Share-Based Payment Arrangements

On March 31, 2018, the shares available for issuance under the FalconStor Software, Inc. 2016 Incentive Stock Plan (the "2016 Plan") totaled 3,191,300. Pursuant to the 2016 Plan, if, on July 1^st of any calendar year in which the 2016 Plan is in effect, the number of shares of stock as to which options, restricted shares and restricted stock units may be granted under the 2016 Plan is less than five percent (5%) of the number of outstanding shares of stock, then the number of shares of stock available for issuance under the 2016 Plan is automatically increased so that the number equals five percent (5%) of the shares of stock outstanding. In no event shall the number of shares of stock subject to the 2016 Plan in the aggregate exceed twenty million shares, subject to adjustment as provided in the 2016 Plan. On July 1, 2017, the total number of outstanding shares of the Company’s common stock totaled 44,525,990. Pursuant to the 2016 Plan, the total shares available for issuance under the 2016 Plan thus increased 2,081,080 to 2,226,300 shares available for issuance as of July 1, 2017. In April 2018, the Board of Directors terminated the 2016 Plan.

The following table summarizes the plans under which the Company was able to grant equity compensation as of March 31, 2018:



	Shares	Shares Available	Shares	Last Date for Grant
Name of Plan	Authorized	for Grant	Outstanding	of Shares
FalconStor Software, Inc., 2016 Incentive Stock Plan	4,247,686	3,191,300	535,000	April 27, 2026
FalconStor Software, Inc., 2016 Outside Directors Equity Compensation Plan	1,000,000	993,400	—	April 27, 2019

The following table summarizes the Company’s equity plans that have expired but that still have equity awards outstanding as of March 31, 2018:



Name of Plan	Shares Available for Grant	Shares Outstanding
FalconStor Software, Inc., 2006 Incentive Stock Plan	—	1,446,000
FalconStor Software, Inc., 2013 Outside Directors Equity Compensation Plan	—	3,400
FalconStor Software, Inc., 2000 Stock Option Plan	—	81,500

Related to the aforementioned 2016 Plan, many share-based compensation awards were forfeited and the related expense reversed accordingly, resulting in negative expense in the period. The following table summarizes the share-based compensation expense for all awards issued under the Company’s stock equity plans in the following line items in the condensed consolidated statements of operations for the three months ended March 31, 2018 and 2017:



	Three Months Ended March 31,
	2018			2017
Cost of revenue - Product	$	—		$	—
Cost of revenue - Support and Service	8,700			56,451
Research and development costs	22,606			129,715
Selling and marketing	7,932			56,540
General and administrative	(62,133		)	202,708
	$	(22,895	)	$	445,414