Share-Based Payment Arrangements

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

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 (the “Compensation Committee”) of the Company’s Board of Directors (the “Board”) and initially provided 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. In June 2021, the Company's stockholders approved an amendment to increase the number of shares of our common stock authorized and reserved for issuance under the 2018 Plan by 220,800 shares to a total of 1,692,797 shares. Exercise prices of the options will be determined by the Compensation Committee, subject to the consent of Hale Capital. The vesting terms will be performance based and determined by the Compensation Committee, subject to the consent of Hale Capital, based on various factors, including (i) the return of capital to the holders of the Series A Preferred Stock and the Company’s common stock in the event of a change of control, (ii) the repayment of the Company’s obligations under its senior secured debt, and (iii) the Company’s free cash flow.

The following table summarizes the 2018 Plan, which was the only plan under which the Company was able to grant equity compensation as of March 31, 2022:

Shares Available

Name of Plan

Authorized

for Grant

Outstanding

FalconStor Software, Inc. 2018 Incentive Stock Plan

1,692,797

52,016

1,545,623

The following table summarizes the Company’s equity plans that have terminated or expired but that still have equity awards outstanding as of March 31, 2022:


Name of Plan	Shares Available for Grant	Shares Outstanding
FalconStor Software, Inc., 2016 Incentive Stock Plan	—	2,250

FalconStor Software, Inc., 2006 Incentive Stock Plan	—	3,440

A summary of the Company’s restricted stock activity for the three months ended March 31, 2022 is below. Such restricted stock did not bestow any voting or dispositive power and is not deemed outstanding until they vest.


						Number of Restricted Stock Awards
Non-Vested at January 1, 2022						1,513,380
Granted						113,230
Vested						(4,248)
Forfeited						(82,429)
Non-Vested at March 31, 2022						1,539,933

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, 2022 and 2021:


	Three Months Ended March 31,
	2022		2021
Cost of revenue - Product	$	227	$	227
Cost of revenue - support and service	181		181
Research and development costs	1,879		—
Selling and marketing	4,511		2,677
General and administrative	1,386		1,386
	$	8,184	$	4,471