FalconStor Filed Form 12b-25 Notification of Late Filing for 3Q10

FalconStor Software, Inc. has filed a Form 12b-25 Notification of Late Filing with the U.S. Securities and Exchange Commission with regard to its Quarterly Report on Form 10-Q for the third quarter of 2010. This will allow the Company an additional five calendar days to file its Form 10-Q, which was otherwise due November 9, 2010.

The Company was unable to file its Form 10-Q for the fiscal quarter ended September 30, 2010 on November 9 due to an internal investigation being conducted by a Special Committee of the Company’s Board of Directors of certain of the Company’s past accounting practices and certain improper payments.

This internal investigation was initiated following the September 29, 2010, announcement by the Company that its former President, Chief Executive Officer and Chairman of its Board of Directors informed the Company that certain improper payments were allegedly made in connection with the Company’s licensing of software to one customer.

The Company is fully cooperating with law enforcement authorities with respect to ongoing investigations into the matter and anticipates that the Special Committee will have made sufficient progress with respect to its internal investigation for the Company to file the Report by the close of business on Monday, November 15. However, it is possible that the Company will not be able to meet this extended filing deadline.

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