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Falconstor Software (FALC)

Cover

Cover - USD ($)12 Months Ended
Dec. 31, 2021Feb. 28, 2022Jun. 30, 2021
Cover [Abstract]
Document Type10-K
Document Annual Reporttrue
Document Period End DateDec. 31,
2021
Current Fiscal Year End Date--12-31
Document Transition Reportfalse
Entity File Number0-23970
Entity Registrant NameFALCONSTOR SOFTWARE, INC.
Entity Incorporation, State or Country CodeDE
Entity Tax Identification Number77-0216135
Entity Address, Address Line One501 Congress Avenue, Suite 150
Entity Address, City or TownAustin
Entity Address, State or ProvinceTX
Entity Address, Postal Zip Code78701
City Area Code631
Local Phone Number777-5188
Title of 12(g) SecurityCommon Stock, $0.001 par value
Entity Well-known Seasoned IssuerNo
Entity Voluntary FilersNo
Entity Current Reporting StatusYes
Entity Interactive Data CurrentYes
Entity Filer CategoryNon-accelerated Filer
Entity Emerging Growth Companyfalse
Entity Small Businesstrue
ICFR Auditor Attestation Flagfalse
Entity Shell Companyfalse
Documents Incorporated by ReferenceThe information required by Part III of Form 10-K will be incorporated by reference to certain portions of a definitive proxy statement which is expected to be filed by the Company pursuant to Regulation 14A within 120 days after the close of its fiscal year.
Entity Central Index Key0000922521
Amendment Flagfalse
Entity Public Float $ 12,745,946
Entity Common Stock, Shares Outstanding7,082,276
Document Fiscal Period FocusFY
Document Fiscal Year Focus2021

Audit Information

Audit Information12 Months Ended
Dec. 31, 2021
Audit Information [Abstract]
Auditor NameMarcum LLP
Auditor LocationCosta Mesa, CA
Auditor Firm ID688

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)Dec. 31, 2021Dec. 31, 2020
Current assets:
Cash and cash equivalents $ 3,181,209 $ 1,920,656
Accounts receivable, net of allowances2,855,135 2,836,571
Prepaid expenses and other current assets1,074,972 1,837,596
Contract assets209,936 254,483
Inventory7,744 15,275
Total current assets7,328,996 6,864,581
Property and equipment, net153,904 197,020
Operating lease right-of-use assets, net112,405 536,272
Deferred tax assets30,190 330,552
Software development costs, net42,695 19,278
Other assets106,023 863,964
Goodwill4,150,339 4,150,339
Other intangible assets, net51,362 100,134
Long-term contract assets692,712 343,934
Total assets12,668,626 13,406,074
Current liabilities:
Accounts payable297,033 453,791
Accrued expenses1,099,257 2,293,765
Current portion of operating lease liabilities76,940 665,074
Short-term loan, net of debt issuance costs and discounts0 3,320,863
Deferred revenue4,557,317 4,603,270
Total current liabilities6,030,547 11,336,763
Liabilities, Noncurrent [Abstract]
Other long-term liabilities950,843 934,785
Notes payable, net of debt issuance costs and discounts2,154,098 754,000
Operating lease liabilities, less current portion35,465 0
Deferred tax liabilities500,499 513,027
Deferred revenue, net of current portion1,578,769 2,467,589
Total liabilities11,250,221 16,006,164
Commitments and contingencies (Note 11)
Series A redeemable convertible preferred stock, $0.001 par value, 2,000,000 shares authorized, 900,000 shares issued and outstanding, redemption value of $14,490,274 and $13,346,577, respectively14,384,388 12,940,722
Stockholders' equity:
Common stock - $0.001 par value, 30,000,000 shares authorized, 7,082,276 and 5,949,463 shares issued and outstanding, respectively7,082 5,949
Additional paid-in capital112,349,613 110,107,170
Accumulated deficit(123,462,638)(123,665,970)
Accumulated other comprehensive loss, net(1,860,040)(1,987,961)
Total stockholders' deficit(12,965,983)(15,540,812)
Total liabilities and stockholders' deficit $ 12,668,626 $ 13,406,074

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($)Dec. 31, 2021Dec. 31, 2020
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 authorized2,000,000 2,000,000
Series A redeemable convertible preferred stock, shares issued900,000 900,000
Series A redeemable convertible preferred stock, shares outstanding900,000 900,000
Series A redeemable convertible preferred stock, redemption value $ 14,490,274 $ 13,346,577
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized30,000,000 30,000,000
Common stock, shares issued7,082,276 5,949,463
Common stock, shares outstanding7,082,276 5,949,463

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Total revenue $ 14,180,480 $ 14,768,693
Total cost of revenue1,952,276 1,827,478
Gross profit12,228,204 12,941,215
Operating expenses:
Research and development costs2,833,643 2,467,783
Selling and marketing5,672,023 4,601,228
General and administrative2,887,957 3,022,350
Gain on litigation settlement(632,600)0
Restructuring costs833,313 1,032,826
Total operating expenses11,594,336 11,124,187
Operating income (loss)633,868 1,817,028
Gain on debt extinguishment754,000 0
Interest and other expense(657,773)(748,621)
Income (loss) before income taxes730,095 1,068,407
Income tax expense (benefit)526,763 (14,319)
Net income (loss)203,332 1,082,726
Less: Accrual of Series A redeemable convertible preferred stock dividends1,143,697 1,083,892
Less: Accretion to redemption value of Series A redeemable convertible preferred stock299,969 552,551
Net income (loss) attributable to common stockholders $ (1,240,334) $ (553,717)
Earnings per share
Basic net income (loss) per share attributable to common stockholders $ (0.19) $ (0.09)
Diluted net income (loss) per share attributable to common stockholders $ (0.19) $ (0.09)
Weighted average basic shares outstanding6,515,274 5,920,517
Weighted average diluted shares outstanding6,515,274 5,920,517
Product
Total revenue $ 7,254,471 $ 7,097,695
Total cost of revenue325,089 297,555
Support and service
Total revenue6,926,009 7,670,998
Total cost of revenue $ 1,627,187 $ 1,529,923

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Loss - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Statement of Comprehensive Income [Abstract]
Net income (loss) $ 203,332 $ 1,082,726
Other comprehensive income (loss), net of applicable taxes:
Foreign currency translation114,675 (68,854)
Net minimum pension liability13,246 (25,847)
Other Comprehensive Income (Loss), Net of Tax, Total127,921 (94,701)
Total comprehensive income (loss)331,253 988,025
Less: Accrual of Series A redeemable convertible preferred stock dividends1,143,697 1,083,892
Less: Accretion to redemption value of Series A redeemable convertible preferred stock299,969 552,551
Total comprehensive income (loss) attributable to common stockholders $ (1,112,413) $ (648,418)

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Deficit - USD ($)TotalCommon StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive Loss, Net
Common stock, shares outstanding, beginning at Dec. 31, 20195,918,733
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Restricted stock issued30,730
Common stock, shares outstanding, ending at Dec. 31, 20205,949,463 5,949,463
Beginning Balance, amount at Dec. 31, 2019 $ (14,908,149) $ 5,919 $ 111,727,888 $ (124,748,696) $ (1,893,260)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)1,082,726 1,082,726
Restricted stock issued30 (30)
Share-based compensation15,755 15,755
Accretion of Series A redeemable convertible preferred stock(552,551)(552,551)
Dividends on Series A redeemable convertible preferred stock(1,083,892)(1,083,892)
Foreign currency translation(68,854)(68,854)
Net minimum pension liability(25,847)(25,847)
Ending Balance, amount at Dec. 31, 2020 $ (15,540,812) $ 5,949 110,107,170 (123,665,970)(1,987,961)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Restricted stock issued36,063
Common stock, shares outstanding, ending at Dec. 31, 20217,082,276 7,082,276
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss) $ 203,332 203,332
Stock Issued During Period, Shares, New Issues3,666,064 1,096,750
Sale of common stock in public offering, net of underwriting discounts and offering costs $ 1,097 3,664,967
Restricted stock issued $ 0 36 (36)
Share-based compensation21,178 21,178
Accretion of Series A redeemable convertible preferred stock(299,969)(299,969)
Dividends on Series A redeemable convertible preferred stock(1,143,697)(1,143,697)
Foreign currency translation114,675 114,675
Net minimum pension liability13,246 13,246
Ending Balance, amount at Dec. 31, 2021 $ (12,965,983) $ 7,082 $ 112,349,613 $ (123,462,638) $ (1,860,040)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Cash flows from operating activities:
Net income (loss) $ 203,332 $ 1,082,726
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization199,246 224,518
Share-based payment compensation21,178 15,755
Gain on debt extinguishment(754,000)0
Gain on litigation settlement(632,600)0
Loss on disposal of fixed assets50,149 0
Provision for returns and doubtful accounts72,461 4,464
Amortization of debt discount on notes payable167,293 467,229
Amortization of right of use assets423,867 1,305,982
Deferred income tax provision261,638 8,820
Changes in operating assets and liabilities:
Accounts receivable(103,138)577,259
Prepaid expenses and other current assets725,046 353,689
Contract assets(304,231)478,855
Inventory7,679 15,889
Other assets756,767 (389)
Accounts payable(49,387)(911,352)
Accrued expenses and other long-term liabilities(476,977)(283,616)
Deferred revenue(899,183)(1,018,459)
Operating lease liabilities(552,669)(1,615,307)
Net cash provided by (used in) operating activities(883,529)706,063
Cash flows from investing activities:
Purchases of property and equipment(142,123)0
Capitalized software development costs30,000 0
Security deposits0 51,734
Purchase of intangible assets(10,226)(80,810)
Net cash provided by (used in) investing activities(182,349)(29,076)
Cash flows from financing activities:
Proceeds from public offering, net of underwriting discounts paid4,181,908 0
Payments of offering costs(515,844)0
Proceeds from issuance PPP Loan0 754,000
Payments of short term-debt(1,334,058)(1,000,000)
Net cash provided by (used in) financing activities2,332,006 (246,000)
Effect of exchange rate changes on cash and cash equivalents(5,575)14,503
Net increase (decrease) in cash and cash equivalents1,260,553 445,490
Cash and cash equivalents, beginning of year1,920,656 1,475,166
Cash and cash equivalents, end of year3,181,209 1,920,656
Supplemental Disclosures:
Cash paid for interest136,042 291,821
Cash paid for income taxes, net0 0
Non-cash financing activities:
Undistributed Series A redeemable convertible preferred stock dividends1,143,697 1,083,892
Accretion of Series A redeemable convertible preferred stock $ 299,969 $ 552,551

Summary of Significant Accounti

Summary of Significant Accounting Policies12 Months Ended
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Summary of Significant Accounting PoliciesSummary of Significant Accounting Policies (a) The Company and Nature of Operations FalconStor Software, Inc., a Delaware corporation ("we", the "Company" or "FalconStor"), is the trusted data protection leader modernizing disaster recovery and backup for the hybrid cloud world. The Company enables enterprise customers and MSPs to secure, migrate, and protect their data while reducing data storage and long-term retention costs. More than 1,000 organizations and MSPs worldwide standardize on FalconStor as the foundation for their cloud first data protection future. (b) Liquidity As of December 31, 2021, we had a working capital surplus of $1.3 million, which is inclusive of current deferred revenue of $4.6 million, and a stockholders' deficit of $13.0 million. During the year ended December 31, 2021, we had net income of $0.2 million and negative cash flow from operations of $0.9 million. Our cash and cash equivalents at December 31, 2021 was $3.2 million, an increase of $1.3 million as compared to December 31, 2020. The Company’s principal sources of liquidity at December 31, 2021 consisted of cash and future cash anticipated to be generated from operations. The Company generated positive net income but negative cash flows from operations during the year ended December 31, 2021, and it reported positive working capital as of December 31, 2021. The Company is currently a party to an Amended and Restated Term Loan Credit Agreement, dated as of February 23, 2018, as amended December 27, 2019, by and between the Company and HCP-FVA, LLC (“HCP-FVA”), (the “Amended and Restated Loan Agreement”). In connection with the then-proposed public offering of the Company as described in the Company's Registration Statement on Form S-1, as amended, originally filed on June 3, 2021 (the "Offering"), we entered into a letter agreement with Hale Capital Partners, LP (“Hale Capital”), dated June 2, 2021 (the “Loan Extension Letter Agreement”), that provided for an extension of the maturity date on Hale Capital’s portion of the outstanding indebtedness owed under the Amended and Restated Loan Agreement to June 30, 2023, which constituted approximately $2,176,621 of the $3,510,679 principal amount outstanding as of June 2, 2021. The remaining $1,334,058 of the principal amount outstanding, which was owed to other lenders, was repaid in full on June 30, 2021. See Note (7) Notes Payable for more information. Also, as described further in Note (12) Series A Redeemable Convertible Preferred Stock, the effective date of the mandatory redemption right of the Series A Redeemable Convertible Preferred Stock (the “Series A Preferred Stock”) held by HCP-FVA and Hale Capital was extended from July 30, 2021 to July 30, 2023 pursuant to an amendment to the Certificate of Designations, dated as of June 24, 2021. The amendment was approved by our shareholders at our 2021 annual meeting of stockholders and filed with the Delaware Secretary of State on June 25, 2021. If such Series A Preferred Stock was redeemed at December 31, 2021, the Company would have been required to pay the holders of the Series A Preferred Stock $14.5 million. As discussed in Note (14) Restructuring Costs the Melville, NY office lease which ended on April 30, 2021 with a gross annualized rental cost of $1.5 million, will not be replaced. FalconStor is primarily a virtual company and is redeploying this savings to more productive uses. The Company believes its current cash balances together with anticipated cash flows from operating activities will be sufficient to meet its working capital requirements for at least one year from the date the consolidated financial statements were issued. (c) Revision of Previously Issued Financial Statements Adjustment in Connection with the Adoption of ASC 606, Revenue from Contracts with Customers During the year ended December 31, 2021, the Company identified an immaterial accounting error related to the beginning balance adjustment to deferred revenue and accumulated deficit in connection with the adoption of ASC 606, Revenue from Contracts with Customers. There was no impact of the correction on the previously issued consolidated statement of operations or on the consolidated statements of cash flows for the year ended December 31, 2020. The Company assessed the materiality of this error on prior period financial statements in accordance with the SEC Staff Accounting Bulletin Number 99, Materiality, and ASC 250-10, Accounting Changes and Error Corrections. The Company determined that this error was not material to the financial statements of any prior annual or interim period. Embedded Derivative Liability Fair Value Adjustment During the year ended December 31, 2021, the Company identified an immaterial accounting error related to the fair value adjustments recorded to the embedded derivative liability associated with the Company's Series A Preferred Stock. The redemption feature of the embedded derivative may require cash payment of face value of preferred stock plus the value of accrued but unpaid dividends converted to common stock at a specified conversion rate at the date of occurrence of a specified breach event. The company recorded the fair value of the liability based on the face value of the preferred stock but not on accrued and unpaid dividends. This error resulted in an understatement of other long-term liabilities and an understatement of interest and other expense in the financial statements included in the Company’s quarterly reports on Form 10-Q and the Company’s annual reports on Form 10-K previously filed with the SEC. The Company assessed the materiality of this error on prior period financial statements in accordance with the SEC Staff Accounting Bulletin Number 99, Materiality, and ASC 250-10, Accounting Changes and Error Corrections. The Company determined that this error was not material to the financial statements of any prior annual or interim period. To correct the misstatements above, the Company revised its previously issued financial statements as follows: As of December 31, 2020 CONSOLIDATED BALANCE SHEET As Previously Reported Adjustments As Revised Other long-term liabilities $ 703,889 $ 230,896 $ 934,785 Deferred revenue, net of current portion $ 1,765,859 $ 701,730 $ 2,467,589 Total liabilities $ 15,073,538 $ 932,626 $ 16,006,164 Accumulated deficit $ (122,733,344) $ (932,626) $ (123,665,970) Stockholders' deficit $ (14,608,186) $ (932,626) $ (15,540,812) Total liabilities and stockholders' deficit $ 13,406,074 $ — $ 13,406,074 For the Year Ended December 31, 2020 CONSOLIDATED STATEMENT OF OPERATIONS As Previously Reported Adjustments As Revised Interest and other expense $ (692,838) $ (55,783) $ (748,621) Income (loss) before income taxes $ 1,124,190 $ (55,783) $ 1,068,407 Net income (loss) $ 1,138,509 $ (55,783) $ 1,082,726 Net income (loss) attributable to common stockholders $ (497,934) $ (55,783) $ (553,717) Basic net income (loss) per share attributable to common stockholders $ (0.08) $ (0.01) $ (0.09) Diluted net income (loss) per share attributable to common stockholders $ (0.08) $ (0.01) $ (0.09) For the Year Ended December 31, 2020 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) As Previously Reported Adjustments As Revised Net income (loss) $ 1,138,509 $ (55,783) $ 1,082,726 Total comprehensive income (loss) $ 1,043,808 $ (55,783) $ 988,025 Total comprehensive income (loss) attributable to common stockholders $ (592,635) $ (55,783) $ (648,418) Total Stockholders' Deficit CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT As Previously Reported Adjustments As Revised Balance at December 31, 2019 $ (14,031,306) $ (876,843) $ (14,908,149) Net income (loss) $ 1,138,509 $ (55,783) $ 1,082,726 Balance at December 31, 2020 $ (14,608,186) $ (932,626) $ (15,540,812) For the Year Ended December 31, 2020 CONSOLIDATED STATEMENT OF CASH FLOWS As Previously Reported Adjustments As Revised Cash flows from operating activities: Net income (loss) $ 1,138,509 $ (55,783) $ 1,082,726 Changes in operating assets and liabilities: Accrued expenses and other long-term liabilities $ (339,399) $ 55,783 $ (283,616) Net cash provided by (used in) operating activities $ 706,063 $ — $ 706,063 (d) 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 2021 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. (e) 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. (f) 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, valuation of derivatives, valuation of goodwill and income taxes. 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. (g) Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measurements, a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies, is as follows: Level 1 —Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2 —Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 —Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. As of December 31, 2021 and 2020, the fair value of the Company’s financial instruments including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximated carrying value due to the short maturity of these instruments. See Note (3) Fair Value Measurements for additional information. (h) Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of convertible preferred stock are reviewed to determine whether or not they contain embedded derivative instruments that are required under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 815 “Derivatives and Hedging” (“ASC 815”) to be accounted for separately from the host contract, and recorded on the balance sheet at fair value. The fair value of derivatives are required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. See Note (12) Derivative Financial Instruments for additional information. (i) Revenue from Contracts with Customers and Associated Balances The Company derives its revenue from sales of its products, support and services. Product revenue consists of the Company’s software integrated with industry standard hardware and sold as complete turn-key integrated solutions, as stand-alone software applications or sold on a subscription or consumption basis. Depending on the nature of the arrangement revenue, related to turn-key solutions and stand-alone software applications are generally recognized upon shipment and delivery of license keys. For certain arrangements revenue is recognized based on usage or ratably over the term of the arrangement. Support and services revenue consists of both maintenance revenues and professional services revenues. Revenue is recorded net of applicable sales taxes. The Company recognizes revenue for the transfer of services or products to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services or products. The principle is achieved through the following five-step approach: • Identification of the contract, or contracts, with the customer • Identification of the performance obligation in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, the Company satisfies a performance obligation Nature of Products and Services Licenses for on-premises software provide the customer with a right to use the software as it exists when made available to the customer. Customers may purchase perpetual licenses or subscribe to licenses, which provide customers with the same functionality and differ mainly in the duration over which the customer benefits from the software. Revenue from distinct on-premises licenses is recognized upfront at the point in time when the software is made available to the customer. Revenue allocated to software maintenance and support services is recognized ratably over the contractual support period. Hardware products consist primarily of servers and associated components and function independently of the software products and as such as accounted for as separate performance obligations. Revenue allocated to hardware maintenance and support services is recognized ratably over the contractual support period. Professional services are primarily related to software implementation services and associated revenue is recognized upon customer acceptance. Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a contract asset when revenue is recognized prior to invoicing, or unearned revenue when revenue is recognized subsequent to invoicing. For perpetual licenses with multi-year maintenance agreements, the company invoices the license and generally one year of maintenance with future maintenance generally invoiced annually. 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 December 31, 2021 and 2020, accounts receivable, net of allowance for doubtful accounts, was $2.9 million and $2.8 million, respectively. Our allowance for doubtful accounts on accounts receivable was $0.1 million as of December 31, 2021 and $0.2 million as of December 31, 2020, respectively. As of December 31, 2021 and 2020, short and long-term contract assets, net of allowance for doubtful accounts, was $0.9 million and $0.6 million, respectively. Our allowance for doubtful accounts on contract assets as of December 31, 2021 was nil. The allowances for doubtful accounts reflect the Company’s best estimates of probable losses inherent in the accounts receivable and contract assets’ balances. The Company determines the allowances based on known troubled accounts, historical experience, and other currently available evidence. Write-offs in the accounts receivable and contract assets allowance accounts during the years ended December 31, 2021 and 2020 were $137,980 and $69,282, 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: Twelve Months Ended December 31, 2021 Balance at December 31, 2020 $ 7,070,859 Deferral of revenue 13,248,342 Recognition of revenue (14,180,480) Change in reserves (2,635) Balance at December 31, 2021 $ 6,136,086 During the twelve months ended December 31, 2021 and 2020, revenue of $4.6 million and $5.3 million, respectively, was recognized from the deferred revenue balance at the beginning of each period. 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 December 31, 2021, of which the Company expects to recognize approximately 74.3% of the revenue over the next 12 months and the remainder thereafter. Approximately $1.7 million of revenue is expected to be recognized from remaining performance obligations for unbilled support and services as of December 31, 2021. We expected to recognize revenue on approximately 34% 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 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. (j) 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 continue through 2023. Below is a summary of our right of use assets and liabilities as of December 31, 2021. Right of use assets $ 112,405 Lease liability obligations, current 76,940 Lease liability obligations, less current portion 35,465 Total lease liability obligations $ 112,405 Weighted-average remaining lease term 2.00 Weighted-average discount rate 3.35 % Our operating lease costs for the year ended December 31, 2021 were as follows: Years Ended December 31, 2021 2020 Components of lease expense: Operating lease cost 766,952 1,794,187 Sublease income (100,418) (505,626) Net lease cost $ 666,534 $ 1,288,561 During the year ended December 31, 2021, operating cash flows from operating leases was approximately $0.6 million. Approximate future minimum lease payments for our right of use assets over the remaining lease periods as of December 31, are as follows: 2022 76,995 2023 38,498 Total minimum lease payments 115,493 Less interest (3,088) Present value of lease liabilities 112,405 (k) Property and Equipment Property and equipment are recorded at cost. Depreciation is recognized using the straight-line method over the estimated useful lives of the assets (3 to 7 years). Leasehold improvements are amortized on a straight-line basis over the terms of the respective leases or over their estimated useful lives, whichever is shorter. (l) Goodwill and Other Intangible Assets Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired in business combinations. The Company has not amortized goodwill related to its acquisitions, but instead tests the balance for impairment. The Company evaluates goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate that the carrying value may not be recoverable. The Company tests goodwill for impairment by first comparing the book value of net assets to the fair value of the reporting unit. If the fair value is determined to be less than the book value or qualitative factors indicate that it is more likely than not that goodwill is impaired, a second step is performed to compute the amount of impairment as the difference between the estimated fair value of goodwill and the carrying value. The fair value of the Company's single reporting unit for purposes of its goodwill impairment test exceeded its carrying value as of December 31, 2021 and 2020 and thus the Company determined there was no impairment of goodwill. As of December 31, 2021 and 2020, the Company's single reporting unit for purposes of its goodwill impairment test had a negative carrying value and thus the Company determined there was no impairment of goodwill. Identifiable intangible assets include (i) assets acquired through business combinations, which include customer contracts and intellectual property, and (ii) patents amortized over three years using the straight-line method. The gross carrying amount and accumulated amortization of goodwill and other intangible assets as of December 31, 2021 and 2020 are as follows: December 31, 2021 December 31, 2020 Goodwill $ 4,150,339 $ 4,150,339 Other intangible assets: Gross carrying amount $ 4,038,138 $ 4,027,912 Accumulated amortization (3,986,776) (3,927,778) Net carrying amount $ 51,362 $ 100,134 For the years ended December 31, 2021 and 2020, amortization expense was $58,998 and $38,393, respectively. As of December 31, 2021, amortization expense for existing identifiable intangible assets is expected to be $33,652, $16,576 and $1,134 for the years ended December 31, 2022, 2023 and 2024, respectively. Such assets will be fully amortized at December 31, 2024. (m) Software Development Costs and Purchased Software Technology In accordance with the authoritative guidance issued by the FASB on costs of software to be sold, leased, or marketed, costs associated with the development of new software products and enhancements to existing software products are expensed as incurred until technological feasibility of the product has been established. Based on the Company’s product development process, technological feasibility is established upon completion of a working model. Amortization of software development costs is recorded at the greater of the straight-line basis over the product’s estimated life, or the ratio of current period revenue of the related products to total current and anticipated future revenue of these products. The gross carrying amount and accumulated amortization of software development costs as of December 31, 2021 and 2020 are as follows: December 31, 2021 December 31, 2020 Software development costs: Gross carrying amount $ 2,980,132 $ 2,950,132 Accumulated amortization (2,937,437) (2,930,854) Software development costs, net $ 42,695 $ 19,278 During the years ended December 31, 2021 and 2020, the Company recorded $6,583 and $7,734, respectively, of amortization expense related to capitalized software costs. As of December 31, 2021, amortization expense for software development costs is expected to be $10,083, $12,112 and $6,000, $6,000, $6,000 and $2,500 for the years ended December 31, 2022, 2023 and 2024, 2025, 2026, and thereafter, respectively. (n) Income Taxes The Company records income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In determining the period in which related tax benefits are realized for financial reporting purposes, excess share-based compensation deductions included in net operating losses are realized after regular net operating losses are exhausted. The Company accounts for uncertain tax positions in accordance with the authoritative guidance issued by the FASB on income taxes, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return, should be recorded in the financial statements. Pursuant to the authoritative guidance, the Company may recognize the tax benefit from an uncertain tax position only if it meets the “more likely than not” threshold that the position will be sustained on examination by the taxing authority, based on the technical merits of the position or under statute expirations. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. In addition, the authoritative guidance addresses de-recognition, classification, interest and penalties on income taxes, accounting in interim periods, and also requires increased disclosures. See Note (5) Income Taxes for additional information. (o) Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the sum of the expected future cash flows, undiscounted and without interest, is less than the carrying amount of the asset, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds its fair value. (p) Share-Based Payments The Company accounts for share-based payments in accordance with the authoritative guidance issued by the FASB on share-based compensati
LiquidityLiquidity As of December 31, 2021, we had a working capital surplus of $1.3 million, which is inclusive of current deferred revenue of $4.6 million, and a stockholders' deficit of $13.0 million. During the year ended December 31, 2021, we had net income of $0.2 million and negative cash flow from operations of $0.9 million. Our cash and cash equivalents at December 31, 2021 was $3.2 million, an increase of $1.3 million as compared to December 31, 2020. The Company’s principal sources of liquidity at December 31, 2021 consisted of cash and future cash anticipated to be generated from operations. The Company generated positive net income but negative cash flows from operations during the year ended December 31, 2021, and it reported positive working capital as of December 31, 2021. The Company is currently a party to an Amended and Restated Term Loan Credit Agreement, dated as of February 23, 2018, as amended December 27, 2019, by and between the Company and HCP-FVA, LLC (“HCP-FVA”), (the “Amended and Restated Loan Agreement”). In connection with the then-proposed public offering of the Company as described in the Company's Registration Statement on Form S-1, as amended, originally filed on June 3, 2021 (the "Offering"), we entered into a letter agreement with Hale Capital Partners, LP (“Hale Capital”), dated June 2, 2021 (the “Loan Extension Letter Agreement”), that provided for an extension of the maturity date on Hale Capital’s portion of the outstanding indebtedness owed under the Amended and Restated Loan Agreement to June 30, 2023, which constituted approximately $2,176,621 of the $3,510,679 principal amount outstanding as of June 2, 2021. The remaining $1,334,058 of the principal amount outstanding, which was owed to other lenders, was repaid in full on June 30, 2021. See Note (7) Notes Payable for more information. Also, as described further in Note (12) Series A Redeemable Convertible Preferred Stock, the effective date of the mandatory redemption right of the Series A Redeemable Convertible Preferred Stock (the “Series A Preferred Stock”) held by HCP-FVA and Hale Capital was extended from July 30, 2021 to July 30, 2023 pursuant to an amendment to the Certificate of Designations, dated as of June 24, 2021. The amendment was approved by our shareholders at our 2021 annual meeting of stockholders and filed with the Delaware Secretary of State on June 25, 2021. If such Series A Preferred Stock was redeemed at December 31, 2021, the Company would have been required to pay the holders of the Series A Preferred Stock $14.5 million. As discussed in Note (14) Restructuring Costs the Melville, NY office lease which ended on April 30, 2021 with a gross annualized rental cost of $1.5 million, will not be replaced. FalconStor is primarily a virtual company and is redeploying this savings to more productive uses. The Company believes its current cash balances together with anticipated cash flows from operating activities will be sufficient to meet its working capital requirements for at least one year from the date the consolidated financial statements were issued.

Property and Equipment

Property and Equipment12 Months Ended
Dec. 31, 2021
Property, Plant and Equipment [Abstract]
Property and EquipmentProperty and Equipment Property and equipment consist of the following: December 31, 2021 December 31, 2020 Computer hardware and software $ 15,544,212 $ 16,456,790 Furniture and equipment — 604,300 Leasehold improvements — 1,730,751 Property and equipment, gross 15,544,212 18,791,841 Less accumulated depreciation and amortization (15,390,308) (18,594,821) Property and equipment, net $ 153,904 $ 197,020 During the year ended December 31, 2021, the Company wrote-off furniture and equipment, leasehold improvements and related accumulated depreciation upon exiting various facilities and recorded an associated loss of $50,149 in general and administrative expense. During the year ended December 31, 2020 the Company did not write off fixed assets or related accumulated depreciation. Depreciation and amortization expense was $133,665 and $178,391 in 2021 and 2020, respectively.

Fair Value Measurements

Fair Value Measurements12 Months Ended
Dec. 31, 2021
Fair Value Disclosures [Abstract]
Fair Value MeasurementsFair Value Measurements The Company measures its cash equivalents, marketable securities 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. Fair Value Hierarchy 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 December 31, 2021 and 2020, the Level 1 category included money market funds and commercial paper, which are included within “cash and cash equivalents” in the 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. The Company had no Level 2 securities at December 31, 2021 and 2020. • Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. At December 31, 2021 and 2020, the Level 3 category included derivatives, which are included in "other long-term liabilities" in the consolidated balance sheets with the change in fair value from the period included in "interest and other loss, net" in the consolidated statement of operations. The Company did not hold any cash, cash equivalents or marketable securities categorized as Level 3 as of December 31, 2021 or 2020. Measurement of Fair Value The Company measures fair value as an exit price using the procedures described below for all assets and liabilities measured at fair value. When available, the Company uses unadjusted quoted market prices to measure fair value and classifies such items within Level 1. If quoted market prices are not available, fair value is based upon financial models that use, when possible, current market-based or independently-sourced market parameters such as interest rates and currency rates. Items valued using financial generated models are classified according to the lowest level input or value driver that is significant to the valuation. Thus, an item may be classified in Level 3 even though there may be inputs that are readily observable. If quoted market prices are not available, the valuation model used generally depends on the specific asset or liability being valued. The determination of fair value considers various factors including interest rate yield curves and time value underlying the financial instruments. 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. Items Measured at Fair Value on a Recurring Basis The following table presents the Company’s liabilities that are measured at fair value on a recurring basis at December 31, 2021: Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets Significant other Significant Derivative liabilities: Derivative Instruments $ 776,623 $ — $ — $ 776,623 Total derivative liabilities $ 776,623 $ — $ — $ 776,623 Total assets and liabilities measured at fair value $ 776,623 $ — $ — $ 776,623 The derivative liabilities above are classified as other long-term liabilities in the December 31, 2021 consolidated balance sheet. The following table presents the Company’s liabilities that are measured at fair value on a recurring basis at December 31, 2020: Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets Significant other Significant Derivative liabilities: Derivative Instruments $ 703,747 $ — $ — $ 703,747 Total derivative liabilities $ 703,747 $ — $ — $ 703,747 Total assets and liabilities measured at fair value $ 703,747 $ — $ — $ 703,747 The derivative liabilities above are classified as other long-term liabilities in the December 31, 2020 consolidated balance sheet. 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 following table presents the Company’s liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of each of the years ended December 31, 2021 and 2020: Fair Value Measurements Using December 31, 2021 December 31, 2020 Beginning Balance $ 703,747 $ 658,917 Total (earnings) loss recognized in earnings 72,876 44,830 Ending Balance $ 776,623 $ 703,747 Earnings and losses resulting from changes in the fair value of the derivative instruments above are recorded as a component of interest and other expense.

Accrued Expenses

Accrued Expenses12 Months Ended
Dec. 31, 2021
Payables and Accruals [Abstract]
Accounts Payable and Accrued Liabilities DisclosureAccrued Expenses Accrued expenses are comprised of the following: December 31, 2021 December 31, 2020 Accrued compensation $ 54,137 $ 100,102 Accrued consulting and professional fees 305,100 1,403,445 Accrued taxes 605,357 550,774 Accrued restructuring costs 134,663 239,444 $ 1,099,257 $ 2,293,765

Income Taxes

Income Taxes12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]
Income TaxesIncome Taxes Information pertaining to the Company’s income (loss) before income taxes and the applicable provision for income taxes is as follows: December 31, 2021 2020 Income (loss) before income taxes: Domestic income (loss) $ 533,225 $ 867,361 Foreign income (loss) 196,870 201,046 Total income (loss) before income taxes: 730,095 1,068,407 Provision (benefit) for income taxes: Current: Federal $ — $ (116,504) State and local (1,080) 10,928 Foreign 266,205 82,437 265,125 (23,139) Deferred: Federal $ 1,785 $ 131,036 State and local 8,148 (6,209) Foreign 251,705 (116,007) 261,638 8,820 Total provision (benefit) for income taxes: $ 526,763 $ (14,319) The Coronavirus Aid, Relief, and Economic Security (CARES) Act, was enacted March 27, 2020. Among the business provisions, the CARES Act provided for various payroll tax incentives, changes to net operating loss carryback and carryforward rules, business interest expense limitation increases, and bonus depreciation on qualified improvement property. Additionally, the Consolidated Appropriations Act of 2021 was signed on December 27, 2020 which provided additional COVID relief provisions for businesses. The Company has evaluated the impact of both the Acts and has determined that any impact is not material to its financial statements. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2021 2020 Deferred Tax Assets: Allowance for receivables $ 20,695 $ 34,820 Deferred revenue 500,841 352,087 Share-based compensation 49,191 23,647 Accrued expenses and other liabilities 93,361 331,497 Domestic net operating loss carryforwards 19,516,151 20,072,283 Foreign net operating loss carryforwards 275,671 187,114 Tax credit carryforwards 3,106,022 3,106,022 Capital loss carryforwards 34,736 34,254 Fixed assets 6,491 155,942 Lease liability — 134,522 Intangibles 87,796 113,932 Sub-total 23,690,955 24,546,120 Valuation allowance (23,257,645) (23,222,032) Total Deferred Tax Assets 433,310 1,324,088 Deferred Tax Liabilities: Prepaid commissions and other (57,438) (113,706) Tax method changes — (429,836) Right of use asset — (105,116) Deferred state income tax (387,655) (408,089) Foreign withholding taxes (458,526) (449,816) Total Deferred Tax Liabilities (903,619) (1,506,563) Net Deferred Tax Liabilities $ (470,309) $ (182,475) As of each reporting date, the Company considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. In assessing the Company’s ability to recover its deferred tax assets, the Company evaluated whether it is more likely than not that some portion or the entire deferred tax asset will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in those periods in which temporary differences become deductible and/or net operating losses can be utilized. The Company considered all positive and negative evidence when determining the amount of the net deferred tax assets that are more likely than not to be realized. This evidence includes, but is not limited to, historical earnings, scheduled reversal of taxable temporary differences, tax planning strategies and projected future taxable income. Based on these factors the Company determined that its U.S. deferred tax assets are not realizable on a more-likely-than-not basis and has recorded a full valuation allowance against such net deferred tax assets. The Company’s valuation allowance increased by $35 thousand due to operations. As of December 31, 2021, the Company had approximately $84.5 million of federal net operating loss carryforwards, of which $79.9 million will begin to expire beginning in 2030, if not utilized, and the remaining $4.6 million of which can be carried forward indefinitely subject to 80% of taxable income. As of December 31, 2021, the Company had approximately $3.1 million of research and development tax credit carryforwards which expire at various dates beginning in 2023, if not utilized. Utilization of the net operating losses and credit carryforwards may be subject to a substantial annual limitation due to the "change in ownership" provisions of the Internal Revenue Code of 1986. The annual limitation may result in the expiration of net operating losses and credit carryforwards before utilization. The effective tax rate before income taxes varies from the current statutory federal income tax rate as follows: December 31, 2021 2020 Tax at Federal statutory rate $ 153,320 $ 224,366 Increase (reduction) in income taxes resulting from: State and local taxes (4,052) 242,992 Non-deductible expenses 22,104 17,416 GILTI 6,708 — PPP loan forgiveness (158,340) — Net effect of foreign operations 248,931 (96,210) Uncertain tax positions (1,499) (1,706) Change in valuation allowance 35,614 (474,956) Foreign withholding taxes 206,323 19,299 Other 17,654 54,480 $ 526,763 $ (14,319) Due to the change in U.S. federal tax law, the Company does not intend to indefinitely reinvest any of its unremitted foreign earnings. As of December 31, 2021, the Company has provided for additional foreign withholding taxes totaling approximately $0.5 million on approximately $4.3 million of undistributed earnings of its subsidiaries operating outside of the United States for which withholding tax applies. A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows: 2021 2020 Balance at January 1, $ 75,506 $ 81,400 Increases to tax positions taken in prior years — — Expiration of statutes of limitation (5,245) (5,894) Translation 9,257 — Balance at December 31, $ 79,518 $ 75,506 At December 31, 2021, unrecognized tax benefits of $79,518, if recognized, would reduce the Company’s annual effective tax rate. As of December 31, 2021, the Company had approximately $43,420 of accrued interest. The Company believes it is reasonably possible that $14,816 of its unrecognized tax benefits will reverse within the next 12 months due to expiring statute of limitations. The Company records any interest and penalties related to unrecognized tax benefits in income tax expense. The Company files federal, state, and foreign income tax returns in jurisdictions with varying statutes of limitations. The 2018 through 2021 tax years generally remain subject to examination by federal and most state tax authorities. In addition to the U.S., the Company’s major taxing jurisdictions include China, Taiwan, Japan, France and Germany. Taiwan is currently under exam for the 2014 through 2018 tax years, but no material tax adjustments are currently expected.

Accumulated Other Comprehensive

Accumulated Other Comprehensive Loss12 Months Ended
Dec. 31, 2021
Equity [Abstract]
Accumulated Other Comprehensive LossAccumulated Other Comprehensive Loss The changes in Accumulated Other Comprehensive Loss, net of applicable tax, for December 31, 2021 are as follows: Foreign Net Total Accumulated other comprehensive income (loss) at January 1, 2021 $ (1,995,680) $ 7,719 $ (1,987,961) Other comprehensive income (loss) Other comprehensive income (loss) before reclassifications 114,675 13,027 127,702 Amounts reclassified from accumulated other comprehensive income — 219 219 Total other comprehensive income (loss) 114,675 13,246 127,921 Accumulated other comprehensive income (loss) at December 31, 2021 $ (1,881,005) $ 20,965 $ (1,860,040) The changes in Accumulated Other Comprehensive Loss, net of applicable tax, for December 31, 2020 are as follows: Foreign Net Total Accumulated other comprehensive income (loss) at January 1, 2020 $ (1,926,826) $ 33,566 $ (1,893,260) Other comprehensive income (loss) Other comprehensive income (loss) before reclassifications (68,854) (24,997) (93,851) Amounts reclassified from accumulated other comprehensive income — (850) (850) Total other comprehensive income (loss) (68,854) (25,847) (94,701) Accumulated other comprehensive income (loss) at December 31, 2020 $ (1,995,680) $ 7,719 $ (1,987,961) For the year ended December 31, 2021 and 2020, the amounts reclassified to net income (loss) related to the Company’s defined benefit plan and maturities of marketable securities. These amounts are included within “Operating income (loss)" within the consolidated statement of operations.

Notes Payable

Notes Payable12 Months Ended
Dec. 31, 2021
Payables and Accruals [Abstract]
Notes PayableNotes Payable Senior Secured Debt The Company is currently a party to an Amended and Restated Term Loan Credit Agreement, dated as of February 23, 2018, as amended December 27, 2019, by and between the Company and HCP-FVA, (the “Amended and Restated Loan Agreement”). In connection with the June Offering, we entered into the Loan Extension Letter Agreement that provided for an extension of the maturity date on Hale Capital’s portion of the outstanding indebtedness owed under the Amended and Restated Loan Agreement to June 30, 2023, which constituted approximately $2,176,621 of the $3,510,679 million principal amount outstanding as of June 2, 2021 (the “Term Loan”). The remaining $1,334,058 of the principal amount outstanding, which was owed to other lenders, was repaid in full on June 30, 2021. The senior secured debt bears interest at prime plus 0.75%. The Company concluded that the modification created by this amendment resulted in a troubled debt restructuring under Accounting Standard Codification—Debt (Topic 470) as it was determined that a concession was granted by HCP-FVA. However, as the future payments to be made subsequent to the modification are greater than the carrying value at the time of the modification, no gain or loss was required to be recognized on the troubled debt restructuring. The change is accounted for prospectively using the new effective interest rate of the loan. Under the Amended and Restated Loan Agreement, in the event the Term Loan is prepaid for any reason, such prepayment will be subject to the payment of a premium in an amount equal to 5% of the principal amount prepaid. The Term Loan is required to be prepaid upon the occurrence of certain events, including but not limited to certain asset dispositions, the incurrence of additional indebtedness, the receipt of insurance proceeds, and a change of control, subject to certain exceptions. The Amended and Restated Loan Agreement has customary representations, warranties and affirmative and negative covenants. The negative covenants include financial covenants by the Company to maintain minimum cash denominated in U.S. dollars plus accounts receivable outstanding for less than 90 days of $2 million. The Amended and Restated Loan Agreement also contains customary events of default, including but not limited to payment defaults, cross defaults with certain other indebtedness, breaches of covenants, bankruptcy events and a change of control. In the case of an event of default, as administrative agent under the Loan Agreement, HCP-FVA may (and upon the written request of lenders holding in excess of 50% of the Term Loan, which must include HCP-FVA, is required to) accelerate payment of all obligations under the Loan Agreement, and seek other available remedies. As of December 31, 2021, the Company was in compliance with the financial covenants contained in the Amended and Restated Term Loan Credit Agreement. The notes payable balance consists of the following: Total notes payable, net at December 31, 2019 $ 3,853,634 Accretion of discount 467,229 Proceeds from issuance of the PPP loan 754,000 Repayment of short-term debt (1,000,000) Total notes payable, net at December 31, 2020 $ 4,074,863 Accretion of discount 167,293 PPP loan forgiveness (754,000) Repayment of short-term debt (1,334,058) Total notes payable, net at December 31, 2021 2,154,098 Loan under the Paycheck Protection Program On April 28, 2020, the Company received a loan from Peapack-Gladstone Bank in an aggregate principal amount of $754,000, pursuant to the Paycheck Protection Program under the CARES Act (the "PPP Loan"). The PPP Loan was evidenced by a promissory note (the “Note”) dated April 28, 2020. The PPP Loan matured two years from the disbursement date and bore interest at a rate of 1.000% per annum, with the first six months of interest deferred. Principal and interest were payable monthly commencing six months after the disbursement date and were permitted to be prepaid by the Company at any time prior to maturity with no prepayment penalties. On March 30, 2021, the PPP Loan was forgiven in full. The PPP Loan is included in notes payable, net of debt issuance costs and discounts in the accompanying condensed consolidated balance sheet.

Series A Redeemable Convertible

Series A Redeemable Convertible Preferred Stock12 Months Ended
Dec. 31, 2021
Equity [Abstract]
Series A Redeemable Convertible Preferred StockSeries 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 an initial conversion price equal to $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). The Series A Preferred Stock consists of the following: Total Series A redeemable convertible preferred stock, net at December 31, 2019 $11,304,279 Accrued dividends 1,083,892 Accretion of preferred stock 552,551 Total Series A redeemable convertible preferred stock, net at December 31, 2020 12,940,722 Accrued dividends 1,143,697 Accretion of preferred stock 299,969 Total Series A redeemable convertible preferred stock, net at December 31, 2021 $14,384,388 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 Amended and Restated Loan 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 9.99% 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 accrued and unpaid dividends with respect thereto) and the closing price as of the occurrence of the triggering event. On or after July 30, 2023, subject to the approval of HCP-FVA, 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 (as defined in the Certificate of Designations) 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 holders of our outstanding Series A Preferred Stock have a mandatory redemption right that may be exercised only with the approval of Hale Capital and HCP-FVA. In connection with the then-proposed public offering of the Company as described in the Company's Registration Statement on Form S-1, as amended, originally filed on June 3, 2021, the effective date of such redemption right was extended from July 30, 2021 to July 30, 2023 pursuant to an amendment to the Certificate of Designations, dated as of June 24, 2021. The amendment was approved by our shareholders at our 2021 annual meeting of stockholders and filed with the Delaware Secretary of State on June 25, 2021. The Company concluded that the modification created by this amendment resulted in a troubled debt restructuring under Accounting Standard Codification—Debt (Topic 470) as it was determined that a concession was granted. However, as the future payments to be made subsequent to the modification are greater than the carrying value at the time of the modification, no gain or loss was required to be recognized on the troubled debt restructuring. The change is accounted for prospectively using the new effective interest rate of the preferred stock. 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 December 31, 2021 and December 31, 2020 the fair value of these derivative instruments was $776,623 and $703,747, respectively, and were included in "other long-term liabilities" within the consolidated balance sheets. The gain on the change in fair value of these derivative instruments for the twelve months ended December 31, 2021 and December 31, 2020 of $72,876 and $44,830, respectively, were included in “interest and other expense” 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 expense” within the consolidated statement of operations, for the twelve months ended December 31, 2021 and 2020, were as follows: Years Ended December 31, 2021 2020 Beginning Balance $ 703,747 $ 658,917 Total (gain) loss recognized in earnings 72,876 44,830 Ending Balance $ 776,623 $ 703,747 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. In connection with the Commitment, 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 twelve months ended December 31, 2021 and 2020, respectively. The following represents a reconciliation of net loss attributable to common stockholders for the twelve months ended December 31, 2021 and 2020, respectively: Years Ended December 31, 2021 2020 Net income (loss) $ 203,332 $ 1,082,726 Effects of Series A redeemable convertible preferred stock: Less: Accrual of Series A redeemable convertible preferred stock dividends 1,143,697 1,083,892 Less: Accretion to redemption value of Series A redeemable convertible preferred stock 299,969 552,551 Net income (loss) attributable to common stockholders $ (1,240,334) $ (553,717)

Stockholders' Equity

Stockholders' Equity12 Months Ended
Dec. 31, 2021
Equity [Abstract]
Stockholders' EquityStockholders’ Equity Stock Repurchase Activity During the year ended December 31, 2021 and December 31, 2020, the Company repurchased no shares of its common stock. As of December 31, 2021, the Company had the authorization to repurchase 49,078 shares of its common stock based upon its judgment and market conditions. Common Stock Offerings On June 23, 2021, the Company issued and sold an aggregate of 811,750 shares of its common stock in a public offering underwritten by Roth, which included 86,750 shares purchased by Roth pursuant to the partial exercise of its over-allotment option. At a price of $4.10 per share, the Company received net proceeds of approximately $2.7 million after deducting the underwriting discount and offering expenses paid by the Company.

Share-Based Payment Arrangement

Share-Based Payment Arrangements12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]
Share-Based Payment ArrangementsShare-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 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 of the Company's Board of Directors (the "Board"), subject to the consent of Hale Capital. The vesting terms shall 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 December 31, 2021: Name of Plan Shares Shares Available Shares FalconStor Software, Inc. 2018 Incentive Stock Plan 1,692,797 82,817 1,513,380 The following table summarizes the Company’s equity plans that have expired but that still have equity awards outstanding as of December 31, 2021: 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 All outstanding options granted under the Company’s equity plans have terms of ten years. A summary of the Company’s stock option activity for 2021 is as follows: Number of Weighted Weighted Aggregate Options Outstanding at December 31, 2020 9,780 $ 113.66 4.25 $ — Granted — $ — Exercised — $ — Forfeited (3,950) $ 108.28 Expired (140) $ 409.79 Options Outstanding at December 31, 2021 5,690 $ 110.10 3.28 $ — Options Exercisable at December 31, 2021 5,690 $ 110.10 3.28 $ — Options Expected to Vest after December 31, 2021 — $ — 0.00 $ — Stock option exercises are fulfilled with new shares of common stock. 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 consolidated statements of operations: Years ended December 31, 2021 2020 Cost of revenue - Support and Service 1,656 496 Research and development costs 2,088 942 Selling and marketing 11,812 785 General and administrative 5,622 13,532 $ 21,178 $ 15,755 The Company did not recognize any tax benefits related to share-based compensation expense during the years ended December 31, 2021 and 2020. The Company has the ability to issue both restricted stock and restricted stock units. The fair value of the restricted stock awards and restricted stock units are expensed at the fair value per share at date of grant for directors, officers and employees. A summary of the total stock-based compensation expense related to 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, 2021 2020 Directors, officers and employees $ 21,178 $ 15,755 A summary of the Company’s restricted stock activity for 2021 is as follows: Number of Restricted Stock Awards Non-Vested at December 31, 2020 1,386,213 Granted 163,230 Vested (36,063) Forfeited — Non-Vested at December 31, 2021 1,513,380 Restricted stock units are fulfilled with new shares of common stock. The total intrinsic value of restricted stock for which the restrictions lapsed during the years ended was $93,043 and $15,365 for the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021, total unrecognized compensation costs for unvested restricted stock unit awards was $966,125, including $922,170 relating to performance-based awards. The performance condition for such awards was not deemed probable at grant dates or at December 31, 2021 and the cost related to such awards will begin to be recognized once the performance condition is deemed probable. The remaining amount of $43,955 relating to time-based awards is expected to be recognized over a weighted-average period of 1.3 years as of December 31, 2021. As of December 31, 2021, the Company had 1,601,887 shares of common stock reserved for issuance upon the exercise or vesting of stock options and restricted stock.

Commitments and Contingencies

Commitments and Contingencies12 Months Ended
Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Commitments and ContingenciesCommitments and Contingencies 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 year ended December 31, 2021, 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 (8) Series A Redeemable Convertible Preferred Stock , the holders of the Series A Preferred Stock have redemption rights upon certain triggering events. As of December 31, 2021, 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 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 Mr. Sita’s appointment as Chief Financial Officer, the Board approved an Independent Contractor Services Agreement with Alucria Consulting, Inc. (“Alucria”), an entity owned by Mr. Sita (the “Sita Agreement”), which was executed on February 11, 2022. The Sita Agreement provides that Alucria is entitled to receive a fee of $20,000 per month. Alucria will also be eligible for an additional payment of up to $60,000 annually, based upon the achievement of goals determined by the Company, to be paid quarterly in accordance with standard Company policies. Mr. Sita will also receive a grant of shares of the Company’s common stock, to be governed by the Company’s 2018 Stock Incentive Plan and subject to specific vesting conditions. The term of the Sita Agreement shall expire on July 1, 2023, unless earlier terminated by either party in accordance with the terms of the Sita Agreement. As described under Note (14) Restructuring Costs , the Company has incurred certain restructuring costs in connection with restructuring plans adopted in 2017 and 2019. In addition, as of December 31, 2021, our liability for uncertain tax positions totaled $109,347. At this time, the settlement period for this liability, including related accrued interest, cannot be determined.

Derivative Financial Instrument

Derivative Financial Instruments12 Months Ended
Dec. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Financial InstrumentsDerivative Financial Instruments The Company does not use derivative financial instruments for trading or speculative purposes. As of December 31, 2021 and 2020, the Company had no foreign currency forward contracts outstanding. The Company did not utilize foreign currency forward contracts during the years ended December 31, 2021 and 2020. As a result of the Company’s analysis of all the embedded conversion and put features within its Series A redeemable convertible preferred stock, the contingent redemption put options in the Series A redeemable convertible 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 were bifurcated from the Series A redeemable convertible preferred stock and recorded as a liability. At the time of issuance of the Series A redeemable convertible preferred stock the fair value of these derivative instruments were recorded as a reduction to preferred stock. As of December 31, 2021 and 2020, the fair value of these derivative instruments was $776,623 and $703,747, respectively, and were included in "other long-term liabilities" within the consolidated balance sheets. The gain on the change in fair value of these derivative instruments for 2021 of $72,876 and the gain on the change in fair value of these derivative instruments for 2020 of $44,830, were included in “interest and other loss, net” within the consolidated statement of operations.

Litigation

Litigation12 Months Ended
Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
LitigationLitigation 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. Litigation Settlement with Datatech Enterprises, Inc. The Company has been involved in litigation with Datatech Enterprises, Inc. ("Datatech") since April 27, 2015 when Falconstor commenced a lawsuit regarding a contractual dispute with Datatech. Falconstor recorded an accrual for a loss contingency in the amount of $0.8 million in the fiscal year ended 2015. On September 23, 2021, Falconstor and Datatech entered into a settlement agreement which resulted in Falconstor issuing payment of $0.2 million to Datatech and recording a gain of $0.6 million. Falconstor issued the payment in full on September 23, 2021. The matter is now fully concluded. Other Claims The Company is subject to various legal proceedings and claims, asserted or unasserted, which arise in the ordinary course of business. While the outcome of any such matters cannot be predicted with certainty, such matters are not expected to have a material adverse effect on the Company’s financial condition or operating results. The Company continues to assess certain litigation and claims to determine the amounts, if any, that the Company believes may be paid as a result of such claims and litigation and, therefore, additional losses may be accrued and paid in the future, which could materially adversely impact the Company’s financial results, its cash flows and its cash reserves.

Restructuring Costs

Restructuring Costs12 Months Ended
Dec. 31, 2021
Restructuring and Related Activities [Abstract]
Restructuring CostsRestructuring 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 its former 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 fiscal year ended December 31, 2021, the Company incurred lease disposal-related costs for this property of $833,313. The Melville, NY lease which ended on April 30, 2021 with a gross annualized rental cost of $1.5 million, will not be replaced. The Company expects the remaining accrued severance-related costs of $134,663 as of December 31, 2021 to be paid once final settlement litigation is completed, which is expected to occur by December 31, 2021. In the third quarter of 2019, the Company adopted and expense control plan (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 (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 20 of these positions were reinstated by the December 31, 2020. The Company has not incurred severance expense as a result of this action. The following table summarizes the activity during 2020 and 2021 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, 2019 $ 293,799 $ 237,493 $ 531,292 Provisions/Additions $ 76,708 $ 956,118 $ 1,032,826 Translation Adjustment 25,353 — 25,353 Utilized/Paid $ (156,416) $ (1,118,145) $ (1,274,561) Balance at December 31, 2020 $ 239,444 $ 75,466 $ 314,910 Provisions/Additions $ — $ 833,313 $ 833,313 Translation Adjustment $ (14,336) $ — $ (14,336) Utilized/Paid $ (90,445) $ (908,779) $ (999,224) Balance at December 31, 2021 $ 134,663 $ — $ 134,663 In the accompanying consolidated balance sheets, the Company's remaining accrued severance and other charges are included within “accrued expenses” and "accounts payable". Expenses incurred under the 2017, 2019 and 2020 Plans during the years ended December 31, 2021 and 2020 are included within “restructuring costs” in the accompanying consolidated statements of operations.

Employee Benefit Plans

Employee Benefit Plans12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]
Employee Benefit PlansEmployee Benefit Plans Defined Contribution Plan Effective July 2002, the Company established a voluntary savings and defined contribution plan (the “Plan”) under Section 401(k) of the Internal Revenue Code. This Plan covers all U.S. employees meeting certain eligibility requirements and allows participants to contribute a portion of their annual compensation. Employees are 100% vested in their own contributions. For the years ended December 31, 2021 and 2020, the Company did not make any contributions to the Plan. Effective July 1, 2007, the Company, in accordance with the labor pension system in Taiwan, contributes 6% of salaries to individual pension accounts managed by the Bureau of Labor Insurance. The plan covers all Taiwan employees that elect the new pension system and all employees hired after July 1, 2005. For the years ended December 31, 2021 and 2020, the Company contributed approximately $6,000 and $2,000, respectively. Defined Benefit Plan The Company has a defined benefit plan covering employees in Taiwan. The Company accounts for its defined benefit plan in accordance with the authoritative guidance issued by the FASB on retirement benefits, which requires the Company to recognize the funded status of its defined benefit plan in the accompanying consolidated balance sheet, with the corresponding adjustment to accumulated other comprehensive income, net of tax. At December 31, 2021 and 2020, $23,255 and $7,719, respectively, is included in accumulated other comprehensive (loss) income for amounts that have not yet been recognized in net periodic pension cost. These amounts include the following: unrecognized transition obligation of $0 and $0 at December 31, 2021 and 2020, respectively, and unrecognized actuarial gains of $23,255 and $9,872 at December 31, 2021 and 2020, respectively. During 2021, the total amount recorded in other comprehensive income (loss) related to the pension plan was $13,246 (net of tax), which consisted of an actuarial gain of $13,246 and the recognition of $0 of transition obligations recognized during 2021 as a component of net periodic pension cost. Pension information for the years ended December 31, 2021 and 2020, is as follows: 2021 2020 Accumulated benefit obligation $ 69,627 $ 65,188 Changes in projected benefit obligation: Projected benefit obligation at beginning of year 95,511 180,151 Interest cost 414 1,207 Actuarial gain (11,223) 28,834 Benefits paid — (121,838) Service cost — — Currency translation 1,259 7,157 Projected benefit obligation at end of year $ 85,961 $ 95,511 Changes in plan assets: Fair value of plan assets at beginning of year $ 40,476 $ 149,903 Actual return on plan assets 2,135 6,226 Benefits paid — (121,838) Employer contributions 5,873 2,012 Currency translation (108,814) 4,173 Fair value of plan assets at end of year $ (60,330) $ 40,476 Funded status (146,291) (55,035) The underfunded status of the Company's defined benefit plan has been recorded as a component of other long-term liabilities as of December 31, 2021 and 2020. Components of net periodic pension cost: Interest cost $ 414 $ 1,207 Expected return on plan assets (176) (1,005) Amortization of net (gain) loss (19) (1,052) Service cost — — Net periodic pension (benefit) cost $ 219 $ (850) The Company makes contributions to the plan so that minimum contribution requirements, as determined by government regulations, are met. Company contributions of approximately $2,000 are expected to be made during 2022. Benefit payments of $77,000 are expected to be paid through 2030. The Company utilized the following assumptions in computing the benefit obligation at December 31, 2021 and 2020 as follows: Years ended December 31, 2021 2020 Discount rate 0.77 % 0.43 % Rate of increase in compensation levels 2.00 % 2.50 % Expected long-term rate of return on plan assets 0.77 % 0.43 %

Segment Reporting and Concentra

Segment Reporting and Concentrations12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]
Segment Reporting and ConcentrationsSegment 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 years ended December 31, 2021 and 2020, and the location of long-lived assets as of December 31, 2021 and 2020, are summarized as follows: Years ended December 31, 2021 2020 Revenues: Americas $ 5,766,791 $ 5,387,128 Asia Pacific 2,764,146 3,655,011 Europe, Middle East, Africa and Other 5,649,543 5,726,554 Total Revenues $ 14,180,480 $ 14,768,693 December 31, 2021 2020 Long-lived assets: Americas $ 858,417 $ 1,735,986 Asia Pacific 261,148 502,344 Europe, Middle East, Africa and Other 18,364 52,690 Total long-lived assets $ 1,137,929 $ 2,291,020 For the years ended December 31, 2021 and December 31 2020, the Company had one and two customers that accounted for more than 10% of total revenue, respectively.

Valuation and Qualifying Accoun

Valuation and Qualifying Accounts Allowance for Returns and Doubtful Accounts12 Months Ended
Dec. 31, 2021
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]
Valuation and Qualifying Accounts - Allowance for Returns and Doubtful AccountsValuation and Qualifying Accounts – Allowance for Returns and Doubtful Accounts Period Ended Balance at Beginning of Period Charges / (Benefits) to Revenue (Increases) Deductions Balance at End of Period December 31, 2021 $ 151,335 72,461 137,980 $ 85,816 December 31, 2020 $ 216,153 4,464 69,282 $ 151,335 Note: Charges/benefits to the allowance for doubtful accounts are recorded within “general and administrative expenses” within the consolidated statements of operations. Charges/benefits to the return reserve for product and service are recorded within “product revenue” within the consolidated statements of operations.

Related Party Transactions

Related Party Transactions12 Months Ended
Dec. 31, 2021
Related Party Transactions [Abstract]
Related Party Transactions DisclosureRelated Party Transactions Martin M. Hale, Jr., a member of the Company's Board of Directors, is a general partner of HCP-FVA, the holder in excess of 50% of the Company’s Series A Preferred Stock. The Series A Preferred Stock was purchased by Hale Capital Partners, LP, of which Mr. Hale is a general partner, pursuant to a September 16, 2013 stock purchase agreement with the Company at a time when Mr. Hale was not a director of the Company. Hale Capital Partners, LP subsequently assigned all of its rights in the Series A Preferred Stock to HCP-FVA. Under the terms of the Certificate of Designations, the holders of the Series A Preferred Stock are entitled, as a group, to nominate and to elect up to two directors so long as at least 85% of the Company's Series A Preferred Stock is outstanding. HCP-FVA, the sole holder of the Series A Preferred Stock at the time, nominated and elected Mr. Hale in September 2013 and Michael P. Kelly on October 29, 2014, to the Company’s Board of Directors. As described further in Note (7) Notes Payable , on December 27, 2019, the Company entered into the Amended and Restated Loan Agreement to provide for, among other things, a new $2,500,000 term loan facility to the Company. In connection with the June Offering, we entered into the Loan Extension Letter Agreement on June 2, 2021 which provided for an extension of the maturity date on Hale Capital’s portion of the outstanding indebtedness owed under the Amended and Restated Loan Agreement to June 30, 2023. The amount extended constituted approximately $2,176,621 of the $3,510,679 principal amount outstanding as of June 2, 2021. The remaining $1,334,058 of the outstanding principal, which was owed to other lenders, was repaid in full on June 30, 2021.

Subsequent Events

Subsequent Events12 Months Ended
Dec. 31, 2021
Subsequent Events [Abstract]
Subsequent EventsSubsequent EventsThe Company evaluated subsequent events through the date on which these financial statements were issued, to ensure appropriate recognition and/or disclosure of events that occurred subsequent to December 31, 2021.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)12 Months Ended
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
LiquidityLiquidity As of December 31, 2021, we had a working capital surplus of $1.3 million, which is inclusive of current deferred revenue of $4.6 million, and a stockholders' deficit of $13.0 million. During the year ended December 31, 2021, we had net income of $0.2 million and negative cash flow from operations of $0.9 million. Our cash and cash equivalents at December 31, 2021 was $3.2 million, an increase of $1.3 million as compared to December 31, 2020. The Company’s principal sources of liquidity at December 31, 2021 consisted of cash and future cash anticipated to be generated from operations. The Company generated positive net income but negative cash flows from operations during the year ended December 31, 2021, and it reported positive working capital as of December 31, 2021. The Company is currently a party to an Amended and Restated Term Loan Credit Agreement, dated as of February 23, 2018, as amended December 27, 2019, by and between the Company and HCP-FVA, LLC (“HCP-FVA”), (the “Amended and Restated Loan Agreement”). In connection with the then-proposed public offering of the Company as described in the Company's Registration Statement on Form S-1, as amended, originally filed on June 3, 2021 (the "Offering"), we entered into a letter agreement with Hale Capital Partners, LP (“Hale Capital”), dated June 2, 2021 (the “Loan Extension Letter Agreement”), that provided for an extension of the maturity date on Hale Capital’s portion of the outstanding indebtedness owed under the Amended and Restated Loan Agreement to June 30, 2023, which constituted approximately $2,176,621 of the $3,510,679 principal amount outstanding as of June 2, 2021. The remaining $1,334,058 of the principal amount outstanding, which was owed to other lenders, was repaid in full on June 30, 2021. See Note (7) Notes Payable for more information. Also, as described further in Note (12) Series A Redeemable Convertible Preferred Stock, the effective date of the mandatory redemption right of the Series A Redeemable Convertible Preferred Stock (the “Series A Preferred Stock”) held by HCP-FVA and Hale Capital was extended from July 30, 2021 to July 30, 2023 pursuant to an amendment to the Certificate of Designations, dated as of June 24, 2021. The amendment was approved by our shareholders at our 2021 annual meeting of stockholders and filed with the Delaware Secretary of State on June 25, 2021. If such Series A Preferred Stock was redeemed at December 31, 2021, the Company would have been required to pay the holders of the Series A Preferred Stock $14.5 million. As discussed in Note (14) Restructuring Costs the Melville, NY office lease which ended on April 30, 2021 with a gross annualized rental cost of $1.5 million, will not be replaced. FalconStor is primarily a virtual company and is redeploying this savings to more productive uses. The Company believes its current cash balances together with anticipated cash flows from operating activities will be sufficient to meet its working capital requirements for at least one year from the date the consolidated financial statements were issued.
Impact of the COVID-19 PandemicImpact 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 2021 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.
Principles of ConsolidationPrinciples of ConsolidationThe 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 EstimatesUse 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, valuation of derivatives, valuation of goodwill and income taxes. Actual results could differ from those estimates.
Fair Value of Financial InstrumentsFair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measurements, a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies, is as follows: Level 1 —Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2 —Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 —Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. As of December 31, 2021 and 2020, the fair value of the Company’s financial instruments including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximated carrying value due to the short maturity of these instruments. See Note (3) Fair Value Measurements for additional information.
Derivative Financial InstrumentsDerivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of convertible preferred stock are reviewed to determine whether or not they contain embedded derivative instruments that are required under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 815 “Derivatives and Hedging” (“ASC 815”) to be accounted for separately from the host contract, and recorded on the balance sheet at fair value. The fair value of derivatives are required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. See Note (12) Derivative Financial Instruments
Revenue from Contracts with Customers and Associated BalancesRevenue from Contracts with Customers and Associated Balances The Company derives its revenue from sales of its products, support and services. Product revenue consists of the Company’s software integrated with industry standard hardware and sold as complete turn-key integrated solutions, as stand-alone software applications or sold on a subscription or consumption basis. Depending on the nature of the arrangement revenue, related to turn-key solutions and stand-alone software applications are generally recognized upon shipment and delivery of license keys. For certain arrangements revenue is recognized based on usage or ratably over the term of the arrangement. Support and services revenue consists of both maintenance revenues and professional services revenues. Revenue is recorded net of applicable sales taxes. The Company recognizes revenue for the transfer of services or products to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those services or products. The principle is achieved through the following five-step approach: • Identification of the contract, or contracts, with the customer • Identification of the performance obligation in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, the Company satisfies a performance obligation Nature of Products and Services Licenses for on-premises software provide the customer with a right to use the software as it exists when made available to the customer. Customers may purchase perpetual licenses or subscribe to licenses, which provide customers with the same functionality and differ mainly in the duration over which the customer benefits from the software. Revenue from distinct on-premises licenses is recognized upfront at the point in time when the software is made available to the customer. Revenue allocated to software maintenance and support services is recognized ratably over the contractual support period. Hardware products consist primarily of servers and associated components and function independently of the software products and as such as accounted for as separate performance obligations. Revenue allocated to hardware maintenance and support services is recognized ratably over the contractual support period. Professional services are primarily related to software implementation services and associated revenue is recognized upon customer acceptance. Contract Balances Timing of revenue recognition may differ from the timing of invoicing to customers. The Company records a contract asset when revenue is recognized prior to invoicing, or unearned revenue when revenue is recognized subsequent to invoicing. For perpetual licenses with multi-year maintenance agreements, the company invoices the license and generally one year of maintenance with future maintenance generally invoiced annually. 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 December 31, 2021 and 2020, accounts receivable, net of allowance for doubtful accounts, was $2.9 million and $2.8 million, respectively. Our allowance for doubtful accounts on accounts receivable was $0.1 million as of December 31, 2021 and $0.2 million as of December 31, 2020, respectively. As of December 31, 2021 and 2020, short and long-term contract assets, net of allowance for doubtful accounts, was $0.9 million and $0.6 million, respectively. Our allowance for doubtful accounts on contract assets as of December 31, 2021 was nil. The allowances for doubtful accounts reflect the Company’s best estimates of probable losses inherent in the accounts receivable and contract assets’ balances. The Company determines the allowances based on known troubled accounts, historical experience, and other currently available evidence. Write-offs in the accounts receivable and contract assets allowance accounts during the years ended December 31, 2021 and 2020 were $137,980 and $69,282, 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: Twelve Months Ended December 31, 2021 Balance at December 31, 2020 $ 7,070,859 Deferral of revenue 13,248,342 Recognition of revenue (14,180,480) Change in reserves (2,635) Balance at December 31, 2021 $ 6,136,086 During the twelve months ended December 31, 2021 and 2020, revenue of $4.6 million and $5.3 million, respectively, was recognized from the deferred revenue balance at the beginning of each period. 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 December 31, 2021, of which the Company expects to recognize approximately 74.3% of the revenue over the next 12 months and the remainder thereafter. Approximately $1.7 million of revenue is expected to be recognized from remaining performance obligations for unbilled support and services as of December 31, 2021. We expected to recognize revenue on approximately 34% 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 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
LeasesLeasesWe 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 continue through 2023. Below is a summary of our right of use assets and liabilities as of December 31, 2021. Right of use assets $ 112,405 Lease liability obligations, current 76,940 Lease liability obligations, less current portion 35,465 Total lease liability obligations $ 112,405 Weighted-average remaining lease term 2.00 Weighted-average discount rate 3.35 % Our operating lease costs for the year ended December 31, 2021 were as follows: Years Ended December 31, 2021 2020 Components of lease expense: Operating lease cost 766,952 1,794,187 Sublease income (100,418) (505,626) Net lease cost $ 666,534 $ 1,288,561 During the year ended December 31, 2021, operating cash flows from operating leases was approximately $0.6 million. Approximate future minimum lease payments for our right of use assets over the remaining lease periods as of December 31, are as follows: 2022 76,995 2023 38,498 Total minimum lease payments 115,493 Less interest (3,088) Present value of lease liabilities 112,405
Property and EquipmentProperty and EquipmentProperty and equipment are recorded at cost. Depreciation is recognized using the straight-line method over the estimated useful lives of the assets (3 to 7 years). Leasehold improvements are amortized on a straight-line basis over the terms of the respective leases or over their estimated useful lives, whichever is shorter.
Goodwill and Other Intangible AssetsGoodwill and Other Intangible Assets Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired in business combinations. The Company has not amortized goodwill related to its acquisitions, but instead tests the balance for impairment. The Company evaluates goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate that the carrying value may not be recoverable. The Company tests goodwill for impairment by first comparing the book value of net assets to the fair value of the reporting unit. If the fair value is determined to be less than the book value or qualitative factors indicate that it is more likely than not that goodwill is impaired, a second step is performed to compute the amount of impairment as the difference between the estimated fair value of goodwill and the carrying value. The fair value of the Company's single reporting unit for purposes of its goodwill impairment test exceeded its carrying value as of December 31, 2021 and 2020 and thus the Company determined there was no impairment of goodwill. As of December 31, 2021 and 2020, the Company's single reporting unit for purposes of its goodwill impairment test had a negative carrying value and thus the Company determined there was no impairment of goodwill. Identifiable intangible assets include (i) assets acquired through business combinations, which include customer contracts and intellectual property, and (ii) patents amortized over three years using the straight-line method.
Software Development Costs and Purchased Software TechnologySoftware Development Costs and Purchased Software TechnologyIn accordance with the authoritative guidance issued by the FASB on costs of software to be sold, leased, or marketed, costs associated with the development of new software products and enhancements to existing software products are expensed as incurred until technological feasibility of the product has been established. Based on the Company’s product development process, technological feasibility is established upon completion of a working model. Amortization of software development costs is recorded at the greater of the straight-line basis over the product’s estimated life, or the ratio of current period revenue of the related products to total current and anticipated future revenue of these products.
Income TaxesIncome TaxesThe Company records income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In determining the period in which related tax benefits are realized for financial reporting purposes, excess share-based compensation deductions included in net operating losses are realized after regular net operating losses are exhausted.The Company accounts for uncertain tax positions in accordance with the authoritative guidance issued by the FASB on income taxes, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return, should be recorded in the financial statements. Pursuant to the authoritative guidance, the Company may recognize the tax benefit from an uncertain tax position only if it meets the “more likely than not” threshold that the position will be sustained on examination by the taxing authority, based on the technical merits of the position or under statute expirations. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. In addition, the authoritative guidance addresses de-recognition, classification, interest and penalties on income taxes, accounting in interim periods, and also requires increased disclosures.
Long-Lived AssetsLong-Lived AssetsThe Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the sum of the expected future cash flows, undiscounted and without interest, is less than the carrying amount of the asset, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds its fair value.
Share-Based PaymentsShare-Based Payments    The Company accounts for share-based payments in accordance with the authoritative guidance issued by the FASB on share-based compensation, which establishes the accounting for transactions in which an entity exchanges its equity instruments for goods or services. Under the provisions of the authoritative guidance, share-based compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite employee service period (generally the vesting period), net of actual forfeitures. For share-based payment awards that contain performance criteria share-based compensation, expense is recorded when the achievement of the performance condition is considered probable of achievement and is recorded on a straight-line basis over the requisite service period. If such performance criteria are not met, no compensation cost is recognized and any recognized compensation cost is reversed. The Company estimates the fair value of share-based payments using the Black-Scholes option-pricing model or the Monte Carlo simulation model if a market condition exists. Share-based compensation expense for a share-based payment award with a market condition is recorded on a straight-line basis over the longer of the explicit service period or the service period derived from the Monte Carlo simulation. Additionally, share-based awards to non-employees are expensed over the period in which the related services are rendered at their fair value. All share-based awards are expected to be fulfilled with new shares of common stock.
Foreign CurrencyForeign CurrencyAssets and liabilities of foreign operations are translated at rates of exchange at the end of the period, while results of operations are translated at average exchange rates in effect for the period. Gains and losses from the translation of foreign assets and liabilities from the functional currency of the Company’s subsidiaries into the U.S. dollar are classified as accumulated other comprehensive loss in stockholders’ deficit. Gains and losses from foreign currency transactions are included in the consolidated statements of operations within interest and other loss, net.
Earnings Per Share (EPS)Earnings Per Share (EPS) Basic 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 and Series A redeemable convertible preferred stock
Recently Issued Accounting PronouncementsRecently Issued Accounting Pronouncements In August 2020, the Financial Accounting Standards Board, or FASB, issued ASU 2020-06, regarding ASC Topic 470 “Debt” and ASC Topic 815 “Derivatives and Hedging,” which reduces the number of accounting models for convertible instruments and amends the calculation of diluted earnings per share for convertible instruments, among other changes. The guidance is effective for smaller reporting companies as defined by the SEC, for annual reporting periods beginning after December 15, 2023, including interim periods within that reporting period. Early adoption is permitted but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. We are currently evaluating the impact of the adoption of this standard on our consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments – Credit Losses (together with all subsequent amendments, ("Topic 326"))", which replaced the previous U.S. GAAP that required an incurred loss methodology for recognizing credit losses and delayed recognition until it was probable a loss had been incurred. Topic 326 replaced the incurred loss methodology with a methodology that reflects expected credit losses and requires consideration of reasonable and supportable information to estimate credit losses. This provision was effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. In February 2020, the FASB issued ASU 2020-02, "Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842)", which delayed the effective date of Topic 326 for smaller reporting companies until fiscal years beginning after December 15, 2022. We are currently evaluating the impact of the adoption of this standard on our consolidated financial statements. Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU 2018-14, "Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20)" ("ASU 2018-14"), which modifies the disclosure requirements for employers who sponsor defined benefit pension or other postretirement plans. The Company adopted ASU 2018-14 on January 1, 2021. The standard relates to financial statement disclosure only and did not have an impact on the Company’s consolidated balance sheet, statement of operations or cash flows. See Note (15) Employee Benefit Plans for disclosure of the Company's defined benefit plan.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)12 Months Ended
Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Deferred Revenue, by Arrangement, DisclosureChanges in deferred revenue were as follows: Twelve Months Ended December 31, 2021 Balance at December 31, 2020 $ 7,070,859 Deferral of revenue 13,248,342 Recognition of revenue (14,180,480) Change in reserves (2,635) Balance at December 31, 2021 $ 6,136,086
Right of Use Assets and Liabilities and Lease CostsWe have various operating leases for office facilities that continue through 2023. Below is a summary of our right of use assets and liabilities as of December 31, 2021. Right of use assets $ 112,405 Lease liability obligations, current 76,940 Lease liability obligations, less current portion 35,465 Total lease liability obligations $ 112,405 Weighted-average remaining lease term 2.00 Weighted-average discount rate 3.35 % Our operating lease costs for the year ended December 31, 2021 were as follows: Years Ended December 31, 2021 2020 Components of lease expense: Operating lease cost 766,952 1,794,187 Sublease income (100,418) (505,626) Net lease cost $ 666,534 $ 1,288,561
Future Minimum Lease PaymentsApproximate future minimum lease payments for our right of use assets over the remaining lease periods as of December 31, are as follows: 2022 76,995 2023 38,498 Total minimum lease payments 115,493 Less interest (3,088) Present value of lease liabilities 112,405
Schedule of Intangible Assets and GoodwillThe gross carrying amount and accumulated amortization of goodwill and other intangible assets as of December 31, 2021 and 2020 are as follows: December 31, 2021 December 31, 2020 Goodwill $ 4,150,339 $ 4,150,339 Other intangible assets: Gross carrying amount $ 4,038,138 $ 4,027,912 Accumulated amortization (3,986,776) (3,927,778) Net carrying amount $ 51,362 $ 100,134
Summary of Software Development CostsThe gross carrying amount and accumulated amortization of software development costs as of December 31, 2021 and 2020 are as follows: December 31, 2021 December 31, 2020 Software development costs: Gross carrying amount $ 2,980,132 $ 2,950,132 Accumulated amortization (2,937,437) (2,930,854) Software development costs, net $ 42,695 $ 19,278
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per ShareThe 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 years ended December 31, 2021 and 2020: Year Ended December 31, 2021 2020 Stock options, warrants and restricted stock 77,847 82,739 Series A redeemable convertible preferred stock 141,385 130,226 Total anti-dilutive common stock equivalents 219,232 212,965
Computation of Earnings Per ShareThe following represents a reconciliation of the numerators and denominators of the basic and diluted EPS computation: Year Ended December 31, 2021 2020 Numerator: Net income (loss) $ 203,332 $ 1,082,726 Effects of Series A redeemable convertible preferred stock: Less: Accrual of Series A redeemable convertible preferred stock dividends 1,143,697 1,083,892 Less: Accretion to redemption value of Series A redeemable convertible preferred stock 299,969 552,551 Net income (loss) attributable to common stockholders $ (1,240,334) $ (553,717) Denominator: Weighted average basic shares outstanding 6,515,274 5,920,517 Weighted average diluted shares outstanding 6,515,274 5,920,517 EPS: Basic net income (loss) per share attributable to common stockholders $ (0.19) $ (0.09) Diluted net income (loss) per share attributable to common stockholders $ (0.19) $ (0.09)
Impact of Error on Financial StatementsTo correct the misstatements above, the Company revised its previously issued financial statements as follows: As of December 31, 2020 CONSOLIDATED BALANCE SHEET As Previously Reported Adjustments As Revised Other long-term liabilities $ 703,889 $ 230,896 $ 934,785 Deferred revenue, net of current portion $ 1,765,859 $ 701,730 $ 2,467,589 Total liabilities $ 15,073,538 $ 932,626 $ 16,006,164 Accumulated deficit $ (122,733,344) $ (932,626) $ (123,665,970) Stockholders' deficit $ (14,608,186) $ (932,626) $ (15,540,812) Total liabilities and stockholders' deficit $ 13,406,074 $ — $ 13,406,074 For the Year Ended December 31, 2020 CONSOLIDATED STATEMENT OF OPERATIONS As Previously Reported Adjustments As Revised Interest and other expense $ (692,838) $ (55,783) $ (748,621) Income (loss) before income taxes $ 1,124,190 $ (55,783) $ 1,068,407 Net income (loss) $ 1,138,509 $ (55,783) $ 1,082,726 Net income (loss) attributable to common stockholders $ (497,934) $ (55,783) $ (553,717) Basic net income (loss) per share attributable to common stockholders $ (0.08) $ (0.01) $ (0.09) Diluted net income (loss) per share attributable to common stockholders $ (0.08) $ (0.01) $ (0.09) For the Year Ended December 31, 2020 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) As Previously Reported Adjustments As Revised Net income (loss) $ 1,138,509 $ (55,783) $ 1,082,726 Total comprehensive income (loss) $ 1,043,808 $ (55,783) $ 988,025 Total comprehensive income (loss) attributable to common stockholders $ (592,635) $ (55,783) $ (648,418) Total Stockholders' Deficit CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT As Previously Reported Adjustments As Revised Balance at December 31, 2019 $ (14,031,306) $ (876,843) $ (14,908,149) Net income (loss) $ 1,138,509 $ (55,783) $ 1,082,726 Balance at December 31, 2020 $ (14,608,186) $ (932,626) $ (15,540,812) For the Year Ended December 31, 2020 CONSOLIDATED STATEMENT OF CASH FLOWS As Previously Reported Adjustments As Revised Cash flows from operating activities: Net income (loss) $ 1,138,509 $ (55,783) $ 1,082,726 Changes in operating assets and liabilities: Accrued expenses and other long-term liabilities $ (339,399) $ 55,783 $ (283,616) Net cash provided by (used in) operating activities $ 706,063 $ — $ 706,063

Property and Equipment (Tables)

Property and Equipment (Tables)12 Months Ended
Dec. 31, 2021
Property, Plant and Equipment [Abstract]
Schedule of Property and EquipmentProperty and equipment consist of the following: December 31, 2021 December 31, 2020 Computer hardware and software $ 15,544,212 $ 16,456,790 Furniture and equipment — 604,300 Leasehold improvements — 1,730,751 Property and equipment, gross 15,544,212 18,791,841 Less accumulated depreciation and amortization (15,390,308) (18,594,821) Property and equipment, net $ 153,904 $ 197,020

Fair Value Measurements (Tables

Fair Value Measurements (Tables)12 Months Ended
Dec. 31, 2021
Fair Value Disclosures [Abstract]
Schedule of Fair Value Assets Measured On Recurring BasisThe following table presents the Company’s liabilities that are measured at fair value on a recurring basis at December 31, 2021: Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets Significant other Significant Derivative liabilities: Derivative Instruments $ 776,623 $ — $ — $ 776,623 Total derivative liabilities $ 776,623 $ — $ — $ 776,623 Total assets and liabilities measured at fair value $ 776,623 $ — $ — $ 776,623 The derivative liabilities above are classified as other long-term liabilities in the December 31, 2021 consolidated balance sheet. The following table presents the Company’s liabilities that are measured at fair value on a recurring basis at December 31, 2020: Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets for Identical Assets Significant other Significant Derivative liabilities: Derivative Instruments $ 703,747 $ — $ — $ 703,747 Total derivative liabilities $ 703,747 $ — $ — $ 703,747 Total assets and liabilities measured at fair value $ 703,747 $ — $ — $ 703,747
Fair Value Measurements Using Significant Unobservable InputsThe following table presents the Company’s liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of each of the years ended December 31, 2021 and 2020: Fair Value Measurements Using December 31, 2021 December 31, 2020 Beginning Balance $ 703,747 $ 658,917 Total (earnings) loss recognized in earnings 72,876 44,830 Ending Balance $ 776,623 $ 703,747 Earnings and losses resulting from changes in the fair value of the derivative instruments above are recorded as a component of interest and other expense.

Accrued Expenses (Tables)

Accrued Expenses (Tables)12 Months Ended
Dec. 31, 2021
Payables and Accruals [Abstract]
Schedule of Accrued ExpensesAccrued expenses are comprised of the following: December 31, 2021 December 31, 2020 Accrued compensation $ 54,137 $ 100,102 Accrued consulting and professional fees 305,100 1,403,445 Accrued taxes 605,357 550,774 Accrued restructuring costs 134,663 239,444 $ 1,099,257 $ 2,293,765

Income Taxes (Tables)

Income Taxes (Tables)12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]
Schedule of loss before income taxesInformation pertaining to the Company’s income (loss) before income taxes and the applicable provision for income taxes is as follows: December 31, 2021 2020 Income (loss) before income taxes: Domestic income (loss) $ 533,225 $ 867,361 Foreign income (loss) 196,870 201,046 Total income (loss) before income taxes: 730,095 1,068,407 Provision (benefit) for income taxes: Current: Federal $ — $ (116,504) State and local (1,080) 10,928 Foreign 266,205 82,437 265,125 (23,139) Deferred: Federal $ 1,785 $ 131,036 State and local 8,148 (6,209) Foreign 251,705 (116,007) 261,638 8,820 Total provision (benefit) for income taxes: $ 526,763 $ (14,319)
Schedule of deferred tax assets and liabilities December 31, 2021 2020 Deferred Tax Assets: Allowance for receivables $ 20,695 $ 34,820 Deferred revenue 500,841 352,087 Share-based compensation 49,191 23,647 Accrued expenses and other liabilities 93,361 331,497 Domestic net operating loss carryforwards 19,516,151 20,072,283 Foreign net operating loss carryforwards 275,671 187,114 Tax credit carryforwards 3,106,022 3,106,022 Capital loss carryforwards 34,736 34,254 Fixed assets 6,491 155,942 Lease liability — 134,522 Intangibles 87,796 113,932 Sub-total 23,690,955 24,546,120 Valuation allowance (23,257,645) (23,222,032) Total Deferred Tax Assets 433,310 1,324,088 Deferred Tax Liabilities: Prepaid commissions and other (57,438) (113,706) Tax method changes — (429,836) Right of use asset — (105,116) Deferred state income tax (387,655) (408,089) Foreign withholding taxes (458,526) (449,816) Total Deferred Tax Liabilities (903,619) (1,506,563) Net Deferred Tax Liabilities $ (470,309) $ (182,475)
Schedule of effective tax rate reconciliation December 31, 2021 2020 Tax at Federal statutory rate $ 153,320 $ 224,366 Increase (reduction) in income taxes resulting from: State and local taxes (4,052) 242,992 Non-deductible expenses 22,104 17,416 GILTI 6,708 — PPP loan forgiveness (158,340) — Net effect of foreign operations 248,931 (96,210) Uncertain tax positions (1,499) (1,706) Change in valuation allowance 35,614 (474,956) Foreign withholding taxes 206,323 19,299 Other 17,654 54,480 $ 526,763 $ (14,319)
Schedule of unrecognized tax benefitsA reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows: 2021 2020 Balance at January 1, $ 75,506 $ 81,400 Increases to tax positions taken in prior years — — Expiration of statutes of limitation (5,245) (5,894) Translation 9,257 — Balance at December 31, $ 79,518 $ 75,506

Accumulated Other Comprehensi_2

Accumulated Other Comprehensive Loss (Tables)12 Months Ended
Dec. 31, 2021
Equity [Abstract]
Schedule of Accumulated Other Comprehensive Income (Loss)The changes in Accumulated Other Comprehensive Loss, net of applicable tax, for December 31, 2021 are as follows: Foreign Net Total Accumulated other comprehensive income (loss) at January 1, 2021 $ (1,995,680) $ 7,719 $ (1,987,961) Other comprehensive income (loss) Other comprehensive income (loss) before reclassifications 114,675 13,027 127,702 Amounts reclassified from accumulated other comprehensive income — 219 219 Total other comprehensive income (loss) 114,675 13,246 127,921 Accumulated other comprehensive income (loss) at December 31, 2021 $ (1,881,005) $ 20,965 $ (1,860,040) The changes in Accumulated Other Comprehensive Loss, net of applicable tax, for December 31, 2020 are as follows: Foreign Net Total Accumulated other comprehensive income (loss) at January 1, 2020 $ (1,926,826) $ 33,566 $ (1,893,260) Other comprehensive income (loss) Other comprehensive income (loss) before reclassifications (68,854) (24,997) (93,851) Amounts reclassified from accumulated other comprehensive income — (850) (850) Total other comprehensive income (loss) (68,854) (25,847) (94,701) Accumulated other comprehensive income (loss) at December 31, 2020 $ (1,995,680) $ 7,719 $ (1,987,961)

Debt (Tables)

Debt (Tables)12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]
Note Payable RollforwardThe notes payable balance consists of the following: Total notes payable, net at December 31, 2019 $ 3,853,634 Accretion of discount 467,229 Proceeds from issuance of the PPP loan 754,000 Repayment of short-term debt (1,000,000) Total notes payable, net at December 31, 2020 $ 4,074,863 Accretion of discount 167,293 PPP loan forgiveness (754,000) Repayment of short-term debt (1,334,058) Total notes payable, net at December 31, 2021 2,154,098

Series A Redeemable Convertib_2

Series A Redeemable Convertible Preferred Stock (Tables)12 Months Ended
Dec. 31, 2021
Equity [Abstract]
Schedule of Conversions of StockThe Series A Preferred Stock consists of the following: Total Series A redeemable convertible preferred stock, net at December 31, 2019 $11,304,279 Accrued dividends 1,083,892 Accretion of preferred stock 552,551 Total Series A redeemable convertible preferred stock, net at December 31, 2020 12,940,722 Accrued dividends 1,143,697 Accretion of preferred stock 299,969 Total Series A redeemable convertible preferred stock, net at December 31, 2021 $14,384,388
Derivative ReconciliationThe 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 expense” within the consolidated statement of operations, for the twelve months ended December 31, 2021 and 2020, were as follows: Years Ended December 31, 2021 2020 Beginning Balance $ 703,747 $ 658,917 Total (gain) loss recognized in earnings 72,876 44,830 Ending Balance $ 776,623 $ 703,747
Derivative Probability and Volatility AssumptionsThe 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 attributable to common stockholdersThe following represents a reconciliation of net loss attributable to common stockholders for the twelve months ended December 31, 2021 and 2020, respectively: Years Ended December 31, 2021 2020 Net income (loss) $ 203,332 $ 1,082,726 Effects of Series A redeemable convertible preferred stock: Less: Accrual of Series A redeemable convertible preferred stock dividends 1,143,697 1,083,892 Less: Accretion to redemption value of Series A redeemable convertible preferred stock 299,969 552,551 Net income (loss) attributable to common stockholders $ (1,240,334) $ (553,717)

Share-Based Payment Arrangeme_2

Share-Based Payment Arrangements (Tables)12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]
Details of Stock Option PlanThe following table summarizes the 2018 Plan, which was the only plan under which the Company was able to grant equity compensation as of December 31, 2021: Name of Plan Shares Shares Available Shares FalconStor Software, Inc. 2018 Incentive Stock Plan 1,692,797 82,817 1,513,380
Schedule of Equity Awards OutstandingThe following table summarizes the Company’s equity plans that have expired but that still have equity awards outstanding as of December 31, 2021: 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
Schedule of Stock Option ActivityA summary of the Company’s stock option activity for 2021 is as follows: Number of Weighted Weighted Aggregate Options Outstanding at December 31, 2020 9,780 $ 113.66 4.25 $ — Granted — $ — Exercised — $ — Forfeited (3,950) $ 108.28 Expired (140) $ 409.79 Options Outstanding at December 31, 2021 5,690 $ 110.10 3.28 $ — Options Exercisable at December 31, 2021 5,690 $ 110.10 3.28 $ — Options Expected to Vest after December 31, 2021 — $ — 0.00 $ —
Schedule of Share Based Compensation RecognizedThe 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 consolidated statements of operations: Years ended December 31, 2021 2020 Cost of revenue - Support and Service 1,656 496 Research and development costs 2,088 942 Selling and marketing 11,812 785 General and administrative 5,622 13,532 $ 21,178 $ 15,755
Stock Based Compensation Expense - Restricted StockA summary of the total stock-based compensation expense related to 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, 2021 2020 Directors, officers and employees $ 21,178 $ 15,755
Schedule of Restricted Stock Units ActivityA summary of the Company’s restricted stock activity for 2021 is as follows: Number of Restricted Stock Awards Non-Vested at December 31, 2020 1,386,213 Granted 163,230 Vested (36,063) Forfeited — Non-Vested at December 31, 2021 1,513,380

Restructuring Costs (Tables)

Restructuring Costs (Tables)12 Months Ended
Dec. 31, 2021
Restructuring and Related Activities [Abstract]
Schedule of Restructuring CostsSeverance related costs Facility and other costs Total Balance at December 31, 2019 $ 293,799 $ 237,493 $ 531,292 Provisions/Additions $ 76,708 $ 956,118 $ 1,032,826 Translation Adjustment 25,353 — 25,353 Utilized/Paid $ (156,416) $ (1,118,145) $ (1,274,561) Balance at December 31, 2020 $ 239,444 $ 75,466 $ 314,910 Provisions/Additions $ — $ 833,313 $ 833,313 Translation Adjustment $ (14,336) $ — $ (14,336) Utilized/Paid $ (90,445) $ (908,779) $ (999,224) Balance at December 31, 2021 $ 134,663 $ — $ 134,663

Employee Benefit Plans (Tables)

Employee Benefit Plans (Tables)12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]
Schedule of Funded StatusPension information for the years ended December 31, 2021 and 2020, is as follows: 2021 2020 Accumulated benefit obligation $ 69,627 $ 65,188 Changes in projected benefit obligation: Projected benefit obligation at beginning of year 95,511 180,151 Interest cost 414 1,207 Actuarial gain (11,223) 28,834 Benefits paid — (121,838) Service cost — — Currency translation 1,259 7,157 Projected benefit obligation at end of year $ 85,961 $ 95,511 Changes in plan assets: Fair value of plan assets at beginning of year $ 40,476 $ 149,903 Actual return on plan assets 2,135 6,226 Benefits paid — (121,838) Employer contributions 5,873 2,012 Currency translation (108,814) 4,173 Fair value of plan assets at end of year $ (60,330) $ 40,476 Funded status (146,291) (55,035)
Schedule of Pension CostComponents of net periodic pension cost: Interest cost $ 414 $ 1,207 Expected return on plan assets (176) (1,005) Amortization of net (gain) loss (19) (1,052) Service cost — — Net periodic pension (benefit) cost $ 219 $ (850)
Schedule of Assumptions Used in Computing Benefit ObligationsThe Company utilized the following assumptions in computing the benefit obligation at December 31, 2021 and 2020 as follows: Years ended December 31, 2021 2020 Discount rate 0.77 % 0.43 % Rate of increase in compensation levels 2.00 % 2.50 % Expected long-term rate of return on plan assets 0.77 % 0.43 %

Segment Reporting and Concent_2

Segment Reporting and Concentrations (Tables)12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]
Schedule of Revenue And Long Lived Assets By Geographical AreasRevenue from the United States to customers in the following geographical areas for the years ended December 31, 2021 and 2020, and the location of long-lived assets as of December 31, 2021 and 2020, are summarized as follows: Years ended December 31, 2021 2020 Revenues: Americas $ 5,766,791 $ 5,387,128 Asia Pacific 2,764,146 3,655,011 Europe, Middle East, Africa and Other 5,649,543 5,726,554 Total Revenues $ 14,180,480 $ 14,768,693 December 31, 2021 2020 Long-lived assets: Americas $ 858,417 $ 1,735,986 Asia Pacific 261,148 502,344 Europe, Middle East, Africa and Other 18,364 52,690 Total long-lived assets $ 1,137,929 $ 2,291,020

Valuation and Qualifying Acco_2

Valuation and Qualifying Accounts Allowance for Returns and Doubtful Accounts (Tables)12 Months Ended
Dec. 31, 2021
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]
Schedule of Valuation AccountsPeriod Ended Balance at Beginning of Period Charges / (Benefits) to Revenue (Increases) Deductions Balance at End of Period December 31, 2021 $ 151,335 72,461 137,980 $ 85,816 December 31, 2020 $ 216,153 4,464 69,282 $ 151,335

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Nature of Operations (Details)Dec. 31, 2021customer
Accounting Policies [Abstract]
Number Of Organizations And MSP Customers1,000

Summary of Significant Accoun_5

Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Liquidity (Details) - USD ($)Jun. 30, 2021Dec. 31, 2021Dec. 31, 2020Jun. 02, 2021Apr. 30, 2021
Line of Credit Facility [Line Items]
Working Capital Deficiency $ 1,300,000
Deferred revenue4,557,317 $ 4,603,270
Stockholders' Equity Attributable to Parent(12,965,983)(15,540,812)
Net Income (Loss) Attributable to Parent203,332 1,082,726
Net Cash Provided by (Used in) Operating Activities(883,529)706,063
Cash and Cash Equivalents, at Carrying Value3,181,209 1,920,656
Cash, Period Increase (Decrease)1,300,000
Repayments of Short-term Debt $ (1,334,058)
Series A redeemable convertible preferred stock, $0.001 par value, 2,000,000 shares authorized, 900,000 shares issued and outstanding, redemption value of $14,490,274 and $13,346,577, respectively14,500,000
Gross Annualized Rental Cost $ 1,500,000
Amended And Restated Loan Agreement [Member]
Line of Credit Facility [Line Items]
Short-term Bank Loans and Notes Payable $ 3,510,679
Accumulated Deficit
Line of Credit Facility [Line Items]
Net Income (Loss) Attributable to Parent $ 203,332 $ 1,082,726

Summary of Significant Accoun_6

Summary of Significant Accounting Policies - Revision of Previously Issued Financial Statements - Balance Sheet (Details) - USD ($)Dec. 31, 2021Dec. 31, 2020
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Other long-term liabilities $ 950,843 $ 934,785
Deferred Revenue, Noncurrent1,578,769 2,467,589
Total liabilities11,250,221 16,006,164
Accumulated deficit(123,462,638)(123,665,970)
Stockholders' Equity Attributable to Parent(12,965,983)(15,540,812)
Liabilities and Equity $ 12,668,626 13,406,074
Previously Reported [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Other long-term liabilities703,889
Deferred Revenue, Noncurrent1,765,859
Total liabilities15,073,538
Accumulated deficit(122,733,344)
Stockholders' Equity Attributable to Parent(14,608,186)
Liabilities and Equity13,406,074
Adjustment [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Other long-term liabilities230,896
Deferred Revenue, Noncurrent701,730
Total liabilities932,626
Accumulated deficit(932,626)
Stockholders' Equity Attributable to Parent(932,626)
Liabilities and Equity $ 0

Summary of Significant Accoun_7

Summary of Significant Accounting Policies - Revision of Previously Issued Financial Statements - Statement of Operations (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Interest and other expense $ (657,773) $ (748,621)
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest730,095 1,068,407
Net Income (Loss) Attributable to Parent203,332 1,082,726
Net income (loss) attributable to common stockholders $ (1,240,334) $ (553,717)
Basic net income (loss) per share attributable to common stockholders $ (0.19) $ (0.09)
Diluted net income (loss) per share attributable to common stockholders $ (0.19) $ (0.09)
Previously Reported [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Interest and other expense $ (692,838)
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest1,124,190
Net Income (Loss) Attributable to Parent1,138,509
Net income (loss) attributable to common stockholders $ (497,934)
Basic net income (loss) per share attributable to common stockholders $ (0.08)
Diluted net income (loss) per share attributable to common stockholders $ (0.08)
Adjustment [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Interest and other expense $ (55,783)
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest(55,783)
Net Income (Loss) Attributable to Parent(55,783)
Net income (loss) attributable to common stockholders $ (55,783)
Basic net income (loss) per share attributable to common stockholders $ (0.01)
Diluted net income (loss) per share attributable to common stockholders $ (0.01)

Summary of Significant Accoun_8

Summary of Significant Accounting Policies - Revision of Previously Issued Financial Statements - Statement of Comprehensive Income (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net Income (Loss) Attributable to Parent $ 203,332 $ 1,082,726
Total comprehensive income (loss)331,253 988,025
Total comprehensive income (loss) attributable to common stockholders $ (1,112,413)(648,418)
Previously Reported [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net Income (Loss) Attributable to Parent1,138,509
Total comprehensive income (loss)1,043,808
Total comprehensive income (loss) attributable to common stockholders(592,635)
Adjustment [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net Income (Loss) Attributable to Parent(55,783)
Total comprehensive income (loss)(55,783)
Total comprehensive income (loss) attributable to common stockholders $ (55,783)

Summary of Significant Accoun_9

Summary of Significant Accounting Policies - Revision of Previously Issued Financial Statements - Statement of Stockholders' Deficit (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020Dec. 31, 2019
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest $ (12,965,983) $ (15,540,812) $ (14,908,149)
Net Income (Loss) Attributable to Parent $ 203,332 1,082,726
Previously Reported [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest(14,608,186)(14,031,306)
Net Income (Loss) Attributable to Parent1,138,509
Adjustment [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest(932,626) $ (876,843)
Net Income (Loss) Attributable to Parent $ (55,783)

Summary of Significant Accou_10

Summary of Significant Accounting Policies - Revision of Previously Issued Financial Statements - Statement of Cash Flows (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net Income (Loss) Attributable to Parent $ 203,332 $ 1,082,726
Accrued expenses and other long-term liabilities(476,977)(283,616)
Net Cash Provided by (Used in) Operating Activities $ (883,529)706,063
Previously Reported [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net Income (Loss) Attributable to Parent1,138,509
Accrued expenses and other long-term liabilities(339,399)
Net Cash Provided by (Used in) Operating Activities706,063
Adjustment [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Net Income (Loss) Attributable to Parent(55,783)
Accrued expenses and other long-term liabilities55,783
Net Cash Provided by (Used in) Operating Activities $ 0

Summary of Significant Accou_11

Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Revenue Additional Details (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Receivables [Abstract]
Accounts receivable, net of allowances $ 2,855,135 $ 2,836,571
Accounts receivable, allowance for doubtful accounts100,000 200,000
Short and long-term contracts, net of allowances900,000 600,000
Contract assets, allowance for doubtful accounts0
Write-offs in the accounts receivable and contract allowance accounts137,980 69,282
Deferred Revenue6,136,086 7,070,859
Deferred Revenue, Revenue Recognized $ 4,600,000 $ 5,300,000
Deferred revenue expected to be recognized over the next 12 months74.30%
Remaining performance obligation $ 1,700,000
Revenue from performance obligations expected to be recognized over next 12 months34.00%

Summary of Significant Accou_12

Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Deferred Revenue Rollforward (Details)12 Months Ended
Dec. 31, 2021USD ($)
Deferred Revenue Rollforward [Abstract]
Deferred Revenue $ 7,070,859
Deferred Revenue, Additions13,248,342
Deferred Revenue, Revenue Recognized(14,180,480)
Deferred Revenue, Increase (Decrease) In Reserves(2,635)
Deferred Revenue $ 6,136,086

Summary of Significant Accou_13

Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Leases Right of Use Assets and Liabilities (Details) - USD ($)Dec. 31, 2021Dec. 31, 2020
Lease, Cost [Abstract]
Right of use assets $ 112,405
Current portion of operating lease liabilities76,940 $ 665,074
Operating lease liabilities, less current portion35,465 $ 0
Operating Lease, Liability $ 112,405
Operating Lease, Weighted Average Remaining Lease Term2 years
Operating Lease, Weighted Average Discount Rate, Percent3.35%

Summary of Significant Accou_14

Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Leases Additional Information (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Leases [Abstract]
Operating lease cost $ 766,952 $ 1,794,187
Sublease income(100,418)(505,626)
Net lease cost666,534 $ 1,288,561
Operating lease payments $ 600,000

Summary of Significant Accou_15

Summary of Significant Accounting Policies Significant Accounting Policies - Leases Schedule of Future Minimum Operating Lease Payments (Details)Dec. 31, 2021USD ($)
Leases [Abstract]
Total minimum lease payments $ 115,493
Less interest(3,088)
Present value of lease liabilities112,405
202276,995
2023 $ 38,498

Summary of Significant Accou_16

Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Property and Equipment (Details)12 Months Ended
Dec. 31, 2021
Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life3 years
Maximum [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life7 years

Summary of Significant Accou_17

Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Goodwill and Other Intangible Assets Narrative (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Goodwill, Impairment Loss $ 0 $ 0
Amortization of Intangible Assets58,998 $ 38,393
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months33,652
Finite-Lived Intangible Asset, Expected Amortization, Year Two16,576
Finite-Lived Intangible Asset, Expected Amortization, Year Three $ 1,134
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life3 years

Summary of Significant Accou_18

Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Goodwill and Other Intangible Assets Table (Details) - USD ($)Dec. 31, 2021Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Goodwill $ 4,150,339 $ 4,150,339
Other intangible assets:
Gross carrying amount4,038,138 4,027,912
Accumulated amortization(3,986,776)(3,927,778)
Net carrying amount $ 51,362 $ 100,134

Summary of Significant Accou_19

Summary of Significant Accounting Policies - Software Development Costs Table (Details) - USD ($)Dec. 31, 2021Dec. 31, 2020
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Gross carrying amount $ 2,980,132 $ 2,950,132
Accumulated amortization(2,937,437)(2,930,854)
Software development costs, net $ 42,695 $ 19,278

Summary of Significant Accou_20

Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Software Development Costs Narrative (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Software Development Costs Disclosure [Abstract]
Capitalized Computer Software, Amortization $ 6,583 $ 7,734
Expected Future Amortization Expense for Software Development Costs, Next Twelve Months10,083
Expected Future Amortization Expense for Software Development Costs, Year Two12,112
Expected Future Amortization Expense for Software Development Costs Year Three6,000
Expected Future Amortization Expense for Software Development Cost Year Four6,000
Expected Future Amortization Expense for Software Development Costs Year Five6,000
Expected Future Amortization Expense for Software Development Costs Thereafter $ 2,500

Summary of Significant Accou_21

Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Foreign Currency (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Foreign Currency [Abstract]
Foreign Currency Transaction Gain (Loss), Unrealized $ (7,735) $ (42,147)

Summary of Significant Accou_22

Summary of Significant Accounting Policies - Earnings per Share Additional Information (Details) - shares12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common stock equivalents219,232 212,965
Stock options, warrants and restricted stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common stock equivalents77,847 82,739
Series A redeemable convertible preferred stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common stock equivalents141,385 130,226

Summary of Significant Accou_23

Summary of Significant Accounting Policies - Earnings per Share (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Numerator:
Net income (loss) $ 203,332 $ 1,082,726
Preferred Stock Dividends and Other Adjustments [Abstract]
Less: Accrual of Series A redeemable convertible preferred stock dividends1,143,697 1,083,892
Less: Accretion to redemption value of Series A redeemable convertible preferred stock299,969 552,551
Net income (loss) attributable to common stockholders $ (1,240,334) $ (553,717)
Denominator:
Weighted average basic shares outstanding6,515,274 5,920,517
Weighted average diluted shares outstanding6,515,274 5,920,517
EPS:
Basic net income (loss) per share attributable to common stockholders $ (0.19) $ (0.09)
Diluted net income (loss) per share attributable to common stockholders $ (0.19) $ (0.09)

Property and Equipment (Details

Property and Equipment (Details) - USD ($)Dec. 31, 2021Dec. 31, 2020
Property, Plant and Equipment [Abstract]
Computer hardware and software $ 15,544,212 $ 16,456,790
Furniture and equipment0 604,300
Leasehold improvements0 1,730,751
Gross15,544,212 18,791,841
Less accumulated depreciation and amortization(15,390,308)(18,594,821)
Net $ 153,904 $ 197,020

Property and Equipment (Detai_2

Property and Equipment (Details Narrative) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Property, Plant and Equipment [Abstract]
Depreciation and amortization expense $ 133,665 $ 178,391
Write off of fixed assets0 0
Accumulated depreciation on disposals of property and equipment0 $ 0
Gain (Loss) on Disposition of Property Plant Equipment, Excluding Oil and Gas Property and Timber Property $ 50,149

Fair Value Measurements Compone

Fair Value Measurements Components (Details) - Recurring - USD ($)Dec. 31, 2021Dec. 31, 2020
Derivative liabilities:
Derivative instruments, fair value $ 776,623 $ 703,747
Total derivative liabilities measured at fair value776,623 703,747
Total assets and liabilities measured at fair value776,623 703,747
Fair Value, Inputs, Level 1
Derivative liabilities:
Derivative instruments, fair value0 0
Total derivative liabilities measured at fair value0 0
Total assets and liabilities measured at fair value0 0
Fair Value, Inputs, Level 2
Derivative liabilities:
Derivative instruments, fair value0 0
Total derivative liabilities measured at fair value0 0
Total assets and liabilities measured at fair value0 0
Fair Value, Inputs, Level 3
Derivative liabilities:
Derivative instruments, fair value776,623 703,747
Total derivative liabilities measured at fair value776,623 703,747
Total assets and liabilities measured at fair value $ 776,623 $ 703,747

Fair Value Measurements Earning

Fair Value Measurements Earnings Recognition (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance $ 703,747 $ 658,917
Total (earnings) loss recognized in earnings72,876 44,830
Ending Balance $ 776,623 $ 703,747

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($)Dec. 31, 2021Dec. 31, 2020
Payables and Accruals [Abstract]
Accrued compensation $ 54,137 $ 100,102
Accrued consulting and professional fees305,100 1,403,445
Accrued taxes605,357 550,774
Accrued restructuring costs134,663 239,444
Total accrued expenses $ 1,099,257 $ 2,293,765

Income Taxes Provision (Details

Income Taxes Provision (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Income (loss) before income taxes:
Domestic income (loss) $ 533,225 $ 867,361
Foreign income196,870 201,046
Income (loss) before income taxes730,095 1,068,407
Provision (benefit) for income taxes:
Federal0 (116,504)
State and local(1,080)10,928
Foreign266,205 82,437
Total265,125 (23,139)
Deferred:
Federal1,785 131,036
State and local8,148 (6,209)
Foreign251,705 (116,007)
Total261,638 8,820
Income tax expense (benefit) $ 526,763 $ (14,319)

Income Taxes Deferred Taxes (De

Income Taxes Deferred Taxes (Details) - USD ($)Dec. 31, 2021Dec. 31, 2020
Deferred Tax Assets:
Allowance for receivables $ 20,695 $ 34,820
Deferred revenue500,841 352,087
Share-based compensation49,191 23,647
Accrued expenses and other liabilities93,361 331,497
Domestic net operating loss carryforwards19,516,151 20,072,283
Foreign net operating loss carryforwards275,671 187,114
Tax credit carryforwards3,106,022 3,106,022
Capital loss carryforwards34,736 34,254
Fixed assets6,491 155,942
Lease liability0 134,522
Intangibles87,796 113,932
Sub-total23,690,955 24,546,120
Valuation allowance(23,257,645)(23,222,032)
Total Deferred Tax Assets433,310 1,324,088
Deferred Tax Liabilities:
Prepaid commissions and other(57,438)(113,706)
Tax method changes0 (429,836)
Deferred Tax Liabilities, Leasing Arrangements0 (105,116)
Deferred state income tax(387,655)(408,089)
Foreign withholding taxes(458,526)(449,816)
Total Deferred Tax Liabilities(903,619)(1,506,563)
Deferred Tax Liabilities, Net $ (470,309) $ (182,475)

Income Taxes Reconciliation (De

Income Taxes Reconciliation (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Income Tax Disclosure [Abstract]
Tax at Federal statutory rate $ 153,320 $ 224,366
Increase (reduction) in income taxes resulting from:
State and local taxes(4,052)242,992
Non-deductible expenses22,104 17,416
Effective Income Tax Rate Reconciliation Global Intangible Low Taxed Income6,708 0
Net effect of foreign operations248,931 (96,210)
Uncertain tax positions(1,499)(1,706)
Change in valuation allowance35,614 (474,956)
Foreign withholding taxes206,323 19,299
Other17,654 54,480
Total provision (benefit) for income taxes526,763 (14,319)
Paycheck Protection Program
Increase (reduction) in income taxes resulting from:
PPP loan forgiveness(158,340)0
Operating Loss Carryforwards [Line Items]
Effective Income Tax Rate Reconciliation, Extinguishment of Debt $ 158,340 $ 0

Income Taxes Unrecognized Tax B

Income Taxes Unrecognized Tax Benefits Reconciliation (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Balance at January 1, $ 75,506 $ 81,400
Increases to tax positions taken in prior years0 0
Expiration of statutes of limitation(5,245)(5,894)
Translation9,257 0
Balance at December 31, $ 79,518 $ 75,506

Income Taxes (Details Narrative

Income Taxes (Details Narrative) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Operating Loss Carryforwards [Line Items]
Provision (benefit) for income taxes $ 526,763 $ (14,319)
Valuation allowance reduction due to Tax Act35,000
Undistributed earnings of foreign subsidiaries4,300,000
Withholding tax liability500,000
Unrecognized tax benefits that would reduce effective tax rate79,518
Accrued interest43,420
Unrecognized tax benefits expected to reverse, net twelve months14,816
Research tax credit carryforward
Operating Loss Carryforwards [Line Items]
Tax credit carryforwards3,100,000
Domestic tax authority
Operating Loss Carryforwards [Line Items]
Federal net operating loss carryforwards84,500,000
To Expire Beginning 2030 [Member] | Domestic tax authority
Operating Loss Carryforwards [Line Items]
Federal net operating loss carryforwards79,900,000
Carried Forward Indefinitely [Member] | Domestic tax authority
Operating Loss Carryforwards [Line Items]
Federal net operating loss carryforwards $ 4,600,000

Accumulated Other Comprehensi_3

Accumulated Other Comprehensive Loss (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance $ (1,987,961) $ (1,893,260)
Other comprehensive income (loss)
Other comprehensive income (loss) before reclassifications127,702 (93,851)
Amounts reclassified from accumulated other comprehensive income (loss)219 (850)
Total other comprehensive income (loss)127,921 (94,701)
Accumulated other comprehensive (loss) income, ending balance(1,860,040)(1,987,961)
Foreign Currency Translation
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance(1,995,680)(1,926,826)
Other comprehensive income (loss)
Other comprehensive income (loss) before reclassifications114,675 (68,854)
Amounts reclassified from accumulated other comprehensive income (loss)0 0
Total other comprehensive income (loss)114,675 (68,854)
Accumulated other comprehensive (loss) income, ending balance(1,881,005)(1,995,680)
Net Minimum Pension Liability
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance7,719 33,566
Other comprehensive income (loss)
Other comprehensive income (loss) before reclassifications13,027 (24,997)
Amounts reclassified from accumulated other comprehensive income (loss)219 (850)
Total other comprehensive income (loss)13,246 (25,847)
Accumulated other comprehensive (loss) income, ending balance $ 20,965 $ 7,719

Notes Payable - Notes Payable B

Notes Payable - Notes Payable Balance (Details) - USD ($)Jun. 30, 2021Apr. 28, 2020Dec. 31, 2021Dec. 31, 2020Dec. 31, 2019
Movement In Notes Payable [Roll Forward]
Notes Payable $ 2,154,098 $ 4,074,863 $ 3,853,634
Accretion of discount167,293 467,229
Repayment of short-term debt $ 1,334,058
Paycheck Protection Program
Movement In Notes Payable [Roll Forward]
Proceeds from issuance of the PPP loan $ 754,000 754,000
PPP loan forgiveness(754,000)
Medium-term Notes [Member]
Movement In Notes Payable [Roll Forward]
Repayment of short-term debt $ 1,334,058 $ 1,000,000

Notes Payable - Notes Payable (

Notes Payable - Notes Payable (Details Narrative) - USD ($)Jun. 30, 2021Apr. 28, 2020Feb. 23, 2018Dec. 31, 2020Jun. 02, 2021
Debt Instrument [Line Items]
Repayment of short-term debt $ 1,334,058
Paycheck Protection Program
Debt Instrument [Line Items]
Proceeds from issuance of the PPP loan $ 754,000 $ 754,000
Long-term Debt, Term2 years
Debt Instrument, Interest Rate, Stated Percentage1.00%
Note Payable, Interest Deferral Period6 months
Debt Instrument, Prepayment Penalties $ 0
Amended And Restated Loan Agreement [Member]
Debt Instrument [Line Items]
Short-term Bank Loans and Notes Payable $ 3,510,679
Amended And Restated Loan Agreement [Member] | HCP-FVA, LLC [Member]
Debt Instrument [Line Items]
Short-term Bank Loans and Notes Payable $ 2,176,621
Line of Credit [Member] | Amended And Restated Loan Agreement [Member] | HCP-FVA, LLC [Member]
Debt Instrument [Line Items]
Prepayment premium percentage5.00%
Required liquidity $ 2,000,000
Prime rate | Senior Notes [Member] | Commitment Loan [Member] | HCP-FVA, LLC [Member]
Debt Instrument [Line Items]
Debt rate basis spread0.75%

Series A Redeemable Convertib_3

Series A Redeemable Convertible Preferred Stock - Components of Preferred Stock (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020Dec. 31, 2019
Share-based Payment Arrangement [Abstract]
Series A redeemable convertible preferred stock, $0.001 par value, 2,000,000 shares authorized, 900,000 shares issued and outstanding, redemption value of $14,490,274 and $13,346,577, respectively $ 14,384,388 $ 12,940,722 $ 11,304,279
Class of Stock [Line Items]
Series A redeemable convertible preferred stock, $0.001 par value, 2,000,000 shares authorized, 900,000 shares issued and outstanding, redemption value of $14,490,274 and $13,346,577, respectively14,384,388 12,940,722 $ 11,304,279
Redeemable Preferred Stock [Member]
Share-based Payment Arrangement [Abstract]
Series A redeemable convertible preferred stock, $0.001 par value, 2,000,000 shares authorized, 900,000 shares issued and outstanding, redemption value of $14,490,274 and $13,346,577, respectively14,384,388 12,940,722
Class of Stock [Line Items]
Temporary Equity, Accretion of Dividends1,143,697 1,083,892
Preferred Stock, Accretion of Redemption Discount299,969 552,551
Series A redeemable convertible preferred stock, $0.001 par value, 2,000,000 shares authorized, 900,000 shares issued and outstanding, redemption value of $14,490,274 and $13,346,577, respectively $ 14,384,388 $ 12,940,722

Series A Redeemable Convertib_4

Series A Redeemable Convertible Preferred Stock (Details Narrative)12 Months Ended
Dec. 31, 2021USD ($)IntegersharesDec. 31, 2020USD ($)sharesSep. 16, 2013$ / sharesshares
Class of Stock [Line Items]
Series A redeemable convertible preferred stock, shares issued | shares900,000 900,000
Minimum percentage of common stock price to conversion price to determine eligibility of conversion through 60 consecutive trading days250.00%
Consecutive trading days, convertible debt threshold | Integer60
Threshold of stock price trigger, percentage225.00%
Upon certain triggering events holders can redeem100.00%
Preferred Stock, Financing Proceeds Threshold $ 5,000,000
Percentage of accounts receivable80.00%
Total (earnings) loss recognized in earnings $ 72,876 $ 44,830
Series A redeemable convertible preferred stock
Class of Stock [Line Items]
Series A redeemable convertible preferred stock, shares issued | shares900,000
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, percentage5.00%
Series A redeemable convertible preferred stock, basis spread on dividend rate, conditional percentage10.00%
Maximum [Member]
Class of Stock [Line Items]
Potential Ownership Percentage By Controlling Owners9.99%
Recurring
Class of Stock [Line Items]
Total assets and liabilities measured at fair value $ 776,623 703,747
Derivative Instruments $ 776,623 $ 703,747

Series A Redeemable Convertib_5

Series A Redeemable Convertible Preferred Stock Series A Redeemable Convertible Preferred Stock (Recognition) (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Beginning Balance $ 703,747 $ 658,917
Total (earnings) loss recognized in earnings72,876 44,830
Ending Balance $ 776,623 $ 703,747

Series A Redeemable Convertib_6

Series A Redeemable Convertible Preferred Stock Series A Redeemable Convertible Preferred Stock - Probability and Volatility Assumptions (Details)12 Months Ended
Dec. 31, 2021
Equity [Abstract]
Probability of redemption as part of a fundamental sale transaction0.50%
Probability of redemption absent a fundamental sale transaction4.75%
Annual volatility65.00%

Series A Redeemable Convertib_7

Series A Redeemable Convertible Preferred Stock Series A Redeemable Convertible Preferred Stock Effect on Net Income (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Equity [Abstract]
Net income (loss) $ 203,332 $ 1,082,726
Less: Accrual of Series A redeemable convertible preferred stock dividends1,143,697 1,083,892
Less: Accretion to redemption value of Series A redeemable convertible preferred stock299,969 552,551
Net income (loss) attributable to common stockholders $ (1,240,334) $ (553,717)

Stockholders' Equity (Details N

Stockholders' Equity (Details Narrative) - USD ($)Jul. 27, 2021Jun. 23, 2021Dec. 31, 2021
Equity, Class of Treasury Stock [Line Items]
Stock repurchased during period, shares0
Remaining number of shares authorized for repurchased49,078
Stock Issued During Period, Shares, New Issues285,000 3,666,064
Shares Issued, Price Per Share $ 4.10 $ 4.10
Sale of common stock in public offering, net of underwriting discounts and offering costs $ 900,000 $ 2,700,000
Common Stock
Equity, Class of Treasury Stock [Line Items]
Stock Issued During Period, Shares, New Issues811,750 1,096,750
Sale of common stock in public offering, net of underwriting discounts and offering costs $ 1,097
Common Stock | Over-Allotment Option
Equity, Class of Treasury Stock [Line Items]
Stock Issued During Period, Shares, New Issues86,750

Compensation Related Costs, Sha

Compensation Related Costs, Share Based Payment Arrangements Current Plan (Details) - sharesDec. 31, 2021Dec. 31, 2020Jun. 22, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding5,690 9,780
FalconStor Software, Inc., 2018 Incentive Stock Plan Member
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized1,692,797
Shares Available for grant82,817 1,471,997
Options Outstanding1,513,380

Share-Based Payment Arrangeme_3

Share-Based Payment Arrangements Expired Plans with Awards Outstanding (Details) - sharesDec. 31, 2021Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Outstanding5,690 9,780
FalconStor Software, Inc., 2016 Incentive Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Available for grant0
Options Outstanding2,250
FalconStor Software, Inc., 2006 Incentive Stock Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Available for grant0
Options Outstanding3,440

Share-Based Payment Arrangeme_4

Share-Based Payment Arrangements Stock Option Activity (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Number of Options Outstanding, Beginning9,780
Number of Options, Granted0
Number of Options, Exercised0
Number of Options, Forfeited(3,950)
Number of Options, Expired(140)
Number of Options Outstanding, Ending5,690 9,780
Number of Options, Exercisable5,690
Number of Options, Expected to Vest after end of period0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Weighted Average Exercise Price, Outstanding, Beginning (in dollars per share) $ 113.66
Weighted Average Exercise Price, Granted (in dollars per share)0
Weighted Average Exercise Price, Exercised (in dollars per share)0
Weighted Average Exercise Price, Forfeited (in dollars per share)108.28
Weighted Average Exercise Price, Expired (in dollars per share)409.79
Weighted Average Exercise Price, Outstanding, Ending (in dollars per share)110.10 $ 113.66
Weighted Average Exercise Price, Exercisable (in dollars per share)110.10
Weighted Average Exercise Price, Expected to Vest After End of Period (in dollars per share) $ 0
Weighted Average Remaining Contractual Life (in years), Outstanding3 years 3 months 10 days4 years 3 months
Weighted Average Remaining Contractual Life (in years), Exercisable3 years 3 months 10 days
Weighted Average Remaining Contractual Life (in years), Expected to Vest after end of period0 years
Aggregate Intrinsic Value, Outstanding $ 0 $ 0
Aggregate Intrinsic Value, Exercisable0
Aggregate Intrinsic Value, Expected to Vest $ 0

Share-Based Payment Arrangeme_5

Share-Based Payment Arrangements Share-Based Compensation Expense by Department (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense $ 21,178 $ 15,755
Cost of revenue - Support and Service
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense1,656 496
Research and development costs
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense2,088 942
Selling and marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense11,812 785
General and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense $ 5,622 $ 13,532

Share-Based Payment Arrangeme_6

Share-Based Payment Arrangements Share-Based Compensation Expense for Restricted Stock Awards (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense $ 21,178 $ 15,755
Restricted stock and restricted stock units | Directors, officers, and employees
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense $ 21,178 $ 15,755

Share-Based Payment Arrangeme_7

Share-Based Payment Arrangements Restricted Stock Activity (Details)12 Months Ended
Dec. 31, 2021shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Number of Restricted Stock Awards/Units Non-Vested, Beginning1,386,213
Granted163,230
Vested(36,063)
Forfeited0
Number of Restricted Stock Awards/Units Non-Vested, Ending1,513,380

Share-Based Payment Arrangeme_8

Share-Based Payment Arrangements (Details Narrative) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020Jun. 22, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options contractual term (maximum)10 years
Weighted-average period of recognition for unrecognized compensation cost1 year 3 months 18 days
Common stock reserved for issuance upon the exercise of stock options, restricted stock and restricted stock units1,601,887
FalconStor Software, Inc., 2018 Incentive Stock Plan Member
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total shares available for issuance82,817 1,471,997
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized220,800
Maximum number of shares authorized (in shares)1,692,797
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total intrinsic value of restricted stock for which the restrictions lapsed $ 93,043 $ 15,365
Total unrecognized compensation costs966,125
Performance-based RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation costs922,170
RSUs, Excluding Performance-based RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation costs $ 43,955

Commitments and Contingencies (

Commitments and Contingencies (Details Narrative) - USD ($)Aug. 14, 2017Dec. 31, 2021Feb. 11, 2022
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Length of warranty of software products (no more than)90 days
Liability for Uncertainty in Income Taxes, Noncurrent $ 109,347
Affiliated Entity | Alucria | Independent Contractor Services Agreement | Subsequent Event
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Due To Related Parties, Monthly Fee $ 20,000
Due To Related Parties, Contingent Annual Payment $ 60,000
Chief Executive Officer [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Base salary $ 350,000
Bonuses $ 17,500
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number735,973
Severance Payments, Severance Payment Period6 months
Severance Payments, Requisite Service Period6 months
Deferred Bonus [Member] | Chief Executive Officer [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Bonuses $ 200,000
Upon Termination [Member] | Chief Executive Officer [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items]
Severance Payments, Severance Payment Period12 months
Severance Payments, Requisite Service Period12 months
Severance Payments, Change In Control Period6 months

Derivative Financial Instrume_2

Derivative Financial Instruments (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Derivative Instruments, Gain (Loss) [Line Items]
Foreign Currency Cash Flow Hedge Derivative at Fair Value, Net $ 0 $ 0
Interest and other income (loss)
Derivative Instruments, Gain (Loss) [Line Items]
Loss on derivative72,876 44,830
Recurring
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments $ 776,623 $ 703,747

Litigation (Details)

Litigation (Details) - USD ($)Sep. 23, 2021Dec. 31, 2021Dec. 31, 2020Apr. 27, 2015
Loss Contingencies [Line Items]
Loss Contingency Accrual $ 800,000
Payments for Legal Settlements $ 200,000
Gain on litigation settlement $ 632,600 $ 0

Restructuring Costs - Schedule

Restructuring Costs - Schedule of Restructuring Costs (Details) - USD ($)3 Months Ended12 Months Ended
Mar. 31, 2021Dec. 31, 2021Dec. 31, 2020
Restructuring Reserve [Roll Forward]
Provisions/Additions $ 833,313 $ 1,032,826
Restructuring Plan, 2013, 2017 and 2019 (1) [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance $ 314,910 314,910 531,292
Provisions/Additions833,313 1,032,826
Restructuring Reserve, Foreign Currency Translation Gain (Loss)(14,336)25,353
Utilized/Paid(999,224)(1,274,561)
Ending Balance134,663 314,910
Severance related costs | Restructuring Costs Under 2019 Plan [Member]
Restructuring Reserve [Roll Forward]
Provisions/Additions100,000 0 76,708
Restructuring Reserve, Foreign Currency Translation Gain (Loss)(14,336)25,353
Severance related costs | Restructuring Plan, 2017 [Member]
Restructuring Reserve [Roll Forward]
Ending Balance134,663
Severance related costs | Restructuring Plan, 2013, 2017 and 2019 (1) [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance239,444 239,444 293,799
Utilized/Paid(90,445)(156,416)
Ending Balance134,663 239,444
Facility and other costs | Restructuring Plan, 2017 [Member]
Restructuring Reserve [Roll Forward]
Beginning Balance $ 75,466 75,466 237,493
Provisions/Additions833,313 956,118
Restructuring Reserve, Foreign Currency Translation Gain (Loss)0 0
Utilized/Paid(908,779)(1,118,145)
Ending Balance $ 0 $ 75,466

Restructuring Costs (Details Na

Restructuring Costs (Details Narrative)3 Months Ended9 Months Ended12 Months Ended
Mar. 31, 2021USD ($)Sep. 30, 2021positionDec. 31, 2021USD ($)positionDec. 31, 2020USD ($)Apr. 30, 2021USD ($)Dec. 31, 2019USD ($)
Restructuring Cost and Reserve [Line Items]
Entity Number of Employees86
Restructuring costs $ 833,313 $ 1,032,826
Annual Expense Run Rate Reduction $ 4,000,000
Annual Expense Run Rate Reduction Percentage29.00%
Number of Positions Furloughed, COVID 19 | position21
Number of Furloughed Positions Reinstated, COVID 19 | position20
Gross Annualized Rental Cost $ 1,500,000
Restructuring Costs Under 2019 Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring plan, number of positions eliminated | position23
Severance related costs | Restructuring Costs Under 2019 Plan [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring costs $ 100,000 $ 0 76,708
Severance related costs | Restructuring Plan, 2017 [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve134,663
Facility Related Costs [Member] | Restructuring Plan, 2017 [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring costs833,313 956,118
Restructuring Reserve $ 0 $ 75,466 $ 237,493

Employee Benefit Plans Pension

Employee Benefit Plans Pension Information (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Retirement Benefits [Abstract]
Accumulated benefit obligation $ 69,627 $ 65,188
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Projected benefit obligation at beginning of year95,511 180,151
Interest cost414 1,207
Actuarial gain(11,223)28,834
Benefits paid0 (121,838)
Service cost0 0
Currency translation1,259 7,157
Projected benefit obligation at end of year85,961 95,511
Changes in plan assets:
Fair value of plan assets at beginning of year40,476 149,903
Actual return on plan assets2,135 6,226
Benefits paid0 (121,838)
Employer contributions5,873 2,012
Currency translation(108,814)4,173
Fair value of plan assets at end of year(60,330)40,476
Funded status $ (146,291) $ (55,035)

Employee Benefit Plans Componen

Employee Benefit Plans Components of Net Periodic Pension Cost (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Components of net periodic pension cost:
Interest cost $ 414 $ 1,207
Expected return on plan assets(176)(1,005)
Amortization of net (gain) loss(19)(1,052)
Service cost0 0
Net periodic pension cost $ 219 $ (850)

Employee Benefit Plans Assumpti

Employee Benefit Plans Assumptions in Computing Benefit Obligation (Details)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Retirement Benefits [Abstract]
Discount rate0.77%0.43%
Rate of increase in compensation levels2.00%2.50%
Expected long-term rate of return on plan assets0.77%0.43%

Employee Benefit Plans (Details

Employee Benefit Plans (Details Narrative) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Defined Benefit Plan Disclosure [Line Items]
Total amount recognized in other comprehensive loss related to pension plan $ 13,246 $ (25,847)
Benefit payments expected over the next twelve months2,000
Benefit payments expected to be paid $ 77,000
Postretirement Benefit Plan | TAIWAN
Defined Benefit Plan Disclosure [Line Items]
Company contributions to plan, percentage of salary6.00%
Employer discretionary contribution amount $ 6,000 2,000
Postretirement Benefit Plan | UNITED STATES
Defined Benefit Plan Disclosure [Line Items]
Employer discretionary contribution amount0 0
Pension Plan | TAIWAN
Defined Benefit Plan Disclosure [Line Items]
Amount included in accumulated other comprehensive income for amounts that have not yet been recognized in net periodic pension cost23,255 7,719
Unrecognized transition obligation included in accumulated other comprehensive income0 0
Unrecognized actuarial (gain) loss included in accumulated other comprehensive income23,255 9,872
Actuarial loss recognized13,246
Recognition of transition obligations in other comprehensive income as a component of net periodic pension cost0
Accumulated Other Comprehensive Loss, Net
Defined Benefit Plan Disclosure [Line Items]
Total amount recognized in other comprehensive loss related to pension plan $ 13,246 $ (25,847)

Segment Reporting and Concent_3

Segment Reporting and Concentrations Revenues and Long-Lived Assets (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Revenues:
Total revenue $ 14,180,480 $ 14,768,693
Long-lived assets:
Total long-lived assets1,137,929 2,291,020
Americas
Revenues:
Total revenue5,766,791 5,387,128
Long-lived assets:
Total long-lived assets858,417 1,735,986
Asia Pacific
Revenues:
Total revenue2,764,146 3,655,011
Long-lived assets:
Total long-lived assets261,148 502,344
Europe, Middle East, Africa and Other
Revenues:
Total revenue5,649,543 5,726,554
Long-lived assets:
Total long-lived assets $ 18,364 $ 52,690

Segment Reporting and Concent_4

Segment Reporting and Concentrations (Details Narrative)12 Months Ended
Dec. 31, 2021IntegercustomerDec. 31, 2020customerInteger
Revenue Benchmark [Member]
Concentration Risk [Line Items]
Number of Customers Accounting for More than 10 Percent of Revenue | Integer1 2
Accounts receivable
Concentration Risk [Line Items]
Number Of Customers With AR Balance More Than 10% | customer2 1

Valuation and Qualifying Acco_3

Valuation and Qualifying Accounts Allowance for Returns and Doubtful Accounts (Details) - USD ($)12 Months Ended
Dec. 31, 2021Dec. 31, 2020
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balance at Beginning of Period $ 151,335 $ 216,153
Charges (Benefits) to Revenue72,461 4,464
Write-offs in the accounts receivable and contract allowance accounts137,980 69,282
Balance at End of Period $ 85,816 $ 151,335

Related Party Transactions Rela

Related Party Transactions Related Party Transactions (Detail Narrative) - USD ($)Jun. 30, 2021Jun. 02, 2021Dec. 27, 2019
Related Party Transaction [Line Items]
Repayment of short-term debt $ 1,334,058
Amended And Restated Loan Agreement [Member]
Related Party Transaction [Line Items]
Short-term Bank Loans and Notes Payable $ 3,510,679
Amended And Restated Loan Agreement [Member] | HCP-FVA, LLC [Member]
Related Party Transaction [Line Items]
Total loan commitment amount available $ 2,500,000
Short-term Bank Loans and Notes Payable $ 2,176,621