FalconStor Software (FALC) 10-Q 14 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 31, 2018
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, 2018
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		97,937,491
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,018

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 4,043,668	$ 1,011,472
Accounts receivable, net of allowances of $208,490 and $354,542, respectively	2,068,998	4,168,015
Prepaid expenses and other current assets	1,254,015	1,244,494
Contract assets, net	1,477,619	0
Total current assets	8,844,300	6,423,981
Property and equipment, net of accumulated depreciation of $18,071,912 and $17,926,959, respectively	504,580	636,112
Deferred tax assets, net	597,780	590,977
Software development costs, net	185,797	279,414
Other assets	941,030	992,760
Goodwill	4,150,340	4,150,339
Other intangible assets, net	110,671	141,631
Contract assets, net	1,460,494	0
Total assets	16,794,992	13,215,214
Current liabilities:
Accounts payable	820,115	1,092,864
Accrued expenses	2,375,718	4,376,235
Short-term loan, net of debt issuance costs and discounts	0	370,151
Deferred revenue, net	7,245,124	11,760,327
Total current liabilities	10,440,957	17,599,577
Other long-term liabilities	1,715,750	1,154,512
Notes payable, net	2,525,670	0
Deferred tax liabilities, net	85,559	85,559
Deferred revenue, net	4,426,638	6,600,363
Total liabilities	19,194,574	25,440,011
Commitments and contingencies (Note 11)
Series A redeemable convertible preferred stock, $.001 par value, 2,000,000 shares authorized, 900,000 shares issued and outstanding, redemption value of $10,527,075 and $9,000,000, respectively	9,040,397	9,000,000
Stockholders' deficit:
Common stock - $.001 par value, 800,000,000 and 100,000,000 shares authorized, respectively, 97,937,491 and 60,091,560 shares issued, respectively and 97,937,491 and 44,563,490 shares outstanding, respectively	97,932	60,090
Additional paid-in capital	112,873,099	168,637,157
Accumulated deficit	(122,496,878)	(130,930,284)
Common stock held in treasury, at cost (0 and 15,528,070 shares, respectively)	0	(57,032,917)
Accumulated other comprehensive loss, net	(1,914,132)	(1,958,843)
Total stockholders' deficit	(11,439,979)	(21,224,797)
Total liabilities and stockholders' deficit	$ 16,794,992	$ 13,215,214

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Allowances on accounts receivable	$ 208,490	$ 354,542
Accumulated depreciation	$ 18,071,912	$ 17,926,959
Series A Redeemable convertible preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Series A Redeemable convertible preferred stock, shares authorized (in shares)	2,000,000	2,000,000
Series A Redeemable convertible preferred stock, shares issued (in shares)	900,000	900,000
Series A Redeemable convertible preferred stock, shares outstanding (in shares)	900,000	900,000
Series A redeemable convertible preferred stock, redemption value	$ 10,527,075	$ 9,000,000
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	800,000,000	100,000,000
Common stock, shares issued (in shares)	97,937,491	60,091,560
Common stock, shares outstanding (in shares)	97,937,491	44,563,490
Common Stock held in treasury, shares (in shares)	0	15,528,070

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenue:
Product revenue	$ 983,645	$ 2,499,655	$ 2,917,589	$ 4,420,707
Support and services revenue	3,027,936	4,234,671	6,087,941	8,352,734
Total revenue	4,011,581	6,734,326	9,005,530	12,773,441
Cost of revenue:
Product	39,740	351,969	65,890	550,684
Support and service	590,309	1,418,663	1,319,197	2,672,579
Total cost of revenue	630,049	1,770,632	1,385,087	3,223,263
Gross profit	3,381,532	4,963,694	7,620,443	9,550,178
Operating expenses:
Research and development costs	928,097	2,025,132	1,932,795	4,319,995
Selling and marketing	872,109	2,109,599	2,065,659	4,160,141
General and administrative	1,451,884	1,345,343	3,106,824	2,966,894
Restructuring costs (benefit)	809,245	0	635,982	(236,302)
Total operating expenses	4,061,335	5,480,074	7,741,260	11,210,728
Operating loss	(679,803)	(516,380)	(120,817)	(1,660,550)
Interest and other income (loss), net	(323,750)	(29,121)	(313,420)	125,800
Loss before income taxes	(1,003,553)	(545,501)	(434,237)	(1,534,750)
Provision for income taxes	551	94,300	62,990	217,248
Net loss	(1,004,104)	(639,801)	(497,227)	(1,751,998)
Less: Accrual of Series A redeemable convertible preferred stock dividends	214,963	215,089	458,130	419,664
Less: Deemed dividend on Series A redeemable convertible preferred stock	0	0	2,269,042	0
Less: Accretion to redemption value of Series A redeemable convertible preferred stock	77,645	0	115,750	0
Net loss attributable to common stockholders	$ (1,296,712)	$ (854,890)	$ (3,340,149)	$ (2,171,662)
Basic net loss per share attributable to common stockholders (in dollars per share)	$ (0.02)	$ (0.02)	$ (0.05)	$ (0.05)
Diluted net loss per share attributable to common stockholders (in dollars per share)	$ (0.02)	$ (0.02)	$ (0.05)	$ (0.05)
Weighted average basic shares outstanding (in shares)	84,448,219	44,440,751	64,616,334	44,265,525
Weighted average diluted shares outstanding (in shares)	84,448,219	44,440,751	64,616,334	44,265,525

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement of Comprehensive Income [Abstract]
Net loss	$ (1,004,104)	$ (639,801)	$ (497,227)	$ (1,751,998)
Other comprehensive income (loss), net of applicable taxes:
Foreign currency translation	129,956	5,433	44,712	(180,096)
Total other comprehensive income (loss), net of applicable taxes:	129,956	5,433	44,712	(180,096)
Total comprehensive loss	(874,148)	(634,368)	(452,515)	(1,932,094)
Less: Accrual of Series A redeemable convertible preferred stock dividends	214,963	215,089	458,130	419,664
Less: Deemed dividend on Series A redeemable convertible preferred stock	0	0	2,269,042	0
Less: Accretion to redemption value of Series A redeemable convertible preferred stock	77,645	0	115,750	0
Total comprehensive loss attributable to common stockholders	$ (1,166,756)	$ (849,457)	$ (3,295,437)	$ (2,351,758)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net loss	$ (497,227)	$ (1,751,998)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	346,346	553,455
Share-based payment compensation	6,624	501,410
Non-cash professional services expenses	0	41,159
Loss on disposal of fixed assets	0	63,774
Provision (benefit) for returns and doubtful accounts	(146,052)	99,312
Deferred income taxes (benefit)	0	30,124
Changes in operating assets and liabilities:
Accounts receivable	2,248,771	1,961,276
Prepaid expenses and other current assets	425,718	403,937
Contract assets	219,141	0
Other assets	7,572	(154,832)
Accounts payable	(300,168)	193,640
Accrued expenses and other long-term liabilities	(260,174)	(1,098,547)
Deferred revenue	(1,350,095)	(2,487,989)
Net cash provided by (used in) operating activities	700,456	(1,645,279)
Cash flows from investing activities:
Purchases of property and equipment	(28,408)	(44,163)
Capitalized software development costs	(23,599)	0
Security deposits	33,845	(17,152)
Purchase of intangible assets	(39,861)	(45,517)
Net cash used in investing activities	(58,023)	(106,832)
Cash flows from financing activities:
Payments for tax withholding for share-based compensation	0	(25,710)
Proceeds from issuance of long-term debt, net of issuance costs	2,354,727	0
Net cash provided by (used in) financing activities	2,354,727	(25,710)
Effect of exchange rate changes on cash and cash equivalents	35,036	33,988
Net increase (decrease) in cash and cash equivalents	3,032,196	(1,743,833)
Cash and cash equivalents, beginning of period	1,011,472	3,391,528
Cash and cash equivalents, end of period	4,043,668	1,647,695
Supplemental disclosures:
Cash paid for interest	34,724	0
Cash paid for income taxes, net	0	135,915
Non-cash investing and financing activities:
Undistributed Series A redeemable convertible preferred stock dividends	573,880	419,664
Warrants issued	4,143,000	0
Deemed dividend	2,269,042	0
Discount on preferred stock	1,602,428	0
Discount on notes payable	$ 288,504	$ 0

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
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) Liquidity As of June 30, 2018 , we had a working capital deficiency of $1.6 million , which is inclusive of current deferred revenue of $7.2 million , and a stockholders' deficit of $11.4 million . During the three months ended June 30, 2018 , we had a net loss of $1.0 million . During the six months ended June 30, 2018 , we had a net loss of $0.5 million and positive cash flow from operations of $0.7 million . Our cash and cash equivalents at June 30, 2018 was $4.0 million , an increase of $3.0 million as compared to December 31, 2017 . In June 2017, the Board approved a comprehensive plan to improve operating performance (the “2017 Plan”). The 2017 Plan resulted in a realignment in workforce. The 2017 Plan was substantially completed by the end of the Company’s fiscal year ended December 31, 2017, and when combined with previous workforce reductions in the second quarter of Fiscal 2017 reduced the Company’s workforce to approximately 81 employees at December 31, 2017. On November 17, 2017, HCP-FVA, LLC (the “Lender” or "HCP-FVA") provided a commitment letter to the Company agreeing to finance up to $3 million to the Company (the “Commitment”) on the terms, and subject to the conditions, set forth in that certain commitment letter. As part of that Commitment, on November 17, 2017, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Lender and certain other loan parties named therein, pursuant to which the Lender made a short term loan to the Company in the principal amount of $500,000 (the “Short Term Loan”). On February 23, 2018, the Company closed on the Commitment and the Lender subscribed for the full $3 million of Units in the Commitment by payment of $2.5 million in cash and the conversion of the $500,000 Short Term Loan. The $3 million term loan has an interest rate of prime plus 0 .75% and a maturity date of June 30, 2021. The Lender is an affiliate of Hale Capital Partners, LP (together, "Hale Capital") and the Company's largest shareholder through its ownership of Series A redeemable preferred stock ("Series A Preferred Stock"), and an affiliate of Martin Hale, a Director of the Company. As part of the Commitment, Hale Capital also agreed to postpone the date of the optional redemption of the Series A Preferred Stock from August 5, 2017 to July 30, 2021, and to waive prior breaches of the terms of the Series A Preferred Stock which had triggered a redemption right. See Note (9) Notes Payable and Stock Warrants for further information. We believe that our cash flows from operations and existing cash on hand are sufficient to conduct our planned operations and meet our contractual requirements. (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. During the first quarter of 2018, the Company also had significant estimates in the determination of the fair value of Series A Preferred Stock, notes payable and warrants issued. 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, 2018 , and the results of its operations for the three and six months ended June 30, 2018 and 2017 . 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, 2017 (" 2017 Form 10-K"). (f) Recently Adopted Accounting Pronouncements Revenue from Contracts with Customers In May 2014, the FASB ("Financial Accounting Standards Board") 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 replaces most existing revenue recognition guidance in GAAP in the United States and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. We adopted the new guidance as of January 1, 2018 using the modified retrospective transition method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under previous revenue guidance. The most significant impact of the standard relates to our accounting for our term license revenue. Specifically, for Freestor software subscription licenses, revenue is now recognized at the time of delivery rather than ratably over the subscription period. The adoption of the standard resulted in an increase to the opening balance of accumulated deficit of $8.9 million , related to the cumulative effect of a decrease in deferred revenue of $5.4 million , an increase in contract assets of $3.1 million from the upfront recognition of term licenses and the general requirement to allocate the transaction price on a relative stand-alone selling price, and an increase of $0.4 million in prepaid expenses and other current assets. Following is a summary of the impact to the Company’s current financial results from adopting the new revenue recognition standard: Statements of Operations Under Previous Guidance New Revenue Standard Adjustment Under Current Accounting Guidance Three Months Ended June 30, 2018 Product revenue $ 2,407,652 $ (1,424,007 ) $ 983,645 Support and services revenue 2,840,818 187,118 3,027,936 Selling and marketing 850,951 21,158 872,109 Provision for income taxes 551 — 551 Net income (loss) 211,627 (1,215,731 ) (1,004,104 ) Net loss attributable to common stockholders (80,981 ) (1,215,731 ) (1,296,712 ) Basic net income (loss) per share attributable to common stockholders — (0.02 ) (0.02 ) Diluted net income (loss) per share attributable to common stockholders — (0.02 ) (0.02 ) Statements of Operations Under Previous Guidance New Revenue Standard Adjustment Under Current Accounting Guidance Six Months Ended June 30, 2018 Product revenue $ 4,075,136 $ (1,157,547 ) $ 2,917,589 Support and services revenue 6,087,941 — 6,087,941 Selling and marketing 2,009,672 55,987 2,065,659 Provision for income taxes 62,990 — 62,990 Net income (loss) 604,333 (1,101,560 ) (497,227 ) Net loss attributable to common stockholders (2,238,589 ) (1,101,560 ) (3,340,149 ) Basic net loss per share attributable to common stockholders (0.03 ) (0.02 ) (0.05 ) Diluted net loss per share attributable to common stockholders (0.03 ) (0.02 ) (0.05 ) Balance Sheets Under Previous Guidance New Revenue Standard Adjustment Under Current Accounting Guidance June 30, 2018 Prepaid expenses and other current assets $ 948,272 $ 305,743 $ 1,254,015 Contract assets, net, current — 1,477,619 1,477,619 Contract assets, net, long-term — 1,460,494 1,460,494 Deferred revenue, net, current 10,842,101 (3,596,977 ) 7,245,124 Deferred tax liabilities, net 85,559 — 85,559 Deferred revenue, net, long-term 5,250,834 (824,196 ) 4,426,638 Accumulated deficit (130,161,907 ) 7,665,029 (122,496,878 ) Adoption of the revenue recognition standard had no impact to cash from or used in operating, financing, or investing on our condensed consolidated statements of cash flows. See Note (2) Summary of Significant Accounting Policies for further details. Statements of Cash Flows 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. The Company has adopted this guidance and it did not have a significant impact on the Company's financial statements and related disclosures. Employee Benefit Plans 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 is the annual period ending December 31, 2018. The Company has adopted this guidance and it did not have a significant impact on the Company's financial statements and related disclosures. Financial Assets and Financial Liabilities 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 Company has adopted this guidance and it did not have a significant impact on the Company's financial statements and related disclosures. (g) Recently Issued Accounting Pronouncements In July 2018, the FASB issued ASU 2018-10 Leases (Topic 842),Codification Improvements and ASU 2018-11 Leases (Topic 842), Targeted Improvements , to provide additional guidance for the adoption of Topic 842 . ASU 2018-10 clarifies certain provisions and correct unintended applications of the guidance such as the application of implicit rate, lessee reassessment of lease classification, and certain transition adjustments that should be recognized to earnings rather than to stockholders' equity. ASU 2018-11 provides an alternative transition method and practical expedient for separating contract components for the adoption of Topic 842 . In February 2016, the FASB issued ASU 2016-02 Leases (Topic 842) which requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases with terms greater than 12 months. ASU 2018-11, ASU 2018-10, and ASU 2016-02 (collectively, "the new lease standards") are effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect the new lease standards will have on its Condensed Consolidated Financial Statements; however, the Company anticipates recognizing assets and liabilities arising from any leases that meet the requirements under the new lease standards on the adoption date and including qualitative and quantitative disclosures in the Company’s Notes to the Condensed Consolidated Financial Statements. In July 2018, the FASB issued ASU 2018-09, Codification Improvements. The amendments in ASU 2018-09 affect a wide variety of Topics in the FASB Codification and apply to all reporting entities within the scope of the affected accounting guidance. The Company has evaluated ASU 2018-09 in its entirety and determined that the amendments related to Topic 718-740, Compensation-Stock Compensation-Income Taxes, are the only provisions that currently apply to the Company. The amendments in ASU 2018-09 related to Topic 718-740, Compensation-Stock Compensation-Income Taxes, clarify that an entity should recognize excess tax benefits related to stock compensation transactions in the period in which the amount of the deduction is determined. The amendments in ASU 2018-09 related to Topic 718-740 are effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company does not expect the adoption of the new standard to have a material impact on the Company's Condensed Consolidated Financial Statements. In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, to expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees and supersedes the guidance in Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees . Under ASU 2018-07, equity-classified nonemployee share-based payment awards are measured at the grant date fair value on the grant date. The probability of satisfying performance conditions must be considered for equity-classified nonemployee share-based payment awards with such conditions. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of the new standard on the Company's Condensed Consolidated Financial Statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which provides entities the option to reclassify tax effects stranded in accumulated other comprehensive income as a result of the 2017 Tax Cuts and Jobs Act (“the Tax Act”) to retained earnings. The guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company does not expect the adoption of this accounting standard to have a material impact on our financial position, results of operations, cash flows, or presentation thereof.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2018
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	The Company's significant accounting policies were described in Note (1) Summary of Significant Accounting Policies of the 2017 Form 10-K. There have been no significant changes in the Company's significant accounting policies since December 31, 2017 , other than those noted below. For a description of the Company's other significant accounting policies refer to the 2017 Form 10-K. Revenue from Contracts with Customers and Associated Balances Nature of Products and Services Licenses for on-premises software provide the customer with a right to use the software as it exists when made available to the customer. Customers may purchase perpetual licenses or subscribe to licenses, which provide customers with the same functionality and differ mainly in the duration over which the customer benefits from the software. Revenue from distinct on-premises licenses is recognized upfront at the point in time when the software is made available to the customer. Revenue allocated to software maintenance and support services is recognized ratably over the contractual support period. Hardware products consist primarily of servers and associated components and function independently of the software products and as such as accounted for as separate performance obligations. Revenue allocated to hardware maintenance and support services is recognized ratably over the contractual support period. Professional services are primarily related to software implementation services and associated revenue is recognized upon customer acceptance. Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a contract asset or receivable when revenue is recognized prior to invoicing, or unearned revenue when revenue is recognized subsequent to invoicing. For perpetual licenses with multi-year product maintenance agreements, the Company generally invoices customers at the beginning of the coverage period. For multi-year subscription licenses, the Company generally invoices customers annually at the beginning of each annual coverage period. The Company records a contract asset related to revenue recognized for multi-year on-premises licenses as its right to payment is conditioned upon providing product support and services in future years. The opening balance of accounts receivable, net of allowance for doubtful accounts, was $4.2 million as of January 1, 2018. There was no adjustment needed to accounts receivable for the cumulative effect of applying ASC 606 under the modified retrospective method. The opening balance of short and long-term contract assets, net of allowance for doubtful accounts, and adjusted for the cumulative effect of applying ASC 606 under the modified retrospective method, was $3.1 million as of January 1, 2018. As of June 30, 2018 and December 31, 2017 , accounts receivable, net of allowance for doubtful accounts, was $2.1 million and $4.2 million , respectively. As of June 30, 2018 and December 31, 2017 , short and long-term contract assets, net of allowance for doubtful accounts, was $2.9 million and $0.0 million , respectively. The allowances for doubtful accounts reflect the Company’s best estimates of probable losses inherent in the accounts receivable and contract assets’ balances. The Company determines the allowances based on known troubled accounts, historical experience, and other currently available evidence. Write-offs in the accounts receivable and contract assets allowance accounts for the three months ended June 30, 2018 were $0.0 million and $0.0 million , respectively. Write-offs in the accounts receivable and contract assets allowance accounts for the six months ended June 30, 2018 were $0.4 million and $0.0 million , respectively. Deferred revenue is comprised mainly of unearned revenue related maintenance and technical support on term and perpetual licenses. Maintenance and technical support revenue is recognized ratably over the coverage period. Deferred revenue also includes contracts for professional services to be performed in the future which are recognized as revenue when the company delivers the related service pursuant to the terms of the customer arrangement. Changes in deferred revenue were as follows: Six Months Ended June 30, 2018 Balance at December 31, 2017 $ 18,360,690 Cumulative effect of applying ASC 606 under the modified retrospective method* (5,359,579 ) Deferral of revenue 7,720,187 Recognition of revenue (9,005,530 ) Change in reserves (44,006 ) Balance at June 30, 2018 $ 11,671,762 *See Note (1) Basis of Presentation to our unaudited condensed consolidated financial statements for further information. Deferred revenue includes invoiced revenue allocated to remaining performance obligations that has not yet been recognized and will be recognized as revenue in future periods. Deferred revenue was $11.7 million as of June 30, 2018 , of which the Company expects to recognize approximately 62% of the revenue over the next 12 months and the remainder thereafter. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 90 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined its contracts generally do not include a significant financing component. The primary purpose of the Company’s invoicing terms is to provide customers with simplified and predictable ways of purchasing its products and services, not to receive financing from our customers or to provide customers with financing. Examples include invoicing at the beginning of a subscription term with maintenance and support revenue recognized ratably over the contract period, and multi-year on-premises licenses that are invoiced annually with product revenue recognized upon delivery. Significant Judgments The Company’s contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgment is required to determine the standalone selling price (“SSP”) for each distinct performance obligation. For products and services aside from maintenance and support, the Company estimates SSP by adjusting the list price by historical discount percentages. SSP for software and hardware maintenance and support fees is based on the stated percentages of the fees charged for the respective products. The Company’s perpetual and term software licenses have significant standalone functionality and therefore revenue allocated to these performance obligations are recognized at a point in time upon electronic delivery of the download link and the license keys. Product maintenance and support services are satisfied over time as they are stand-ready obligations throughout the support period. As a result, revenues associated with maintenance services are deferred and recognized as revenue ratably over the term of the contract. Revenues associated with professional services are recognized at a point in time upon customer acceptance. Assets Recognized from Costs to Obtain a Contract with a Customer The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. The Company has determined that its sales commission program meets the requirements for cost capitalization. Total capitalized costs to obtain a contract were immaterial during the periods presented and are included in other current and long-term assets on our consolidated balance sheets. The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less.

Earnings Per Share

Earnings Per Share	6 Months Ended
	Jun. 30, 2018
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, warrants and the Series A 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, 2018 and 2017 : Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Stock options, warrants and restricted stock 370,239,830 6,427,858 370,239,830 6,427,858 Series A redeemable convertible preferred stock 8,781,516 8,781,516 8,781,516 8,781,516 Total anti-dilutive common stock equivalents 379,021,346 15,209,374 379,021,346 15,209,374 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, 2018 2017 2018 2017 Numerator Net loss $ (1,004,104 ) $ (639,801 ) $ (497,227 ) $ (1,751,998 ) Effects of Series A redeemable convertible preferred stock: Less: Series A redeemable convertible preferred stock dividends 214,963 215,089 458,130 419,664 Less: Deemed dividend on Series A redeemable convertible preferred stock — — 2,269,042 — Less: Accretion to redemption value of Series A redeemable convertible preferred stock 77,645 — 115,750 — Net loss attributable to common stockholders $ (1,296,712 ) $ (854,890 ) $ (3,340,149 ) $ (2,171,662 ) Denominator Weighted average basic shares outstanding 84,448,219 44,440,751 64,616,334 44,265,525 Effect of dilutive securities: Stock options, warrants and restricted stock — — — — Series A redeemable convertible preferred stock — — — — Weighted average diluted shares outstanding 84,448,219 44,440,751 64,616,334 44,265,525 EPS Basic net loss per share attributable to common stockholders $ (0.02 ) $ (0.02 ) $ (0.05 ) $ (0.05 ) Diluted net loss per share attributable to common stockholders $ (0.02 ) $ (0.02 ) $ (0.05 ) $ (0.05 )

Property and Equipment

Property and Equipment	6 Months Ended
	Jun. 30, 2018
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, 2018 and December 31, 2017 are as follows: June 30, 2018 December 31, 2017 Gross carrying amount $ 18,576,492 $ 18,563,071 Accumulated depreciation (18,071,912 ) (17,926,959 ) Property and Equipment, net $ 504,580 $ 636,112 For the three months ended June 30, 2018 and 2017 , depreciation expense was $71,441 and $135,669 , respectively. For the six months ended June 30, 2018 and 2017 , depreciation expense was $158,310 and $321,754 , respectively.

Software Development Costs

Software Development Costs	6 Months Ended
	Jun. 30, 2018
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, 2018 and December 31, 2017 are as follows: June 30, 2018 December 31, 2017 Gross carrying amount $ 2,940,812 $ 2,917,215 Accumulated amortization (2,755,015 ) (2,637,801 ) Software development costs, net $ 185,797 $ 279,414 During the three months ended June 30, 2018 and 2017 , the Company recorded $58,609 and $61,687 , respectively, of amortization expense related to capitalized software costs. During the six months ended June 30, 2018 and 2017 , the Company recorded $117,216 and $150,928 , respectively, of amortization expense related to capitalized software costs.

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets	6 Months Ended
	Jun. 30, 2018
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, 2018 and December 31, 2017 are as follows: June 30, 2018 December 31, 2017 Goodwill $ 4,150,340 $ 4,150,339 Other intangible assets: Gross carrying amount $ 3,856,262 $ 3,816,402 Accumulated amortization (3,745,591 ) (3,674,771 ) Net carrying amount $ 110,671 $ 141,631 For the three months ended June 30, 2018 and 2017 , amortization expense was $36,541 and $39,858 , respectively. For the six months ended June 30, 2018 and 2017 , amortization expense was $70,820 and $80,773 , respectively.

Share-Based Payment Arrangement

Share-Based Payment Arrangements	6 Months Ended
	Jun. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-Based Payment Arrangements	Share-Based Payment Arrangements On June 22, 2018, the Company's stockholders adopted the FalconStor Software, Inc. 2018 Incentive Stock Plan (the "2018 Plan"). The 2018 Plan is administered by the Compensation Committee and provides for the issuance of up to 147,199,698 shares of the Company's common stock upon the grant of shares with such restrictions as determined by the Compensation Committee to the employees and directors of, and consultants providing services to, the Company or its affiliates. Exercise prices of the options will be determined by the Compensation Committee, subject to the consent of Hale Capital. The vesting terms shall be performance based and determined by the Committee, subject to the consent of Hale Capital, based on various factors, including (i) the return of capital to the holders of the Series A Preferred Stock and the Company’s Common Stock in the event of a Change of Control, (ii) the repayment of the Company’s obligations under its senior secured debt, and (iii) the Company’s free cash flow. Seventy percent (70%) of the Shares issuable under the 2018 Plan shall be granted as stock options as soon as practicable following the approval of the Plan by the shareholders of the Company. The remaining thirty percent (30%) of the shares subject to the Plan plus any returned shares will be reserved for future grants of awards to new hires. The 2016 Incentive Stock Plan was terminated in April 2018. The following table summarizes the plan under which the Company was able to grant equity compensation as of June 30, 2018 : Shares Shares Available Shares Name of Plan Authorized for Grant Outstanding FalconStor Software, Inc. 2018 Incentive Stock Plan 147,199,698 147,199,698 — The following table summarizes the Company’s equity plans that have terminated or expired but that still have equity awards outstanding as of June 30, 2018 : Name of Plan Shares Available for Grant Shares Outstanding FalconStor Software, Inc., 2016 Incentive Stock Plan — 505,000 FalconStor Software, Inc., 2006 Incentive Stock Plan — 1,196,700 FalconStor Software, Inc., 2000 Stock Option Plan — 4,500 Related to the aforementioned 2016 Plan, many share-based compensation awards were forfeited and the related expense reversed accordingly, resulting in negative expense in the period. The following table summarizes the 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, 2018 and 2017 : Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Cost of revenue - Support and Service 4,875 8,834 13,575 65,285 Research and development costs 18,744 54,813 41,350 184,528 Selling and marketing 4,525 7,198 12,457 63,738 General and administrative 1,375 26,310 (60,758 ) 229,018 $ 29,519 $ 97,155 $ 6,624 $ 542,569

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company’s provision for income taxes consists principally 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, 2018 , the Company recorded an income tax provision of $62,990 . The effective tax rate for the six months ended June 30, 2018 was (14.5%) . The effective tax differs from the statutory rate of 21% primarily related 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, 2018 , 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 income tax expense as such amounts are fully offset with a valuation allowance. For the six months ended June 30, 2017 , the Company recorded an income tax provision of $217,248 . The effective tax rate for the six months ended June 30, 2017 was (14.2%) . The effective tax rate differs from the statutory rate of 35% primarily related to the mix of foreign and domestic earnings as no tax expense or benefit is being recognized on domestic earnings or losses. The Company’s total unrecognized tax benefits, excluding interest, at June 30, 2018 and December 31, 2017 were $180,202 . As of June 30, 2018 and December 31, 2017 , the Company had $90,035 and $82,508 , respectively, of accrued interest. On December 22, 2017 the SEC staff issued Staff Accounting Bulletin (“SAB”) No. 118, which provides guidance on accounting for the tax effects of TCJA. The purpose of SAB No. 118 was to address any uncertainty or diversity of view in applying ASC Topic 740, Income Taxes in the reporting period in which the TCJA was enacted. SAB No. 118 addresses situations where the accounting is incomplete for certain income tax effects of the TJCA upon issuance of a company’s financial statements for the reporting period that includes the enactment date. SAB No. 118 allows for a provisional amount to be recorded if it is a reasonable estimate of the impact of the TCJA. Additionally, SAB No. 118 allows for a measurement period to finalize the impacts of the TCJA, not to extend beyond one year from the date of enactment. The Company’s accounting for certain elements of the 2017 Tax Cuts and Jobs Act was incomplete as of the period ended December 31, 2017, and remains incomplete as of June 30, 2018 . However, the Company was able to make reasonable estimates of the effects and, therefore, recorded provisional estimates for these items at December 31, 2017 and June 30, 2018.

Notes Payable and Stock Warrant

Notes Payable and Stock Warrants	6 Months Ended
	Jun. 30, 2018
Payables and Accruals [Abstract]
Notes Payable and Stock Warrants	Notes Payable and Stock Warrants On November 17, 2017, HCP-FVA provided a commitment letter to the Company agreeing to finance up to $3 million to the Company on the terms, and subject to the conditions, set forth in that certain commitment letter, as further described below. As part of that Commitment, on November 17, 2017, the Company entered into a Loan Agreement with Lender and certain other loan parties named therein, pursuant to which the Lender made the Short Term Loan to the Company in the principal amount of $500,000 . Pursuant to the terms of the Loan Agreement, the Short Term Loan was secured by all of the assets of the Company and guaranteed by each of the Company’s domestic subsidiaries. The Short Term Loan bore interest at a rate equal to the prime rate plus 0.75% . The Short Term Loan was due and payable on May 17, 2018, unless prepaid or satisfied through the issuance by the Company of units in a proposed private placement which will be offered to certain eligible stockholders existing on the date of the Loan Agreement. Such units would consist of senior secured debt in the aggregate principal amount of the Short Term Loan and nominal warrants to purchase approximately 61,165,134 shares of the Company’s common stock, at an exercise price of $0.001 per share, (the "Backstop Warrants"). Fifty percent (50%) of the Backstop Warrants (or the shares of common stock issuable upon exercise thereof on a post-cashless exercise basis) are subject to cancellation in the event that more than half of the units in the Proposed Offering are purchased by eligible stockholders (other than Hale Capital). On February 23, 2018, the Company closed on its previously-announced Commitment from HCP-FVA to purchase up to $3 million of Units (as defined below) from the Company to backstop a proposed private placement of Units to certain eligible stockholders of the Company (the “Financing”). HCP-FVA subscribed for the full $3 million of Units (at the Company’s election) in the Commitment by payment of $2.5 million in cash and the conversion of a $500,000 Short-Term Loan into Units. In the Financing, the Company intends to offer to FalconStor stockholders as of November 17, 2017 who are accredited investors the opportunity to purchase up to a total of 40 million Units (inclusive of subscriptions by HCP-FVA). The Financing is expected to close on or before September 23, 2018, and documentation relating to the Financing is anticipated to be provided to prospective investors during the week of August 15, 2018. Each Unit consists of the following (each, a “Unit”): i. $0.10 in senior secured debt (for a total of $4 million of senior secured debt assuming full subscription of the Financing), secured by all of the assets of the Company and guaranteed by each of the Company’s domestic subsidiaries, having an interest rate of prime plus 0.75% and a maturity date of June 30, 2021 (the “Term Loan”); ii. warrants to purchase 12.233 shares of the Company’s common stock for a nominal exercise price (for a total of 489.32 million shares assuming full subscription of the Financing) (the “Financing Warrants”); and iii. 0.0225 shares of Series A Preferred Stock at a per Unit price of $0.2643 (subject to increase to take into account accretion of the Series A Preferred Stock after June 30, 2018), all such shares to be acquired directly from their current holder, HCP-FVA. The closing of the Commitment effectively constitutes HCP-FVA’s purchase of 30 million Units in the Financing. As a result, the maximum additional funds that the Company may receive in the Financing is $1 million through the purchase of 10 million Units by other eligible stockholders. If other eligible stockholders subscribe for more than 10 million Units, they will purchase those additional Units consisting of senior secured debt and Series A Preferred Stock directly from HCP-FVA (with the associated Financing Warrants to be issued by the Company directly to the eligible stockholders, and HCP-FVA’s Financing Warrants associated with those additional Units sold to the eligible stockholders to be cancelled in accordance with the terms of such Financing Warrants), subject to HCP-FVA maintaining at least 25% of the total Units to be issued in the Financing. HCP-FVA has agreed to subscribe for more than its pro rata portion of the Units available for purchase in the Financing (based on common stock ownership on an as-converted basis as of November 17, 2017), and if other eligible stockholders elect to subscribe for more than their pro rata share, the remaining Units shall be allocated among such stockholders (including HCP-FVA) based on their common stock ownership on an as-converted basis as of November 17, 2017 and HCP-FVA's right to purchase 25% of the total units in the Financing. On February 23, 2018, in connection with HCP-FVA’s subscription in the Financing, the Company entered into an Amended and Restated Term Loan Credit Agreement, dated as of the same date (the “Amended and Restated Loan Agreement”), with HCP-FVA and certain other loan parties named therein setting forth the terms of the Term Loan. The Amended and Restated Loan Agreement amends and restates the Loan Agreement. Under the Amended and Restated Loan Agreement, in the event the Term Loan is prepaid for any reason, such prepayment will be subject to the payment of a premium in an amount equal to 5% of the principal amount prepaid. The Term Loan is required to be prepaid upon the occurrence of certain events, including but not limited to certain assets dispositions, the incurrence of additional indebtedness, the receipt of insurance proceeds, and a change of control, subject to certain exceptions. The Amended and Restated Loan Agreement has customary representations, warranties and affirmative and negative covenants. The negative covenants include financial covenants by the Company to (i) maintain minimum cash denominated in U.S. dollars plus accounts receivable outstanding for less than 90 days of $2 million , and (ii) until the consummation of the Financing with eligible stockholders (other than HCP-FVA), not permit a variance of more than 10% of net cash flow from the amounts set forth in a rolling weekly detailed budget through the second fiscal quarter of 2018, agreed upon at the signing of the Amended and Restated Loan Agreement. The Amended and Restated Loan Agreement also contains customary events of default, including but not limited to payment defaults, cross defaults with certain other indebtedness, breaches of covenants, bankruptcy events and a change of control. In the case of an event of default, as administrative agent under the Loan Agreement, HCP-FVA may (and upon the written request of lenders holding in excess of 50% of the Term Loan, which must include HCP-FVA, is required to accelerate payment of all obligations under the Loan Agreement, and seek other available remedies). Under the Amended and Restated Loan Agreement, the Company also agreed to use its commercially reasonable efforts to obtain, as soon as practicable, the approval of its stockholders to amend the Company’s Restated Certificate of Incorporation, as amended, to increase the number of authorized shares of the Company’s common stock in order to permit the exercise of the Financing Warrants issuable in the Financing (the “Stockholder Approval”). Such stockholder approval has been obtained. As part of the Commitment, Hale Capital also agreed to postpone the date of the redemption of the Series A Preferred Stock from August 5, 2017 to July 30, 2021, and to waive prior breaches of the terms of the Series A Preferred Stock which had also triggered a redemption right. If eligible stockholders (other than HCP-FVA) subscribe for and purchase more than fifty percent ( 50% ) of the Units in the Financing on the terms and conditions set forth in Section 10.13 of the Amended and Restated Loan Agreement and Schedule 10.13 thereto, then 66.66% of the number of shares of common stock issued to HCP-FVA in respect of the Backstop Warrants issued upon the closing of the Commitment (or, if the Backstop Warrants issued upon the closing of the Commitment have not then been exercised, issuable to HCP-FVA) upon exercise of such Backstop Warrants, as determined on a post-cashless exercise basis, shall be cancelled (and, if such Backstop Warrants have been exercised on a non-cashless exercise basis, the Company shall reimburse HCP-FVA for the cash exercise price paid in respect of the cancelled warrant shares). In consideration for HCP-FVA’s subscription of 3 million of Units, HCP-FVA was issued Financing Warrants to purchase 366,990,000 shares of the Company’s common stock for a nominal exercise price. The Financing Warrants are currently exercisable as Stockholder Approval has been obtained. On April 23, 2018, HCP-FVA exercised most of its Backstop Warrants on a cash-less basis and was issued 53,370,601 shares of the Company's common stock. The issuance of the Financing Warrants and the Backstop Warrants in connection with the Commitment and the Financing will have a substantial dilutive effect on all existing stockholders of the Company. For example, if HCP-FVA is the only subscriber in the Financing, Hale Capital will beneficially own, when combined with Hale Capital’s current ownership and shares set aside for management, approximately 73% of the common stock of the Company on an as-converted basis. If the Financing is fully subscribed and HCP-FVA’s subscription amounts to 25% of the total number of Units issued in the Financing, Hale Capital will beneficially own, when combined with Hale Capital’s current ownership and shares set aside for management, approximately 22% of the common stock of the Company on an as-converted basis. The Commitment and the Financing were approved by the Company’s Board of Directors, based on a recommendation of a special committee of independent directors, with Mr. Hale recusing himself. As previously disclosed in the Company’s filings with the Securities and Exchange Commission, the Company was actively seeking financing in order to meet the Company’s operating cash flow needs. During the fiscal year-ended December 31, 2017 and six months ended June 30, 2018 , FalconStor was unable to make its Series A Preferred Stock quarterly dividend payments, and was subject to mandatory redemption under the Series A Preferred Stock purchase agreement. In conjunction with the Commitment, Hale Capital agreed to postpone the date of the mandatory redemption of the Series A Preferred Stock from August 5, 2017 to July 30, 2021, and to waive prior breaches of the terms of the Series A Preferred Stock which had also triggered a mandatory redemption right (“Series A Mandatory Redemption Extension”). Accordingly, as a result of these changes, for accounting purposes, the Series A Preferred Stock is considered new Series A Preferred Stock. As a result, the Company assessed whether the transaction was a troubled debt restructuring. Although the Company meets the criteria of a debtor experiencing financial difficulties as described above in Accounting Standards Code ("ASC") 470-60-55-8, Hale Capital was not granted a concession as defined in ASC 470-60-55-10 as the effective interest rate for both the Series A Preferred Stock and the Original Loan was higher following the restructuring of Series A Preferred Stock and Long-Term Debt compared to the interest rate immediately before the restructuring. Since no concession was granted, Troubled Debt Restructuring accounting guidance does not apply. As part of the analysis, the present value of the cash flows under the terms of the new Series A Preferred Stock and loans are greater than 10% different than the present value of the old Series A Preferred Stock and loans cash flows, as such extinguishment treatment applies. There is no beneficial conversion feature associated with the revised Series A Preferred Stock. When preferred stock is extinguished, the issuer should include the gain or loss on extinguishment in its net income attributable to common shareholders used to calculate earnings per share, as described in ASC 260-10-S99-2. When multiple instruments are issued in a single transaction, the total proceeds from the transaction should be allocated among the individual freestanding instruments identified. Since Hale Capital currently holds all of the debt and Series A Preferred Stock, the restructuring is considered to be a capital transaction. As such the gain or loss is recorded in equity. ASC 470-20-25-2 requires that debt or stock with detachable warrants issued in a bundled transaction with debt and equity proceeds be accounted for separately, based on the relative fair values of each instrument. The proceeds allocated to the Backstop Warrants and Financing Warrants are valued at $4,143,000 . Derivative treatment does not apply to the warrants issued in association with the restructuring based upon the warrants being penny warrants (pre-paid stock). Warrants should be considered outstanding in earnings per share calculation if the Company is profitable to common shareholders; otherwise, warrants should be excluded as the effect would be antidilutive. At the time of the grant, the Company had insufficient shares outstanding to accommodate the exercise of the Financing Warrants granted as detailed in the Background section above. ASC 480 "Distinguishing Liabilities from Equity" is referenced below to determine whether such warrants need to be recorded as liabilities or equity. Warrant grants that do not have associated outstanding common shares, will be recorded as liabilities as the Company would be required to settle such obligations using cash settlement (deficient by 368,533,620 shares). Changes in the fair value of the liability from period to period should be reflected within earnings. On June 22, 2018, the Company filed a certificate of amendment to the Company’s Restated Certificate of Incorporation to increase the authorized shares of common stock to 800,000,000 . As a result, the fair value of these warrants have been reclassified to equity. The warrants contain standard antidilution language; therefore, they do not prevent a freestanding instrument from being considered indexed to the issuer’s own stock. The initial transaction was recorded as follows: At Inception February 23, 2018 Basis Fair Value Series A redeemable convertible preferred stock, net $ 10,312,113 $ 8,709,684 Notes payable, net 2,728,778 2,457,249 Warrant liability — 4,143,000 Total $ 13,040,891 $ 15,309,933 Deemed dividend $ 2,269,042 The Series A Preferred Stock consists of the following: Series A redeemable convertible preferred stock principal balance $ 9,000,000 Accrued dividends 1,312,112 Discount (1,602,428 ) Total Series A redeemable convertible preferred stock, net at inception on February 23, 2018 8,709,684 Accrued dividends 214,963 Accretion of preferred stock 115,750 Total Series A redeemable convertible preferred stock, net at June 30, 2018 $ 9,040,397 The notes payable balance consists of the following: Notes payable principal balance $ 3,000,000 Deferred issuance costs (254,247 ) Discount (288,504 ) Total notes payable, net at inception on February 23, 2018 2,457,249 Accretion of discount 72,321 Deferred issuance costs (3,900 ) Total notes payable, net at June 30, 2018 $ 2,525,670

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 2018
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, 2018 , the Company did not have any Level 1 category assets included in the condensed consolidated balance sheets. At December 31, 2017 , 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, 2018 and December 31, 2017 , 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, 2018 and December 31, 2017 , 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, 2018 or December 31, 2017 . The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at June 30, 2018 : Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets Significant other Inputs Significant Unobservable Inputs Derivative liabilities: Derivative Instruments 482,871 — — 482,871 Total derivative liabilities 482,871 — — 482,871 Total assets and liabilities measured at fair value $ 482,871 $ — $ — $ 482,871 The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2017 : Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets Significant other Inputs Significant Unobservable Inputs Derivative liabilities: Derivative Instruments 445,838 — — 445,838 Total derivative liabilities 445,838 — — 445,838 Total assets and liabilities measured at fair value $ 445,838 $ — $ — $ 445,838 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 fair value of the Company's Series A Preferred Stock is based on its future cash flows discounted at a 15% yield. The fair value of the Company's note payable is based on its future cash flows discounted at 12% . The fair value of the Backstop Warrants and Financing Warrants to purchase approximately 424 million shares of the Company's common stock , was based on the enterprise value of the Company calculated by a third party appraiser less the preferred stock and preferred stock accrued dividends that have a preference over common shares. These warrants were then valued based on a Black Scholes value using volatility of 60% and resulted in a fair value of approximately $0.01 per share. 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, 2018 and June 30, 2017 : Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Beginning Balance $ 445,838 $ 355,612 $ 445,838 $ 336,862 Total loss recognized in earnings 37,033 63,948 37,033 82,698 Ending Balance $ 482,871 $ 419,560 $ 482,871 $ 419,560

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies The Company’s headquarters are located in Austin, Texas. The Company has an operating lease covering its Melville, N.Y. office facility that expires in April 2021. The Company also has several additional operating leases related to offices in foreign countries. The expiration dates for these leases range from 2018 through 2021. The following is a schedule of future minimum lease payments for all operating leases as of June 30, 2018 : Payments Sublease Income Net Commitments 2018 1,003,556 (178,414 ) 825,142 2019 1,614,843 (428,194 ) 1,186,649 2020 1,444,247 (428,194 ) 1,016,053 2021 491,020 (142,731 ) 348,289 Thereafter — — — $ 4,553,666 $ (1,177,533 ) $ 3,376,133 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, 2018 , 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 on 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 Preferred Stock in accordance with its obligations, the Series A Preferred Stockholders may require the Company to redeem all or some of the Series A 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 Preferred Stock and the closing price as of the occurrence of the triggering event. Commencing after July 30, 2021, each Series A Preferred Stockholder can require the Company to redeem its Series A 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 Preferred Stock for two consecutive quarters, which provides the Series A Preferred Stockholders the right to require the Company to redeem any of the Series A 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 Preferred Stock and the closing price of the Company's common stock as of December 31, 2016. The holder of the Series A Preferred Stock did not exercise this right as the holder of the Series A Preferred Stock subsequently agreed to waive these breaches. As of June 30, 2018 , the Company did not fail any non-financial covenants related to the Company's Series A Preferred Stock. As of August 14, 2017, the Board appointed Todd Brooks as Chief Executive Officer effective August 14, 2017. In connection with Mr. Brooks’ appointment as Chief Executive Officer, the Board approved an offer letter to Mr. Brooks (the “Brooks Agreement”), which was executed on August 14, 2017. The Brooks Offer Letter provides that Mr. Brooks is entitled to receive an annualized base salary of $350,000 , payable in regular installments in accordance with the Company’s general payroll practices. Mr. Brooks will also be eligible for a cash bonus of $17,500 for any quarter that is free cash flow positive on an operating basis and additional incentive compensation of an annual bonus of up to $200,000 , subject to attainment of performance objectives to be mutually agreed upon and established. Pursuant to the Brooks Agreement, the Company created the 2018 Plan, which was adopted by the Company's stockholders on June 22, 2018. The 2018 Plan provides for the issuance of up to 147,199,698 shares which is based on up to 15% of the equity of the Company on a fully diluted basis, plus potentially two additional tranches of 2.5% of the equity of the Company on a fully diluted basis. Mr. Brooks’ employment can be terminated at will. If Mr. Brooks’ 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 ( 6 ) months of Mr. Brooks’ employment. Except as set forth in the preceding sentence, Mr. Brooks 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 ( 6 ) months and his employment was terminated by the Company without cause. Mr. Brooks is also entitled to vacation and other employee benefits in accordance with the Company’s policies as well as reimbursement for an apartment. On April 5, 2018, the Company announced the appointment of Brad Wolfe to serve as the Company’s Executive Vice President, Chief Financial Officer and Treasurer, effective April 9, 2018. Mr. Wolfe shall also assume the roles of principal financial officer and principal accounting officer of the Company. In connection with Mr. Wolfe’s appointment as Chief Financial Officer, the Board approved an offer letter to Mr. Wolfe (the “Wolfe Offer Letter”), which was executed on April 4, 2018. The Wolfe Offer Letter provides that Mr. Wolfe is entitled to receive an annualized base salary of $240,000 , payable in regular installments in accordance with the Company’s general payroll practices. Mr. Wolfe will also be eligible for a cash bonus of $10,000 for any quarter has net working capital – cash in excess of $27,500 and additional incentive compensation of an annual bonus of up to $70,000 , subject to attainment of performance objectives to be mutually agreed upon and established. 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, 2018 , the restructuring accrual totaled $461,362 . 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 six months . In June 2017, the Board approved a comprehensive plan to increase operating performance (the “2017 Plan”). The 2017 Plan resulted in a realignment and reduction in workforce. The 2017 Plan was substantially completed by the end of the Company’s fiscal year ended December 31, 2017, and when combined with previous workforce reductions in the second quarter of Fiscal 2017 reduced the Company’s workforce to approximately 76 employees. In connection with the 2017 Plan, the Company incurred severance expense of $1.2 million for the fiscal year ended December 31, 2017. In making these changes, the Company prioritized customer support and development while consolidating operations and streamlining direct sales resources allowing the company to focus on the install base and develop alternate channels to the market. In the three months ended June 30, 2018 , we had vacated a portion of the Mellville, NY office space. In accordance with accounting standards governing costs associated with exit or disposal activities, expenses related to future rental payments for which the Company longer intends to receive any economic benefit are accrued when the Company ceases to use the leased space and have been reduced by estimated sublease income. In the three months ended June 30, 2018 , the Company incurred lease disposal-related costs of $0.8 million. In addition, as of June 30, 2018 , the Company's liability for uncertain tax positions totaled $270,238 . 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, 2018
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 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 Preferred Stock is convertible into common stock equivalents, at the option of the holder and upon certain 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). If the volume weighted average price of common stock for each trading day of any 60 consecutive trading days exceeds 250% of the conversion price and exceeds 225% of the conversion price through the conversion date, and certain equity conditions are met such that shares of common stock issued upon conversion can be immediately saleable by the Series A Preferred Stockholders, the Company can convert the Series A 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 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 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 Preferred Stock provides 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 Preferred Stock still have outstanding Series A Preferred Stock, then the Company must offer to repurchase their Series A Preferred Stock. The holder of the Series A Preferred Stock has the right to accept the offer or to retain their Series A Preferred Stock. If the Company does a financing, and the holder of the Series A Preferred Stock elect to have their Series A Preferred Stock repurchased, then the capital raised in excess of $5.0 million will go to repurchase the holders’ Series A 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 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 Preferred Stock, the Series A 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 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 Preferred Stock on an as converted basis as of June 30, 2018 ) 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 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 Preferred Stock at June 30, 2018 is $10.5 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 Preferred Stock in accordance with its obligations, the Series A Preferred Stockholder may require the Company to redeem all or some of the Series A 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 Preferred Stock and the closing price as of the occurrence of the triggering event. On or after July 30, 2021, each Series A Preferred Stockholder can require the Company to redeem its Series A 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 Preferred Stock, the dividends accruing on any outstanding Series A Preferred Stock will increase to prime plus 10% (from prime plus 5% ). For each six months that the Series A 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 Preferred Stock would be considered a “Breach Event” under the agreements with the holders of the Series A 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 Preferred Stock, then, under the agreements with the holders of our Series A Preferred Stock, the Company's Board of Directors would automatically be increased, with the holders of the Series A Preferred Stock having the right to appoint the new directors, so that the holders of the Series A Preferred stock would have appointed a majority of the Board of Directors. This would give the holders of the Series A 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 Preferred Stock for two consecutive quarters, which provides the Series A Preferred Stockholders the right to require the Company to redeem any of the Series A 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 Preferred Sock and the closing price of the Company's common stock as of December 31, 2016. As part of the Amended Restated Loan Agreement, the holder of the Series A Preferred Stock agreed to waive these breaches. As of June 30, 2018 , the Company did not fail any non-financial covenants related to the Company's Series A Preferred Stock. The holders of the Series A Preferred Stock are entitled to receive quarterly dividends at the Prime Rate (Wall Street Journal Eastern Edition) plus 5% (up to a maximum amount of 10%) , payable in cash, provided, that if the Company will not have at least $1.0 million in positive cash flow for any calendar quarter after giving effect to the payment of such dividends, the Company, at its election, can pay such dividends in whole or in part in cash, provided that cash flow from operations is not negative, and the remainder can be accrued or paid in common stock to the extent certain equity conditions are satisfied. As of December 31, 2016, March 31, 2017, June 30, 2017, September 30, 2017 and December 31, 2017, due to the lack of sufficient surplus to pay dividends as required by the Delaware General Corporation Law, the Company was not permitted to pay dividends in cash or through the issuance of common stock. As of June 30, 2018 , the Company's liability for dividends to the holder of the Series A Preferred Stock totaled $1,642,825 . Each share of Series A Preferred Stock has a vote equal to the number of shares of common stock into which the Series A 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, the holder of the Series A 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 Preferred Stock; payment of dividends or distributions; any liquidation, capitalization, reorganization or any other fundamental transaction of the Company, other than that set forth above; issuance of certain equity securities senior to or in parity with the Series A Preferred Stock as to dividend rights, redemption rights, liquidation preference and other rights; issuances of equity below the conversion price; any liens or borrowings other than non-convertible indebtedness from standard commercial lenders which does not exceed 80% of the Company’s accounts receivable; and the redemption or purchase of any capital stock of the Company. The Company has classified the Series A 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 Preferred Stock, the contingent redemption put options in the Series A 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 was bifurcated from the Series A Preferred Stock and recorded as a liability. As of June 30, 2018 and December 31, 2017 the fair value of these derivative instruments was $482,871 and $445,838 , respectively, and were included in "other long-term liabilities" within the consolidated balance sheets. The loss on the change in fair value of these derivative instruments for the six months ended June 30, 2018 and June 30, 2017 of $37,033 and $82,698 , respectively, were included in “interest and other loss, net” within the consolidated statement of operations. 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, 2018 and 2017 , were as follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Beginning Balance $ 445,838 $ 355,612 $ 445,838 $ 336,862 Total loss recognized in earnings 37,033 63,948 37,033 82,698 Ending Balance $ 482,871 $ 419,560 $ 482,871 $ 419,560 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 Preferred Stock. These costs were being accreted to the Series A 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 at that time. In connection with the Commitment, Hale agreed to the Series A mandatory extension and waived prior breaches of the terms of the Series A Preferred Stock. The Company included deductions for accretion, deemed and accrued dividends on the Series A Preferred Stock as adjustments to net loss attributable to common stockholders on the statement of operations and in determining loss per share for the three and six months ended June 30, 2018 and 2017 , respectively. The following represents a reconciliation of net loss attributable to common stockholders for the three and six months ended June 30, 2018 and 2017 , respectively: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net loss $ (1,004,104 ) $ (639,801 ) $ (497,227 ) $ (1,751,998 ) Effects of Series A redeemable convertible preferred stock: Less: Accrual of Series A redeemable convertible preferred stock dividends 214,963 215,089 458,130 419,664 Less: Deemed dividend on Series A redeemable convertible preferred stock — — 2,269,042 — Less: Accretion to redemption value of Series A redeemable convertible preferred stock 77,645 — 115,750 — Net loss attributable to common stockholders $ (1,296,712 ) $ (854,890 ) $ (3,340,149 ) $ (2,171,662 )

Accumulated Other Comprehensive

Accumulated Other Comprehensive Loss	6 Months Ended
	Jun. 30, 2018
Equity [Abstract]
Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss The changes in Accumulated Other Comprehensive Loss, net of tax, for the three months ended June 30, 2018 are as follows: Foreign Currency Net Unrealized Gains (Losses) on Marketable Net Minimum Total Accumulated other comprehensive income (loss) at March 31, 2018 $ (2,066,185 ) $ — $ 22,097 $ (2,044,088 ) Other comprehensive income (loss) Other comprehensive income before reclassifications 129,956 — — 129,956 Amounts reclassified from accumulated other comprehensive income (loss) — — — — Total other comprehensive income 129,956 — — 129,956 Accumulated other comprehensive income (loss) at June 30, 2018 $ (1,936,229 ) $ — $ 22,097 $ (1,914,132 ) The changes in Accumulated Other Comprehensive Loss, net of tax, for the six months ended June 30, 2018 are as follows: Foreign Currency Net Unrealized (Losses) Gains on Marketable Net Minimum Total Accumulated other comprehensive income (loss) at December 31, 2017 $ (1,980,940 ) $ — $ 22,097 $ (1,958,843 ) Other comprehensive income (loss) Other comprehensive income (loss) before reclassifications 44,711 — — 44,711 Amounts reclassified from accumulated other comprehensive income (loss) — — — — Total other comprehensive income (loss) 44,711 — — 44,711 Accumulated other comprehensive income (loss) at June 30, 2018 $ (1,936,229 ) $ — $ 22,097 $ (1,914,132 ) The changes in Accumulated Other Comprehensive Loss, net of tax, for the three months ended June 30, 2017 are as follows: Foreign Currency Net Unrealized Net Minimum Total Accumulated other comprehensive income (loss) at March 31, 2017 $ (2,051,917 ) $ — $ 28,675 $ (2,023,242 ) Other comprehensive income (loss) Other comprehensive income before reclassifications 5,433 — — 5,433 Amounts reclassified from accumulated other comprehensive income (loss) — — — — Total other comprehensive income 5,433 — — 5,433 Accumulated other comprehensive income (loss) at June 30, 2017 $ (2,046,484 ) $ — $ 28,675 $ (2,017,809 ) The changes in Accumulated Other Comprehensive Loss, 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 income (loss) at December 31, 2016 $ (1,866,388 ) $ — $ 28,675 $ (1,837,713 ) Other comprehensive income (loss) Other comprehensive income (loss) before reclassifications (180,096 ) — — (180,096 ) Amounts reclassified from accumulated other comprehensive income (loss) — — — — Total other comprehensive income (loss) (180,096 ) — — (180,096 ) Accumulated other comprehensive income (loss) at June 30, 2017 $ (2,046,484 ) $ — $ 28,675 $ (2,017,809 ) For the three and six months ended June 30, 2018 , the amounts reclassified to net income (loss) related to the Company’s defined benefit plan and maturity of marketable securities. These amounts are included within “ Operating income (loss) ” within the condensed consolidated statements of operations.

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Jun. 30, 2018
Equity [Abstract]
Stockholders' Equity	Stockholders' Equity Amendments to Articles of Incorporation On June 22, 2018, following stockholder approval, the Company filed a certificate of amendment (the “Charter Amendment”) to the Company’s Restated Certificate of Incorporation, as amended, with the Delaware Secretary of State to increase the authorized shares of common stock, $.001 par value per share, to 800,000,000 and filed an Amended and Restated Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock (the “Amended and Restated Certificate of Designations”) with the Delaware Secretary of State to implement certain modifications to the terms of the Company’s Series A Preferred Stock. 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 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, 2018 and 2017 , the Company did not repurchase any shares of its common stock. As of June 30, 2018 , 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, 2018
Commitments and Contingencies Disclosure [Abstract]
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, 2018
Segment Reporting [Abstract]
Segment Reporting	Segment Reporting and Concentrations 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, 2018 and 2017 , and the location of long-lived assets as of June 30, 2018 and December 31, 2017 , are summarized as follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Revenue: Americas $ 931,246 $ 2,040,247 $ 2,062,895 $ 3,641,494 Asia Pacific 1,631,910 2,445,409 3,580,334 4,696,486 Europe, Middle East, Africa and Other 1,448,425 2,248,670 3,362,301 4,435,461 Total Revenue $ 4,011,581 $ 6,734,326 $ 9,005,530 $ 12,773,441 June 30, 2018 December 31, 2017 Long-lived assets: Americas $ 6,976,675 $ 5,754,977 Asia Pacific 787,199 822,885 Europe, Middle East, Africa and Other 186,818 213,371 Total long-lived assets $ 7,950,692 $ 6,791,233 For the three and six months ended June 30, 2018 , the Company had one customer that accounted for 10% or more of total revenue. For the three and six months ended June 30, 2017 , the Company had no customers that accounted for 10% of total revenue. As of June 30, 2018 , the Company had no customers that accounted for 10% or more of the gross accounts receivable balance. As of December 31, 2017 , the Company had one customer that accounted for 23% of the gross accounts receivable balance.

Restructuring Costs

Restructuring Costs	6 Months Ended
	Jun. 30, 2018
Restructuring and Related Activities [Abstract]
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 remaining severance related costs to be paid once final settlement litigation is completed, which can be at various times over the next six months . In June 2017, the Board approved a comprehensive plan to increase operating performance (the “2017 Plan”). The 2017 Plan resulted in a realignment and reduction in workforce. The 2017 Plan was substantially completed by the end of the Company’s fiscal year ended December 31, 2017, and when combined with previous workforce reductions in the second quarter of Fiscal 2017 reduced the Company’s workforce to approximately 76 employees. In connection with the 2017 Plan, the Company incurred severance expense of $1.2 million for the fiscal year ended December 31, 2017. In making these changes, the Company prioritized customer support and development while consolidating operations and streamlining direct sales resources, allowing the Company to focus on the install base and develop alternate channels to the market. As part of this consolidation effort the Company vacated a portion of the Mellville, NY office space during the three months ended June 30, 2018 . In accordance with accounting standards governing costs associated with exit or disposal activities, expenses related to future rental payments for which the Company no longer intends to receive any economic benefit are accrued, net of any anticipated sublease income, when the Company ceases use of the leased space. During the three months ended June 30, 2018 , the Company incurred lease disposal-related costs for this property of $0.8 million. The following table summarizes the activity during 2018 related to restructuring liabilities recorded in connection with the 2013 and 2017 Plans: Severance Related Costs Facility and Other Costs Total Balance at December 31, 2017 $ 648,399 $ — $ 648,399 Additions (Reductions) (173,263 ) — (173,263 ) Utilized/Paid (13,774 ) — (13,774 ) Balance at March 31, 2018 $ 461,362 $ — $ 461,362 Additions (Reductions) — 809,245 809,245 Utilized/Paid — (312,507 ) (312,507 ) Balance at June 30, 2018 $ 461,362 $ 496,738 $ 958,100 The severance and facility related liabilities are included within “accrued expenses” in the accompanying condensed consolidated balance sheets. The expenses under the 2013 and 2017 Plans 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, 2018
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.
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. During the first quarter of 2018, the Company also had significant estimates in the determination of the fair value of Series A Preferred Stock, notes payable and warrants issued. 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, 2018 , and the results of its operations for the three and six months ended June 30, 2018 and 2017 . 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, 2017 (" 2017 Form 10-K").
Recently Adopted and Issued Accounting Pronouncements	Recently Adopted Accounting Pronouncements Revenue from Contracts with Customers In May 2014, the FASB ("Financial Accounting Standards Board") 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 replaces most existing revenue recognition guidance in GAAP in the United States and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. We adopted the new guidance as of January 1, 2018 using the modified retrospective transition method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with our historic accounting under previous revenue guidance. The most significant impact of the standard relates to our accounting for our term license revenue. Specifically, for Freestor software subscription licenses, revenue is now recognized at the time of delivery rather than ratably over the subscription period. The adoption of the standard resulted in an increase to the opening balance of accumulated deficit of $8.9 million , related to the cumulative effect of a decrease in deferred revenue of $5.4 million , an increase in contract assets of $3.1 million from the upfront recognition of term licenses and the general requirement to allocate the transaction price on a relative stand-alone selling price, and an increase of $0.4 million in prepaid expenses and other current assets. Following is a summary of the impact to the Company’s current financial results from adopting the new revenue recognition standard: Statements of Operations Under Previous Guidance New Revenue Standard Adjustment Under Current Accounting Guidance Three Months Ended June 30, 2018 Product revenue $ 2,407,652 $ (1,424,007 ) $ 983,645 Support and services revenue 2,840,818 187,118 3,027,936 Selling and marketing 850,951 21,158 872,109 Provision for income taxes 551 — 551 Net income (loss) 211,627 (1,215,731 ) (1,004,104 ) Net loss attributable to common stockholders (80,981 ) (1,215,731 ) (1,296,712 ) Basic net income (loss) per share attributable to common stockholders — (0.02 ) (0.02 ) Diluted net income (loss) per share attributable to common stockholders — (0.02 ) (0.02 ) Statements of Operations Under Previous Guidance New Revenue Standard Adjustment Under Current Accounting Guidance Six Months Ended June 30, 2018 Product revenue $ 4,075,136 $ (1,157,547 ) $ 2,917,589 Support and services revenue 6,087,941 — 6,087,941 Selling and marketing 2,009,672 55,987 2,065,659 Provision for income taxes 62,990 — 62,990 Net income (loss) 604,333 (1,101,560 ) (497,227 ) Net loss attributable to common stockholders (2,238,589 ) (1,101,560 ) (3,340,149 ) Basic net loss per share attributable to common stockholders (0.03 ) (0.02 ) (0.05 ) Diluted net loss per share attributable to common stockholders (0.03 ) (0.02 ) (0.05 ) Balance Sheets Under Previous Guidance New Revenue Standard Adjustment Under Current Accounting Guidance June 30, 2018 Prepaid expenses and other current assets $ 948,272 $ 305,743 $ 1,254,015 Contract assets, net, current — 1,477,619 1,477,619 Contract assets, net, long-term — 1,460,494 1,460,494 Deferred revenue, net, current 10,842,101 (3,596,977 ) 7,245,124 Deferred tax liabilities, net 85,559 — 85,559 Deferred revenue, net, long-term 5,250,834 (824,196 ) 4,426,638 Accumulated deficit (130,161,907 ) 7,665,029 (122,496,878 ) Adoption of the revenue recognition standard had no impact to cash from or used in operating, financing, or investing on our condensed consolidated statements of cash flows. See Note (2) Summary of Significant Accounting Policies for further details. Statements of Cash Flows 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. The Company has adopted this guidance and it did not have a significant impact on the Company's financial statements and related disclosures. Employee Benefit Plans 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 is the annual period ending December 31, 2018. The Company has adopted this guidance and it did not have a significant impact on the Company's financial statements and related disclosures. Financial Assets and Financial Liabilities 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 Company has adopted this guidance and it did not have a significant impact on the Company's financial statements and related disclosures. (g) Recently Issued Accounting Pronouncements In July 2018, the FASB issued ASU 2018-10 Leases (Topic 842),Codification Improvements and ASU 2018-11 Leases (Topic 842), Targeted Improvements , to provide additional guidance for the adoption of Topic 842 . ASU 2018-10 clarifies certain provisions and correct unintended applications of the guidance such as the application of implicit rate, lessee reassessment of lease classification, and certain transition adjustments that should be recognized to earnings rather than to stockholders' equity. ASU 2018-11 provides an alternative transition method and practical expedient for separating contract components for the adoption of Topic 842 . In February 2016, the FASB issued ASU 2016-02 Leases (Topic 842) which requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases with terms greater than 12 months. ASU 2018-11, ASU 2018-10, and ASU 2016-02 (collectively, "the new lease standards") are effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect the new lease standards will have on its Condensed Consolidated Financial Statements; however, the Company anticipates recognizing assets and liabilities arising from any leases that meet the requirements under the new lease standards on the adoption date and including qualitative and quantitative disclosures in the Company’s Notes to the Condensed Consolidated Financial Statements. In July 2018, the FASB issued ASU 2018-09, Codification Improvements. The amendments in ASU 2018-09 affect a wide variety of Topics in the FASB Codification and apply to all reporting entities within the scope of the affected accounting guidance. The Company has evaluated ASU 2018-09 in its entirety and determined that the amendments related to Topic 718-740, Compensation-Stock Compensation-Income Taxes, are the only provisions that currently apply to the Company. The amendments in ASU 2018-09 related to Topic 718-740, Compensation-Stock Compensation-Income Taxes, clarify that an entity should recognize excess tax benefits related to stock compensation transactions in the period in which the amount of the deduction is determined. The amendments in ASU 2018-09 related to Topic 718-740 are effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company does not expect the adoption of the new standard to have a material impact on the Company's Condensed Consolidated Financial Statements. In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, to expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees and supersedes the guidance in Subtopic 505-50, Equity - Equity-Based Payments to Non-Employees . Under ASU 2018-07, equity-classified nonemployee share-based payment awards are measured at the grant date fair value on the grant date. The probability of satisfying performance conditions must be considered for equity-classified nonemployee share-based payment awards with such conditions. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of the new standard on the Company's Condensed Consolidated Financial Statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which provides entities the option to reclassify tax effects stranded in accumulated other comprehensive income as a result of the 2017 Tax Cuts and Jobs Act (“the Tax Act”) to retained earnings. The guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company does not expect the adoption of this accounting standard to have a material impact on our financial position, results of operations, cash flows, or presentation thereof.
Revenue from Contracts with Customers and Associated Balances	Significant Judgments The Company’s contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. Judgment is required to determine the standalone selling price (“SSP”) for each distinct performance obligation. For products and services aside from maintenance and support, the Company estimates SSP by adjusting the list price by historical discount percentages. SSP for software and hardware maintenance and support fees is based on the stated percentages of the fees charged for the respective products. The Company’s perpetual and term software licenses have significant standalone functionality and therefore revenue allocated to these performance obligations are recognized at a point in time upon electronic delivery of the download link and the license keys. Product maintenance and support services are satisfied over time as they are stand-ready obligations throughout the support period. As a result, revenues associated with maintenance services are deferred and recognized as revenue ratably over the term of the contract. Revenues associated with professional services are recognized at a point in time upon customer acceptance. Assets Recognized from Costs to Obtain a Contract with a Customer The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. The Company has determined that its sales commission program meets the requirements for cost capitalization. Total capitalized costs to obtain a contract were immaterial during the periods presented and are included in other current and long-term assets on our consolidated balance sheets. The Company applies a practical expedient to expense costs as incurred for costs to obtain a contract with a customer when the amortization period would have been one year or less. Nature of Products and Services Licenses for on-premises software provide the customer with a right to use the software as it exists when made available to the customer. Customers may purchase perpetual licenses or subscribe to licenses, which provide customers with the same functionality and differ mainly in the duration over which the customer benefits from the software. Revenue from distinct on-premises licenses is recognized upfront at the point in time when the software is made available to the customer. Revenue allocated to software maintenance and support services is recognized ratably over the contractual support period. Hardware products consist primarily of servers and associated components and function independently of the software products and as such as accounted for as separate performance obligations. Revenue allocated to hardware maintenance and support services is recognized ratably over the contractual support period. Professional services are primarily related to software implementation services and associated revenue is recognized upon customer acceptance. Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a contract asset or receivable when revenue is recognized prior to invoicing, or unearned revenue when revenue is recognized subsequent to invoicing. For perpetual licenses with multi-year product maintenance agreements, the Company generally invoices customers at the beginning of the coverage period. For multi-year subscription licenses, the Company generally invoices customers annually at the beginning of each annual coverage period. The Company records a contract asset related to revenue recognized for multi-year on-premises licenses as its right to payment is conditioned upon providing product support and services in future years.

Basis of Presentation (Tables)

Basis of Presentation (Tables)	6 Months Ended
	Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule of Impact on Financial Results from Adopting Revenue Recognition Standard	Following is a summary of the impact to the Company’s current financial results from adopting the new revenue recognition standard: Statements of Operations Under Previous Guidance New Revenue Standard Adjustment Under Current Accounting Guidance Three Months Ended June 30, 2018 Product revenue $ 2,407,652 $ (1,424,007 ) $ 983,645 Support and services revenue 2,840,818 187,118 3,027,936 Selling and marketing 850,951 21,158 872,109 Provision for income taxes 551 — 551 Net income (loss) 211,627 (1,215,731 ) (1,004,104 ) Net loss attributable to common stockholders (80,981 ) (1,215,731 ) (1,296,712 ) Basic net income (loss) per share attributable to common stockholders — (0.02 ) (0.02 ) Diluted net income (loss) per share attributable to common stockholders — (0.02 ) (0.02 ) Statements of Operations Under Previous Guidance New Revenue Standard Adjustment Under Current Accounting Guidance Six Months Ended June 30, 2018 Product revenue $ 4,075,136 $ (1,157,547 ) $ 2,917,589 Support and services revenue 6,087,941 — 6,087,941 Selling and marketing 2,009,672 55,987 2,065,659 Provision for income taxes 62,990 — 62,990 Net income (loss) 604,333 (1,101,560 ) (497,227 ) Net loss attributable to common stockholders (2,238,589 ) (1,101,560 ) (3,340,149 ) Basic net loss per share attributable to common stockholders (0.03 ) (0.02 ) (0.05 ) Diluted net loss per share attributable to common stockholders (0.03 ) (0.02 ) (0.05 ) Balance Sheets Under Previous Guidance New Revenue Standard Adjustment Under Current Accounting Guidance June 30, 2018 Prepaid expenses and other current assets $ 948,272 $ 305,743 $ 1,254,015 Contract assets, net, current — 1,477,619 1,477,619 Contract assets, net, long-term — 1,460,494 1,460,494 Deferred revenue, net, current 10,842,101 (3,596,977 ) 7,245,124 Deferred tax liabilities, net 85,559 — 85,559 Deferred revenue, net, long-term 5,250,834 (824,196 ) 4,426,638 Accumulated deficit (130,161,907 ) 7,665,029 (122,496,878 )

Summary of Significant Accoun26

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2018
Accounting Policies [Abstract]
Schedule of Changes in Deferred Revenue	Changes in deferred revenue were as follows: Six Months Ended June 30, 2018 Balance at December 31, 2017 $ 18,360,690 Cumulative effect of applying ASC 606 under the modified retrospective method* (5,359,579 ) Deferral of revenue 7,720,187 Recognition of revenue (9,005,530 ) Change in reserves (44,006 ) Balance at June 30, 2018 $ 11,671,762 *See Note (1) Basis of Presentation to our unaudited condensed consolidated financial statements for further information.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Jun. 30, 2018
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, 2018 and 2017 : Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Stock options, warrants and restricted stock 370,239,830 6,427,858 370,239,830 6,427,858 Series A redeemable convertible preferred stock 8,781,516 8,781,516 8,781,516 8,781,516 Total anti-dilutive common stock equivalents 379,021,346 15,209,374 379,021,346 15,209,374
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, 2018 2017 2018 2017 Numerator Net loss $ (1,004,104 ) $ (639,801 ) $ (497,227 ) $ (1,751,998 ) Effects of Series A redeemable convertible preferred stock: Less: Series A redeemable convertible preferred stock dividends 214,963 215,089 458,130 419,664 Less: Deemed dividend on Series A redeemable convertible preferred stock — — 2,269,042 — Less: Accretion to redemption value of Series A redeemable convertible preferred stock 77,645 — 115,750 — Net loss attributable to common stockholders $ (1,296,712 ) $ (854,890 ) $ (3,340,149 ) $ (2,171,662 ) Denominator Weighted average basic shares outstanding 84,448,219 44,440,751 64,616,334 44,265,525 Effect of dilutive securities: Stock options, warrants and restricted stock — — — — Series A redeemable convertible preferred stock — — — — Weighted average diluted shares outstanding 84,448,219 44,440,751 64,616,334 44,265,525 EPS Basic net loss per share attributable to common stockholders $ (0.02 ) $ (0.02 ) $ (0.05 ) $ (0.05 ) Diluted net loss per share attributable to common stockholders $ (0.02 ) $ (0.02 ) $ (0.05 ) $ (0.05 )

Property and Equipment (Tables)

Property and Equipment (Tables)	6 Months Ended
	Jun. 30, 2018
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, 2018 and December 31, 2017 are as follows: June 30, 2018 December 31, 2017 Gross carrying amount $ 18,576,492 $ 18,563,071 Accumulated depreciation (18,071,912 ) (17,926,959 ) Property and Equipment, net $ 504,580 $ 636,112

Software Development Costs (Tab

Software Development Costs (Tables)	6 Months Ended
	Jun. 30, 2018
Research and Development [Abstract]
Summary of Software Development Costs	The gross carrying amount and accumulated amortization of software development costs as of June 30, 2018 and December 31, 2017 are as follows: June 30, 2018 December 31, 2017 Gross carrying amount $ 2,940,812 $ 2,917,215 Accumulated amortization (2,755,015 ) (2,637,801 ) Software development costs, net $ 185,797 $ 279,414

Goodwill and Other Intangible30

Goodwill and Other Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2018
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, 2018 and December 31, 2017 are as follows: June 30, 2018 December 31, 2017 Goodwill $ 4,150,340 $ 4,150,339 Other intangible assets: Gross carrying amount $ 3,856,262 $ 3,816,402 Accumulated amortization (3,745,591 ) (3,674,771 ) Net carrying amount $ 110,671 $ 141,631

Share-Based Payment Arrangeme31

Share-Based Payment Arrangements (Tables)	6 Months Ended
	Jun. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Details of Stock Option Plan	The following table summarizes the plan under which the Company was able to grant equity compensation as of June 30, 2018 : Shares Shares Available Shares Name of Plan Authorized for Grant Outstanding FalconStor Software, Inc. 2018 Incentive Stock Plan 147,199,698 147,199,698 —
Schedule of Equity Awards Outstanding	The following table summarizes the Company’s equity plans that have terminated or expired but that still have equity awards outstanding as of June 30, 2018 : Name of Plan Shares Available for Grant Shares Outstanding FalconStor Software, Inc., 2016 Incentive Stock Plan — 505,000 FalconStor Software, Inc., 2006 Incentive Stock Plan — 1,196,700 FalconStor Software, Inc., 2000 Stock Option Plan — 4,500
Schedule Of Share Based Compensation Recognized	The following table summarizes the 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, 2018 and 2017 : Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Cost of revenue - Support and Service 4,875 8,834 13,575 65,285 Research and development costs 18,744 54,813 41,350 184,528 Selling and marketing 4,525 7,198 12,457 63,738 General and administrative 1,375 26,310 (60,758 ) 229,018 $ 29,519 $ 97,155 $ 6,624 $ 542,569

Notes Payable and Stock Warra32

Notes Payable and Stock Warrants (Tables)	6 Months Ended
	Jun. 30, 2018
Payables and Accruals [Abstract]
Schedule of Initial Transaction Recorded	The initial transaction was recorded as follows: At Inception February 23, 2018 Basis Fair Value Series A redeemable convertible preferred stock, net $ 10,312,113 $ 8,709,684 Notes payable, net 2,728,778 2,457,249 Warrant liability — 4,143,000 Total $ 13,040,891 $ 15,309,933 Deemed dividend $ 2,269,042
Schedule of Components of Series A Preferred Stock	The Series A Preferred Stock consists of the following: Series A redeemable convertible preferred stock principal balance $ 9,000,000 Accrued dividends 1,312,112 Discount (1,602,428 ) Total Series A redeemable convertible preferred stock, net at inception on February 23, 2018 8,709,684 Accrued dividends 214,963 Accretion of preferred stock 115,750 Total Series A redeemable convertible preferred stock, net at June 30, 2018 $ 9,040,397
Schedule of Notes Payable	The notes payable balance consists of the following: Notes payable principal balance $ 3,000,000 Deferred issuance costs (254,247 ) Discount (288,504 ) Total notes payable, net at inception on February 23, 2018 2,457,249 Accretion of discount 72,321 Deferred issuance costs (3,900 ) Total notes payable, net at June 30, 2018 $ 2,525,670

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2018
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, 2018 : Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets Significant other Inputs Significant Unobservable Inputs Derivative liabilities: Derivative Instruments 482,871 — — 482,871 Total derivative liabilities 482,871 — — 482,871 Total assets and liabilities measured at fair value $ 482,871 $ — $ — $ 482,871 The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2017 : Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets Significant other Inputs Significant Unobservable Inputs Derivative liabilities: Derivative Instruments 445,838 — — 445,838 Total derivative liabilities 445,838 — — 445,838 Total assets and liabilities measured at fair value $ 445,838 $ — $ — $ 445,838
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, 2018 and June 30, 2017 : Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Beginning Balance $ 445,838 $ 355,612 $ 445,838 $ 336,862 Total loss recognized in earnings 37,033 63,948 37,033 82,698 Ending Balance $ 482,871 $ 419,560 $ 482,871 $ 419,560

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
	Jun. 30, 2018
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, 2018 : Payments Sublease Income Net Commitments 2018 1,003,556 (178,414 ) 825,142 2019 1,614,843 (428,194 ) 1,186,649 2020 1,444,247 (428,194 ) 1,016,053 2021 491,020 (142,731 ) 348,289 Thereafter — — — $ 4,553,666 $ (1,177,533 ) $ 3,376,133

Series A Redeemable Convertib35

Series A Redeemable Convertible Preferred Stock (Tables)	6 Months Ended
	Jun. 30, 2018
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, 2018 and 2017 , were as follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Beginning Balance $ 445,838 $ 355,612 $ 445,838 $ 336,862 Total loss recognized in earnings 37,033 63,948 37,033 82,698 Ending Balance $ 482,871 $ 419,560 $ 482,871 $ 419,560
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, 2018 and 2017 , respectively: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net loss $ (1,004,104 ) $ (639,801 ) $ (497,227 ) $ (1,751,998 ) Effects of Series A redeemable convertible preferred stock: Less: Accrual of Series A redeemable convertible preferred stock dividends 214,963 215,089 458,130 419,664 Less: Deemed dividend on Series A redeemable convertible preferred stock — — 2,269,042 — Less: Accretion to redemption value of Series A redeemable convertible preferred stock 77,645 — 115,750 — Net loss attributable to common stockholders $ (1,296,712 ) $ (854,890 ) $ (3,340,149 ) $ (2,171,662 )

Accumulated Other Comprehensi36

Accumulated Other Comprehensive Loss (Tables)	6 Months Ended
	Jun. 30, 2018
Equity [Abstract]
Schedule of accumulated other comprehensive loss	The changes in Accumulated Other Comprehensive Loss, net of tax, for the three months ended June 30, 2018 are as follows: Foreign Currency Net Unrealized Gains (Losses) on Marketable Net Minimum Total Accumulated other comprehensive income (loss) at March 31, 2018 $ (2,066,185 ) $ — $ 22,097 $ (2,044,088 ) Other comprehensive income (loss) Other comprehensive income before reclassifications 129,956 — — 129,956 Amounts reclassified from accumulated other comprehensive income (loss) — — — — Total other comprehensive income 129,956 — — 129,956 Accumulated other comprehensive income (loss) at June 30, 2018 $ (1,936,229 ) $ — $ 22,097 $ (1,914,132 ) The changes in Accumulated Other Comprehensive Loss, net of tax, for the six months ended June 30, 2018 are as follows: Foreign Currency Net Unrealized (Losses) Gains on Marketable Net Minimum Total Accumulated other comprehensive income (loss) at December 31, 2017 $ (1,980,940 ) $ — $ 22,097 $ (1,958,843 ) Other comprehensive income (loss) Other comprehensive income (loss) before reclassifications 44,711 — — 44,711 Amounts reclassified from accumulated other comprehensive income (loss) — — — — Total other comprehensive income (loss) 44,711 — — 44,711 Accumulated other comprehensive income (loss) at June 30, 2018 $ (1,936,229 ) $ — $ 22,097 $ (1,914,132 ) The changes in Accumulated Other Comprehensive Loss, net of tax, for the three months ended June 30, 2017 are as follows: Foreign Currency Net Unrealized Net Minimum Total Accumulated other comprehensive income (loss) at March 31, 2017 $ (2,051,917 ) $ — $ 28,675 $ (2,023,242 ) Other comprehensive income (loss) Other comprehensive income before reclassifications 5,433 — — 5,433 Amounts reclassified from accumulated other comprehensive income (loss) — — — — Total other comprehensive income 5,433 — — 5,433 Accumulated other comprehensive income (loss) at June 30, 2017 $ (2,046,484 ) $ — $ 28,675 $ (2,017,809 ) The changes in Accumulated Other Comprehensive Loss, 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 income (loss) at December 31, 2016 $ (1,866,388 ) $ — $ 28,675 $ (1,837,713 ) Other comprehensive income (loss) Other comprehensive income (loss) before reclassifications (180,096 ) — — (180,096 ) Amounts reclassified from accumulated other comprehensive income (loss) — — — — Total other comprehensive income (loss) (180,096 ) — — (180,096 ) Accumulated other comprehensive income (loss) at June 30, 2017 $ (2,046,484 ) $ — $ 28,675 $ (2,017,809 )

Segment Reporting (Tables)

Segment Reporting (Tables)	6 Months Ended
	Jun. 30, 2018
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, 2018 and 2017 , and the location of long-lived assets as of June 30, 2018 and December 31, 2017 , are summarized as follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Revenue: Americas $ 931,246 $ 2,040,247 $ 2,062,895 $ 3,641,494 Asia Pacific 1,631,910 2,445,409 3,580,334 4,696,486 Europe, Middle East, Africa and Other 1,448,425 2,248,670 3,362,301 4,435,461 Total Revenue $ 4,011,581 $ 6,734,326 $ 9,005,530 $ 12,773,441 June 30, 2018 December 31, 2017 Long-lived assets: Americas $ 6,976,675 $ 5,754,977 Asia Pacific 787,199 822,885 Europe, Middle East, Africa and Other 186,818 213,371 Total long-lived assets $ 7,950,692 $ 6,791,233

Restructuring Costs (Tables)

Restructuring Costs (Tables)	6 Months Ended
	Jun. 30, 2018
Restructuring and Related Activities [Abstract]
Schedule Of Restructuring Costs	The following table summarizes the activity during 2018 related to restructuring liabilities recorded in connection with the 2013 and 2017 Plans: Severance Related Costs Facility and Other Costs Total Balance at December 31, 2017 $ 648,399 $ — $ 648,399 Additions (Reductions) (173,263 ) — (173,263 ) Utilized/Paid (13,774 ) — (13,774 ) Balance at March 31, 2018 $ 461,362 $ — $ 461,362 Additions (Reductions) — 809,245 809,245 Utilized/Paid — (312,507 ) (312,507 ) Balance at June 30, 2018 $ 461,362 $ 496,738 $ 958,100

Basis of Presentation - Narrati

Basis of Presentation - Narrative (Details)	Feb. 23, 2018USD ($)	Jan. 01, 2018USD ($)	Jun. 30, 2018USD ($)	Jun. 30, 2017USD ($)	Jun. 30, 2018USD ($)	Jun. 30, 2017USD ($)	Dec. 31, 2017USD ($)	Nov. 17, 2017USD ($)	Dec. 31, 2016USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Working Capital Deficiency			$ (1,600,000)		$ (1,600,000)
Deferred revenue, net			7,245,124		7,245,124		$ 11,760,327
Total Stockholders' Deficit			(11,439,979)		(11,439,979)		(21,224,797)
Net loss			(1,004,104)	$ (639,801)	(497,227)	$ (1,751,998)
Net cash used in operating activities			700,000		700,456	(1,645,279)
Cash and cash equivalents			4,043,668	$ 1,647,695	4,043,668	$ 1,647,695	$ 1,011,472		$ 3,391,528
Cash Period Decrease			3,000,000
Entity number of employees							81
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Decrease in deferred revenue			(11,671,762)		(11,671,762)		$ (18,360,690)
Increase in contract assets			2,900,000		2,900,000		$ 0
Finance Commitment Loan | HCP-FVA, LLC
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Aggregate amount of debt	$ 3,000,000							$ 3,000,000
Loan And Security Agreement, Short-Term Loan | HCP-FVA, LLC
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Aggregate amount of debt	500,000							$ 500,000
Loan And Security Agreement, Long-Term Loan | HCP-FVA, LLC
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Aggregate amount of debt	$ 2,500,000
Prime rate | Secured Debt | Investor | Finance Commitment Loan
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Variable interest rate	0.75%
Accounting Standards Update 2014-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Increase in accumulated deficit		$ 8,900,000
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Deferred revenue, net			(3,596,977)		(3,596,977)
Net loss			$ (1,215,731)		$ (1,101,560)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Decrease in deferred revenue		5,400,000
Increase in contract assets		3,100,000
Increase in prepaid expenses and other current assets		$ 400,000

Basis of Presentation - Impact

Basis of Presentation - Impact on Financial Results from Adopting Revenue Recognition Standard (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Product revenue	$ 983,645	$ 2,499,655	$ 2,917,589	$ 4,420,707
Support and services revenue	3,027,936	4,234,671	6,087,941	8,352,734
Selling and marketing	872,109	2,109,599	2,065,659	4,160,141
Provision for income taxes	551	94,300	62,990	217,248
Net loss	(1,004,104)	(639,801)	(497,227)	(1,751,998)
Net income attributable to common stockholders	$ (1,296,712)	$ (854,890)	$ (3,340,149)	$ (2,171,662)
Basic net loss per share attributable to common stockholders (in dollars per share)	$ (0.02)	$ (0.02)	$ (0.05)	$ (0.05)
Diluted net loss per share attributable to common stockholders (in dollars per share)	$ (0.02)	$ (0.02)	$ (0.05)	$ (0.05)
Under Previous Guidance
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Product revenue	$ 2,407,652		$ 4,075,136
Support and services revenue	2,840,818		6,087,941
Selling and marketing	850,951		2,009,672
Provision for income taxes	551		62,990
Net loss	211,627		604,333
Net income attributable to common stockholders	$ (80,981)		$ (2,238,589)
Basic net loss per share attributable to common stockholders (in dollars per share)	$ 0		$ (0.03)
Diluted net loss per share attributable to common stockholders (in dollars per share)	$ 0		$ (0.03)
Accounting Standards Update 2014-09 | New Revenue Standard Adjustment
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Product revenue	$ (1,424,007)		$ (1,157,547)
Support and services revenue	187,118		0
Selling and marketing	21,158		55,987
Provision for income taxes	0		0
Net loss	(1,215,731)		(1,101,560)
Net income attributable to common stockholders	$ (1,215,731)		$ (1,101,560)
Basic net loss per share attributable to common stockholders (in dollars per share)	$ (0.02)		$ (0.02)
Diluted net loss per share attributable to common stockholders (in dollars per share)	$ (0.02)		$ (0.02)

Basis of Presentation - Impac41

Basis of Presentation - Impact on the Balance Sheet from Adopting Revenue Recognition Standard (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Prepaid expenses and other current assets	$ 1,254,015	$ 1,244,494
Contract assets, net	1,477,619	0
Contract assets, net	1,460,494	0
Deferred revenue, net	7,245,124	11,760,327
Deferred tax liabilities, net	85,559	85,559
Deferred revenue, net	4,426,638	6,600,363
Accumulated deficit	(122,496,878)	$ (130,930,284)
Under Previous Guidance
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Prepaid expenses and other current assets	948,272
Contract assets, net	0
Contract assets, net	0
Deferred revenue, net	10,842,101
Deferred tax liabilities, net	85,559
Deferred revenue, net	5,250,834
Accumulated deficit	(130,161,907)
Accounting Standards Update 2014-09 | New Revenue Standard Adjustment
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Prepaid expenses and other current assets	305,743
Contract assets, net	1,477,619
Contract assets, net	1,460,494
Deferred revenue, net	(3,596,977)
Deferred tax liabilities, net	0
Deferred revenue, net	(824,196)
Accumulated deficit	$ 7,665,029

Summary of Significant Accoun42

Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018	Jan. 01, 2018	Dec. 31, 2017
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Accounts receivable, net of allowances	$ 2,068,998	$ 2,068,998		$ 4,168,015
Contract assets	2,900,000	2,900,000		0
Contract assets, net	1,460,494	1,460,494		0
Write-offs in accounts receivable	0	400,000
Write-offs in contract assets account	0	0
Deferred revenue	11,671,762	$ 11,671,762		$ 18,360,690
Revenue expected to be recognized during next 12 months		62.00%
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Contract assets			$ 3,100,000
Contract assets, net	$ 1,460,494	$ 1,460,494
Deferred revenue			$ (5,400,000)

Summary of Significant Accoun43

Summary of Significant Accounting Policies - Changes in Deferred Revenue (Details)	6 Months Ended
	Jun. 30, 2018USD ($)
Movement in Deferred Revenue [Roll Forward]
Balance at December 31, 2017	$ 18,360,690
Cumulative effect of applying ASC 606 under the modified retrospective method	(5,359,579)
Deferral of revenue	7,720,187
Recognition of revenue	(9,005,530)
Change in reserves	(44,006)
Balance at June 30, 2018	$ 11,671,762

Earnings Per Share (Details)

Earnings Per Share (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common stock equivalents	379,021,346	15,209,374	379,021,346	15,209,374
Stock options, warrants and restricted stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common stock equivalents	370,239,830	6,427,858	370,239,830	6,427,858
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, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Numerator
Net loss	$ (1,004,104)	$ (639,801)	$ (497,227)	$ (1,751,998)
Effects of Series A redeemable convertible preferred stock:
Less: Series A redeemable convertible preferred stock dividends	214,963	215,089	458,130	419,664
Less: Deemed dividend on Series A redeemable convertible preferred stock	0	0	2,269,042	0
Less: Accretion to redemption value of Series A redeemable convertible preferred stock	77,645	0	115,750	0
Net loss attributable to common stockholders	$ (1,296,712)	$ (854,890)	$ (3,340,149)	$ (2,171,662)
Denominator
Weighted average basic shares outstanding (in shares)	84,448,219	44,440,751	64,616,334	44,265,525
Effect of dilutive securities:
Stock options, warrants and restricted stock	0	0	0	0
Series A redeemable convertible preferred stock	0	0	0	0
Weighted average diluted shares outstanding (in shares)	84,448,219	44,440,751	64,616,334	44,265,525
Basic net loss per share attributable to common stockholders (in dollars per share)	$ (0.02)	$ (0.02)	$ (0.05)	$ (0.05)
Diluted net loss per share attributable to common stockholders (in dollars per share)	$ (0.02)	$ (0.02)	$ (0.05)	$ (0.05)

Property and Equipment (Details

Property and Equipment (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Property, Plant and Equipment [Abstract]
Gross carrying amount	$ 18,576,492		$ 18,576,492		$ 18,563,071
Accumulated depreciation	(18,071,912)		(18,071,912)		(17,926,959)
Property and Equipment, net	504,580		504,580		$ 636,112
Depreciation expense	$ 71,441	$ 135,669	$ 158,310	$ 321,754

Software Development Costs (Det

Software Development Costs (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Research and Development [Abstract]
Gross carrying amount	$ 2,940,812		$ 2,940,812		$ 2,917,215
Accumulated amortization	(2,755,015)		(2,755,015)		(2,637,801)
Software development costs, net	185,797		185,797		$ 279,414
Capitalized computer software amortization	$ 58,609	$ 61,687	$ 117,216	$ 150,928

Goodwill and Other Intangible48

Goodwill and Other Intangible Assets (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 4,150,340		$ 4,150,340		$ 4,150,339
Other intangible assets:
Gross carrying amount	3,856,262		3,856,262		3,816,402
Accumulated amortization	(3,745,591)		(3,745,591)		(3,674,771)
Net carrying amount	110,671		110,671		$ 141,631
Amortization of intangible assets	$ 36,541	$ 39,858	$ 70,820	$ 80,773

Share-Based Payment Arrangeme49

Share-Based Payment Arrangements (Details) - FalconStor Software, Inc., 2018 Incentive Stock Plan	Jun. 30, 2018shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Authorized (in shares)	147,199,698
Shares Available for Grant (in shares)	147,199,698
Shares Outstanding (in shares)	0

Share-Based Payment Arrangeme50

Share-Based Payment Arrangements (Details 1)	Jun. 30, 2018shares
FalconStor Software, Inc., 2016 Incentive Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Available for Grant (in shares)	0
Shares Outstanding (in shares)	505,000
FalconStor Software, Inc., 2006 Incentive Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Available for Grant (in shares)	0
Shares Outstanding (in shares)	1,196,700
FalconStor Software, Inc., 2000 Stock Option Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Available for Grant (in shares)	0
Shares Outstanding (in shares)	4,500

Share-Based Payment Arrangeme51

Share-Based Payment Arrangements (Details 2) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 29,519	$ 97,155	$ 6,624	$ 542,569
Cost of revenue - Support and Service
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	4,875	8,834	13,575	65,285
Research and development costs
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	18,744	54,813	41,350	184,528
Selling and marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	4,525	7,198	12,457	63,738
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 1,375	$ 26,310	$ (60,758)	$ 229,018

Income Taxes (Details)

Income Taxes (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Income tax provision	$ 551	$ 94,300	$ 62,990	$ 217,248
Effective income tax rate			(14.50%)	(14.20%)
Unrecognized tax benefits	180,202		$ 180,202		$ 180,202
Unrecognized tax benefits, interest on income taxes accrued	$ 90,035		$ 90,035		$ 82,508

Notes Payable and Stock Warra53

Notes Payable and Stock Warrants - Additional Information (Details) - USD ($)	Apr. 23, 2018	Feb. 23, 2018	Nov. 17, 2017	Jun. 30, 2018	Jun. 22, 2018	Mar. 31, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Class Of Warrant Or Right, Unassociated Warrant Grants, Cash Settlement Obligation						$ 368,533,620
Common stock, shares authorized (in shares)				800,000,000	800,000,000		100,000,000
Commitment Loan [Member] | HCP-FVA, LLC
Debt Instrument [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		30,000,000
Line of Credit [Member] | Commitment Loan [Member] | HCP-FVA, LLC
Debt Instrument [Line Items]
Aggregate amount of debt		$ 3,000,000
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		40,000,000
Proceeds from Issuance of Debt		$ 2,500,000
Debt Instrument, Additional Amount Of Financing		$ 1,000,000
Class Of Warrant Or Right, Additional Warrants		10,000,000
Line of Credit [Member] | Amended And Restated Loan Agreement [Member] | HCP-FVA, LLC
Debt Instrument [Line Items]
Debt Instrument, Prepayment Premium Rate		5.00%
Debt Instrument, Required Liquidity		$ 2,000,000
Line Of Credit Facility, Cash Flow Variance Threshold		10.00%
Line of Credit [Member] | Short Term Loan, Due May 2018 [Member] | Hale Capital Partners, LP [Member]
Debt Instrument [Line Items]
Aggregate amount of debt		$ 500,000
Line of Credit [Member] | Short Term And Commitment Loans [Member]
Debt Instrument [Line Items]
Class Of Warrant Or Right, Subscription To Purchase, Percentage			50.00%
Senior Notes [Member] | Commitment Loan [Member] | HCP-FVA, LLC
Debt Instrument [Line Items]
Aggregate amount of debt		$ 4,000,000
Class Of Warrant Or Right, Senior Debt Component		$ 0.10
Prime rate | Line of Credit [Member] | Short Term Loan, Due May 2018 [Member] | Hale Capital Partners, LP [Member]
Debt Instrument [Line Items]
Variable interest rate			0.75%
Common Stock [Member] | Line of Credit [Member] | Commitment Loan [Member] | HCP-FVA, LLC
Debt Instrument [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		489,320,000
Class Of Warrant Or Right, Issued		12.233
Class Of Warrant Or Right, Warrant Ownership, Percentage		25.00%
Common Stock [Member] | Line of Credit [Member] | Short Term Loan, Due May 2018 [Member] | Hale Capital Partners, LP [Member]
Debt Instrument [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			61,165,134
Common Stock [Member] | Line of Credit [Member] | Short Term And Commitment Loans [Member]
Debt Instrument [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 0.001
Class Of Warrant Or Right, Subscription To Purchase, Percentage			66.66%
Common Stock [Member] | Prime rate | Senior Notes [Member] | Commitment Loan [Member] | HCP-FVA, LLC
Debt Instrument [Line Items]
Variable interest rate		0.75%
Additional Backstop Warrant [Member] | Line of Credit [Member] | Commitment Loan [Member] | HCP-FVA, LLC
Debt Instrument [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			3,000,000
Financing Warrants [Member] | Line of Credit [Member] | Commitment Loan [Member] | HCP-FVA, LLC
Debt Instrument [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights			366,990,000
Common stock issued for warrants (in shares)	53,370,601
Maximum | Hale Capital Partners, LP [Member] | Line of Credit [Member] | Short Term And Commitment Loans [Member]
Debt Instrument [Line Items]
Potential Ownership Percentage By Controlling Owners			73.00%
Series A Preferred Stock | Line of Credit [Member] | Commitment Loan [Member] | HCP-FVA, LLC
Debt Instrument [Line Items]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		0.0225
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 0.2643
Series A Preferred Stock | Minimum [Member] | Line of Credit [Member] | Commitment Loan [Member] | HCP-FVA, LLC
Debt Instrument [Line Items]
Private Placement, Lender Purchase Commitment			25.00%
Estimate of Fair Value Measurement [Member]
Debt Instrument [Line Items]
Warrant liability		$ 4,143,000

Notes Payable and Stock Warra54

Notes Payable and Stock Warrants - Initial Transaction As Recorded (Details) - USD ($)	Jun. 30, 2018	Feb. 23, 2018
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes payable, net	$ 2,525,670	$ 2,457,249
Deemed dividend	$ 1,642,825
Reported Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Series A redeemable convertible preferred stock, net		10,312,113
Notes payable, net		2,728,778
Warrant liability		0
Total		13,040,891
Estimate of Fair Value Measurement [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Series A redeemable convertible preferred stock, net		8,709,684
Notes payable, net		2,457,249
Warrant liability		4,143,000
Total		15,309,933
Deemed dividend		$ 2,269,042

Notes Payable and Stock Warra55

Notes Payable and Stock Warrants - Components of Preferred Stock (Details) - USD ($)	2 Months Ended	4 Months Ended
	Feb. 23, 2018	Jun. 30, 2018
Movement In Preferred Stock [Roll Forward]
Series A redeemable convertible preferred stock principal balance	$ 9,000,000
Total Series A redeemable convertible preferred stock, net at inception on February 23, 2018	9,000,000	$ 10,527,075
Total Series A redeemable convertible preferred stock, net at June 30, 2018		10,527,075
Redeemable Preferred Stock [Member]
Movement In Preferred Stock [Roll Forward]
Series A redeemable convertible preferred stock principal balance	9,000,000	8,709,684
Accrued dividends	1,312,112	214,963
Discount	(1,602,428)
Total Series A redeemable convertible preferred stock, net at inception on February 23, 2018	9,000,000	9,040,397
Accretion of preferred stock		115,750
Total Series A redeemable convertible preferred stock, net at June 30, 2018	$ 8,709,684	$ 9,040,397

Notes Payable and Stock Warra56

Notes Payable and Stock Warrants - Components of Notes Payable (Details) - USD ($)	1 Months Ended
	Mar. 31, 2018	Jun. 30, 2018	Feb. 23, 2018
Payables and Accruals [Abstract]
Notes payable principal balance			$ 3,000,000
Deferred issuance costs		$ (3,900)	(254,247)
Discount			$ (288,504)
Movement In Notes Payable [Roll Forward]
Total notes payable, net at inception on February 23, 2018	$ 2,457,249
Accretion of discount	$ 72,321

Fair Value Measurements (Detail

Fair Value Measurements (Details) - Recurring - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Derivative liabilities:
Derivative Instruments	$ 482,871	$ 445,838
Total derivative liabilities		445,838
Total assets and liabilities measured at fair value	482,871	445,838
Fair Value, Inputs, Level 1
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 2
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
Derivative liabilities:
Derivative Instruments	482,871	445,838
Total derivative liabilities	482,871	445,838
Total assets and liabilities measured at fair value	$ 482,871	$ 445,838

Fair Value Measurements Fair Va

Fair Value Measurements Fair Value Measurements (Narrative) (Details) - $ / shares shares in Millions	6 Months Ended
	Jun. 30, 2018	Sep. 13, 2013
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Volatility rate to value warrants	60.00%
Fair value per share (in dollars per share)	$ 0.01	$ 1.23
Initial Backstop And Additional Backstop Warrants
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Common stock issued for warrants (in shares)	424
Preferred Stock
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value discount yield	15.00%
Notes Payable
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value discount yield	12.00%

Fair Value Measurements (Deta59

Fair Value Measurements (Details1) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	$ 445,838	$ 355,612	$ 445,838	$ 336,862
Total loss recognized in earnings	37,033	63,948	37,033	82,698
Ending Balance	$ 482,871	$ 419,560	$ 482,871	$ 419,560

Commitments and Contingencies60

Commitments and Contingencies (Details)	Jun. 30, 2018USD ($)
Payments
2,018	$ 1,003,556
2,019	1,614,843
2,020	1,444,247
2,021	491,020
Thereafter	0
Total Payments Due	4,553,666
Sublease Income
2,018	(178,414)
2,019	(428,194)
2,020	(428,194)
2,021	(142,731)
Thereafter	0
Total Sublease Income	(1,177,533)
Net Commitments
2,018	825,142
2,019	1,186,649
2,020	1,016,053
2,021	348,289
Thereafter	0
Total Future Minimum Lease Payments Due	$ 3,376,133

Commitments and Contingencies61

Commitments and Contingencies (Narrative) (Details)	Apr. 05, 2018USD ($)	Aug. 14, 2017USD ($)tranche	Jun. 30, 2018USD ($)shares	Jun. 30, 2018USD ($)shares	Dec. 31, 2017USD ($)	Dec. 31, 2014position	Mar. 31, 2018USD ($)
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%
Restructuring reserve			$ 958,100	$ 958,100	$ 648,399		$ 461,362
Entity number of employees					81
Lease disposal related costs incurred			800,000
Uncertainty in income tax liability			$ 270,238	$ 270,238
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
Chief Executive Officer
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Compensation		$ 350,000
Accrued bonuses		$ 17,500
Percentage of outstanding stock, threshold		15.00%
Severance payment period		6 months
Award requisite period		6 months
Chief Financial Officer [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Compensation	$ 240,000
Accrued bonuses	10,000
Deferred Bonus | Chief Executive Officer
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Accrued bonuses		$ 200,000
Deferred Bonus | Chief Financial Officer [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Accrued bonuses	70,000
Excess Capital	$ 27,500
Upon Stockholder Approval | Chief Executive Officer
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Percentage of outstanding stock, threshold		2.50%
Number of tranches | tranche		2
Upon Termination | Chief Executive Officer
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Severance payment period		12 months
Award requisite period		12 months
Change of control period		6 months
FalconStor Software, Inc., 2018 Incentive Stock Plan
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Shares Authorized (in shares) | shares			147,199,698	147,199,698
2017 Plan
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Entity number of employees					76
Severance expense					$ 1,200,000
Severance Related Costs
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Restructuring reserve			$ 461,362	$ 461,362	$ 648,399		$ 461,362

Series A Redeemable Convertib62

Series A Redeemable Convertible Preferred Stock (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Equity [Abstract]
Beginning Balance	$ 445,838	$ 355,612	$ 445,838	$ 336,862
Total loss recognized in earnings	37,033	63,948	37,033	82,698
Ending Balance	$ 482,871	$ 419,560	$ 482,871	$ 419,560

Series A Redeemable Convertib63

Series A Redeemable Convertible Preferred Stock (Details 1) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Equity [Abstract]
Net loss	$ (1,004,104)	$ (639,801)	$ (497,227)	$ (1,751,998)
Less: Accrual of Series A redeemable convertible preferred stock dividends	214,963	215,089	458,130	419,664
Less: Deemed dividend on Series A redeemable convertible preferred stock	0	0	2,269,042	0
Less: Accretion to redemption value of Series A redeemable convertible preferred stock	77,645	0	115,750	0
Net loss attributable to common stockholders	$ (1,296,712)	$ (854,890)	$ (3,340,149)	$ (2,171,662)

Series A Redeemable Convertib64

Series A Redeemable Convertible Preferred Stock (Details Narrative)	3 Months Ended		6 Months Ended
	Jun. 30, 2018USD ($)$ / sharesshares	Jun. 30, 2017USD ($)	Jun. 30, 2018USD ($)Integer$ / sharesshares	Jun. 30, 2017USD ($)	Mar. 31, 2018USD ($)	Dec. 31, 2017USD ($)$ / sharesshares	Mar. 31, 2017USD ($)	Dec. 31, 2016USD ($)	Sep. 16, 2013USD ($)$ / sharesshares	Sep. 13, 2013$ / sharesshares
Class of Stock [Line Items]
Series A redeemable convertible preferred stock issued (in shares) | shares	900,000		900,000			900,000
Series A redeemable convertible preferred stock, par value (in dollars per share) | $ / shares	$ 0.001		$ 0.001			$ 0.001
Series A redeemable convertible preferred stock, redemption value	$ 10,527,075		$ 10,527,075			$ 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		$ 22,500,000
Series A redeemable convertible preferred stock, redemption price upon fundamental sale, per share purchase price | $ / shares	$ 2.56		$ 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			holders of the Series A Preferred Stock are entitled to receive quarterly dividends at the Prime Rate (Wall Street Journal Eastern Edition) plus 5% (up to a maximum amount of 10%)
Series A redeemable convertible preferred stock dividend, minimum cash flow requirement			$ 1,000,000
Dividend payable	$ 1,642,825		$ 1,642,825
Stock Price (in dollars per share) | $ / shares	$ 0.01		$ 0.01							$ 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 Preferred Stock as temporary equity in the financial statements as it is subject to redemption at the option of the holder under certain circumstances.
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs	$ 482,871	$ 419,560	$ 482,871	$ 419,560	$ 445,838	445,838	$ 355,612	$ 336,862
Loss on change in fair value	37,033	63,948	37,033	82,698
Undistributed Series A redeemable convertible preferred stock dividends	214,963	$ 215,089	$ 458,130	$ 419,664
Series A redeemable convertible preferred stock
Class of Stock [Line Items]
Series A redeemable convertible preferred stock issued (in shares) | shares									900,000
Series A redeemable convertible preferred stock, par value (in dollars per share) | $ / shares									$ 0.001
Series A redeemable preferred stock price per share | $ / shares									$ 10
Series A redeemable convertible preferred stock, redemption value									$ 9,000,000
Series A redeemable convertible preferred stock, conversion price | $ / shares									$ 1.02488
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%
Recurring
Class of Stock [Line Items]
Fair value of derivative instruments	$ 482,871		$ 482,871			$ 445,838

Accumulated Other Comprehensi65

Accumulated Other Comprehensive Loss (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Other comprehensive income (loss)
Accumulated other comprehensive (loss) income, beginning balance			$ (21,224,797)
Total other comprehensive income (loss), net of applicable taxes:	$ 129,956	$ 5,433	44,712	$ (180,096)
Accumulated other comprehensive (loss) income, ending balance	(11,439,979)		(11,439,979)
Foreign Currency Translation
Other comprehensive income (loss)
Accumulated other comprehensive (loss) income, beginning balance	(2,066,185)	(2,051,917)	(1,980,940)	(1,866,388)
Other comprehensive income (loss) before reclassifications	129,956	5,433	44,711	(180,096)
Amounts reclassified from accumulated other comprehensive income (loss)	0	0	0	0
Total other comprehensive income (loss), net of applicable taxes:	129,956	5,433	44,711	(180,096)
Accumulated other comprehensive (loss) income, ending balance	(1,936,229)	(2,046,484)	(1,936,229)	(2,046,484)
Net Unrealized Gains (Losses) on Marketable Securities
Other comprehensive income (loss)
Accumulated other comprehensive (loss) income, beginning balance	0	0	0	0
Other comprehensive income (loss) before reclassifications	0	0	0	0
Amounts reclassified from accumulated other comprehensive income (loss)	0	0	0	0
Total other comprehensive income (loss), net of applicable taxes:	0	0	0	0
Accumulated other comprehensive (loss) income, ending balance	0	0	0	0
Net Minimum Pension Liability
Other comprehensive income (loss)
Accumulated other comprehensive (loss) income, beginning balance	22,097	28,675	22,097	28,675
Other comprehensive income (loss) before reclassifications	0	0	0	0
Amounts reclassified from accumulated other comprehensive income (loss)	0	0	0	0
Total other comprehensive income (loss), net of applicable taxes:	0	0	0	0
Accumulated other comprehensive (loss) income, ending balance	22,097	28,675	22,097	28,675
Accumulated Other Comprehensive loss, net
Other comprehensive income (loss)
Accumulated other comprehensive (loss) income, beginning balance	(2,044,088)	(2,023,242)	(1,958,843)	(1,837,713)
Other comprehensive income (loss) before reclassifications	129,956	5,433	44,711	(180,096)
Amounts reclassified from accumulated other comprehensive income (loss)	0	0	0	0
Total other comprehensive income (loss), net of applicable taxes:	129,956	5,433	44,711	(180,096)
Accumulated other comprehensive (loss) income, ending balance	$ (1,914,132)	$ (2,017,809)	$ (1,914,132)	$ (2,017,809)

Stockholders' Equity (Details N

Stockholders' Equity (Details Narrative) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 22, 2018	Dec. 31, 2017	Apr. 22, 2015
Equity [Abstract]
Common stock, par value (in dollars per share)	$ 0.001		$ 0.001		$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	800,000,000		800,000,000		800,000,000	100,000,000
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

Segment Reporting - Schedule Of

Segment Reporting - Schedule Of Segment Reporting By Geographical Areas (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Revenue:
Total revenue	$ 4,011,581	$ 6,734,326	$ 9,005,530	$ 12,773,441
Long-lived assets:
Total long-lived assets	7,950,692		7,950,692		$ 6,791,233
Americas
Revenue:
Total revenue	931,246	2,040,247	2,062,895	3,641,494
Long-lived assets:
Total long-lived assets	6,976,675		6,976,675		5,754,977
Asia Pacific
Revenue:
Total revenue	1,631,910	2,445,409	3,580,334	4,696,486
Long-lived assets:
Total long-lived assets	787,199		787,199		822,885
Europe, Middle East, Africa and Other
Revenue:
Total revenue	1,448,425	$ 2,248,670	3,362,301	$ 4,435,461
Long-lived assets:
Total long-lived assets	$ 186,818		$ 186,818		$ 213,371

Segment Reporting (Details Narr

Segment Reporting (Details Narrative)	12 Months Ended
	Dec. 31, 2017
Customer concentration risk | Accounts receivable
Revenue, Major Customer [Line Items]
Percentage accounted for by one customer	23.00%

Restructuring Costs (Details Na

Restructuring Costs (Details Narrative) $ in Millions	3 Months Ended	12 Months Ended	18 Months Ended
	Jun. 30, 2018USD ($)	Dec. 31, 2017USD ($)	Dec. 31, 2014position
Restructuring Cost and Reserve [Line Items]
Entity number of employees		81
Lease disposal related costs incurred	$ 0.8
2017 Plan
Restructuring Cost and Reserve [Line Items]
Entity number of employees		76
Severance expense		$ 1.2
Restructuring Costs Under the 2013 Plan
Restructuring Cost and Reserve [Line Items]
Number of positions eliminated, worldwide (over 100) | position			100

Restructuring Costs - Schedule

Restructuring Costs - Schedule Of Restructuring Costs (Details) - USD ($)	3 Months Ended			6 Months Ended
	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Restructuring Reserve [Roll Forward]
Beginning Balance	$ 461,362	$ 648,399		$ 648,399
Provisions/Additions	809,245	(173,263)	$ 0	635,982	$ (236,302)
Utilized/Paid	(312,507)	(13,774)
Ending Balance	958,100	461,362		958,100
Severance Related Costs
Restructuring Reserve [Roll Forward]
Beginning Balance	461,362	648,399		648,399
Provisions/Additions	0	(173,263)
Utilized/Paid	0	(13,774)
Ending Balance	461,362	461,362		461,362
Facility and Other Costs
Restructuring Reserve [Roll Forward]
Beginning Balance	0	0		0
Provisions/Additions	809,245	0
Utilized/Paid	(312,507)	0
Ending Balance	$ 496,738	$ 0		$ 496,738