key	922,521
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		44,563,490
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,017

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 1,647,695	$ 3,391,528
Accounts receivable, net of allowances of $359,475 and $260,676, respectively	2,986,927	5,003,972
Prepaid expenses and other current assets	875,598	1,245,085
Inventory	6,181	6,181
Total current assets	5,516,401	9,646,766
Property and equipment, net of accumulated depreciation of $18,387,382 and $18,580,547, respectively	858,978	1,174,942
Deferred tax assets, net	580,395	577,735
Software development costs, net	396,630	547,558
Other assets	1,010,247	973,949
Goodwill	4,150,339	4,150,339
Other intangible assets, net	174,200	209,456
Total assets	12,687,190	17,280,745
Current liabilities:
Accounts payable	685,384	419,877
Accrued expenses	3,783,381	4,471,010
Deferred revenue, net	13,998,843	15,236,123
Total current liabilities	18,467,608	20,127,010
Other long-term liabilities	1,217,275	1,170,844
Deferred tax liabilities, net	267,174	254,776
Deferred revenue, net	7,272,609	8,430,692
Total liabilities	27,224,666	29,983,322
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	9,000,000	9,000,000
Stockholders' deficit:
Common stock - $.001 par value, 100,000,000 shares authorized, 60,054,060 and 59,482,989 shares issued, respectively and 44,525,990 and 43,954,919 shares outstanding, respectively	60,054	59,483
Additional paid-in capital	169,187,879	169,091,255
Accumulated deficit	(133,734,683)	(131,982,685)
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	(2,017,809)	(1,837,713)
Total stockholders' deficit	(23,537,476)	(21,702,577)
Total liabilities and stockholders' deficit	$ 12,687,190	$ 17,280,745

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Allowances on accounts receivable	$ 359,475	$ 260,676
Accumulated depreciation	$ 18,387,382	$ 18,580,547
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	60,054,060	59,482,989
Common stock, shares outstanding	44,525,990	43,954,919
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		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenue:
Product revenue	$ 2,499,655	$ 2,939,594	$ 4,420,707	$ 5,220,452
Support and services revenue	4,234,671	5,128,357	8,352,734	10,279,830
Total revenue	6,734,326	8,067,951	12,773,441	15,500,282
Cost of revenue:
Product	351,969	319,974	550,684	564,247
Support and service	1,418,663	1,999,125	2,672,579	3,761,345
Total cost of revenue	1,770,632	2,319,099	3,223,263	4,325,592
Gross profit	4,963,694	5,748,852	9,550,178	11,174,690
Operating expenses:
Research and development costs	2,025,132	3,304,079	4,319,995	6,960,856
Selling and marketing	2,109,599	4,124,350	4,160,141	8,393,150
General and administrative	1,345,343	1,833,479	2,966,894	3,539,404
Restructuring	0	93,405	(236,302)	177,389
Total operating expenses	5,480,074	9,355,313	11,210,728	19,070,799
Operating loss	(516,380)	(3,606,461)	(1,660,550)	(7,896,109)
Interest and other (loss) income, net	(29,121)	237,251	125,800	355,434
Loss before income taxes	(545,501)	(3,369,210)	(1,534,750)	(7,540,675)
Provision for income taxes	94,300	165,672	217,248	290,819
Net loss	(639,801)	(3,534,882)	(1,751,998)	(7,831,494)
Less: Accrual of Series A redeemable convertible preferred stock dividends	215,089	195,366	419,664	387,974
Less: Accretion to redemption value of Series A redeemable convertible preferred stock	0	170,981	0	334,650
Net loss attributable to common stockholders	$ (854,890)	$ (3,901,229)	$ (2,171,662)	$ (8,554,118)
Basic net loss per share attributable to common stockholders (in dollars per share)	$ (0.02)	$ (0.09)	$ (0.05)	$ (0.20)
Diluted net loss per share attributable to common stockholders (in dollars per share)	$ (0.02)	$ (0.09)	$ (0.05)	$ (0.20)
Weighted average basic shares outstanding (in shares)	44,440,751	43,159,285	44,265,525	42,521,018
Weighted average diluted shares outstanding (in shares)	44,440,751	43,159,285	44,265,525	42,521,018

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Statement of Comprehensive Income [Abstract]
Net loss	$ (639,801)	$ (3,534,882)	$ (1,751,998)	$ (7,831,494)
Other comprehensive income (loss), net of applicable taxes:
Foreign currency translation	5,433	(334,161)	(180,096)	(561,576)
Net unrealized gain on marketable securities	0	(283)	0	3,756
Net minimum pension liability	0	678	0	3,854
Total other comprehensive income (loss), net of applicable taxes:	5,433	(333,766)	(180,096)	(553,966)
Total comprehensive loss	(634,368)	(3,868,648)	(1,932,094)	(8,385,460)
Less: Accrual of Series A redeemable convertible preferred stock dividends	215,089	195,366	419,664	387,974
Less: Accretion to redemption value of Series A redeemable convertible preferred stock	0	170,981	0	334,650
Total comprehensive loss attributable to common stockholders	$ (849,457)	$ (4,234,995)	$ (2,351,758)	$ (9,108,084)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities:
Net loss	$ (1,751,998)	$ (7,831,494)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	553,455	747,974
Share-based payment compensation	501,410	637,231
Non-cash professional services expenses	41,159	1,480,725
Loss on disposal of fixed assets	63,774	0
Provision for returns and doubtful accounts	99,312	61,068
Deferred income taxes	30,124	(265,756)
Changes in operating assets and liabilities:
Accounts receivable	1,961,276	1,787,845
Prepaid expenses and other current assets	403,937	377,103
Inventory	0	64,353
Other assets	(154,832)	23,429
Accounts payable	193,640	(42,587)
Accrued expenses and other long-term liabilities	(1,098,547)	(289,754)
Deferred revenue	(2,487,989)	(541,348)
Net cash used in operating activities	(1,645,279)	(3,791,211)
Cash flows from investing activities:
Sales of marketable securities	0	6,066,000
Purchases of marketable securities	0	(150,000)
Purchases of property and equipment	(44,163)	(110,421)
Security deposits	(17,152)	82,311
Purchase of intangible assets	(45,517)	(61,506)
Net cash (used in) provided by investing activities	(106,832)	5,826,384
Cash flows from financing activities:
Payments for tax withholding for share-based compensation	(25,710)	0
Net cash used in financing activities	(25,710)	0
Effect of exchange rate changes on cash and cash equivalents	33,988	(123,221)
Net (decrease) increase in cash and cash equivalents	(1,743,833)	1,911,952
Cash and cash equivalents, beginning of period	3,391,528	6,013,382
Cash and cash equivalents, end of period	1,647,695	7,925,334
Supplemental disclosures:
Cash paid for income taxes, net	135,915	443,908
Non-cash investing and financing activities:
Undistributed Series A redeemable convertible preferred stock dividends	419,664	195,366
Series A redeemable convertible preferred stock dividend payment	$ 0	$ 381,413

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Statement of Cash Flows [Abstract]
Interest Paid	$ 0	$ 0

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jun. 30, 2017
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 storage software company offering a converged data services software platform that is hardware agnostic. The Company develops, manufactures and sells data migration, business continuity, disaster recovery, optimized backup and de-duplication solutions and provides the related maintenance, implementation and engineering services. (b) Going Concern A fundamental principle of the preparation of financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") is the assumption that an entity will continue in existence as a going concern, which contemplates continuity of operations and the realization of assets and settlement of liabilities occurring in the ordinary course of business. This principle is applicable to all entities except for entities in liquidation or entities for which liquidation appears imminent. In accordance with this requirement, the Company has prepared its consolidated financial statements on a going concern basis. The Company has incurred significant operating losses in the previous eight years and negative cash flow from operations in five of the previous eight years. The Company currently has a working capital deficiency of $13.0 million , which is inclusive of current deferred revenue of $14.0 million and a stockholders' deficit of $23.5 million . During the six months ended June 30, 2017 , the Company incurred a net loss of $1.8 million and cash flow used in operations of $1.6 million . The Company's total cash balance at June 30, 2017 was $1.6 million , a decrease of $1.7 million as compared to December 31, 2016 . In addition to these financial metrics, as of December 31, 2016, the Company was not in compliance with the financial covenants of the Series A redeemable convertible preferred stock, which were mutually agreed to annually, for two consecutive quarters. This breach provides the holder of the Series A redeemable convertible preferred stock with the right to require the Company to redeem any of the Series A redeemable convertible preferred stock at 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 of the Company's common stock as of December 31, 2016. To date, the holder of the Series A redeemable convertible preferred stock has neither exercised nor waived this right and accordingly this right may be exercised at any time. In addition, the holders of the Series A redeemable convertible preferred stock have the right to request a redemption of the Series A redeemable convertible preferred stock on or after August 5, 2017. If the holders request that the Series A redeemable convertible preferred stock be redeemed, the Company may not have sufficient liquidity or sufficient surplus as such term is defined under the Delaware General Business Corporation Law ("DGCL") 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 (11) Series A Redeemable Convertible Preferred Stock for further discussion regarding these other remedies. The Company's reduced cash balance and history of losses both in and of itself, and in combination with the redemption rights of the holders of the Series A redeemable convertible preferred stock, raise substantial doubt about the Company's ability to continue as a going concern within one year after August 11, 2017 (the date that these financial statements were issued). The Company's ability to continue as a going concern, including in the event of a redemption request by the holder, depends on its ability to execute its business plan, increase revenue and billings and reduce expenditures. During 2016, the Company continued to focus on aligning its expense structure with revenue expectations which 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. In June 2017, the Company's Board of Directors, approved a comprehensive plan to increase operating performance (the “2017 Plan”). The 2017 Plan will result in a realignment and reduction in workforce. The 2017 Plan was substantially completed as of June 30, 2017. These actions are anticipated to result in an annualized cost savings of approximately $10.0 million . In connection with the 2017 Plan, the Company incurred severance expense of $0.8 million . In making these changes, the Company prioritized customer support and development while consolidating operations and cutting direct sales resources, therefore allowing the company to focus on its install base and develop more efficient market channels. The Company's worldwide headcount was 97 employees as of June 30, 2017 , compared with 166 and 226 employees as of December 31, 2016 and 2015 , respectively. Although, the Company was able to reduce its operating expenses, the Company's bookings, billings and revenue continued to decline which negatively impacts the Company's ability to continue as a going concern. There is no assurance that the Company will be successful in generating sufficient bookings, billings, revenue or continue to reduce operating costs. In addition, if the Company continues to incur losses, the Company will need to seek additional financing and there can be no assurance that the Company will be able to obtain financing or that such financing will be on favorable terms. Any such financing would be dilutive to our shareholders. Failure to generate sufficient revenue, billings, control or further reduce expenditures and/or the inability to obtain financing will result in an inability of the Company to continue as a going concern. (c) 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. (d) Use of Estimates The preparation of financial statements in conformity with 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. (e) 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 June 30, 2017 , and the results of its operations for the three and six months ended June 30, 2017 and 2016 . 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, 2016 (" 2016 Form 10-K"). (f) Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board ("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 Company adopted this guidance as of January 1, 2017. In accordance with this new guidance the Company has made an entity-wide accounting policy election to account for forfeitures when they occur. As a result of this election, the Company recognized additional stock-based compensation expense of approximately $0.1 million in the first quarter of 2017 to adjust for actual forfeitures on historical share-based payment awards. In January 2017, the FASB issued new guidance on accounting for goodwill to simplify the goodwill impairment test by eliminating Step 2 of the goodwill impairment test. This new guidance also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. The new standard is effective for the annual period beginning after December 15, 2019, including interim reporting periods within that period, which for the Company is the annual period ending December 31, 2020. Early adoption is permitted. The Company elected to adopt this guidance as of January 1, 2017, prospectively for impairment tests performed subsequent to January 1, 2017. The Company's single reporting unit for purposes of its goodwill impairment test had a negative carrying value of $13.8 million as of March 31, 2017 and thus the Company determined there was no impairment of goodwill. During the second quarter of 2017 there were no triggering events that would require a goodwill impairment test to be performed prior to the Company's annual goodwill impairment test. The adoption of this guidance did not have an impact on the Company's financial statements and related disclosures. (g) Recently Issued Accounting Pronouncements In May 2017, the FASB issued new guidance on stock-based compensation to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the stock-based compensation guidance to a change to the terms or conditions of a share-based payment award. The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This new guidance requires application on a prospective basis. This update is effective for public entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted, which for the Company will be the annual period ending December 31, 2018. 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 statements and related disclosures. In March 2017, the FASB issued new guidance on retirement benefits, which requires employers to disaggregate the service cost component from other components of net periodic benefit costs and to disclose the amounts of net periodic benefit costs that are included in each income statement line item. The standard requires employers to report the service cost component in the same line item as other compensation costs and to report the other components of net periodic benefit costs (which include interest costs, expected return on plan assets, amortization of prior service cost or credits and actuarial gains and losses) separately and outside a subtotal of operating income. The income statement guidance requires application on a retrospective basis. This update is effective for public entities for annual periods beginning after December 15, 2017, including interim periods, with early adoption permitted, which for the Company will be the annual period ending December 31, 2018. 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 statements and related disclosures. 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 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 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's preliminary analysis indicates that the Company will recognize a liability for remaining lease payments and a right-of-use asset related to the Company's operating lease covering its corporate office facility that expires in April 2021. Currently the Company's additional operating leases related to offices in foreign countries are set to expire prior to adoption of the new guidance. The Company is in the initial stages of evaluating the effect of the standard on the Company's financial statements. 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 statements and related disclosures. In May 2014, the FASB issued new guidance which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This new guidance will replace most existing revenue recognition guidance in GAAP 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 formed an implementation team to evaluate the standard's effect on the Company's financial statements. The Company has historically deferred revenue for certain deliverables in its multiple-element arrangements due to a lack of vendor-specific objective evidence (“VSOE”) for those deliverables. The Company's preliminary analysis indicates that the Company will recognize revenue for these arrangements earlier under the new standard than under existing guidance due to the elimination of the VSOE requirement. The Company will use the cumulative effect transition method upon adoption of this guidance. The Company is in the initial stages of evaluating the effect of the standard on the Company's financial statements.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2017
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 2016 Form 10-K. The Company's revenue recognition accounting policy is included below for reference. There have been no significant changes in the Company's significant accounting policies since December 31, 2016 , other than those noted below in (b) and (c). For a description of the Company's other significant accounting policies refer to the 2016 Form 10-K. (a) 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 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. (b) Share-Based Payments The Company accounts for share-based payments in accordance with the authoritative guidance issued by the FASB on share-based compensation, which establishes the accounting for transactions in which an entity exchanges its equity instruments for goods or services. Under the provisions of the authoritative guidance, share-based compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite employee service period (generally the vesting period), net of actual forfeitures. For share-based payment awards that contain performance criteria share-based compensation, expense is recorded when the achievement of the performance condition is considered probable of achievement and is recorded on a straight-line basis over the requisite service period. If such performance criteria are not met, no compensation cost is recognized and any recognized compensation cost is reversed. The Company estimates the fair value of share-based payments using the Black-Scholes option-pricing model or the Monte Carlo simulation model if a market condition exists. Share-based compensation expense for a share-based payment award with a market condition is recorded on a straight-line basis over the longer of the explicit service period or the service period derived from the Monte Carlo simulation. Additionally, share-based awards to non-employees are expensed over the period in which the related services are rendered at their fair value. All share-based awards are expected to be fulfilled with new shares of common stock. (c) Goodwill and Other Intangible Assets Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired in business combinations. The Company has not amortized goodwill related to its acquisitions, but instead tests the balance for impairment. The Company evaluates goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate that the carrying value may not be recoverable. The Company tests goodwill for impairment by comparing the book value of net assets to the fair value of the reporting unit. If the fair value is determined to be less than the book value, the computed difference represents the amount of impairment. The Company's single reporting unit for purposes of its goodwill impairment test has a negative carrying value of $13.8 million as of March 31, 2017 and thus the Company has determined there was no impairment of goodwill. During the second quarter of 2017, there were no triggering events that would require a goodwill impairment test to be performed prior to the Company's annual goodwill impairment test.

Earnings Per Share

Earnings Per Share	6 Months Ended
	Jun. 30, 2017
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 six months ended June 30, 2017 and 2016 : Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Stock options and restricted stock 6,427,858 7,692,595 6,427,858 7,692,595 Series A redeemable convertible preferred stock 8,781,516 8,781,516 8,781,516 8,781,516 Total anti-dilutive common stock equivalents 15,209,374 16,474,111 15,209,374 16,474,111 The following represents a reconciliation of the numerators and denominators of the basic and diluted EPS computation: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Numerator Net loss $ (639,801 ) $ (3,534,882 ) $ (1,751,998 ) $ (7,831,494 ) Effects of Series A redeemable convertible preferred stock: Less: Series A redeemable convertible preferred stock dividends 215,089 195,366 419,664 387,974 Less: Accretion to redemption value of Series A redeemable convertible preferred stock — 170,981 — 334,650 Net loss attributable to common stockholders $ (854,890 ) $ (3,901,229 ) $ (2,171,662 ) $ (8,554,118 ) Denominator Weighted average basic shares outstanding 44,440,751 43,159,285 44,265,525 42,521,018 Effect of dilutive securities: Stock options and restricted stock — — — — Series A redeemable convertible preferred stock — — — — Weighted average diluted shares outstanding 44,440,751 43,159,285 44,265,525 42,521,018 EPS Basic net loss per share attributable to common stockholders $ (0.02 ) $ (0.09 ) $ (0.05 ) $ (0.20 ) Diluted net loss per share attributable to common stockholders $ (0.02 ) $ (0.09 ) $ (0.05 ) $ (0.20 )

Property and Equipment

Property and Equipment	6 Months Ended
	Jun. 30, 2017
Property, Plant and Equipment [Abstract]
Property and Equipment	Property and Equipment The gross carrying amount and accumulated depreciation of property and equipment as of June 30, 2017 and December 31, 2016 are as follows: June 30, 2017 December 31, 2016 Property and Equipment: Gross carrying amount $ 19,246,360 $ 19,755,489 Accumulated depreciation (18,387,382 ) (18,580,547 ) Property and Equipment, net $ 858,978 $ 1,174,942 For the three months ended June 30, 2017 and 2016 , depreciation expense was $135,669 and $180,475 , respectively. For the six months ended June 30, 2017 and 2016 , depreciation expense was $321,754 and $405,376 , respectively.

Software Development Costs

Software Development Costs	6 Months Ended
	Jun. 30, 2017
Research and Development [Abstract]
Software Development Costs	Software Development Costs The gross carrying amount and accumulated amortization of software development costs as of June 30, 2017 and December 31, 2016 are as follows: June 30, 2017 December 31, 2016 Software development costs: Gross carrying amount $ 2,917,215 $ 2,917,215 Accumulated amortization (2,520,585 ) (2,369,657 ) Software development costs, net $ 396,630 $ 547,558 During the three months ended June 30, 2017 and 2016 , the Company recorded $61,687 and $129,870 , respectively, of amortization expense related to capitalized software costs. During the six months ended June 30, 2017 and 2016 , the Company recorded $150,928 and $260,363 , respectively, of amortization expense related to capitalized software costs.

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets	6 Months Ended
	Jun. 30, 2017
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 June 30, 2017 and December 31, 2016 are as follows: June 30, 2017 December 31, 2016 Goodwill $ 4,150,339 $ 4,150,339 Other intangible assets: Gross carrying amount $ 3,770,954 $ 3,725,437 Accumulated amortization (3,596,754 ) (3,515,981 ) Net carrying amount $ 174,200 $ 209,456 For the three months ended June 30, 2017 and 2016 , amortization expense was $39,858 and $40,758 , respectively. For the six months ended June 30, 2017 and 2016 , amortization expense was $80,773 and $82,235 , respectively.

Share-Based Payment Arrangement

Share-Based Payment Arrangements	6 Months Ended
	Jun. 30, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-Based Payment Arrangements	Share-Based Payment Arrangements On June 30, 2017, the total shares available for issuance under the FalconStor Software, Inc. 2016 Incentive Stock Plan (the "2016 Plan") totaled 145,220 . 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, 2017, the total number of outstanding shares of the Company’s common stock totaled 44,525,990 . Pursuant to the 2016 Plan, the total shares available for issuance under the 2016 Plan thus increased 2,081,080 to 2,226,300 shares available for issuance as of July 1, 2017. The following table summarizes the plans under which the Company was able to grant equity compensation as of June 30, 2017 : Shares Shares Available Shares Last Date for Grant Name of Plan Authorized for Grant Outstanding of Shares FalconStor Software, Inc., 2016 Incentive Stock Plan 2,166,606 145,220 1,500,000 April 27, 2026 FalconStor Software, Inc., 2016 Outside Directors Equity Compensation Plan 1,000,000 583,532 409,868 April 27, 2019 The following table summarizes the Company’s equity plans that have expired but that still have equity awards outstanding as of June 30, 2017 : Name of Plan Shares Available for Grant Shares Outstanding FalconStor Software, Inc., 2006 Incentive Stock Plan — 4,410,290 FalconStor Software, Inc., 2013 Outside Directors Equity Compensation Plan — 10,200 FalconStor Software, Inc., 2000 Stock Option Plan — 97,500 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 six months ended June 30, 2017 and 2016 : Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Cost of revenue - Product $ — $ — $ — $ — Cost of revenue - Support and Service 8,834 44,066 65,285 68,837 Research and development costs 54,813 825,635 184,528 1,571,797 Selling and marketing 7,198 75,342 63,738 143,072 General and administrative 26,310 182,303 229,018 334,250 $ 97,155 $ 1,127,346 $ 542,569 $ 2,117,956 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 per share 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 per share of the common stock on the date of issue of $1.33 .

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2017
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 six months ended June 30, 2017 and 2016 , the Company recorded an income tax provision of $217,248 and $290,819 , respectively, consisting primarily of state and local and foreign taxes. The effective tax rate for the six months ended June 30, 2017 and June 30, 2016 was (14.2%) and (3.9%) , 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 June 30, 2017 , 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 2017 estimated annual effective tax rate. As of June 30, 2017 , the valuation allowance totaled approximately $40.4 million . The Company’s total unrecognized tax benefits, excluding interest, at both June 30, 2017 and December 31, 2016 were $217,461 . At June 30, 2017 , $337,881 of unrecognized tax benefits, including interest, if recognized, would reduce the Company’s effective tax rate. As of June 30, 2017 and December 31, 2016 , the Company had $120,420 and $111,278 , respectively, of accrued interest.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 2017
Fair Value Disclosures [Abstract]
Fair Value Measurements	Fair Value Measurements The Company measures its cash equivalents 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 June 30, 2017 the Company did not have any Level 1 category assets included in the condensed consolidated balance sheets. At December 31, 2016 , the Level 1 category included money market funds, which are included within cash and cash equivalents in the condensed consolidated balance sheets. • Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly. At June 30, 2017 and December 31, 2016 , the Company did not have any Level 2 category assets included 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 June 30, 2017 and December 31, 2016 , 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 categorized as Level 3 as of June 30, 2017 or December 31, 2016 . The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at June 30, 2017 : 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 $ — $ — $ — $ — Total cash equivalents — — — — Derivative liabilities: Derivative Instruments 419,560 — — 419,560 Total derivative liabilities 419,560 — — 419,560 Total assets and liabilities measured at fair value $ 419,560 $ — $ — $ 419,560 The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 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 and commercial paper $ 1,133,280 $ 1,133,280 $ — $ — Total cash equivalents 1,133,280 1,133,280 — — Derivative liabilities: Derivative Instruments 336,862 — — 336,862 Total derivative liabilities 336,862 — — 336,862 Total assets and liabilities measured at fair value $ 1,470,142 $ 1,133,280 $ — $ 336,862 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 six months ended June 30, 2017 and June 30, 2016 : Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Beginning Balance $ 355,612 $ 133,229 $ 336,862 $ 82,024 Total loss recognized in earnings 63,948 31,441 82,698 82,646 Ending Balance $ 419,560 $ 164,670 $ 419,560 $ 164,670

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2017
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 2017 through 2019. The following is a schedule of future minimum lease payments for all operating leases as of June 30, 2017 : 2017 $ 976,176 2018 1,958,440 2019 1,611,627 2020 1,444,247 2021 491,020 Thereafter — $ 6,481,510 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 six months ended June 30, 2017 , 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 December 31, 2016, the Company was not in compliance with the financial covenants of the Series A redeemable convertible preferred stock for two consecutive quarters, which provides the Series A redeemable convertible preferred stockholders the right to require the Company to redeem any of the Series A redeemable convertible preferred stock at 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 of the Company's common stock as of December 31, 2016. To date, the holders of the Series A redeemable convertible preferred stock have neither exercised nor waived this right and accordingly this right may be exercised at any time. As of June 30, 2017 , the Company did not fail any non-financial covenants related to the Company's Series A redeemable convertible preferred stock. 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 was to be issued based on certain milestone achievements and/or transactions over a twenty-four month period. The Independent Marketing Agreement with RFN Prime Marketing Inc., was terminated effective March 31, 2017 and none of the performance milestones had been met, and therefore no restricted Company common stock was 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. The Quinn Employment Agreement automatically renewed on July 24, 2016 for an additional twelve (12) months. 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 June 30, 2017 , neither of the milestones related to this award have been met. Mr. Quinn resigned from all his positions with the Company effective July 1, 2017. On July 1, 2017, Todd Oseth was appointed Chief Executive Officer of the Company. In connection with this appointment the Board of Director's approved an offer letter to Mr. Oseth (the "Offer Letter") which was executed on June 14, 2017. The Offer Letter provides that Mr. Oseth is entitled to receive an annualized base salary of $350,000 . Mr. Oseth will also be eligible for an annual cash bonus of up to $227,500 , subject to attainment of performance objectives to be mutually agreed upon and established. Pursuant to the offer letter, it is the intention of the Company to create an equity plan for all employees subject to stockholder approval, for up to 20% of the equity of the Company on a fully diluted basis at the time the equity plan is adopted following stockholder approval. Vesting of the equity issued under the plan would occur only upon a sale of the Company’s assets or capital stock at a premium to the valuation of the Company at the time the equity plan is adopted. Mr. Oseth’s employment can be terminated at will. If Mr. Oseth’s employment is terminated by the Company other than for cause he is entitled to receive severance equal to twelve (12) months of his base salary if (i) he has been employed by the Company for at least twelve (12) months at the time of termination or (ii) a change of control has occurred within six months of Mr. Oseth’s employment. Except as set forth in the preceding sentence, Mr. Oseth is entitled to receive severance equal to six (6) months of his base salary if he has been employed by the Company for less than six months and his employment was terminated by the Company without cause. 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 expected 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 June 30, 2017 , the restructuring accrual totaled $571,694 . 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 June 30, 2017 , the Company's liability for uncertain tax positions totaled $337,881 . 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	6 Months Ended
	Jun. 30, 2017
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 Series A redeemable convertible preferred stockholders, the Company can convert the Series A 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 Series A 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 holder of the Series A redeemable convertible preferred stock has 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 agreement with the holder 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 holder of the Series A redeemable convertible preferred stock still has outstanding Series A redeemable convertible preferred stock, then the Company must offer to repurchase their Series A redeemable convertible preferred stock. The holder of the Series A redeemable convertible preferred stock has the right to accept the offer or to retain their Series A redeemable convertible preferred stock. If the Company does a financing, and the holder of the Series A redeemable convertible preferred stock elects 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 June 30, 2017 ) and (ii) the price such holder would receive in the transaction on an as converted basis. In addition in the event of the liquidation of the Company or a Fundamental Transaction of the Company (which includes a merger or sale of the Company), the holders of the Series A redeemable convertible preferred stock shall be entitled to receive from the proceeds of the transaction, prior to the holders of the Common Stock, an amount equal to 100% of the stated value plus accrued and unpaid dividends. The stated value and accrued and unpaid dividends of the Series A redeemable convertible preferred stock at June 30, 2017 is $9.6 million . 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 stockholder 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 holder 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 holder 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 holder of the Series A redeemable convertible preferred stock control of the Company. As of December 31, 2016, the Company was not in compliance with the financial covenants of the Series A redeemable convertible preferred stock for two consecutive quarters, which provides the Series A redeemable convertible preferred stockholder the right to require the Company to redeem any of the Series A redeemable convertible preferred stock at 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 of the Company's common stock as of December 31, 2016. To date, the holder of the Series A redeemable convertible preferred stock has neither exercised nor waived this right and accordingly this right may be exercised at any time. As of June 30, 2017 , the Company did not fail any non-financial covenants related to the Company's Series A redeemable convertible preferred stock. The holder of the Series A redeemable convertible preferred stock is entitled to receive quarterly dividends at the Prime Rate (Wall Street Journal Eastern Edition) plus 5% (up to a maximum amount of 10%) , payable in cash, provided, that if the Company will not have at least $1.0 million in positive cash flow for any calendar quarter after giving effect to the payment of such dividends, the Company, at its election, can pay such dividends in whole or in part in cash, provided that cash flow from operations is not negative, and the remainder can be accrued or paid in common stock to the extent certain equity conditions are satisfied. As of December 31, 2016, March 31, 2017 and June 30, 2017, due to the lack of sufficient surplus to pay dividends as required by the DGCL, the Company was not permitted to pay the fourth quarter 2016 and first and second quarter 2017 dividends in cash or through the issuance of the Company's common stock and accrued the aforementioned dividends. As of June 30, 2017 , the Company's liability for dividends to the holder of the Series A redeemable convertible preferred stock totaled $615,568 . Each share of Series A redeemable convertible preferred stock has a vote equal to the number of shares of common stock into which the Series A 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, holder 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 recorded on the change in the fair value of these derivative instruments, which was included in “Interest and other income, net” within the condensed consolidated statement of operations, for the three and six months ended June 30, 2017 and 2016 , were as follows: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Beginning Balance $ 355,612 $ 133,229 $ 336,862 $ 82,024 Total loss recognized in earnings 63,948 31,441 82,698 82,646 Ending Balance $ 419,560 $ 164,670 $ 419,560 $ 164,670 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 were 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. This accretion was accelerated as of December 31, 2016 due to the failure of the financial covenants and the redemption right of the holders as noted above. 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 six months ended June 30, 2017 and 2016 . The following represents a reconciliation of net loss attributable to common stockholders for the three and six months ended June 30, 2017 and 2016 : Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Net loss $ (639,801 ) $ (3,534,882 ) $ (1,751,998 ) $ (7,831,494 ) Effects of Series A redeemable convertible preferred stock: Less: Series A redeemable convertible preferred stock dividends 215,089 195,366 419,664 387,974 Less: Accretion to redemption value of Series A redeemable convertible preferred stock — 170,981 — 334,650 Net loss attributable to common stockholders $ (854,890 ) $ (3,901,229 ) $ (2,171,662 ) $ (8,554,118 )

Accumulated Other Comprehensive

Accumulated Other Comprehensive Loss	6 Months Ended
	Jun. 30, 2017
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 June 30, 2017 are as follows: Foreign Currency Net Unrealized Gains (Losses) on Marketable Net Minimum Total Accumulated other comprehensive (loss) income at March 31, 2017 $ (2,051,917 ) $ — $ 28,675 $ (2,023,242 ) Other comprehensive loss Other comprehensive loss before reclassifications 5,433 — — 5,433 Amounts reclassified from accumulated other comprehensive loss — — — — Total other comprehensive loss 5,433 — — 5,433 Accumulated other comprehensive (loss) income at June 30, 2017 $ (2,046,484 ) $ — $ 28,675 $ (2,017,809 ) The changes in Accumulated Other Comprehensive (Loss) Income, net of tax, for the six months ended June 30, 2017 are as follows: Foreign Currency Net Unrealized (Losses) Gains on Marketable Net Minimum Total Accumulated other comprehensive (loss) income at December 31, 2016 $ (1,866,388 ) $ — $ 28,675 $ (1,837,713 ) Other comprehensive (loss) income Other comprehensive (loss) income before reclassifications (180,096 ) — — (180,096 ) Amounts reclassified from accumulated other comprehensive (loss) income — — — — Total other comprehensive (loss) income (180,096 ) — — (180,096 ) Accumulated other comprehensive (loss) income at June 30, 2017 $ (2,046,484 ) $ — $ 28,675 $ (2,017,809 ) The changes in Accumulated Other Comprehensive (Loss) Income, net of tax, for the three months ended June 30, 2016 are as follows: Foreign Currency Net Unrealized Net Minimum Total Accumulated other comprehensive (loss) income at March 31, 2016 $ (1,954,409 ) $ 633 $ 30,362 $ (1,923,414 ) Other comprehensive (loss) income Other comprehensive (loss) income before reclassifications (334,161 ) (81 ) (550 ) (334,792 ) Amounts reclassified from accumulated other comprehensive (loss) income — (202 ) 1,228 1,026 Total other comprehensive (loss) income (334,161 ) (283 ) 678 (333,766 ) Accumulated other comprehensive (loss) income at June 30, 2016 $ (2,288,570 ) $ 350 $ 31,040 $ (2,257,180 ) The changes in Accumulated Other Comprehensive (Loss) Income, net of tax, for the six months ended June 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 (561,576 ) 2,513 1,423 (557,640 ) Amounts reclassified from accumulated other comprehensive (loss) income — 1,243 2,431 3,674 Total other comprehensive (loss) income (561,576 ) 3,756 3,854 (553,966 ) Accumulated other comprehensive (loss) income at June 30, 2016 $ (2,288,570 ) $ 350 $ 31,040 $ (2,257,180 ) For the three and six months ended June 30, 2017 , 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 ” within the condensed consolidated statements of operations.

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Jun. 30, 2017
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 six months ended June 30, 2017 and 2016 , the Company did not repurchase any shares of its common stock. As of June 30, 2017 , the Company had the authorization to repurchase 4,907,839 shares of its common stock based upon its judgment and market conditions.

Litigation

Litigation	6 Months Ended
	Jun. 30, 2017
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.

Segment Reporting

Segment Reporting	6 Months Ended
	Jun. 30, 2017
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 six months ended June 30, 2017 and 2016 , and the location of long-lived assets as of June 30, 2017 and December 31, 2016 , are summarized as follows: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Revenue: Americas $ 2,040,247 $ 2,667,901 $ 3,641,494 $ 5,053,626 Asia Pacific 2,445,409 2,949,051 4,696,486 5,686,244 Europe, Middle East, Africa and Other 2,248,670 2,450,999 4,435,461 4,760,412 Total Revenue $ 6,734,326 $ 8,067,951 $ 12,773,441 $ 15,500,282 June 30, 2017 December 31, 2016 Long-lived assets: Americas $ 6,058,326 $ 6,525,612 Asia Pacific 852,238 890,051 Europe, Middle East, Africa and Other 260,225 218,316 Total long-lived assets $ 7,170,789 $ 7,633,979 For both the three and six months ended June 30, 2017 , the Company had no customers that accounted for 10% or more of total revenue. For both the three and six months ended June 30, 2016 , the Company had one customer, Hitachi Data Systems, that accounted for 11% of total revenue. As of June 30, 2017 , the Company had no customers that accounted for 10% or more of the gross accounts receivable balance. As of December 31, 2016 , the Company had three customers, Datang Telecom International Technology Co., Ltd, Hitachi Data Systems and Huawei Technologies Co., Ltd, that accounted for 15% , 14% and 12% , respectively, of the gross accounts receivable balance.

Restructuring Costs

Restructuring Costs	6 Months Ended
	Jun. 30, 2017
Restructuring and Related Activities [Abstract]
Restructuring Costs	Restructuring Costs 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 expected 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 during 2017 related to restructuring liabilities recorded in connection with the 2013 Plan: Severance related costs Balance at December 31, 2016 $ 846,337 Provisions/Additions (236,302 ) Utilized/Paid — Balance at March 31, 2017 $ 610,035 Provisions/Additions — Utilized/Paid (38,341 ) Balance at June 30, 2017 $ 571,694 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)	6 Months Ended
	Jun. 30, 2017
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 storage software company offering a converged data services software platform that is hardware agnostic. The Company develops, manufactures and sells data migration, business continuity, disaster recovery, optimized backup and de-duplication solutions and provides the related maintenance, implementation and engineering services.
Substantial Doubt about Going Concern [Text Block]	Going Concern A fundamental principle of the preparation of financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") is the assumption that an entity will continue in existence as a going concern, which contemplates continuity of operations and the realization of assets and settlement of liabilities occurring in the ordinary course of business. This principle is applicable to all entities except for entities in liquidation or entities for which liquidation appears imminent. In accordance with this requirement, the Company has prepared its consolidated financial statements on a going concern basis. The Company has incurred significant operating losses in the previous eight years and negative cash flow from operations in five of the previous eight years. The Company currently has a working capital deficiency of $13.0 million , which is inclusive of current deferred revenue of $14.0 million and a stockholders' deficit of $23.5 million . During the six months ended June 30, 2017 , the Company incurred a net loss of $1.8 million and cash flow used in operations of $1.6 million . The Company's total cash balance at June 30, 2017 was $1.6 million , a decrease of $1.7 million as compared to December 31, 2016 . In addition to these financial metrics, as of December 31, 2016, the Company was not in compliance with the financial covenants of the Series A redeemable convertible preferred stock, which were mutually agreed to annually, for two consecutive quarters. This breach provides the holder of the Series A redeemable convertible preferred stock with the right to require the Company to redeem any of the Series A redeemable convertible preferred stock at 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 of the Company's common stock as of December 31, 2016. To date, the holder of the Series A redeemable convertible preferred stock has neither exercised nor waived this right and accordingly this right may be exercised at any time. In addition, the holders of the Series A redeemable convertible preferred stock have the right to request a redemption of the Series A redeemable convertible preferred stock on or after August 5, 2017. If the holders request that the Series A redeemable convertible preferred stock be redeemed, the Company may not have sufficient liquidity or sufficient surplus as such term is defined under the Delaware General Business Corporation Law ("DGCL") 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 (11) Series A Redeemable Convertible Preferred Stock for further discussion regarding these other remedies. The Company's reduced cash balance and history of losses both in and of itself, and in combination with the redemption rights of the holders of the Series A redeemable convertible preferred stock, raise substantial doubt about the Company's ability to continue as a going concern within one year after August 11, 2017 (the date that these financial statements were issued). The Company's ability to continue as a going concern, including in the event of a redemption request by the holder, depends on its ability to execute its business plan, increase revenue and billings and reduce expenditures. During 2016, the Company continued to focus on aligning its expense structure with revenue expectations which 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. In June 2017, the Company's Board of Directors, approved a comprehensive plan to increase operating performance (the “2017 Plan”). The 2017 Plan will result in a realignment and reduction in workforce. The 2017 Plan was substantially completed as of June 30, 2017. These actions are anticipated to result in an annualized cost savings of approximately $10.0 million . In connection with the 2017 Plan, the Company incurred severance expense of $0.8 million . In making these changes, the Company prioritized customer support and development while consolidating operations and cutting direct sales resources, therefore allowing the company to focus on its install base and develop more efficient market channels. The Company's worldwide headcount was 97 employees as of June 30, 2017 , compared with 166 and 226 employees as of December 31, 2016 and 2015 , respectively. Although, the Company was able to reduce its operating expenses, the Company's bookings, billings and revenue continued to decline which negatively impacts the Company's ability to continue as a going concern. There is no assurance that the Company will be successful in generating sufficient bookings, billings, revenue or continue to reduce operating costs. In addition, if the Company continues to incur losses, the Company will need to seek additional financing and there can be no assurance that the Company will be able to obtain financing or that such financing will be on favorable terms. Any such financing would be dilutive to our shareholders. Failure to generate sufficient revenue, billings, control or further reduce expenditures and/or the inability to obtain financing will result in an inability of the Company to continue as a going concern.
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 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 June 30, 2017 , and the results of its operations for the three and six months ended June 30, 2017 and 2016 . 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, 2016 (" 2016 Form 10-K").
Recently Adopted and Issued Accounting Pronouncements	Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board ("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 Company adopted this guidance as of January 1, 2017. In accordance with this new guidance the Company has made an entity-wide accounting policy election to account for forfeitures when they occur. As a result of this election, the Company recognized additional stock-based compensation expense of approximately $0.1 million in the first quarter of 2017 to adjust for actual forfeitures on historical share-based payment awards. In January 2017, the FASB issued new guidance on accounting for goodwill to simplify the goodwill impairment test by eliminating Step 2 of the goodwill impairment test. This new guidance also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. The new standard is effective for the annual period beginning after December 15, 2019, including interim reporting periods within that period, which for the Company is the annual period ending December 31, 2020. Early adoption is permitted. The Company elected to adopt this guidance as of January 1, 2017, prospectively for impairment tests performed subsequent to January 1, 2017. The Company's single reporting unit for purposes of its goodwill impairment test had a negative carrying value of $13.8 million as of March 31, 2017 and thus the Company determined there was no impairment of goodwill. During the second quarter of 2017 there were no triggering events that would require a goodwill impairment test to be performed prior to the Company's annual goodwill impairment test. The adoption of this guidance did not have an impact on the Company's financial statements and related disclosures. (g) Recently Issued Accounting Pronouncements In May 2017, the FASB issued new guidance on stock-based compensation to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying the stock-based compensation guidance to a change to the terms or conditions of a share-based payment award. The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. This new guidance requires application on a prospective basis. This update is effective for public entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted, which for the Company will be the annual period ending December 31, 2018. 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 statements and related disclosures. In March 2017, the FASB issued new guidance on retirement benefits, which requires employers to disaggregate the service cost component from other components of net periodic benefit costs and to disclose the amounts of net periodic benefit costs that are included in each income statement line item. The standard requires employers to report the service cost component in the same line item as other compensation costs and to report the other components of net periodic benefit costs (which include interest costs, expected return on plan assets, amortization of prior service cost or credits and actuarial gains and losses) separately and outside a subtotal of operating income. The income statement guidance requires application on a retrospective basis. This update is effective for public entities for annual periods beginning after December 15, 2017, including interim periods, with early adoption permitted, which for the Company will be the annual period ending December 31, 2018. 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 statements and related disclosures. 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 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 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's preliminary analysis indicates that the Company will recognize a liability for remaining lease payments and a right-of-use asset related to the Company's operating lease covering its corporate office facility that expires in April 2021. Currently the Company's additional operating leases related to offices in foreign countries are set to expire prior to adoption of the new guidance. The Company is in the initial stages of evaluating the effect of the standard on the Company's financial statements. 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 statements and related disclosures. In May 2014, the FASB issued new guidance which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This new guidance will replace most existing revenue recognition guidance in GAAP 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 formed an implementation team to evaluate the standard's effect on the Company's financial statements. The Company has historically deferred revenue for certain deliverables in its multiple-element arrangements due to a lack of vendor-specific objective evidence (“VSOE”) for those deliverables. The Company's preliminary analysis indicates that the Company will recognize revenue for these arrangements earlier under the new standard than under existing guidance due to the elimination of the VSOE requirement. The Company will use the cumulative effect transition method upon adoption of this guidance. The Company is in the initial stages of evaluating the effect of the standard on the Company's financial statements.
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 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.
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]	Share-Based Payments The Company accounts for share-based payments in accordance with the authoritative guidance issued by the FASB on share-based compensation, which establishes the accounting for transactions in which an entity exchanges its equity instruments for goods or services. Under the provisions of the authoritative guidance, share-based compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite employee service period (generally the vesting period), net of actual forfeitures. For share-based payment awards that contain performance criteria share-based compensation, expense is recorded when the achievement of the performance condition is considered probable of achievement and is recorded on a straight-line basis over the requisite service period. If such performance criteria are not met, no compensation cost is recognized and any recognized compensation cost is reversed. The Company estimates the fair value of share-based payments using the Black-Scholes option-pricing model or the Monte Carlo simulation model if a market condition exists. Share-based compensation expense for a share-based payment award with a market condition is recorded on a straight-line basis over the longer of the explicit service period or the service period derived from the Monte Carlo simulation. Additionally, share-based awards to non-employees are expensed over the period in which the related services are rendered at their fair value. All share-based awards are expected to be fulfilled with new shares of common stock.
Goodwill and Intangible Assets, Policy [Policy Text Block]	Goodwill and Other Intangible Assets Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired in business combinations. The Company has not amortized goodwill related to its acquisitions, but instead tests the balance for impairment. The Company evaluates goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate that the carrying value may not be recoverable. The Company tests goodwill for impairment by comparing the book value of net assets to the fair value of the reporting unit. If the fair value is determined to be less than the book value, the computed difference represents the amount of impairment. The Company's single reporting unit for purposes of its goodwill impairment test has a negative carrying value of $13.8 million as of March 31, 2017 and thus the Company has determined there was no impairment of goodwill. During the second quarter of 2017, there were no triggering events that would require a goodwill impairment test to be performed prior to the Company's annual goodwill impairment test.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Jun. 30, 2017
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 six months ended June 30, 2017 and 2016 : Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Stock options and restricted stock 6,427,858 7,692,595 6,427,858 7,692,595 Series A redeemable convertible preferred stock 8,781,516 8,781,516 8,781,516 8,781,516 Total anti-dilutive common stock equivalents 15,209,374 16,474,111 15,209,374 16,474,111
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 June 30, Six Months Ended June 30, 2017 2016 2017 2016 Numerator Net loss $ (639,801 ) $ (3,534,882 ) $ (1,751,998 ) $ (7,831,494 ) Effects of Series A redeemable convertible preferred stock: Less: Series A redeemable convertible preferred stock dividends 215,089 195,366 419,664 387,974 Less: Accretion to redemption value of Series A redeemable convertible preferred stock — 170,981 — 334,650 Net loss attributable to common stockholders $ (854,890 ) $ (3,901,229 ) $ (2,171,662 ) $ (8,554,118 ) Denominator Weighted average basic shares outstanding 44,440,751 43,159,285 44,265,525 42,521,018 Effect of dilutive securities: Stock options and restricted stock — — — — Series A redeemable convertible preferred stock — — — — Weighted average diluted shares outstanding 44,440,751 43,159,285 44,265,525 42,521,018 EPS Basic net loss per share attributable to common stockholders $ (0.02 ) $ (0.09 ) $ (0.05 ) $ (0.20 ) Diluted net loss per share attributable to common stockholders $ (0.02 ) $ (0.09 ) $ (0.05 ) $ (0.20 )

Property and Equipment (Tables)

Property and Equipment (Tables)	6 Months Ended
	Jun. 30, 2017
Property, Plant and Equipment [Abstract]
Schedule of Property and Equipment	The gross carrying amount and accumulated depreciation of property and equipment as of June 30, 2017 and December 31, 2016 are as follows: June 30, 2017 December 31, 2016 Property and Equipment: Gross carrying amount $ 19,246,360 $ 19,755,489 Accumulated depreciation (18,387,382 ) (18,580,547 ) Property and Equipment, net $ 858,978 $ 1,174,942

Software Development Costs (Tab

Software Development Costs (Tables)	6 Months Ended
	Jun. 30, 2017
Research and Development [Abstract]
Summary of Software Development Costs	The gross carrying amount and accumulated amortization of software development costs as of June 30, 2017 and December 31, 2016 are as follows: June 30, 2017 December 31, 2016 Software development costs: Gross carrying amount $ 2,917,215 $ 2,917,215 Accumulated amortization (2,520,585 ) (2,369,657 ) Software development costs, net $ 396,630 $ 547,558

Goodwill and Other Intangible28

Goodwill and Other Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2017
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 June 30, 2017 and December 31, 2016 are as follows: June 30, 2017 December 31, 2016 Goodwill $ 4,150,339 $ 4,150,339 Other intangible assets: Gross carrying amount $ 3,770,954 $ 3,725,437 Accumulated amortization (3,596,754 ) (3,515,981 ) Net carrying amount $ 174,200 $ 209,456

Share-Based Payment Arrangeme29

Share-Based Payment Arrangements (Tables)	6 Months Ended
	Jun. 30, 2017
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 June 30, 2017 : Shares Shares Available Shares Last Date for Grant Name of Plan Authorized for Grant Outstanding of Shares FalconStor Software, Inc., 2016 Incentive Stock Plan 2,166,606 145,220 1,500,000 April 27, 2026 FalconStor Software, Inc., 2016 Outside Directors Equity Compensation Plan 1,000,000 583,532 409,868 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 June 30, 2017 : Name of Plan Shares Available for Grant Shares Outstanding FalconStor Software, Inc., 2006 Incentive Stock Plan — 4,410,290 FalconStor Software, Inc., 2013 Outside Directors Equity Compensation Plan — 10,200 FalconStor Software, Inc., 2000 Stock Option Plan — 97,500
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 six months ended June 30, 2017 and 2016 : Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Cost of revenue - Product $ — $ — $ — $ — Cost of revenue - Support and Service 8,834 44,066 65,285 68,837 Research and development costs 54,813 825,635 184,528 1,571,797 Selling and marketing 7,198 75,342 63,738 143,072 General and administrative 26,310 182,303 229,018 334,250 $ 97,155 $ 1,127,346 $ 542,569 $ 2,117,956

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2017
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 June 30, 2017 : 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 $ — $ — $ — $ — Total cash equivalents — — — — Derivative liabilities: Derivative Instruments 419,560 — — 419,560 Total derivative liabilities 419,560 — — 419,560 Total assets and liabilities measured at fair value $ 419,560 $ — $ — $ 419,560 The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 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 and commercial paper $ 1,133,280 $ 1,133,280 $ — $ — Total cash equivalents 1,133,280 1,133,280 — — Derivative liabilities: Derivative Instruments 336,862 — — 336,862 Total derivative liabilities 336,862 — — 336,862 Total assets and liabilities measured at fair value $ 1,470,142 $ 1,133,280 $ — $ 336,862
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 six months ended June 30, 2017 and June 30, 2016 : Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Beginning Balance $ 355,612 $ 133,229 $ 336,862 $ 82,024 Total loss recognized in earnings 63,948 31,441 82,698 82,646 Ending Balance $ 419,560 $ 164,670 $ 419,560 $ 164,670

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
	Jun. 30, 2017
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 June 30, 2017 : 2017 $ 976,176 2018 1,958,440 2019 1,611,627 2020 1,444,247 2021 491,020 Thereafter — $ 6,481,510

Series A Redeemable Convertib32

Series A Redeemable Convertible Preferred Stock (Tables)	6 Months Ended
	Jun. 30, 2017
Equity [Abstract]
Embedded Derivative Instruments Rollforward	The fair value of these derivative instruments and the loss recorded on the change in the fair value of these derivative instruments, which was included in “Interest and other income, net” within the condensed consolidated statement of operations, for the three and six months ended June 30, 2017 and 2016 , were as follows: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Beginning Balance $ 355,612 $ 133,229 $ 336,862 $ 82,024 Total loss recognized in earnings 63,948 31,441 82,698 82,646 Ending Balance $ 419,560 $ 164,670 $ 419,560 $ 164,670
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 six months ended June 30, 2017 and 2016 : Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Net loss $ (639,801 ) $ (3,534,882 ) $ (1,751,998 ) $ (7,831,494 ) Effects of Series A redeemable convertible preferred stock: Less: Series A redeemable convertible preferred stock dividends 215,089 195,366 419,664 387,974 Less: Accretion to redemption value of Series A redeemable convertible preferred stock — 170,981 — 334,650 Net loss attributable to common stockholders $ (854,890 ) $ (3,901,229 ) $ (2,171,662 ) $ (8,554,118 )

Accumulated Other Comprehensi33

Accumulated Other Comprehensive Loss (Tables)	6 Months Ended
	Jun. 30, 2017
Equity [Abstract]
Schedule of accumulated other comprehensive loss	The changes in Accumulated Other Comprehensive (Loss) Income, net of tax, for the three months ended June 30, 2017 are as follows: Foreign Currency Net Unrealized Gains (Losses) on Marketable Net Minimum Total Accumulated other comprehensive (loss) income at March 31, 2017 $ (2,051,917 ) $ — $ 28,675 $ (2,023,242 ) Other comprehensive loss Other comprehensive loss before reclassifications 5,433 — — 5,433 Amounts reclassified from accumulated other comprehensive loss — — — — Total other comprehensive loss 5,433 — — 5,433 Accumulated other comprehensive (loss) income at June 30, 2017 $ (2,046,484 ) $ — $ 28,675 $ (2,017,809 ) The changes in Accumulated Other Comprehensive (Loss) Income, net of tax, for the six months ended June 30, 2017 are as follows: Foreign Currency Net Unrealized (Losses) Gains on Marketable Net Minimum Total Accumulated other comprehensive (loss) income at December 31, 2016 $ (1,866,388 ) $ — $ 28,675 $ (1,837,713 ) Other comprehensive (loss) income Other comprehensive (loss) income before reclassifications (180,096 ) — — (180,096 ) Amounts reclassified from accumulated other comprehensive (loss) income — — — — Total other comprehensive (loss) income (180,096 ) — — (180,096 ) Accumulated other comprehensive (loss) income at June 30, 2017 $ (2,046,484 ) $ — $ 28,675 $ (2,017,809 ) The changes in Accumulated Other Comprehensive (Loss) Income, net of tax, for the three months ended June 30, 2016 are as follows: Foreign Currency Net Unrealized Net Minimum Total Accumulated other comprehensive (loss) income at March 31, 2016 $ (1,954,409 ) $ 633 $ 30,362 $ (1,923,414 ) Other comprehensive (loss) income Other comprehensive (loss) income before reclassifications (334,161 ) (81 ) (550 ) (334,792 ) Amounts reclassified from accumulated other comprehensive (loss) income — (202 ) 1,228 1,026 Total other comprehensive (loss) income (334,161 ) (283 ) 678 (333,766 ) Accumulated other comprehensive (loss) income at June 30, 2016 $ (2,288,570 ) $ 350 $ 31,040 $ (2,257,180 )

Segment Reporting (Tables)

Segment Reporting (Tables)	6 Months Ended
	Jun. 30, 2017
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 six months ended June 30, 2017 and 2016 , and the location of long-lived assets as of June 30, 2017 and December 31, 2016 , are summarized as follows: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Revenue: Americas $ 2,040,247 $ 2,667,901 $ 3,641,494 $ 5,053,626 Asia Pacific 2,445,409 2,949,051 4,696,486 5,686,244 Europe, Middle East, Africa and Other 2,248,670 2,450,999 4,435,461 4,760,412 Total Revenue $ 6,734,326 $ 8,067,951 $ 12,773,441 $ 15,500,282 June 30, 2017 December 31, 2016 Long-lived assets: Americas $ 6,058,326 $ 6,525,612 Asia Pacific 852,238 890,051 Europe, Middle East, Africa and Other 260,225 218,316 Total long-lived assets $ 7,170,789 $ 7,633,979

Restructuring Costs (Tables)

Restructuring Costs (Tables)	6 Months Ended
	Jun. 30, 2017
Restructuring and Related Activities [Abstract]
Schedule Of Restructuring Costs	The following table summarizes the activity during 2017 related to restructuring liabilities recorded in connection with the 2013 Plan: Severance related costs Balance at December 31, 2016 $ 846,337 Provisions/Additions (236,302 ) Utilized/Paid — Balance at March 31, 2017 $ 610,035 Provisions/Additions — Utilized/Paid (38,341 ) Balance at June 30, 2017 $ 571,694

Basis of Presentation Basis of

Basis of Presentation Basis of Presentation (Detail Narrative)	1 Months Ended	3 Months Ended			6 Months Ended
	Jun. 30, 2017USD ($)	Jun. 30, 2017USD ($)	Mar. 31, 2017USD ($)	Jun. 30, 2016USD ($)	Jun. 30, 2017USD ($)	Jun. 30, 2016USD ($)	Dec. 31, 2016USD ($)	Dec. 31, 2015USD ($)
Basis of Presentation [Abstract]
Working Capital Deficiency	$ (13,000,000)	$ (13,000,000)			$ (13,000,000)
Deferred revenue, net	13,998,843	13,998,843			13,998,843		$ 15,236,123
Total Stockholders' Deficit	(23,537,476)	(23,537,476)			(23,537,476)		(21,702,577)
Net loss		(639,801)		$ (3,534,882)	(1,751,998)	$ (7,831,494)
Net cash used in operating activities		(1,600,000)			(1,645,279)	(3,791,211)
Cash and cash equivalents	$ 1,647,695	$ 1,647,695		7,925,334	1,647,695	7,925,334	$ 3,391,528	$ 6,013,382
Cash Period Decrease					$ 1,700,000
Upon certain triggering events holders can redeem					100.00%
Entity number of employees	97	97			97		166	226
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Share-based compensation expense		$ 97,155		$ 1,127,346	$ 542,569	$ 2,117,956
Reporting Unit, Carrying Value			$ 13,800,000
Accounting Standards Update 2016-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Share-based compensation expense			$ 100,000
2017 Plan
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Estimated annualized cost savings	$ 10,000,000
Severance expense	$ 800,000

Summary of Significant Accoun37

Summary of Significant Accounting Policies (Details Narrative) $ in Millions	Mar. 31, 2017USD ($)
Summary of Significant Accounting Policies [Abstract]
Reporting Unit, Carrying Value	$ (13.8)

Earnings Per Share (Details)

Earnings Per Share (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common stock equivalents	15,209,374	16,474,111	15,209,374	16,474,111
Stock options and restricted stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common stock equivalents	6,427,858	7,692,595	6,427,858	7,692,595
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		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Numerator
Net loss	$ (639,801)	$ (3,534,882)	$ (1,751,998)	$ (7,831,494)
Effects of Series A redeemable convertible preferred stock:
Less: Series A redeemable convertible preferred stock dividends	215,089	195,366	419,664	387,974
Less: Accretion to redemption value of Series A redeemable convertible preferred stock	0	170,981	0	334,650
Net loss attributable to common stockholders	$ (854,890)	$ (3,901,229)	$ (2,171,662)	$ (8,554,118)
Denominator
Weighted average basic shares outstanding (in shares)	44,440,751	43,159,285	44,265,525	42,521,018
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)	44,440,751	43,159,285	44,265,525	42,521,018
Basic net loss per share attributable to common stockholders (in dollars per share)	$ (0.02)	$ (0.09)	$ (0.05)	$ (0.20)
Diluted net loss per share attributable to common stockholders (in dollars per share)	$ (0.02)	$ (0.09)	$ (0.05)	$ (0.20)

Property and Equipment (Details

Property and Equipment (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Property, Plant and Equipment [Abstract]
Gross carrying amount	$ 19,246,360		$ 19,246,360		$ 19,755,489
Accumulated depreciation	(18,387,382)		(18,387,382)		(18,580,547)
Property and Equipment, net	858,978		858,978		$ 1,174,942
Depreciation expense	$ 135,669	$ 180,475	$ 321,754	$ 405,376

Software Development Costs (Det

Software Development Costs (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Research and Development [Abstract]
Gross carrying amount	$ 2,917,215		$ 2,917,215		$ 2,917,215
Accumulated amortization	(2,520,585)		(2,520,585)		(2,369,657)
Software development costs, net	396,630		396,630		$ 547,558
Capitalized computer software amortization	$ 61,687	$ 129,870	$ 150,928	$ 260,363

Goodwill and Other Intangible42

Goodwill and Other Intangible Assets (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 4,150,339		$ 4,150,339		$ 4,150,339
Other intangible assets:
Gross carrying amount	3,770,954		3,770,954		3,725,437
Accumulated amortization	(3,596,754)		(3,596,754)		(3,515,981)
Net carrying amount	174,200		174,200		$ 209,456
Amortization of intangible assets	$ 39,858	$ 40,758	$ 80,773	$ 82,235

Share-Based Payment Arrangeme43

Share-Based Payment Arrangements (Details)	6 Months Ended
	Jun. 30, 2017shares
FalconStor Software, Inc., 2016 Incentive Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Authorized	2,166,606
Shares Available for Grant	145,220
Shares Outstanding	1,500,000
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	1,000,000
Shares Available for Grant	583,532
Shares Outstanding	409,868
Last date for grant of shares	Apr. 27, 2019

Share-Based Payment Arrangeme44

Share-Based Payment Arrangements (Details 1)	Jun. 30, 2017shares
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	4,410,290
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	10,200
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	97,500

Share-Based Payment Arrangeme45

Share-Based Payment Arrangements (Details 2) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 97,155	$ 1,127,346	$ 542,569	$ 2,117,956
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	8,834	44,066	65,285	68,837
Research and development costs
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	54,813	825,635	184,528	1,571,797
Selling and marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	7,198	75,342	63,738	143,072
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 26,310	$ 182,303	$ 229,018	$ 334,250

Share-Based Payment Arrangeme46

Share-Based Payment Arrangements (Detail Narrative) - USD ($)	Jul. 01, 2017	Apr. 01, 2016	Mar. 07, 2016	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016	Sep. 13, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, shares outstanding				44,525,990		44,525,990		43,954,919
Share-based compensation expense				$ 97,155	$ 1,127,346	$ 542,569	$ 2,117,956
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 Available for Grant				145,220		145,220
Shares Authorized				2,166,606		2,166,606
FalconStor Software, Inc., 2016 Outside Directors Equity Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Available for Grant				583,532		583,532
Shares Authorized				1,000,000		1,000,000
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				$ 54,813	$ 825,635	$ 184,528	$ 1,571,797
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
Subsequent Event
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, shares outstanding	44,525,990
Subsequent Event | FalconStor Software, Inc., 2016 Incentive Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Available for Grant	2,226,300
Maximum Shares Outstanding Under Plan Percentage	5.00%
Shares Authorized	20,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Other Increases (Decreases) in Period	2,081,080

Income Taxes (Details Narrative

Income Taxes (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Income tax provision	$ 94,300	$ 165,672	$ 217,248	$ 290,819
Effective income tax rate			(14.20%)	(3.90%)
Valuation allowance	40,400,000		$ 40,400,000
Unrecognized tax benefits	217,461		217,461		$ 217,461
Unrecognized tax benefits, impact on effective tax rate	337,881		337,881
Unrecognized tax benefits, interest on income taxes accrued	$ 120,420		$ 120,420		$ 111,278

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($)	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015
Derivative liabilities:
Derivative Instruments	$ 419,560	$ 355,612	$ 336,862	$ 164,670	$ 133,229	$ 82,024
Recurring
Cash equivalents:
Total cash equivalents	0		1,133,280
Derivative liabilities:
Derivative Instruments	419,560		336,862
Total derivative liabilities	419,560		336,862
Total assets and liabilities measured at fair value	419,560		1,470,142
Fair Value, Inputs, Level 1 | Recurring
Cash equivalents:
Total cash equivalents	0		1,133,280
Derivative liabilities:
Derivative Instruments	0		0
Total derivative liabilities	0		0
Total assets and liabilities measured at fair value	0		1,133,280
Fair Value, Inputs, Level 2 | Recurring
Cash equivalents:
Total cash equivalents	0		0
Derivative liabilities:
Derivative Instruments	0		0
Total derivative liabilities	0		0
Total assets and liabilities measured at fair value	0		0
Fair Value, Inputs, Level 3 | Recurring
Cash equivalents:
Total cash equivalents	0		0
Derivative liabilities:
Derivative Instruments	419,560		336,862
Total derivative liabilities	419,560		336,862
Total assets and liabilities measured at fair value	419,560		336,862
Money Market Funds and Commercial Paper [Domain] | Recurring
Cash equivalents:
Total cash equivalents	0		1,133,280
Money Market Funds and Commercial Paper [Domain] | Fair Value, Inputs, Level 1 | Recurring
Cash equivalents:
Total cash equivalents	0		1,133,280
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 (Deta49

Fair Value Measurements (Details 1) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	$ 355,612	$ 133,229	$ 336,862	$ 82,024
Total loss recognized in earnings	63,948	31,441	82,698	82,646
Ending Balance	$ 419,560	$ 164,670	$ 419,560	$ 164,670

Commitments and Contingencies50

Commitments and Contingencies (Details)	Jun. 30, 2017USD ($)
Operating Lease Payment
2,017	$ 976,176
2,018	1,958,440
2,019	1,611,627
2,020	1,444,247
2,021	491,020
Thereafter	0
Total Future Minimum Lease Payments Due	$ 6,481,510

Commitments and Contingencies51

Commitments and Contingencies (Details Narrative)	Jul. 01, 2017USD ($)	Jul. 24, 2016	Jul. 24, 2015USD ($)milestoneshares	Jun. 30, 2017USD ($)shares	Dec. 31, 2014position	Mar. 31, 2017USD ($)	Dec. 31, 2016USD ($)	Jul. 28, 2015shares
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%
Unrecognized tax benefits, impact on effective tax rate				$ 337,881
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				571,694
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
Employment Agreement Renewal		12 months
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				$ 571,694		$ 610,035	$ 846,337
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
Subsequent Event | 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	$ 350,000
Annual bonus President and Chief Executive Officer of the Company	$ 227,500
Maximum percentage of equity available for employee ownership	20.00%
Length of employment	12 months
Subsequent Event | Minimum | President and Chief Executive Officer
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Period of severance payments	6 months
Subsequent Event | Maximum | President and Chief Executive Officer
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Period of severance payments	12 months

Series A Redeemable Convertib52

Series A Redeemable Convertible Preferred Stock (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Embedded Derivative [Roll Forward]
Derivative instruments, fair value	$ 355,612	$ 133,229	$ 336,862	$ 82,024
Derivative instruments, fair value	419,560	164,670	419,560	164,670
Interest and other loss, net
Embedded Derivative [Roll Forward]
Total loss recognized in earnings	$ 63,948	$ 31,441	$ 82,698	$ 82,646

Series A Redeemable Convertib53

Series A Redeemable Convertible Preferred Stock (Details 1) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Equity [Abstract]
Net loss	$ (639,801)	$ (3,534,882)	$ (1,751,998)	$ (7,831,494)
Less: Accrual of Series A redeemable convertible preferred stock dividends	215,089	195,366	419,664	387,974
Less: Accretion to redemption value of Series A redeemable convertible preferred stock	0	170,981	0	334,650
Net loss attributable to common stockholders	$ (854,890)	$ (3,901,229)	$ (2,171,662)	$ (8,554,118)

Series A Redeemable Convertib54

Series A Redeemable Convertible Preferred Stock (Details Narrative)	Sep. 16, 2013USD ($)$ / sharesshares	Jun. 30, 2017USD ($)Integer$ / sharesshares	Dec. 31, 2016USD ($)$ / sharesshares	Sep. 13, 2013$ / sharesshares
Class of Stock [Line Items]
Series A redeemable convertible preferred stock issued | shares		900,000	900,000
Series A redeemable convertible preferred stock, par value | $ / shares		$ 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 | Integer		60
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
Series A redeemable convertible preferred stock redemption price upon fundamental sale, percentage of per share purchase price		250.00%
Series A redeemable convertible preferred stock, redemption price upon fundamental sale, value		$ 22,500,000
Series A redeemable convertible preferred stock, redemption price upon fundamental sale, per share purchase price | $ / shares		$ 2.56
Series A redeemable convertible preferred stock redemption percentage upon fundamental sale percentage required to redeem		100.00%
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		holder of the Series A redeemable convertible preferred stock is 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
Undistributed Series A redeemable convertible preferred stock dividends		$ 615,568
Stock Price (in dollars per share) | $ / shares				$ 1.23
Voting power | shares				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 | shares	900,000
Series A redeemable convertible preferred stock, par value | $ / shares	$ 0.001
Series A redeemable preferred stock price per share | $ / shares	$ 10
Series A redeemable convertible preferred stock, purchase consideration (in millions)	$ 9,000,000
Series A redeemable convertible preferred stock, conversion price | $ / shares	$ 1.02488
Net proceeds from issuance of Series A redeemable convertible preferred stock	$ 8,700,000
Series A Redeemable convertible preferred stock, fair value		$ 9,600,000
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 Comprehensi55

Accumulated Other Comprehensive Loss (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Other comprehensive (loss) income
Accumulated other comprehensive (loss) income, beginning balance			$ (21,702,577)
Total other comprehensive income (loss), net of applicable taxes:	$ 5,433	$ (333,766)	(180,096)	$ (553,966)
Accumulated other comprehensive (loss) income, ending balance	(23,537,476)		(23,537,476)
Foreign Currency Translation
Other comprehensive (loss) income
Accumulated other comprehensive (loss) income, beginning balance	(2,051,917)	(1,954,409)	(1,866,388)	(1,726,994)
Other comprehensive (loss) income before reclassifications	5,433	(334,161)	(180,096)	(561,576)
Amounts reclassified from accumulated other comprehensive (loss) income	0	0	0	0
Total other comprehensive income (loss), net of applicable taxes:	5,433	(334,161)	(180,096)	(561,576)
Accumulated other comprehensive (loss) income, ending balance	(2,046,484)	(2,288,570)	(2,046,484)	(2,288,570)
Net Unrealized Gains (Losses) on Marketable Securities
Other comprehensive (loss) income
Accumulated other comprehensive (loss) income, beginning balance	0	633	0	(3,406)
Other comprehensive (loss) income before reclassifications	0	(81)	0	2,513
Amounts reclassified from accumulated other comprehensive (loss) income	0	(202)	0	1,243
Total other comprehensive income (loss), net of applicable taxes:	0	(283)	0	3,756
Accumulated other comprehensive (loss) income, ending balance	0	350	0	350
Net Minimum Pension Liability
Other comprehensive (loss) income
Accumulated other comprehensive (loss) income, beginning balance	28,675	30,362	28,675	27,186
Other comprehensive (loss) income before reclassifications	0	(550)	0	1,423
Amounts reclassified from accumulated other comprehensive (loss) income	0	1,228	0	2,431
Total other comprehensive income (loss), net of applicable taxes:	0	678	0	3,854
Accumulated other comprehensive (loss) income, ending balance	28,675	31,040	28,675	31,040
Accumulated Other Comprehensive loss, net
Other comprehensive (loss) income
Accumulated other comprehensive (loss) income, beginning balance	(2,023,242)	(1,923,414)	(1,837,713)	(1,703,214)
Other comprehensive (loss) income before reclassifications	5,433	(334,792)	(180,096)	(557,640)
Amounts reclassified from accumulated other comprehensive (loss) income	0	1,026	0	3,674
Total other comprehensive income (loss), net of applicable taxes:	5,433	(333,766)	(180,096)	(553,966)
Accumulated other comprehensive (loss) income, ending balance	$ (2,017,809)	$ (2,257,180)	$ (2,017,809)	$ (2,257,180)

Stockholders' Equity (Details N

Stockholders' Equity (Details Narrative) - shares	Jul. 24, 2015	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	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	0
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		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Revenue:
Total revenue	$ 6,734,326	$ 8,067,951	$ 12,773,441	$ 15,500,282
Long-lived assets:
Total long-lived assets	7,170,789		7,170,789		$ 7,633,979
Americas
Revenue:
Total revenue	2,040,247	2,667,901	3,641,494	5,053,626
Long-lived assets:
Total long-lived assets	6,058,326		6,058,326		6,525,612
Asia Pacific
Revenue:
Total revenue	2,445,409	2,949,051	4,696,486	5,686,244
Long-lived assets:
Total long-lived assets	852,238		852,238		890,051
Europe, Middle East, Africa and Other
Revenue:
Total revenue	2,248,670	$ 2,450,999	4,435,461	$ 4,760,412
Long-lived assets:
Total long-lived assets	$ 260,225		$ 260,225		$ 218,316

Segment Reporting (Details Narr

Segment Reporting (Details Narrative) - customer	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016	Dec. 31, 2015
Revenue
Revenue, Major Customer [Line Items]
Number of customers accounting for greater than 10% of accounts receivable or revenues	0	1	0	1
Accounts receivable
Revenue, Major Customer [Line Items]
Number of customers accounting for greater than 10% of accounts receivable or revenues			0			3
Customer concentration risk | Revenue
Revenue, Major Customer [Line Items]
Percentage accounted for by one customer	10.00%		10.00%
Datang Telecom International Technology Co., Ltd [Member] | Customer concentration risk | Accounts receivable
Revenue, Major Customer [Line Items]
Percentage accounted for by one customer					15.00%
Huawei Technologies Co., Ltd [Member] | Customer concentration risk | Accounts receivable
Revenue, Major Customer [Line Items]
Percentage accounted for by one customer					12.00%
Hitachi Data Systems [Member] | Customer concentration risk | Revenue
Revenue, Major Customer [Line Items]
Percentage accounted for by one customer		11.00%		11.00%
Hitachi Data Systems [Member] | Customer concentration risk | Accounts receivable
Revenue, Major Customer [Line Items]
Percentage accounted for by one customer					14.00%
Community Health Services [Member] | Customer concentration risk | Accounts receivable
Revenue, Major Customer [Line Items]
Percentage accounted for by one customer			10.00%

Restructuring Costs - Schedule

Restructuring Costs - Schedule Of Restructuring Costs (Details) - USD ($)	3 Months Ended			6 Months Ended
	Jun. 30, 2017	Mar. 31, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Restructuring Reserve [Roll Forward]
Provisions/Additions	$ 0		$ 93,405	$ (236,302)	$ 177,389
Restructuring Costs Under the 2013 Plan
Restructuring Reserve [Roll Forward]
Ending Balance	571,694			571,694
Severance related costs | Restructuring Costs Under the 2013 Plan
Restructuring Reserve [Roll Forward]
Beginning Balance	610,035	$ 846,337		846,337
Provisions/Additions	0	(236,302)
Utilized/Paid	(38,341)	0
Ending Balance	$ 571,694	$ 610,035		$ 571,694

Restructuring Costs (Details Na

Restructuring Costs (Details Narrative) - position	6 Months Ended	18 Months Ended
	Jun. 30, 2017	Dec. 31, 2014
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