FalconStor Software (FALC) Form 3 Initial statement of insider ownership

SEC Form 3

FORM 3

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person^*

HCP-FVA, LLC

(Last) (First) (Middle)

C/O HALE CAPITAL PARTNERS, LP

17 STATE STREET, SUITE 3230

(Street)

NEW YORK NY 10004

(City) (State) (Zip)

2. Date of Event Requiring Statement (Month/Day/Year)
11/17/2017

3. Issuer Name and Ticker or Trading Symbol
FALCONSTOR SOFTWARE INC [ FALC ]

4. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director	X	10% Owner
	Officer (give title below)		Other (specify below)

5. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Beneficially Owned
1. Title of Security (Instr. 4)	2. Amount of Securities Beneficially Owned (Instr. 4)	3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	4. Nature of Indirect Beneficial Ownership (Instr. 5)
Common Stock	851,354	D

Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 4)	2. Date Exercisable and Expiration Date (Month/Day/Year)		3. Title and Amount of Securities Underlying Derivative Security (Instr. 4)		4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Series A Convertible Preferred Stock	09/16/2013	(1)	Common Stock, par value $0.001, per share	8,781,515(2)(3)	(4)	D
Warrants	11/17/2017	11/17/2027	Common Stock, par value $0.001, per share	13,859,128(5)	0.001	D

Explanation of Responses:

1. The Series A Convertible Preferred Stock (the "Preferred Stock") of Falconstor Software Inc. (the "Issuer") is convertible at any time, at the holder's election, into common stock of the Issuer (the "Common Stock") and has no expiration date. The Preferred Stock accrues dividends which may, under circumstances, be paid in shares of Common Stock.

2. The Preferred Stock reported herein is held by HCP-FVA, LLC, a Delaware limited liability company ("HCP-FVA"). Hale Capital Partners, LP, a Delaware limited partnership ("HCP"), is the sole member of HCP-FVA. The securities reported herein were purchased from the Issuer pursuant to a Preferred Stock Purchase Agreement, dated as of September 16, 2013, between HCP and the Issuer.

3. The shares of Preferred Stock held by HCP-FVA are convertible into 8,781,515 shares of Common Stock (without giving effect any limitations on conversion due to the Blocker, as defined below). The Certificate of Designations for the Preferred Stock contains a 9.99% beneficial ownership blocker (the "Blocker") and, as a result, the number of shares of Common Stock issuable upon conversion of the shares of the Preferred Stock held by HCP-FVA are limited pursuant to the terms of the Blocker.

4. Each share of Preferred Stock has a stated value of $10 (the "Stated Value"). Each share Preferred Stock is initially convertible into such number of shares of Common Stock determined by dividing the Stated Value by $1.02488, the initial conversion price of the Preferred Stock. The conversion price of the Preferred Stock is subject to adjustment from time to time in accordance with the terms of the Certificate of Designations of the Preferred Stock.

5. The Warrants were issued to HCP-FVA in connection with (i) a loan made to the Issuer by HCP-FVA in the principal amount of $500,000 and (ii) a commitment from HCP to purchase up to $3,000,000 worth of units from the Issuer in a proposed private placement of units subject to, and on the terms and conditions set forth in, a certain commitment letter, dated as of November 17, 2017, by and between HCP and the Issuer.

Remarks:

HCP-FVA has the right to designate a director of the Issuer pursuant to the terms of the Certificate of Designation and Martin Hale, Jr. is the board designee of HCP-FVA. Accordingly, HCP-FVA is a director by deputization.

	HCP-FVA, LLC, By: Hale Capital Partners, LP, its sole member /s/ Martin M. Hale, Jr., CEO	11/21/2017
	** Signature of Reporting Person	Date
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