FalconStor Software (FALC) 10-Q 9 Nov 20 2020 Q3 Quarterly report Financial data

Cover

Cover - shares	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020	Oct. 31, 2020
Cover [Abstract]
Document Type		10-Q
Document Quarterly Report		true
Document Transition Report		false
Document Period End Date		Sep. 30, 2020
Entity File Number		000-23970
Entity Registrant Name		FALCONSTOR SOFTWARE, INC.
Entity Incorporation, State or Country Code		DE
Entity Tax Identification Number		77-0216135
Entity Address, Address Line One		701 Brazos Street
Entity Address, Address Line Two		Suite 400
Entity Address, City or Town		Austin
Entity Address, State or Province		TX
Entity Address, Postal Zip Code		78701
City Area Code		631
Local Phone Number		777-5188
Entity Current Reporting Status	Yes
Entity Interactive Data Current		Yes
Entity Filer Category		Non-accelerated Filer
Entity Small Business		true
Entity Emerging Growth Company		false
Entity Shell Company		false
Entity Common Stock, Shares Outstanding			5,919,837
Entity Central Index Key		0000922521
Amendment Flag		false
Current Fiscal Year End Date		--12-31
Document Fiscal Period Focus		Q3
Document Fiscal Year Focus		2020

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 871,281	$ 1,475,166
Accounts receivable, net of allowances	3,476,930	3,406,550
Prepaid expenses and other current assets	1,930,671	2,252,372
Contract assets	419,940	749,515
Inventory	14,809	30,014
Total current assets	6,713,631	7,913,617
Property and equipment, net of accumulated depreciation and amortization	236,442	369,273
Operating lease right-of-use assets, net	854,712	1,842,254
Deferred tax assets, net	259,209	258,841
Software development costs, net	20,928	27,012
Other assets	926,928	829,335
Goodwill	4,150,339	4,150,339
Other intangible assets, net	100,358	57,718
Long-term contract assets	225,128	327,757
Total assets	13,487,675	15,776,146
Current liabilities:
Accounts payable	764,371	1,302,290
Accrued expenses	2,046,399	2,533,824
Current portion of lease liabilities	1,074,032	1,655,522
Short-term loan, net of debt issuance costs and discounts	3,968,827	947,501
Deferred revenue	4,010,383	5,270,190
Total current liabilities	11,864,012	11,709,327
Other long-term liabilities	679,644	745,254
Notes payable, net of debt issuance costs and discounts	0	2,906,133
Operating lease liabilities, net of current portion	2,194	624,859
Deferred tax liabilities	427,030	432,520
Deferred revenue, net of current portion	2,042,978	2,085,080
Total liabilities	15,015,858	18,503,173
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 $12,548,444 and $12,262,685, respectively	12,483,206	11,304,279
Stockholders' deficit:
Common stock - $0.001 par value, 30,000,000 shares authorized, 5,919,837 shares and 5,918,733 shares issued and outstanding, respectively	5,920	5,919
Additional paid-in capital	110,560,351	111,727,888
Accumulated deficit	(122,638,926)	(123,871,853)
Accumulated other comprehensive loss, net	(1,938,734)	(1,893,260)
Total stockholders' deficit	(14,011,389)	(14,031,306)
Total liabilities and stockholders' deficit	$ 13,487,675	$ 15,776,146

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
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	$ 13,075,046	$ 12,262,685
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	30,000,000	30,000,000
Common stock, shares issued (in shares)	5,919,837	5,918,733
Common stock, shares outstanding (in shares)	5,919,837	5,918,733

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenue:
Total revenue	$ 4,436,400	$ 3,972,445	$ 11,116,199	$ 12,464,812
Cost of revenue:
Total cost of revenue	415,958	772,843	1,359,564	2,715,903
Gross profit	4,020,442	3,199,602	9,756,635	9,748,909
Operating expenses:
Research and development costs	600,430	782,161	1,809,354	2,503,008
Selling and marketing	1,026,241	1,067,436	3,027,372	3,436,783
General and administrative	358,701	1,454,103	2,297,451	4,280,188
Restructuring costs	317,595	384,829	758,740	745,201
Total operating expenses	2,302,967	3,688,529	7,892,917	10,965,180
Operating income (loss)	1,717,475	(488,927)	1,863,718	(1,216,271)
Interest and other expense	(159,994)	(123,261)	(586,082)	(468,717)
Income (loss) before income taxes	1,557,481	(612,188)	1,277,636	(1,684,988)
Income tax expense (benefit)	11,272	(55,274)	44,709	168,556
Net income (loss)	1,546,209	(556,914)	1,232,927	(1,853,544)
Less: Accrual of Series A redeemable convertible preferred stock dividends	266,007	266,447	812,362	770,027
Less: Accretion to redemption value of Series A redeemable convertible preferred stock	175,335	139,399	366,566	402,861
Net income (loss) attributable to common stockholders	$ 1,104,867	$ (962,760)	$ 53,999	$ (3,026,432)
Basic net loss per share attributable to common stockholders (in dollars per share)	$ 0.19	$ (0.16)	$ 0.01	$ (0.51)
Diluted net loss per share attributable to common stockholders (in dollars per share)	$ 0.15	$ (0.16)	$ 0.01	$ (0.51)
Weighted average basic shares outstanding (in shares)	5,919,837	5,910,718	5,919,773	5,887,638
Weighted average diluted shares outstanding (in shares)	7,393,082	5,910,718	7,197,050	5,887,638
Product revenue
Revenue:
Total revenue	$ 2,521,695	$ 1,663,782	$ 5,202,713	$ 4,879,996
Cost of revenue:
Total cost of revenue	48,895	241,134	250,185	1,076,604
Support and services revenue
Revenue:
Total revenue	1,914,705	2,308,663	5,913,486	7,584,816
Cost of revenue:
Total cost of revenue	$ 367,063	$ 531,709	$ 1,109,379	$ 1,639,299

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 1,546,209	$ (556,914)	$ 1,232,927	$ (1,853,544)
Other comprehensive income (loss), net of applicable taxes
Foreign currency translation	(24,234)	(131,497)	(45,474)	(161,515)
Total other comprehensive income (loss), net of applicable taxes:	(24,234)	(131,497)	(45,474)	(161,515)
Total comprehensive income (loss)	1,521,975	(688,411)	1,187,453	(2,015,059)
Less: Accrual of Series A redeemable convertible preferred stock dividends	266,007	266,447	812,362	770,027
Less: Accretion to redemption value of Series A redeemable convertible preferred stock	175,335	139,399	366,566	402,861
Total comprehensive income (loss) attributable to common stockholders	$ 1,080,633	$ (1,094,257)	$ 8,525	$ (3,187,947)

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (Unaudited) Statement - USD ($)	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]	AOCI Attributable to Parent [Member]
Beginning balance (shares) at Dec. 31, 2018		5,872,552
Ending balance (shares) at Mar. 31, 2019		5,872,552
Beginning balance at Dec. 31, 2018	$ (10,765,901)	$ 5,873	$ 113,243,227	$ (122,119,899)	$ (1,895,102)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(124,907)			(124,907)
Share-based compensation to employees	9,251		9,251
Accretion of Series A redeemable convertible preferred stock	(129,239)		(129,239)
Dividends on Series A redeemable convertible preferred stock	(247,027)		(247,027)
Foreign currency translation	19,392				19,392
Ending balance at Mar. 31, 2019	(11,238,431)	$ 5,873	112,876,212	(122,244,806)	(1,875,710)
Beginning balance (shares) at Dec. 31, 2018		5,872,552
Ending balance (shares) at Sep. 30, 2019		5,918,733
Beginning balance at Dec. 31, 2018	(10,765,901)	$ 5,873	113,243,227	(122,119,899)	(1,895,102)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(1,853,544)
Accretion of Series A redeemable convertible preferred stock	(402,861)
Dividends on Series A redeemable convertible preferred stock	(770,027)
Foreign currency translation	(161,515)
Ending balance at Sep. 30, 2019	(13,925,266)	$ 5,919	112,098,875	(123,973,443)	(2,056,617)
Beginning balance (shares) at Mar. 31, 2019		5,872,552
Ending balance (shares) at Jun. 30, 2019		5,887,733
Beginning balance at Mar. 31, 2019	(11,238,431)	$ 5,873	112,876,212	(122,244,806)	(1,875,710)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(1,171,723)			(1,171,723)
Share-based compensation to employees	16,231		16,231
Warrants exercised (shares)		15,181
Warrants exercised	0	$ (15)	(15)
Accretion of Series A redeemable convertible preferred stock	(134,223)		(134,223)
Dividends on Series A redeemable convertible preferred stock	(256,553)		(256,553)
Foreign currency translation	(49,410)				(49,410)
Ending balance at Jun. 30, 2019	(12,834,109)	$ 5,888	112,501,652	(123,416,529)	(1,925,120)
Ending balance (shares) at Sep. 30, 2019		5,918,733
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(556,914)			(556,914)
Share-based compensation to employees	3,100		3,100
Warrants exercised (shares)		31,000
Warrants exercised	0	$ (31)	(31)
Accretion of Series A redeemable convertible preferred stock	(139,399)		(139,399)
Dividends on Series A redeemable convertible preferred stock	(266,447)		(266,447)
Foreign currency translation	(131,497)				(131,497)
Ending balance at Sep. 30, 2019	$ (13,925,266)	$ 5,919	112,098,875	(123,973,443)	(2,056,617)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock, shares outstanding (in shares)	5,918,733
Beginning balance (shares) at Dec. 31, 2019		5,918,733
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Restricted stock issued (shares)		1,104
Ending balance (shares) at Mar. 31, 2020		5,919,837
Beginning balance at Dec. 31, 2019	$ (14,031,306)	$ 5,919	111,727,888	(123,871,853)	(1,893,260)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(719,840)			(719,840)
Restricted stock issued	0	(1)	(1)
Share-based compensation to employees	4,510		4,510
Accretion of Series A redeemable convertible preferred stock	(26,090)		(26,090)
Dividends on Series A redeemable convertible preferred stock	(285,760)		(285,760)
Foreign currency translation	(13,153)				(13,153)
Ending balance at Mar. 31, 2020	(15,071,639)	$ 5,920	111,420,547	(124,591,693)	(1,906,413)
Beginning balance (shares) at Dec. 31, 2019		5,918,733
Ending balance (shares) at Sep. 30, 2020		5,919,837
Beginning balance at Dec. 31, 2019	(14,031,306)	$ 5,919	111,727,888	(123,871,853)	(1,893,260)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	1,232,927
Accretion of Series A redeemable convertible preferred stock	(366,566)
Dividends on Series A redeemable convertible preferred stock	(812,362)
Foreign currency translation	(45,474)
Ending balance at Sep. 30, 2020	(14,011,389)	$ 5,920	110,560,351	(122,638,926)	(1,938,734)
Beginning balance (shares) at Mar. 31, 2020		5,919,837
Ending balance (shares) at Jun. 30, 2020		5,919,837
Beginning balance at Mar. 31, 2020	(15,071,639)	$ 5,920	111,420,547	(124,591,693)	(1,906,413)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	406,558			406,558
Share-based compensation to employees	3,060		3,060
Accretion of Series A redeemable convertible preferred stock	(165,141)		(165,141)
Dividends on Series A redeemable convertible preferred stock	(260,595)		(260,595)
Foreign currency translation	(8,087)				(8,087)
Ending balance at Jun. 30, 2020	(15,095,844)	$ 5,920	110,997,871	(124,185,135)	(1,914,500)
Ending balance (shares) at Sep. 30, 2020		5,919,837
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	1,546,209			1,546,209
Share-based compensation to employees	3,822		3,822
Accretion of Series A redeemable convertible preferred stock	(175,335)		(175,335)
Dividends on Series A redeemable convertible preferred stock	(266,007)		(266,007)
Foreign currency translation	(24,234)				(24,234)
Ending balance at Sep. 30, 2020	$ (14,011,389)	$ 5,920	$ 110,560,351	$ (122,638,926)	$ (1,938,734)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock, shares outstanding (in shares)	5,919,837

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended				9 Months Ended		10 Months Ended	12 Months Ended
	Sep. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2019
Cash flows from operating activities:
Net income (loss)	$ 1,546,209	$ (719,840)	$ (556,914)	$ (124,907)	$ 1,232,927	$ (1,853,544)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization					162,127	320,388
Amortization of debt discount on notes payable					361,193	217,336
Amortization of right of use assets					987,542	784,204
Share-based payment compensation					11,392	28,582
Provision for (recovery of) returns and doubtful accounts					70,932	(128,628)
Deferred income taxes (benefit)					(5,485)	0
Changes in operating assets and liabilities:
Accounts receivable					(138,271)	1,778,241
Prepaid expenses and other current assets					249,383	(173,775)
Contract assets					432,204	79,192
Inventory					15,713	(89,843)
Other assets					(254)	(782,802)
Accounts payable					(571,231)	487,202
Accrued expenses and other long-term liabilities					(589,952)	45,039
Operating lease liabilities					(1,204,155)	(980,937)
Deferred revenue					(1,317,239)	(1,163,169)
Net cash provided by (used in) operating activities					(303,174)	(1,432,514)
Cash flows from investing activities:
Purchases of property and equipment					0	(175,139)
Security deposits					(125)	33,815
Purchase of intangible assets					(63,005)	(46,674)
Net cash provided by (used in) investing activities					(63,130)	(187,998)
Cash flows from financing activities:
Proceeds from issuance of PPP loan					754,000	0	$ 1,000,000	$ 1,000,000
Repayment of short-term debt					(1,000,000)	0
Repayment of long-term debt					0	(489,321)		(489,321)
Net cash provided by (used in) financing activities					(246,000)	(489,321)
Effect of exchange rate changes on cash and cash equivalents					8,419	10,557
Net increase (decrease) in cash and cash equivalents					(603,885)	(2,099,276)
Cash and cash equivalents, beginning of period		1,475,166		3,059,677	1,475,166	3,059,677		3,059,677
Cash and cash equivalents, end of period	871,281		960,401		871,281	960,401	$ 3,059,677	$ 1,475,166
Supplemental disclosures:
Cash paid for interest					261,095	176,008
Non-cash investing and financing activities:
Undistributed Series A redeemable convertible preferred stock dividends					812,362	770,027
Accretion of Series A redeemable convertible preferred stock	$ 175,335	$ 26,090	$ 139,399	$ 129,239	$ 366,566	$ 402,861

Basis of Presentation

Basis of Presentation	9 Months Ended
	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation (a) The Company and Nature of Operations FalconStor Software, Inc., a Delaware corporation (the "Company" or "FalconStor"), 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 September 30, 2020, the Company had a working capital deficiency of $5.2 million, which is inclusive of current deferred revenue of $4.0 million, and a stockholders' deficit of $14.0 million. During the nine months ended September 30, 2020, the Company had net income of $1.2 million and negative cash flow from operations of $0.3 million. The Company's total cash balance at September 30, 2020 was $0.9 million, a decrease of $603,885 compared to December 31, 2019. On April 28, 2020, the Company entered into a loan with Peapack-Gladstone Bank in an aggregate principal amount of $754,000 (the "Loan"), pursuant to the Paycheck Protection Program (the "PPP") under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). As described below, the Company repaid the $1,000,000 Term Loan (as herewith defined). The Company's ability to continue as a going concern for the next twelve months, depends on its ability to execute its business plan, increase revenue and billings and reduce expenditures. In the third quarter of 2019, the Company adopted a 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 (the "2019 Plan"). In connection with the 2019 Plan, the Company eliminated 23 positions worldwide, implemented tighter expense controls, ceased non-core activities and downsized several facilities. As of September 30, 2020, the 2019 Plan is considered to be substantially completed. On December 27, 2019, the Company entered into Amendment No. 1 to Amended and Restated Term Loan Credit Agreement (the “Amendment”), by and among the Company, certain of the Company’s affiliates in their capacities as guarantors, HCP-FVA, LLC (“HCP-FVA”) as administrative agent for the lenders party thereto (the “Lenders”), ESW Capital, LLC (“ESW”), as co-agent, and the Lenders, to provide for, among other things, a new term loan facility of up to $2,500,000 to the Company with an interest rate of 15% (the “2019 Term Loan”). The Amendment also provides for certain financial covenants. On December 27, 2019, the Company drew down $1,000,000 of the 2019 Term Loan and the Company has a fixed amount of interest on such advance equal to 15% of the principal amount advanced. The Company paid the 2019 Term Loan in full on September 27, 2020. Given the commercial uncertainty caused by the novel coronavirus pandemic, or COVID-19, the Company developed and implemented an even more aggressive expense control plan in March 2020, that it is prepared to keep in place for the remainder of 2020. This plan reduced the Company's annual cash expense run rate by $4.0 million or 29%. The Company has furloughed 21 positions worldwide, and 8 of these positions were reinstated in the second and third quarters of 2020. We believe the reduced expense level will enable FalconStor to remain profitable during the remainder of 2020, even with the impact of COVID-19. There is no assurance that the Company will be successful in generating sufficient bookings, billings, revenue or continue to reduce operating costs or that the Company will be able to obtain financing or that such financing will be on favorable terms. Any such financing would be dilutive to our shareholders. Failure to generate sufficient revenue, billings, control or further reduce expenditures and/or the inability to obtain financing will result in an inability of the Company to continue as a going concern. Subject to the foregoing, management believes that, based on projected cash flows and additional financing, the Company will have sufficient capital and liquidity to fund its operations for at least one year from the date of issuance of the accompanying interim financial statements. 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 through November 9, 2021. (c) Impact of the COVID-19 Pandemic We are continuing to monitor the impact of COVID-19, on all aspects of our business. The outbreak of COVID-19 has caused and may continue to cause travel bans or disruptions, and in some cases, prohibitions of non-essential activities, disruption and shutdown of businesses and greater uncertainty in global financial markets. The impact of COVID-19 is fluid and uncertain, but it has caused and may continue to cause various negative effects, including an inability to meet with actual or potential customers, our end customers deciding to delay or abandon their planned purchases or failing to make payments, and delays or disruptions in our or our partners’ supply chains. As a result, we may experience extended sales cycles, our ability to close transactions with new and existing customers and partners may be negatively impacted, our ability to recognize revenue from software transactions we do close may be negatively impacted, our demand generation activities, and the efficiency and effect of those activities, may be negatively affected, and it has been and, until the COVID-19 outbreak is contained, will continue to be more difficult for us to forecast our operating results. These uncertainties have, and may continue to, put pressure on global economic conditions and overall IT spending and may cause our end customers to modify spending priorities or delay or abandon purchasing decisions, thereby lengthening sales cycles and potentially lowering prices for our solutions, and may make it difficult for us to forecast our sales and operating results and to make decisions about future investments, any of which could materially harm our business, operating results and financial condition. Further, our management team is focused on addressing the impacts of COVID-19 on our business, which has required and will continue to require, a large investment of their time and resources and may distract our management team or disrupt our 2020 operating plans. The extent to which COVID-19 ultimately impacts our results of operations, cash flow and financial position will depend on future developments, which are uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity, the actions taken by governments and authorities to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume. Even after the COVID-19 pandemic has subsided, we may continue to experience materially adverse impacts to our business as a result of its global economic impact, including as a result of any recession that may occur. (d) 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. (e) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s significant estimates include those related to revenue recognition, accounts receivable allowances, share-based payment compensation, valuation of derivatives, capitalizable software development costs, valuation of goodwill and other intangible assets and income taxes. During the first quarter of 2018, the Company also had significant estimates in the determination of the fair value of Series A Redeemable Convertible Preferred Stock ("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. (f) 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 fairly state the financial position of the Company at September 30, 2020, and the results of its operations for the three and nine months ended September 30, 2020 and 2019. 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, 2019 ("2019 Form 10-K"). (g) Recently Issued Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General: Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. The objective of the guidance is to improve the effectiveness of disclosure requirements on defined benefit pension plans and other postretirement plans. The guidance is effective for fiscal years beginning after December 15, 2020. The Company does not expect adoption of the new standard to have a material impact on its condensed consolidated financial statements. In December 2019, the FASB released ASU 2019-12, which affects general principles within Topic 740, Income Taxes. The amendments of ASU 2019-12 are meant to simplify and reduce the cost of accounting for income taxes. The amendments in ASU 2019-12 are effective for public business entities for fiscal years beginning after December 15, 2020, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The Company does not expect adoption of the new standard to have a material impact on its condensed consolidated financial statements.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies The Company's significant accounting policies were described in Note (1) Summary of Significant Accounting Policies of the 2019 Form 10-K. There have been no significant changes in the Company's significant accounting policies since December 31, 2019, other than those noted below. For a description of the Company's other significant accounting policies refer to the 2019 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 are 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 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. As of September 30, 2020 and December 31, 2019, accounts receivable, net of allowance for doubtful accounts, was $3.5 million and $3.4 million, respectively. As of September 30, 2020 and December 31, 2019, short and long-term contract assets, net of allowance for doubtful accounts, was $0.6 million and $1.1 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: Nine Months Ended September 30, 2020 Balance at December 31, 2019 $ 7,355,270 Deferral of revenue 9,807,409 Recognition of revenue (11,116,199) Change in reserves 6,881 Balance at September 30, 2020 $ 6,053,361 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 $6.1 million as of September 30, 2020, of which the Company expects to recognize approximately 66% of such amount as revenue over the next 12 months and the remainder thereafter. Approximately $2.6 million of revenue is expected to be recognized from remaining performance obligations for unbilled support and services as of September 30, 2020. We expect to recognize revenue on approximately 42% of these remaining performance obligations over the next twelve months, with the balance recognized 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. Disaggregation of Revenue Please refer to the condensed consolidated statements of operations and Note (16), Segment Reporting and Concentrations, for discussion on revenue disaggregation by product type and by geography. The Company believes this level of disaggregation sufficiently depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. 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. Leases We have entered into operating leases for our various facilities. We determine if an arrangement is a lease at inception. Operating leases are included in Right-of-Use ("ROU") assets, and lease liability obligations in our condensed consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liability obligations represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. We have lease agreements with lease and non-lease components and account for such components as a single lease component. As most of our leases do not provide an implicit rate, we estimated our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The ROU asset also includes any lease payments made and excludes lease incentives and lease direct costs. Our lease terms may include options to extend or terminate the lease. Such extended terms have been considered in determining the ROU assets and lease liability obligations when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. Right of Use Assets and Liabilities We have various operating leases for office facilities that expire through 2021. Below is a summary of our ROU assets and liabilities as of September 30, 2020. Right of use assets $ 854,712 Lease liability obligations, current 1,074,032 Lease liability obligations, less current portion 2,194 Total lease liability obligations $ 1,076,226 Weighted-average remaining lease term 0.89 Weighted-average discount rate 5.99 % Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Components of lease expense: Operating lease cost $ 466,556 $ 323,117 $ 1,248,958 $ 1,157,390 Sublease income (75,314) (155,944) (223,941) (467,832) Net lease cost $ 391,242 $ 167,173 $ 1,025,017 $ 689,558 During the three months ended September 30, 2020 and 2019, operating cash flows from operating leases was approximately $357,245 and $480,992, respectively. During the nine months ended September 30, 2020 and 2019, operating cash flows from operating leases was approximately $1,117,557 and $1,476,704, respectively. Approximate future minimum lease payments for our ROU assets over the remaining lease periods as of September 30, 2020, are as follows: Remainder of 2020 424,592 2021 659,754 Total minimum lease payments 1,084,346 Less interest (8,120) Present value of lease liabilities 1,076,226

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 30, 2020
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 nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Stock options and restricted stock 9,945 1,157,537 1,483,450 1,263,009 Series A redeemable convertible preferred stock 87,815 87,815 87,815 87,815 Total anti-dilutive common stock equivalents 97,760 1,245,352 1,571,265 1,350,824

Property and Equipment

Property and Equipment	9 Months Ended
	Sep. 30, 2020
Property, Plant and Equipment [Abstract]
Property and Equipment	Property and Equipment The gross carrying amount and accumulated depreciation of property and equipment as of September 30, 2020 and December 31, 2019 are as follows: September 30, 2020 December 31, 2019 Gross carrying amount $ 18,759,199 $ 18,735,885 Accumulated depreciation (18,522,757) (18,366,612) Property and Equipment, net $ 236,442 $ 369,273 For the three months ended September 30, 2020 and 2019, depreciation expense was $44,958 and $62,910, respectively. For the nine months ended September 30, 2020 and 2019, depreciation expense was $135,679 and $196,736, respectively.

Software Development Costs

Software Development Costs	9 Months Ended
	Sep. 30, 2020
Research and Development [Abstract]
Software Development Costs	Software Development Costs The gross carrying amount and accumulated amortization of software development costs as of September 30, 2020 and December 31, 2019 are as follows: September 30, 2020 December 31, 2019 Gross carrying amount $ 2,950,132 $ 2,950,132 Accumulated amortization (2,929,204) (2,923,120) Software development costs, net $ 20,928 $ 27,012

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets	9 Months Ended
	Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Other Intangible Assets	Goodwill and Other Intangible Assets The gross carrying amount and accumulated amortization of goodwill and other intangible assets as of September 30, 2020 and December 31, 2019 are as follows: September 30, 2020 December 31, 2019 Goodwill $ 4,150,339 $ 4,150,339 Other intangible assets: Gross carrying amount $ 4,010,107 $ 3,947,103 Accumulated amortization (3,909,749) (3,889,385) Net carrying amount $ 100,358 $ 57,718 For the three months ended September 30, 2020 and 2019, amortization expense was $18,455 and $22,130, respectively. For the nine months ended September 30, 2020 and 2019, amortization expense was $20,364 and $69,454, respectively.

Share-Based Payment Arrangement

Share-Based Payment Arrangements	9 Months Ended
	Sep. 30, 2020
Share-based Payment Arrangement [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 1,471,997 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 of the Company's Board of Directors, subject to the consent of Hale Capital Partners, LP. The vesting terms shall be performance based and determined by the Compensation Committee, subject to the consent of Hale Capital Partners, LP, 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. The following table summarizes the 2018 Plan, which was the only plan under which the Company was able to grant equity compensation as of September 30, 2020: Shares Shares Available Shares Name of Plan Authorized for Grant Outstanding FalconStor Software, Inc. 2018 Incentive Stock Plan 1,471,997 (1,248) 1,473,245 The following table summarizes the Company’s equity plans that have terminated or expired but that still have equity awards outstanding as of September 30, 2020: Name of Plan Shares Available for Grant Shares Outstanding FalconStor Software, Inc., 2016 Incentive Stock Plan — 3,850 FalconStor Software, Inc., 2006 Incentive Stock Plan — 6,095 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 nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Cost of revenue - support and service 104 104 310 2,146 Research and development costs 433 371 1,289 5,977 Selling and marketing 186 186 554 3,844 General and administrative 3,099 2,439 9,239 16,615 $ 3,822 $ 3,100 $ 11,392 $ 28,582

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2020
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 nine months ended September 30, 2020, the Company recorded an income tax provision of $44,709. The effective tax rate for the nine months ended September 30, 2020 was 3.5%. The effective tax rate differs from the statutory rate of 21% due to the mix of foreign and domestic earnings and the application of valuation allowances. As of September 30, 2020, 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 benefit as such amounts are fully offset with a valuation allowance. For the nine months ended September 30, 2019, the Company recorded an income tax provision of $168,556. The effective tax rate for the nine months ended September 30, 2019 was (10.0%). 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 September 30, 2020, 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. The Company’s total unrecognized tax benefits, excluding interest, at September 30, 2020 and December 31, 2019 were $76,275 and $134,246, respectively. As of September 30, 2020 and December 31, 2019, the Company had $33,865 and $63,404, respectively, of accrued interest reflected in accrued expenses. The Company recognized approximately $7,000 of tax benefits during the quarter due to expiring statute of limitations, which impacted the Company's effective tax rate. The Company does not expect any material changes of unrecognized tax benefits during the next twelve months..

Notes Payable and Stock Warrant

Notes Payable and Stock Warrants	9 Months Ended
	Sep. 30, 2020
Payables and Accruals [Abstract]
Notes Payable and Stock Warrants	Notes Payable and Stock Warrants 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 Proceeds from issuance of long-term debt 1,000,000 Revaluation of long-term debt (447,008) Accretion of discount 202,195 Deferred issuance costs (87,609) Total notes payable, net at December 31, 2018 $ 3,124,827 Repayment of long-term debt (489,321) Proceeds from issuance of long-term debt 1,000,000 Accretion of discount 273,521 Deferred issuance costs (55,393) Total notes payable, net at December 31, 2019 $ 3,853,634 Accretion of discount 361,193 Proceeds from issuance of the PPP loan 754,000 Repayment of short-term debt (1,000,000) Total notes payable, net at September 30, 2020 $ 3,968,827 The $4 million senior secured debt bears interest at prime plus 0.75% and matures on June 30, 2021. On September 27, 2020, we paid the 2019 Term Loan in full. As of September 30, 2020, the Company was in compliance with the financial covenants contained in the Amended and Restated Term Loan Credit Agreement. Loan under the Paycheck Protection Program On April 28, 2020, the Company entered into the Loan with Peapack-Gladstone Bank in an aggregate principal amount of $754,000, pursuant to the PPP under the CARES Act. The Loan is evidenced by a promissory note (the “Note”) dated April 28, 2020. The Loan matures two years from the disbursement date and bears interest at a rate of 1.000% per annum, with the first six months of interest deferred. Principal and interest are payable monthly commencing six months after the disbursement date and may be prepaid by the Company at any time prior to maturity with no prepayment penalties. Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP. The Loan is subject to forgiveness to the extent proceeds are used for payroll costs, including payments required to continue group health care benefits, and certain rent, utility, and mortgage interest expenses (collectively, “Qualifying Expenses”), pursuant to the terms and limitations of the PPP. The Company has used a significant majority of the Loan amount for Qualifying Expenses. However, no assurance is provided that the Company will obtain forgiveness of the Loan in whole or in part. The Loan is included in notes payable, net of debt issuance costs and discounts in the accompanying condensed consolidated balance sheet.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2020
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 September 30, 2020, the Company did not have any Level 1 category assets included in the condensed consolidated balance sheets. • Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly. At September 30, 2020 and December 31, 2019, 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 September 30, 2020 and December 31, 2019, 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 and cash equivalents categorized as Level 3 as of September 30, 2020 or December 31, 2019. The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2020: 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 475,561 — — 475,561 Total derivative liabilities 475,561 — — 475,561 Total assets and liabilities measured at fair value $ 475,561 $ — $ — $ 475,561 The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2019: 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 483,804 — — 483,804 Total derivative liabilities 483,804 — — 483,804 Total assets and liabilities measured at fair value $ 483,804 $ — $ — $ 483,804 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 14% yield. The fair value of the Company's note payable is based on its future cash flows discounted at a 17% yield. The following table presents a reconciliation of the beginning and ending balances of the Company's liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2020 and September 30, 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Beginning Balance $ 478,312 $ 489,489 $ 483,804 $ 498,086 Total income recognized in earnings (2,751) (2,866) (8,243) (11,463) Ending Balance $ 475,561 $ 486,623 $ 475,561 $ 486,623

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2020
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, New York office facility that expires in April 2021. The Company has sublet a portion of this lease. The Company also has several additional operating leases related to offices in foreign countries. The expiration dates for these leases range from 2020 through 2021. The following is a schedule of future minimum lease payments as well as sublease income for all operating leases as of September 30, 2020: Payments Sublease Income Net Commitments 2020 424,592 (75,314) 349,278 2021 659,754 (530,447) 129,307 $ 1,084,346 $ (605,761) $ 478,585 The Company typically provides its customers a warranty on its software products for a period of no more than 90 days. Such warranties are accounted for in accordance with the authoritative guidance issued by the FASB on contingencies. For the three and nine months ended September 30, 2020, 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. As described under Note (12), the holders of the Series A Preferred Stock have redemption rights upon certain triggering events. As of September 30, 2020, the Company did not fail any non-financial covenants related to the Company's Series A Preferred Stock. In connection with the appointment of Todd Brooks 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 Agreement 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. Mr. Brooks' employment can be terminated at will. Pursuant to the Brooks Agreement and the 2018 Plan, Mr. Brooks received 735,973 shares of restricted stock. 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. In connection with the appointment of Brad Wolfe as the Company's 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 which has net working capital cash that exceeds the prior quarter 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. As described under Note (17), the Company has incurred certain restructuring costs in connection with restructuring plans adopted in 2017 and 2019. In addition, as of September 30, 2020, the Company's liability for uncertain tax positions totaled $110,141. At this time, the settlement period for this liability, including related accrued interest, cannot be determined.

Series A Redeemable Convertible

Series A Redeemable Convertible Preferred Stock	9 Months Ended
	Sep. 30, 2020
Equity [Abstract]
Series A Redeemable Convertible Preferred Stock	Series A Redeemable Convertible Preferred Stock The Company has 900,000 shares of Series A Preferred Stock outstanding . Pursuant to the Amended and Restated Certificate of Designations, Preferences and Rights for the Series A Preferred Stock (the "Certificate of Designations"), each share of Series A Preferred Stock can be converted into shares of the Company’s common stock, at current conversion price of $102.488 per share, subject to appropriate adjustments for any stock dividend, stock split, stock combination, reclassification or similar transaction, (i) at any time at the option of the holder or (ii) by the Company if, following the first anniversary of the issuance of the Series A Preferred Stock (subject to extension under certain circumstances), the volume weighted average trading price per share of the Company’s common stock for sixty (60) consecutive trading days exceeds 250% of the conversion price and continues to exceed 225% of the conversion price through the conversion date, subject at all times to the satisfaction of, and the limitations imposed by, the equity conditions set forth in the Certificate of Designations (including, without limitation, the volume limitations set forth therein). Pursuant to the Certificate of Designations, the holders of the Series A Preferred Stock are entitled to receive quarterly dividends at the prime rate (provided in the Wall Street Journal Eastern Edition) plus 5% (up to a maximum dividend rate of 10%), payable in cash or in kind (i.e., through the issuance of additional shares of Series A Preferred Stock), except that the Company is not permitted to pay such dividends in cash while any indebtedness under the Company’s Amended and Restated Term Loan Credit Agreement remains outstanding without the consent of the holders of the Series A Preferred Stock. In addition, the declaration and payment of dividends is subject to compliance with applicable law and unpaid dividends will accrue. A holder’s right to convert its shares of Series A Preferred Stock and receive dividends in the form of common stock is subject to certain limitations including, among other things, that the shares of common stock issuable upon conversion or as dividends will not, prior to receipt of stockholder approval, result in any holder beneficially owning greater than 19.99% of the Company’s currently outstanding shares of common stock. The Series A Preferred Stock dividends shall accrue whether or not the declaration or payment of such Series A Preferred Stock dividends are prohibited by applicable law, whether or not the Company has earnings, whether or not there are funds legally available for the payment of such dividends and whether or not such dividends are authorized or declared. Upon certain triggering events, such as bankruptcy, insolvency or a material adverse effect or failure of the Company to issue shares of common stock upon conversion of the Series A Preferred Stock in accordance with its obligations, the holders may require the Company to redeem all or some of the Series A Preferred Stock at a price per share equal to the greater of (i) the sum of 100% of the stated value of a share of Series A Preferred Stock plus accrued and unpaid dividends with respect thereto, and (ii) the product of the number of shares of common stock underlying a share of Series A Preferred Stock and the closing price as of the occurrence of the triggering event. On or after July 30, 2021, each holder of Series A Preferred Stock can also require the Company to redeem its Series A Preferred Stock in cash at a per share price equal to 100% of the stated value of a share of Series A Preferred Stock plus accrued and unpaid dividends with respect thereto. Notwithstanding the forgoing, no holder of Series A Preferred Stock is permitted to exercise any rights or remedies upon a Breach Event or to exercise any redemption rights under the Certificate of Designations, unless approved by the holders of a majority of the then outstanding shares of Series A Preferred Stock. Upon consummation of a fundamental sale transaction, the Series A Preferred Stock shall be redeemed at a per share redemption price equal to the greater of (y) 250% of the per share purchase price of the Series A Preferred Stock and (z) the price payable in respect of such share of Series A Preferred Stock if such share of Series A Preferred Stock had been converted into such number of shares of common stock in accordance with the Certificate of Designations (but without giving effect to any limitations or restrictions contained therein) immediately prior to such fundamental sale transaction; provided however that the 250% threshold is changed to 100% if the fundamental sale transaction is approved by the two Series A Directors (as defined in the Certificate of Designations). In addition, if the Company consummates an equity or debt financing that results in more than $5.0 million of net proceeds to the Company and/or its subsidiaries, the holders of Series A Preferred Stock will have the right, but not the obligation, to require the Company to use the net proceeds in excess of $5.0 million to repurchase all or a portion of the Series A Preferred Stock at a per share price equal to the greater of (i) the sum of 100% of the stated value of such share of Series A Preferred Stock plus accrued and unpaid dividends with respect thereto, and (ii) the number of shares of common stock into which such share of Series A Preferred Stock is then convertible multiplied by the greater of (y) the closing price of the common stock on the date of announcement of such financing or (z) the closing price of the Common Stock on the date of consummation of such financing. Each holder of Series A Preferred Stock has a vote equal to the number of shares of common stock into which its Series A Preferred Stock would be convertible as of the record date. In addition, the holders of a majority of the Series A Preferred Stock must approve certain actions, including approving any amendments to the Company’s Restated Certificate of Incorporation as amended or Amended and Restated 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; issuance of any equity security senior to or on 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 of the 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 September 30, 2020 and December 31, 2019, the fair value of these derivative instruments was $475,561 and $483,804, 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 nine months ended September 30, 2020 and September 30, 2019 of $8,243 and 11,463, 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 nine months ended September 30, 2020 and 2019, were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Beginning Balance $ 478,312 $ 489,489 $ 483,804 $ 498,086 Total income recognized in earnings (2,751) (2,866) (8,243) (11,463) Ending Balance $ 475,561 $ 486,623 $ 475,561 $ 486,623 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 as follows: Probability of redemption as part of a fundamental sale transaction 0.5% Probability of redemption absent a fundamental sale transaction 4.75% Annual volatility 65% 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. Hale Capital Partners, LP, which was the sole holder of the Series A Preferred Stock agreed to the Series A mandatory extension of the mandatory redemption right 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 income (loss) attributable to common stockholders on the statement of operations and in determining income (loss) per share for the three and nine months ended September 30, 2020 and 2019, respectively. The following represents a reconciliation of net loss attributable to common stockholders for the three and nine months ended September 30, 2020 and 2019, respectively: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net income (loss) $ 1,546,209 $ (556,914) $ 1,232,927 $ (1,853,544) Effects of Series A redeemable convertible preferred stock: Less: Accrual of Series A redeemable convertible preferred stock dividends 266,007 266,447 812,362 770,027 Less: Accretion to redemption value of Series A redeemable convertible preferred stock 175,335 139,399 366,566 402,861 Net income (loss) attributable to common stockholders $ 1,104,867 $ (962,760) $ 53,999 $ (3,026,432) 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 683,742 Accretion of preferred stock 363,280 Total Series A redeemable convertible preferred stock, net at December 31, 2018 $ 9,756,706 Accrued dividends 1,157,762 Accretion of preferred stock 389,811 Total Series A redeemable convertible preferred stock, net at December 31, 2019 $ 11,304,279 Accrued dividends 812,362 Accretion of preferred stock 366,565 Total Series A redeemable convertible preferred stock, net at September 30, 2020 $ 12,483,206

Accumulated Other Comprehensive

Accumulated Other Comprehensive Loss	9 Months Ended
	Sep. 30, 2020
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 September 30, 2020 are as follows: Foreign Currency Net Minimum Total Accumulated other comprehensive income (loss) at June 30, 2020 $ (1,948,066) $ 33,566 $ (1,914,500) Other comprehensive income (loss) Other comprehensive income (loss) before reclassifications (24,234) — (24,234) Total other comprehensive income (loss) (24,234) — (24,234) Accumulated other comprehensive income (loss) at September 30, 2020 $ (1,972,300) $ 33,566 $ (1,938,734) The changes in Accumulated Other Comprehensive Loss, net of tax, for the three months ended September 30, 2019 are as follows: Foreign Currency Net Minimum Total Accumulated other comprehensive income (loss) at June 30, 2019 $ (1,951,923) $ 26,803 $ (1,925,120) Other comprehensive income (loss) Other comprehensive income (loss) before reclassifications (131,497) — (131,497) Total other comprehensive income (loss) (131,497) — (131,497) Accumulated other comprehensive income (loss) at September 30, 2019 $ (2,083,420) $ 26,803 $ (2,056,617) The changes in Accumulated Other Comprehensive Loss, net of tax, for the nine months ended September 30, 2020 are as follows: Foreign Currency Net Minimum Total Accumulated other comprehensive income (loss) at December 31, 2019 $ (1,926,826) $ 33,566 $ (1,893,260) Other comprehensive income (loss) Other comprehensive income (loss) before reclassifications (45,474) — (45,474) Total other comprehensive income (loss) (45,474) — (45,474) Accumulated other comprehensive income (loss) at September 30, 2020 $ (1,972,300) $ 33,566 $ (1,938,734) The changes in Accumulated Other Comprehensive Loss, net of tax, for the nine months ended September 30, 2019 are as follows: Foreign Currency Net Minimum Total Accumulated other comprehensive income (loss) at December 31, 2018 $ (1,921,905) $ 26,803 $ (1,895,102) Other comprehensive income (loss) Other comprehensive income (loss) before reclassifications (161,515) — (161,515) Total other comprehensive income (loss) (161,515) — (161,515) Accumulated other comprehensive income (loss) at September 30, 2019 $ (2,083,420) $ 26,803 $ (2,056,617)

Stockholders' Equity

Stockholders' Equity	9 Months Ended
	Sep. 30, 2020
Equity [Abstract]
Stockholders' Equity	Stockholders' Equity Stock Repurchase Activity

Litigation

Litigation	9 Months Ended
	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Litigation	Litigation In view of the inherent difficulty of predicting the outcome of litigation, particularly where the claimants seek very large or indeterminate damages, the Company generally cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss, fines or penalties related to each pending matter may be. In accordance with the authoritative guidance issued by the FASB on contingencies, the Company accrues anticipated costs of settlement, damages and losses for claims to the extent specific losses are probable and estimable. The Company records a receivable for insurance recoveries when such amounts are probable and collectable. In such cases, there may be an exposure to loss in excess of any amounts accrued. If, at the time of evaluation, the loss contingency related to a litigation is not both probable and estimable, the matter will continue to be monitored for further developments that would make such loss contingency both probable and estimable and, the Company will expense these costs as incurred. If the estimate of a probable loss is a range and no amount within the range is more likely, the Company will accrue the minimum amount of the range. 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 and Concentra

Segment Reporting and Concentrations	9 Months Ended
	Sep. 30, 2020
Segment Reporting [Abstract]
Segment Reporting and Concentrations	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 nine months ended September 30, 2020 and 2019, and the location of long-lived assets as of September 30, 2020 and December 31, 2019, are summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenue: Americas $ 1,834,443 $ 600,590 $ 4,085,936 $ 3,098,395 Asia Pacific 951,145 1,662,689 2,913,414 3,930,077 Europe, Middle East, Africa and Other 1,650,812 1,709,166 4,116,849 5,436,340 Total Revenue $ 4,436,400 $ 3,972,445 $ 11,116,199 $ 12,464,812 September 30, 2020 December 31, 2019 Long-lived assets: Americas $ 5,888,483 $ 6,811,578 Asia Pacific 724,224 860,023 Europe, Middle East, Africa and Other 161,337 190,928 Total long-lived assets $ 6,774,044 $ 7,862,529 For the three and nine months ended September 30, 2020, the Company had two customers that accounted for 10% or more of total revenue, respectively. For the three and nine months ended September 30, 2019, the Company had two customers and two customer that accounted for 10% or more of total revenue, respectively.

Restructuring Costs

Restructuring Costs	9 Months Ended
	Sep. 30, 2020
Restructuring and Related Activities [Abstract]
Restructuring Costs	Restructuring Costs In June 2017, the Board approved a comprehensive plan to increase operating performance (the “2017 Plan”). 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 86 employees at December 31, 2018. 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 nine months ended September 30, 2020, the Company incurred lease disposal-related costs for this property of $0.7 million. In the third quarter of 2019, the Company adopted the 2019 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 2019 Plan, the Company eliminated 23 positions worldwide, implemented tighter expense controls, ceased non-core activities and downsized several facilities. During the three months ended March 31, 2020, the Company incurred $0.1 million in severance expense as a result of this action. The 2019 Plan was substantially completed as of March 31, 2020. Given the commercial uncertainty caused by the novel coronavirus pandemic, or COVID-19, the Company developed and implemented an even more aggressive expense control plan in March 2020, that it is prepared to keep in place for the remainder of 2020 (the "2020 Plan"). The 2020 Plan reduced the Company's annual cash expense run rate by $4.0 million or 29%. The Company has furloughed 21 positions worldwide, and 8 of these positions were reinstated in the second and third quarters of 2020. During the nine months ended September 30, 2020, the Company has not yet incurred severance expense as a result of this action. We believe the reduced expense level will enable FalconStor to remain profitable during the remainder of 2020, even with continued revenue challenges throughout. The following table summarizes the activity during 2019 and 2020 related to restructuring liabilities recorded in connection with the 2017, 2019 and 2020 Plans: Severance Related Costs Facility and Other Costs Total Balance at December 31, 2018 $ 461,362 $ 453,446 $ 914,808 Additions (Reductions) — 157,693 157,693 Utilized/Paid — (187,833) (187,833) Balance at March 31, 2019 $ 461,362 $ 423,306 $ 884,668 Additions (Reductions) — 202,679 202,679 Utilized/Paid — (238,090) (238,090) Balance at June 30, 2019 $ 461,362 $ 387,895 $ 849,257 Additions (Reductions) 214,050 170,779 384,829 Utilized/Paid (214,050) (257,453) (471,503) Balance at September 30, 2019 $ 461,362 $ 301,221 $ 762,583 Additions (Reductions) 31,860 327,257 359,117 Utilized/Paid (199,423) (390,985) (590,408) Balance at December 31, 2019 $ 293,799 $ 237,493 $ 531,292 Additions (Reductions) 76,708 210,752 287,460 Utilized/Paid (156,415) (225,835) (382,250) Balance at March 31, 2020 $ 214,092 $ 222,410 $ 436,502 Additions (Reductions) — 153,685 153,685 Translation Adjustment 4,674 — 4,674 Utilized/Paid — (201,211) (201,211) Balance at June 30, 2020 $ 218,766 $ 174,884 $ 393,650 Additions (Reductions) — 317,595 317,595 Translation Adjustment 9,554 — 9,554 Utilized/Paid — (366,562) (366,562) Balance at September 30, 2020 $ 228,320 $ 125,917 $ 354,237 The severance and facility related liabilities are included within “accrued expenses” in the accompanying condensed consolidated balance sheets. The expenses under the 2017 and 2019 Plans are included within “restructuring costs” in the accompanying condensed consolidated statements of operations.

Basis of Presentation (Policies

Basis of Presentation (Policies)	9 Months Ended
	Sep. 30, 2020
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" or "FalconStor"), 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 accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s significant estimates include those related to revenue recognition, accounts receivable allowances, share-based payment compensation, valuation of derivatives, capitalizable software development costs, valuation of goodwill and other intangible assets and income taxes. During the first quarter of 2018, the Company also had significant estimates in the determination of the fair value of Series A Redeemable Convertible Preferred Stock ("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 fairly state the financial position of the Company at September 30, 2020, and the results of its operations for the three and nine months ended September 30, 2020 and 2019. 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, 2019 ("2019 Form 10-K").
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General: Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans. The objective of the guidance is to improve the effectiveness of disclosure requirements on defined benefit pension plans and other postretirement plans. The guidance is effective for fiscal years beginning after December 15, 2020. The Company does not expect adoption of the new standard to have a material impact on its condensed consolidated financial statements. In December 2019, the FASB released ASU 2019-12, which affects general principles within Topic 740, Income Taxes. The amendments of ASU 2019-12 are meant to simplify and reduce the cost of accounting for income taxes. The amendments in ASU 2019-12 are effective for public business entities for fiscal years beginning after December 15, 2020, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The Company does not expect adoption of the new standard to have a material impact on its condensed consolidated financial statements.
Revenue from Contract with Customers and Associated Balances	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 are 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 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. As of September 30, 2020 and December 31, 2019, accounts receivable, net of allowance for doubtful accounts, was $3.5 million and $3.4 million, respectively. As of September 30, 2020 and December 31, 2019, short and long-term contract assets, net of allowance for doubtful accounts, was $0.6 million and $1.1 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. Approximately $2.6 million of revenue is expected to be recognized from remaining performance obligations for unbilled support and services as of September 30, 2020. We expect to recognize revenue on approximately 42% of these remaining performance obligations over the next twelve months, with the balance recognized 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. Disaggregation of Revenue Please refer to the condensed consolidated statements of operations and Note (16), Segment Reporting and Concentrations, for discussion on revenue disaggregation by product type and by geography. The Company believes this level of disaggregation sufficiently depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. 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.
Leases	LeasesWe have entered into operating leases for our various facilities. We determine if an arrangement is a lease at inception. Operating leases are included in Right-of-Use ("ROU") assets, and lease liability obligations in our condensed consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liability obligations represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. We have lease agreements with lease and non-lease components and account for such components as a single lease component. As most of our leases do not provide an implicit rate, we estimated our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The ROU asset also includes any lease payments made and excludes lease incentives and lease direct costs. Our lease terms may include options to extend or terminate the lease. Such extended terms have been considered in determining the ROU assets and lease liability obligations when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Schedule of Changes in Deferred Revenue	Changes in deferred revenue were as follows: Nine Months Ended September 30, 2020 Balance at December 31, 2019 $ 7,355,270 Deferral of revenue 9,807,409 Recognition of revenue (11,116,199) Change in reserves 6,881 Balance at September 30, 2020 $ 6,053,361
Assets And Liabilities, Lessee	We have various operating leases for office facilities that expire through 2021. Below is a summary of our ROU assets and liabilities as of September 30, 2020. Right of use assets $ 854,712 Lease liability obligations, current 1,074,032 Lease liability obligations, less current portion 2,194 Total lease liability obligations $ 1,076,226 Weighted-average remaining lease term 0.89 Weighted-average discount rate 5.99 %
Lease Cost	Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Components of lease expense: Operating lease cost $ 466,556 $ 323,117 $ 1,248,958 $ 1,157,390 Sublease income (75,314) (155,944) (223,941) (467,832) Net lease cost $ 391,242 $ 167,173 $ 1,025,017 $ 689,558
Operating Leases Maturity	Approximate future minimum lease payments for our ROU assets over the remaining lease periods as of September 30, 2020, are as follows: Remainder of 2020 424,592 2021 659,754 Total minimum lease payments 1,084,346 Less interest (8,120) Present value of lease liabilities 1,076,226 Payments Sublease Income Net Commitments 2020 424,592 (75,314) 349,278 2021 659,754 (530,447) 129,307 $ 1,084,346 $ (605,761) $ 478,585

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 30, 2020
Earnings Per Share [Abstract]
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	The following represents the common stock equivalents that were excluded from the computation of diluted shares outstanding because their effect would have been anti-dilutive for the three and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Stock options and restricted stock 9,945 1,157,537 1,483,450 1,263,009 Series A redeemable convertible preferred stock 87,815 87,815 87,815 87,815 Total anti-dilutive common stock equivalents 97,760 1,245,352 1,571,265 1,350,824

Property and Equipment (Tables)

Property and Equipment (Tables)	9 Months Ended
	Sep. 30, 2020
Property, Plant and Equipment [Abstract]
Schedule of Property and Equipment	The gross carrying amount and accumulated depreciation of property and equipment as of September 30, 2020 and December 31, 2019 are as follows: September 30, 2020 December 31, 2019 Gross carrying amount $ 18,759,199 $ 18,735,885 Accumulated depreciation (18,522,757) (18,366,612) Property and Equipment, net $ 236,442 $ 369,273

Software Development Costs (Tab

Software Development Costs (Tables)	9 Months Ended
	Sep. 30, 2020
Research and Development [Abstract]
Summary of Software Development Costs	The gross carrying amount and accumulated amortization of software development costs as of September 30, 2020 and December 31, 2019 are as follows: September 30, 2020 December 31, 2019 Gross carrying amount $ 2,950,132 $ 2,950,132 Accumulated amortization (2,929,204) (2,923,120) Software development costs, net $ 20,928 $ 27,012

Goodwill and Other Intangible_2

Goodwill and Other Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Intangible Assets and Goodwill	The gross carrying amount and accumulated amortization of goodwill and other intangible assets as of September 30, 2020 and December 31, 2019 are as follows: September 30, 2020 December 31, 2019 Goodwill $ 4,150,339 $ 4,150,339 Other intangible assets: Gross carrying amount $ 4,010,107 $ 3,947,103 Accumulated amortization (3,909,749) (3,889,385) Net carrying amount $ 100,358 $ 57,718

Share-Based Payment Arrangeme_2

Share-Based Payment Arrangements (Tables)	9 Months Ended
	Sep. 30, 2020
Share-based Payment Arrangement [Abstract]
Details of Stock Option Plan	The following table summarizes the 2018 Plan, which was the only plan under which the Company was able to grant equity compensation as of September 30, 2020: Shares Shares Available Shares Name of Plan Authorized for Grant Outstanding FalconStor Software, Inc. 2018 Incentive Stock Plan 1,471,997 (1,248) 1,473,245
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 September 30, 2020: Name of Plan Shares Available for Grant Shares Outstanding FalconStor Software, Inc., 2016 Incentive Stock Plan — 3,850 FalconStor Software, Inc., 2006 Incentive Stock Plan — 6,095
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 nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Cost of revenue - support and service 104 104 310 2,146 Research and development costs 433 371 1,289 5,977 Selling and marketing 186 186 554 3,844 General and administrative 3,099 2,439 9,239 16,615 $ 3,822 $ 3,100 $ 11,392 $ 28,582

Notes Payable and Stock Warra_2

Notes Payable and Stock Warrants (Tables)	9 Months Ended
	Sep. 30, 2020
Payables and Accruals [Abstract]
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 Proceeds from issuance of long-term debt 1,000,000 Revaluation of long-term debt (447,008) Accretion of discount 202,195 Deferred issuance costs (87,609) Total notes payable, net at December 31, 2018 $ 3,124,827 Repayment of long-term debt (489,321) Proceeds from issuance of long-term debt 1,000,000 Accretion of discount 273,521 Deferred issuance costs (55,393) Total notes payable, net at December 31, 2019 $ 3,853,634 Accretion of discount 361,193 Proceeds from issuance of the PPP loan 754,000 Repayment of short-term debt (1,000,000) Total notes payable, net at September 30, 2020 $ 3,968,827

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2020
Fair Value Disclosures [Abstract]
Schedule of Fair Value Assets Measured On Recurring Basis	The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2020: 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 475,561 — — 475,561 Total derivative liabilities 475,561 — — 475,561 Total assets and liabilities measured at fair value $ 475,561 $ — $ — $ 475,561 The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis at December 31, 2019: 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 483,804 — — 483,804 Total derivative liabilities 483,804 — — 483,804 Total assets and liabilities measured at fair value $ 483,804 $ — $ — $ 483,804
Fair Value Measurements using Significant Unobservable Inputs	The following table presents a reconciliation of the beginning and ending balances of the Company's liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2020 and September 30, 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Beginning Balance $ 478,312 $ 489,489 $ 483,804 $ 498,086 Total income recognized in earnings (2,751) (2,866) (8,243) (11,463) Ending Balance $ 475,561 $ 486,623 $ 475,561 $ 486,623

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Future Minimum Payments for Operating Leases	Approximate future minimum lease payments for our ROU assets over the remaining lease periods as of September 30, 2020, are as follows: Remainder of 2020 424,592 2021 659,754 Total minimum lease payments 1,084,346 Less interest (8,120) Present value of lease liabilities 1,076,226 Payments Sublease Income Net Commitments 2020 424,592 (75,314) 349,278 2021 659,754 (530,447) 129,307 $ 1,084,346 $ (605,761) $ 478,585

Series A Redeemable Convertib_2

Series A Redeemable Convertible Preferred Stock (Tables)	9 Months Ended
	Sep. 30, 2020
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 nine months ended September 30, 2020 and 2019, were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Beginning Balance $ 478,312 $ 489,489 $ 483,804 $ 498,086 Total income recognized in earnings (2,751) (2,866) (8,243) (11,463) Ending Balance $ 475,561 $ 486,623 $ 475,561 $ 486,623
Derivative Probability and Volatility Assumptions	The probability and volatility assumptions are as follows: Probability of redemption as part of a fundamental sale transaction 0.5% Probability of redemption absent a fundamental sale transaction 4.75% Annual volatility 65%
Reconciliation of net (loss) income attributable to common stockholders	The following represents a reconciliation of net loss attributable to common stockholders for the three and nine months ended September 30, 2020 and 2019, respectively: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Net income (loss) $ 1,546,209 $ (556,914) $ 1,232,927 $ (1,853,544) Effects of Series A redeemable convertible preferred stock: Less: Accrual of Series A redeemable convertible preferred stock dividends 266,007 266,447 812,362 770,027 Less: Accretion to redemption value of Series A redeemable convertible preferred stock 175,335 139,399 366,566 402,861 Net income (loss) attributable to common stockholders $ 1,104,867 $ (962,760) $ 53,999 $ (3,026,432)
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 683,742 Accretion of preferred stock 363,280 Total Series A redeemable convertible preferred stock, net at December 31, 2018 $ 9,756,706 Accrued dividends 1,157,762 Accretion of preferred stock 389,811 Total Series A redeemable convertible preferred stock, net at December 31, 2019 $ 11,304,279 Accrued dividends 812,362 Accretion of preferred stock 366,565 Total Series A redeemable convertible preferred stock, net at September 30, 2020 $ 12,483,206

Accumulated Other Comprehensi_2

Accumulated Other Comprehensive Loss (Tables)	9 Months Ended
	Sep. 30, 2019
Equity [Abstract]
Schedule of accumulated other comprehensive loss	The changes in Accumulated Other Comprehensive Loss, net of tax, for the three months ended September 30, 2020 are as follows: Foreign Currency Net Minimum Total Accumulated other comprehensive income (loss) at June 30, 2020 $ (1,948,066) $ 33,566 $ (1,914,500) Other comprehensive income (loss) Other comprehensive income (loss) before reclassifications (24,234) — (24,234) Total other comprehensive income (loss) (24,234) — (24,234) Accumulated other comprehensive income (loss) at September 30, 2020 $ (1,972,300) $ 33,566 $ (1,938,734) The changes in Accumulated Other Comprehensive Loss, net of tax, for the three months ended September 30, 2019 are as follows: Foreign Currency Net Minimum Total Accumulated other comprehensive income (loss) at June 30, 2019 $ (1,951,923) $ 26,803 $ (1,925,120) Other comprehensive income (loss) Other comprehensive income (loss) before reclassifications (131,497) — (131,497) Total other comprehensive income (loss) (131,497) — (131,497) Accumulated other comprehensive income (loss) at September 30, 2019 $ (2,083,420) $ 26,803 $ (2,056,617) The changes in Accumulated Other Comprehensive Loss, net of tax, for the nine months ended September 30, 2020 are as follows: Foreign Currency Net Minimum Total Accumulated other comprehensive income (loss) at December 31, 2019 $ (1,926,826) $ 33,566 $ (1,893,260) Other comprehensive income (loss) Other comprehensive income (loss) before reclassifications (45,474) — (45,474) Total other comprehensive income (loss) (45,474) — (45,474) Accumulated other comprehensive income (loss) at September 30, 2020 $ (1,972,300) $ 33,566 $ (1,938,734) The changes in Accumulated Other Comprehensive Loss, net of tax, for the nine months ended September 30, 2019 are as follows: Foreign Currency Net Minimum Total Accumulated other comprehensive income (loss) at December 31, 2018 $ (1,921,905) $ 26,803 $ (1,895,102) Other comprehensive income (loss) Other comprehensive income (loss) before reclassifications (161,515) — (161,515) Total other comprehensive income (loss) (161,515) — (161,515) Accumulated other comprehensive income (loss) at September 30, 2019 $ (2,083,420) $ 26,803 $ (2,056,617)

Segment Reporting and Concent_2

Segment Reporting and Concentrations (Tables)	9 Months Ended
	Sep. 30, 2020
Segment Reporting [Abstract]
Schedule of Revenues And Long Lived Assets By Geographical Areas	The Company is organized in a single operating segment for purposes of making operating decisions and assessing performance. Revenue from the United States to customers in the following geographical areas for the three and nine months ended September 30, 2020 and 2019, and the location of long-lived assets as of September 30, 2020 and December 31, 2019, are summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Revenue: Americas $ 1,834,443 $ 600,590 $ 4,085,936 $ 3,098,395 Asia Pacific 951,145 1,662,689 2,913,414 3,930,077 Europe, Middle East, Africa and Other 1,650,812 1,709,166 4,116,849 5,436,340 Total Revenue $ 4,436,400 $ 3,972,445 $ 11,116,199 $ 12,464,812 September 30, 2020 December 31, 2019 Long-lived assets: Americas $ 5,888,483 $ 6,811,578 Asia Pacific 724,224 860,023 Europe, Middle East, Africa and Other 161,337 190,928 Total long-lived assets $ 6,774,044 $ 7,862,529

Restructuring Costs (Tables)

Restructuring Costs (Tables)	9 Months Ended
	Sep. 30, 2020
Restructuring and Related Activities [Abstract]
Schedule Of Restructuring Costs	The following table summarizes the activity during 2019 and 2020 related to restructuring liabilities recorded in connection with the 2017, 2019 and 2020 Plans: Severance Related Costs Facility and Other Costs Total Balance at December 31, 2018 $ 461,362 $ 453,446 $ 914,808 Additions (Reductions) — 157,693 157,693 Utilized/Paid — (187,833) (187,833) Balance at March 31, 2019 $ 461,362 $ 423,306 $ 884,668 Additions (Reductions) — 202,679 202,679 Utilized/Paid — (238,090) (238,090) Balance at June 30, 2019 $ 461,362 $ 387,895 $ 849,257 Additions (Reductions) 214,050 170,779 384,829 Utilized/Paid (214,050) (257,453) (471,503) Balance at September 30, 2019 $ 461,362 $ 301,221 $ 762,583 Additions (Reductions) 31,860 327,257 359,117 Utilized/Paid (199,423) (390,985) (590,408) Balance at December 31, 2019 $ 293,799 $ 237,493 $ 531,292 Additions (Reductions) 76,708 210,752 287,460 Utilized/Paid (156,415) (225,835) (382,250) Balance at March 31, 2020 $ 214,092 $ 222,410 $ 436,502 Additions (Reductions) — 153,685 153,685 Translation Adjustment 4,674 — 4,674 Utilized/Paid — (201,211) (201,211) Balance at June 30, 2020 $ 218,766 $ 174,884 $ 393,650 Additions (Reductions) — 317,595 317,595 Translation Adjustment 9,554 — 9,554 Utilized/Paid — (366,562) (366,562) Balance at September 30, 2020 $ 228,320 $ 125,917 $ 354,237

Basis of Presentation - Narrati

Basis of Presentation - Narrative (Details)	Dec. 27, 2019USD ($)	Sep. 30, 2020USD ($)position	Jun. 30, 2020USD ($)	Mar. 31, 2020USD ($)position	Sep. 30, 2019USD ($)	Jun. 30, 2019USD ($)	Mar. 31, 2019USD ($)	Sep. 30, 2020USD ($)	Sep. 30, 2019USD ($)	Apr. 28, 2020USD ($)	Dec. 31, 2019USD ($)
Organization, Consolidation And Presentation Of Financial Statements [Line Items]
Working Capital Deficiency		$ (5,200,000)						$ (5,200,000)
Deferred revenue		4,010,383						4,010,383			$ 5,270,190
Total Stockholders' Deficit		(14,011,389)						(14,011,389)			(14,031,306)
Net income (loss)		1,546,209	$ 406,558	$ (719,840)	$ (556,914)	$ (1,171,723)	$ (124,907)	1,232,927	$ (1,853,544)
Net cash used in operating activities								(303,174)	$ (1,432,514)
Cash and cash equivalents		871,281						$ 871,281			$ 1,475,166
Cash Period Change		(603,885)
Number of positions eliminated, worldwide | position				23
Annual Expense Run Rate Reduction		$ 4,000,000
Annual Expense Run Rate Reduction Percentage		29.00%
Number of positions furloughed | position		21
Number of furloughed positions reinstated | position		8
Paycheck Protection Program Loan [Member]
Organization, Consolidation And Presentation Of Financial Statements [Line Items]
Principal amount of PPP Loan										$ 754,000
Various Lenders [Member] | 2019 Term Loan [Member]
Organization, Consolidation And Presentation Of Financial Statements [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 2,500,000
Proceeds from Lines of Credit	$ 1,000,000

Summary of Significant Accoun_3

Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)	9 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Accounting Policies [Abstract]
Accounts receivable, net of allowances	$ 3,476,930	$ 3,406,550
Contract assets	600,000	1,100,000
Deferred revenue	$ 6,053,361	$ 7,355,270
Revenue expected to be recognized during next 12 months (percent)	66.00%
Remaining performance obligation	$ 2,600,000
Remaining performance obligation expected to be recognized over next 12 months (percent)	42.00%

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Changes in Deferred Revenue (Details)	9 Months Ended
	Sep. 30, 2020USD ($)
Movement in Deferred Revenue [Roll Forward]
Balance at December 31, 2019	$ 7,355,270
Deferral of revenue	9,807,409
Recognition of revenue	(11,116,199)
Change in reserves	6,881
Balance at September 30, 2020	$ 6,053,361

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Right of Use Assets and Liabilities (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Leases [Abstract]
Operating lease right-of-use assets, net	$ 854,712		$ 854,712		$ 1,842,254
Current portion of lease liabilities	1,074,032		1,074,032		1,655,522
Operating lease liabilities, net of current portion	$ 2,194		$ 2,194		$ 624,859
Weighted-average remaining lease term	10 months 20 days		10 months 20 days
Weighted-average discount rate	5.99%		5.99%
Operating Lease, Cost	$ 466,556	$ 323,117	$ 1,248,958	$ 1,157,390
Sublease Income	(75,314)	(155,944)	(223,941)	(467,832)
Lease, Cost	391,242	167,173	1,025,017	689,558
Operating Lease, Payments	357,245	$ 480,992	1,117,557	$ 1,476,704
Remainder of 2020	424,592		424,592
2021	659,754		659,754
Total minimum lease payments	1,084,346		1,084,346
Less interest	(8,120)		(8,120)
Present value of lease liabilities	$ 1,076,226		$ 1,076,226

Earnings Per Share (Details)

Earnings Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common stock equivalents	97,760	1,245,352	1,571,265	1,350,824
Stock options and restricted stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common stock equivalents	9,945	1,157,537	1,483,450	1,263,009
Series A redeemable convertible preferred stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common stock equivalents	87,815	87,815	87,815	87,815

Property and Equipment (Details

Property and Equipment (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Property, Plant and Equipment [Abstract]
Gross carrying amount	$ 18,759,199		$ 18,759,199		$ 18,735,885
Accumulated depreciation	(18,522,757)		(18,522,757)		(18,366,612)
Property and Equipment, net	236,442		236,442		$ 369,273
Depreciation expense	$ 44,958	$ 62,910	$ 135,679	$ 196,736

Software Development Costs (Det

Software Development Costs (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Research and Development [Abstract]
Gross carrying amount	$ 2,950,132		$ 2,950,132		$ 2,950,132
Accumulated amortization	(2,929,204)		(2,929,204)		(2,923,120)
Software development costs, net	20,928		20,928		$ 27,012
Capitalized computer software amortization	$ 1,649	$ 11,565	$ 6,084	$ 54,198

Goodwill and Other Intangible_3

Goodwill and Other Intangible Assets (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 4,150,339		$ 4,150,339		$ 4,150,339
Other intangible assets:
Gross carrying amount	4,010,107		4,010,107		3,947,103
Accumulated amortization	(3,909,749)		(3,909,749)		(3,889,385)
Net carrying amount	100,358		100,358		$ 57,718
Amortization of intangible assets	$ 18,455	$ 22,130	$ 20,364	$ 69,454

Share-Based Payment Arrangeme_3

Share-Based Payment Arrangements (Detail Narrative)	Sep. 30, 2020shares
FalconStor Software, Inc., 2018 Incentive Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Authorized (in shares)	1,471,997

Share-Based Payment Arrangeme_4

Share-Based Payment Arrangements (Details) - FalconStor Software, Inc., 2018 Incentive Stock Plan	Sep. 30, 2020shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Authorized (in shares)	1,471,997
Shares Available for Grant (in shares)	(1,248)
Shares Outstanding (in shares)	1,473,245

Share-Based Payment Arrangeme_5

Share-Based Payment Arrangements - Equity Plans Terminated or Expired (Details)	Sep. 30, 2020shares
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)	3,850
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)	6,095

Share-Based Payment Arrangeme_6

Share-Based Payment Arrangements - Share-Based Compensation Expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 3,822	$ 3,100	$ 11,392	$ 28,582
Cost of revenue - support and service
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	104	104	310	2,146
Research and development costs
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	433	371	1,289	5,977
Selling and marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	186	186	554	3,844
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 3,099	$ 2,439	$ 9,239	$ 16,615

Income Taxes (Details)

Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Income tax provision	$ 11,272	$ (55,274)	$ 44,709	$ 168,556
Effective income tax rate			3.50%	(10.00%)
Unrecognized tax benefits	76,275		$ 76,275		$ 134,246
Unrecognized tax benefits, interest on income taxes accrued	$ 33,865		33,865		$ 63,404
Recognized tax benefits			$ 7,000

Notes Payable and Stock Warra_3

Notes Payable and Stock Warrants - Components of Notes Payable (Details) - USD ($)	Apr. 28, 2020	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2019	Feb. 23, 2018
Payables and Accruals [Abstract]
Notes payable principal balance						$ 3,000,000
Deferred issuance costs						(254,247)
Discount						$ (288,504)
Movement In Notes Payable [Roll Forward]
Total notes payable, beginning		$ 3,853,634	$ 3,124,827	$ 2,457,249	$ 3,124,827
Proceeds from issuance of long-term debt		754,000	0	1,000,000	1,000,000
Revaluation of long-term debt				(447,008)
Accretion of discount		361,193		202,195	273,521
Deferred issuance costs				(87,609)	(55,393)
Repayment of long-term debt		0	(489,321)		(489,321)
Repayment of short-term debt		1,000,000	0
Total notes payable, ending		3,968,827		$ 3,124,827	$ 3,853,634
Debt Instrument [Line Items]
Repayment of short-term debt		1,000,000	$ 0
Paycheck Protection Program [Member]
Movement In Notes Payable [Roll Forward]
Proceeds from issuance of the PPP loan	$ 754,000
Term Loan [Member]
Movement In Notes Payable [Roll Forward]
Repayment of short-term debt		1,000,000
Debt Instrument [Line Items]
Repayment of short-term debt		$ 1,000,000

Notes Payable and Stock Warra_4

Notes Payable and Stock Warrants - Additional Information (Details) - USD ($)	Apr. 28, 2020	Feb. 23, 2018
Paycheck Protection Program [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	1.00%
Proceeds from issuance of the PPP loan	$ 754,000
Long-term Debt, Term	2 years
Note Payable, Interest Deferral Period	6 months
Debt Instrument, Prepayment Penalties	$ 0
Senior Secured Debt [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount		$ 4,000,000
Debt Instrument, Basis Spread on Variable Rate		0.75%

Fair Value Measurements (Detail

Fair Value Measurements (Details) - Recurring - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Derivative liabilities:
Derivative Instruments	$ 475,561	$ 483,804
Total derivative liabilities	475,561	483,804
Total assets and liabilities measured at fair value	475,561	483,804
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	475,561	483,804
Total derivative liabilities	475,561	483,804
Total assets and liabilities measured at fair value	$ 475,561	$ 483,804

Fair Value Measurements (Narrat

Fair Value Measurements (Narrative) (Details) - Future Cash Flows - Discount Rate	Sep. 30, 2020
Preferred Stock
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Discount yield of preferred equity	0.14
Notes Payable
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value discount yield of note payable	0.17

Fair Value Measurements - Rollf

Fair Value Measurements - Rollforward (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	$ 478,312	$ 489,489	$ 483,804	$ 498,086
Total income recognized in earnings	(2,751)	(2,866)	(8,243)	(11,463)
Ending Balance	$ 475,561	$ 486,623	$ 475,561	$ 486,623

Commitments and Contingencies_2

Commitments and Contingencies (Details)	Sep. 30, 2020USD ($)
Payments
2020	$ 424,592
2021	659,754
Total minimum lease payments	1,084,346
Sublease Income
2020	(75,314)
2021	(530,447)
Total Sublease Income	(605,761)
Net Commitments
2020	349,278
2021	129,307
Total minimum lease payments	$ 478,585

Commitments and Contingencies_3

Commitments and Contingencies (Narrative) (Details) - USD ($)	Apr. 05, 2018	Aug. 14, 2017	Sep. 30, 2020
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Maximum length of warranty on software products			90 days
Uncertainty in income tax liability			$ 110,141
Chief Executive Officer
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Salary and Wage, NonOfficer, Excluding Cost of Good and Service Sold		$ 350,000
Accrued bonuses		$ 17,500
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number		735,973
Severance payment period		6 months
Award requisite period		6 months
Chief Financial Officer
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Salary and Wage, NonOfficer, Excluding Cost of Good and Service Sold	$ 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
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Accrued bonuses	$ 70,000
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

Series A Redeemable Convertib_3

Series A Redeemable Convertible Preferred Stock (Details Narrative)	3 Months Ended		9 Months Ended
	Sep. 30, 2020USD ($)shares	Sep. 30, 2019USD ($)	Sep. 30, 2020USD ($)Integershares	Sep. 30, 2019USD ($)	Jun. 30, 2020USD ($)	Dec. 31, 2019USD ($)shares	Jun. 30, 2019USD ($)	Dec. 31, 2018USD ($)	Sep. 16, 2013$ / sharesshares
Class of Stock [Line Items]
Series A Redeemable convertible preferred stock, shares outstanding (in shares) | shares	900,000		900,000			900,000
Consecutive trading days, convertible debt threshold | Integer			60
Series A redeemable convertible preferred stock redemption price upon fundamental sale, percentage of per share purchase price			250.00%
Threshold of stock price trigger, percentage			225.00%
Upon certain triggering events holders can redeem			100.00%
Series A redeemable convertible preferred stock, financing proceeds threshold			$ 5,000,000
Percentage of accounts receivable			80.00%
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs	$ 475,561	$ 486,623	$ 475,561	$ 486,623	$ 478,312	$ 483,804	$ 489,489	$ 498,086
Loss on change in fair value	(2,751)	$ (2,866)	$ (8,243)	$ (11,463)
Series A redeemable convertible preferred stock
Class of Stock [Line Items]
Series A redeemable convertible preferred stock, conversion price | $ / shares									$ 102.488
Series A redeemable convertible preferred stock | Prime rate
Class of Stock [Line Items]
Basis spread on Series A redeemable convertible preferred stock dividend, percentage			5.00%
Series A redeemable convertible preferred stock, basis spread of dividend			10.00%
Maximum
Class of Stock [Line Items]
Potential ownership percentage by controlling owners (greater than)			19.99%
Recurring
Class of Stock [Line Items]
Financial and Nonfinancial Liabilities, Fair Value Disclosure	$ 475,561		$ 475,561			$ 483,804
HCP-FVA, LLC | Series A redeemable convertible preferred stock
Class of Stock [Line Items]
Series A Redeemable convertible preferred stock, shares outstanding (in shares) | shares									900,000

Series A Redeemable Convertib_4

Series A Redeemable Convertible Preferred Stock - Rollforward (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Equity [Abstract]
Beginning Balance	$ 478,312	$ 489,489	$ 483,804	$ 498,086
Total income recognized in earnings	(2,751)	(2,866)	(8,243)	(11,463)
Ending Balance	$ 475,561	$ 486,623	$ 475,561	$ 486,623

Series A Redeemable Convertib_5

Series A Redeemable Convertible Preferred Stock - Probability and Volatility Assumptions (Details)	9 Months Ended
	Sep. 30, 2020
Equity [Abstract]
Probability of redemption as part of a fundamental sale transaction	0.50%
Probability of redemption absent a fundamental sale transaction	4.75%
Annual volatility	65.00%

Series A Redeemable Convertib_6

Series A Redeemable Convertible Preferred Stock - Reconciliation of Net Loss Attributable to Common Stockholders (Details) - USD ($)	3 Months Ended						9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Equity [Abstract]
Net income (loss)	$ 1,546,209	$ 406,558	$ (719,840)	$ (556,914)	$ (1,171,723)	$ (124,907)	$ 1,232,927	$ (1,853,544)
Less: Accrual of Series A redeemable convertible preferred stock dividends	266,007	260,595	285,760	266,447	256,553	247,027	812,362	770,027
Less: Accretion to redemption value of Series A redeemable convertible preferred stock	175,335	$ 165,141	$ 26,090	139,399	$ 134,223	$ 129,239	366,566	402,861
Net loss attributable to common stockholders	$ 1,104,867			$ (962,760)			$ 53,999	$ (3,026,432)

Series A Redeemable Convertib_7

Series A Redeemable Convertible Preferred Stock - Components of Preferred Stock (Details) - USD ($)	2 Months Ended	9 Months Ended	10 Months Ended	12 Months Ended
	Feb. 23, 2018	Sep. 30, 2020	Dec. 31, 2018	Dec. 31, 2019
Increase (Decrease) in Temporary Equity [Roll Forward]
Beginning balance		$ 11,304,279
Ending balance		12,483,206		$ 11,304,279
Redeemable Preferred Stock [Member]
Class of Stock [Line Items]
Series A redeemable convertible preferred stock principal balance	$ 9,000,000
Increase (Decrease) in Temporary Equity [Roll Forward]
Beginning balance		11,304,279	$ 8,709,684	9,756,706
Accrued dividends	1,312,112	812,362	683,742	1,157,762
Discount	(1,602,428)
Accretion of preferred stock		366,565	363,280	389,811
Ending balance	$ 8,709,684	$ 12,483,206	$ 9,756,706	$ 11,304,279

Accumulated Other Comprehensi_3

Accumulated Other Comprehensive Loss (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Other comprehensive income (loss)
Accumulated other comprehensive (loss) income, beginning balance			$ (14,031,306)
Total other comprehensive income (loss), net of applicable taxes:	$ (24,234)	$ (131,497)	(45,474)	$ (161,515)
Accumulated other comprehensive (loss) income, ending balance	(14,011,389)		(14,011,389)
Foreign Currency Translation
Other comprehensive income (loss)
Accumulated other comprehensive (loss) income, beginning balance	(1,948,066)	(1,951,923)	(1,926,826)	(1,921,905)
Other comprehensive income	(24,234)	(131,497)	(45,474)	(161,515)
Total other comprehensive income (loss), net of applicable taxes:	(24,234)	(131,497)	(45,474)	(161,515)
Accumulated other comprehensive (loss) income, ending balance	(1,972,300)	(2,083,420)	(1,972,300)	(2,083,420)
Net Minimum Pension Liability
Other comprehensive income (loss)
Accumulated other comprehensive (loss) income, beginning balance	33,566	26,803	33,566	26,803
Other comprehensive income	0	0	0	0
Total other comprehensive income (loss), net of applicable taxes:	0	0	0	0
Accumulated other comprehensive (loss) income, ending balance	33,566	26,803	33,566	26,803
Accumulated Other Comprehensive loss, net
Other comprehensive income (loss)
Accumulated other comprehensive (loss) income, beginning balance	(1,914,500)	(1,925,120)	(1,893,260)	(1,895,102)
Other comprehensive income	(24,234)	(131,497)	(45,474)	(161,515)
Total other comprehensive income (loss), net of applicable taxes:	(24,234)	(131,497)	(45,474)	(161,515)
Accumulated other comprehensive (loss) income, ending balance	$ (1,938,734)	$ (2,056,617)	$ (1,938,734)	$ (2,056,617)

Stockholders' Equity (Details N

Stockholders' Equity (Details Narrative) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Equity [Abstract]
Stock repurchased during period (shares)	0	0	0	0
Remaining number of shares authorized for repurchased	49,078		49,078

Segment Reporting and Concent_3

Segment Reporting and Concentrations - Schedule Of Segment Reporting By Geographical Areas (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Revenue:
Total revenue	$ 4,436,400	$ 3,972,445	$ 11,116,199	$ 12,464,812
Long-lived assets:
Total long-lived assets	6,774,044		6,774,044		$ 7,862,529
Americas
Revenue:
Total revenue	1,834,443	600,590	4,085,936	3,098,395
Long-lived assets:
Total long-lived assets	5,888,483		5,888,483		6,811,578
Asia Pacific
Revenue:
Total revenue	951,145	1,662,689	2,913,414	3,930,077
Long-lived assets:
Total long-lived assets	724,224		724,224		860,023
Europe, Middle East, Africa and Other
Revenue:
Total revenue	1,650,812	$ 1,709,166	4,116,849	$ 5,436,340
Long-lived assets:
Total long-lived assets	$ 161,337		$ 161,337		$ 190,928

Segment Reporting and Concent_4

Segment Reporting and Concentrations (Details Narrative)	3 Months Ended		9 Months Ended
	Sep. 30, 2020Integercustomer	Sep. 30, 2019customer	Sep. 30, 2020Integercustomer	Sep. 30, 2019customer	Dec. 31, 2019Integer
Segment Reporting [Abstract]
Number of Customers Accounting for More than 10 Percent of Revenue | customer	2	2	2	2
Number Of Customers With Significant Accounts Receivable Balance | Integer	4		4		1

Restructuring Costs (Details Na

Restructuring Costs (Details Narrative)	3 Months Ended							9 Months Ended
	Sep. 30, 2020USD ($)position	Jun. 30, 2020USD ($)	Mar. 31, 2020USD ($)position	Dec. 31, 2019USD ($)	Sep. 30, 2019USD ($)	Jun. 30, 2019USD ($)	Mar. 31, 2019USD ($)	Sep. 30, 2020USD ($)position	Sep. 30, 2019USD ($)	Dec. 31, 2018
Restructuring Cost and Reserve [Line Items]
Entity number of employees										86
Restructuring costs | $	$ 317,595	$ 153,685	$ 287,460	$ 359,117	$ 384,829	$ 202,679	$ 157,693	$ 758,740	$ 745,201
Number of positions eliminated, worldwide | position			23
Annual Expense Run Rate Reduction | $	$ 4,000,000
Annual Expense Run Rate Reduction Percentage	29.00%
Number of positions furloughed | position	21
Number of furloughed positions reinstated | position	8
Restructuring Costs Under 2019 Plan
Restructuring Cost and Reserve [Line Items]
Restructuring costs | $		100,000
Number of positions eliminated, worldwide | position								23
Lease-Disposal Related Costs
Restructuring Cost and Reserve [Line Items]
Restructuring costs | $	$ 317,595	$ 153,685	$ 210,752	$ 327,257	$ 170,779	$ 202,679	$ 157,693	$ 700,000

Restructuring Costs - Schedule

Restructuring Costs - Schedule Of Restructuring Costs (Details) - USD ($)	3 Months Ended							9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020	Sep. 30, 2019
Restructuring Reserve [Roll Forward]
Beginning Balance	$ 393,650	$ 436,502	$ 531,292	$ 762,583	$ 849,257	$ 884,668	$ 914,808	$ 531,292	$ 914,808
Provisions/Additions	317,595	153,685	287,460	359,117	384,829	202,679	157,693	758,740	745,201
Translation Adjustment	9,554	4,674
Utilized/Paid	(366,562)	(201,211)	(382,250)	(590,408)	(471,503)	(238,090)	(187,833)
Translation Adjustment	(24,234)	(8,087)	(13,153)		(131,497)	(49,410)	19,392	(45,474)	(161,515)
Ending Balance	354,237	393,650	436,502	531,292	762,583	849,257	884,668	354,237	762,583
Restructuring Costs Under 2019 Plan
Restructuring Reserve [Roll Forward]
Beginning Balance	218,766	214,092	293,799	461,362	461,362	461,362	461,362	293,799	461,362
Provisions/Additions	0	0	76,708	31,860	214,050	0	0
Translation Adjustment	9,554	4,674
Utilized/Paid	0	0	(156,415)	(199,423)	(214,050)	0	0
Ending Balance	228,320	218,766	214,092	293,799	461,362	461,362	461,362	228,320	461,362
Facility and Other Costs
Restructuring Reserve [Roll Forward]
Beginning Balance	174,884	222,410	237,493	301,221	387,895	423,306	453,446	237,493	453,446
Provisions/Additions	317,595	153,685	210,752	327,257	170,779	202,679	157,693	700,000
Translation Adjustment	0	0
Utilized/Paid	(366,562)	(201,211)	(225,835)	(390,985)	(257,453)	(238,090)	(187,833)
Ending Balance	$ 125,917	$ 174,884	$ 222,410	$ 237,493	$ 301,221	$ 387,895	$ 423,306	$ 125,917	$ 301,221