Share-Based Payment Arrangements (Tables)

12 Months Ended

Dec. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Details of Stock Option Plan

The following table summarizes the plans under which the Company granted equity compensation as of December 31, 2014: 

Name of Plan	Shares Authorized	Shares Available for Grant	Shares Outstanding	Last Date for Grant of Shares
FalconStor Software, Inc., 2006 Incentive Stock Plan	13,455,546	3,726,452	6,795,492	May 17, 2016
FalconStor Software, Inc., 2013 Outside Directors Equity Compensation Plan	400,000	280,000	103,500	May 9, 2016

Schedule of Equity Awards Outstanding

The following table summarizes the Company’s equity plans that have expired but that still have equity awards outstanding as of December 31, 2014:

Name of Plan	Shares Available for Grant	Shares Outstanding
FalconStor Software, Inc., 2000 Stock Option Plan	—	604,301
2004 Outside Directors Stock Option Plan	—	120,000
FalconStor Software, Inc., 2007 Outside Directors Equity Compensation Plan	—	160,000
FalconStor Software, Inc., 2010 Outside Directors Equity Compensation Plan	—	17,000

Schedule of Stock Option Activity

A summary of the Company’s stock option activity for 2014 is as follows: 

	Number of Options		Weighted Average Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Options Outstanding at December 31, 2013	7,544,432		$	4.16	6.28	$	3,000
Granted	30,000		$	1.19
Exercised	(18,150	)	$	1.36
Forfeited	(1,931,801	)	$	4.56
Expired	(157,545	)	$	6.95
Options Outstanding at December 31, 2014	5,466,936		$	3.93	5.51	$	7,350
Options Exercisable at December 31, 2014	4,187,071		$	4.62	4.74	$	941
Options Expected to Vest after December 31, 2014 (1)	895,906		$	1.69	8.05	$	4,487
(1) Options expected to vest after December 31, 2014 reflect an estimated forfeiture rate

Schedule of Share Based Compensation Recognized

The Company recognized share-based compensation expense for all awards issued under the Company’s stock equity plans in the following line items in the consolidated statement of operations:

	Years ended December 31,
	2014		2013		2012
Cost of revenues - Product	$	—	$	181	$	262
Cost of revenues - Support and Service	91,197		136,975		172,707
Research and development costs	282,416		363,296		727,826
Selling and marketing	327,694		397,967		1,677,469
General and administrative	764,876		807,010		2,036,505
	$	1,466,183	$	1,705,429	$	4,614,769

Stock Based Compensation Expense - Restricted Stock

A summary of the total stock-based compensation expense related to restricted stock awards and restricted stock units, which is included in the Company’s total share-based compensation expense for each respective year, is as follows: 

	Years ended December 31,
	2014		2013		2012
Directors, officers and employees	$	602,889	$	257,843	$	584,959
Non-employee consultants	—		—		13,488
	$	602,889	$	257,843	$	598,447

Schedule of Restricted Stock Units Activity

A summary of the Company’s restricted stock activity for 2014 is as follows: 

	Number of Restricted Stock Awards
Non-Vested at December 31, 2013	605,600
Granted	2,107,857
Vested	(305,100	)
Forfeited	(75,000	)
Non-Vested at December 31, 2014	2,333,357

Schedule of Share-based Compensation, Nonemployee

A summary of the total stock-based compensation expense/(benefit) related to share-based awards granted to non-employee consultants, which is included in the Company’s total share-based compensation expense for each respective period, is as follows: 

	Years ended December 31,
	2014		2013		2012
Non-qualified stock options	$	1,173	$	37,379	$	13,999
Restricted stock awards	—		—		13,488
	$	1,173	$	37,379	$	27,487

Schedule of assumptions used to value share-based compensation

In addition to the exercise and grant date prices of the awards, certain weighted average assumptions that were used to estimate the fair value of share-based payment grants in the respective periods are listed in the table below: 

	Years ended December 31,
	2014	2013	2012
Expected dividend yield	0%	0%	0%
Expected volatility	55 - 57%	61 - 64%	60 - 61%
Risk-free interest rate	1.20 - 1.84%	0.84 - 1.64%	0.7 - 1.2%
Expected term (years)	3.4 - 5.5	5.5	5.5
Discount for post-vesting restrictions	N/A	N/A	N/A