SEC Form 4 · accession 0001144204-18-022356
FALCONSTOR SOFTWARE INC · FALC
Statement of changes in beneficial ownership, as filed. Original on EDGAR ↗
Reporting owner
Martin M Hale Jr.
Director · 10% Owner · Other
Period of report
Apr 23, 2018
Accepted (ET)
Apr 25, 2018 · 4:00 pm EDT
Rule 10b5-1 plan
unknown — predates the checkbox
Issuer CIK
0000922521
Table I — non-derivative securities
| Security | Date | Code | Shares | Price | A/D | Owned after | D/I | Nature of ownership |
|---|---|---|---|---|---|---|---|---|
| Common StockF1,F3,F5 | Apr 23, 2018 | M | 13,724,818 | $0.001 | A | 15,175,209 | I | See Footnotes |
| Common StockF2,F3,F5 | Apr 23, 2018 | M | 39,645,783 | $0.001 | A | 54,820,992 | I | See Footnotes |
| Common StockF6 | holding | — | — | — | 70,815 | D |
Table II — derivative securities
| Security | Conv. / exercise price | Date | Code | Shares | A/D | Exercisable | Expires | Underlying | Underlying shares | Owned after | D/I |
|---|---|---|---|---|---|---|---|---|---|---|---|
| WarrantsF1,F4,F5 | $0.001 | Apr 23, 2018 | M | 13,859,128 | D | Nov 17, 2017 | Nov 17, 2027 | Common Stock | 13,724,818 | 0 | I |
| WarrantsF2,F4,F5 | $0.001 | Apr 23, 2018 | M | 40,033,752 | D | Feb 23, 2018 | Feb 23, 2028 | Common Stock | 39,645,783 | 1,543,630 | I |
Explanation of responses
- F1HCP-FVA, LLC, a Delaware limited liability company ("HCP-FVA"), exercised that certain Warrant, dated November 17, 2017, to purchase 13,859,128 shares of common stock ("Common Stock") of Falconstor Software, Inc. (the "Issuer") on a cashless exercise basis with respect to all 13,859,128 shares issuable upon exercise thereof. As a result of such cashless exercise, HCP-FVA received 13,724,818 shares of Common Stock.
- F2HCP-FVA exercised that certain Warrant, dated February 23, 2018, to purchase 41,577,382 shares of Common Stock on a cashless exercise basis with respect to 40,033,752 shares issuable upon exercise thereof. As a result of such cashless exercise, HCP-FVA received 39,645,783 shares of Common Stock and retained the right to purchase 1,543,630 shares of Common Stock under such Warrant.
- F3The shares of Common Stock reported herein are held by HCP-FVA and Hale Capital Partners, LP ("HCP").
- F4As set forth in the previous filings of Martin Hale, Jr. ("MH") and HCP-FVA, HCP-FVA also holds that certain Warrant, dated February 23, 2018, to purchase 366,990,000 shares of Common Stock and shares of Series A Convertible Preferred Stock of the Issuer that are convertible into 8,781,515 shares of Common Stock.
- F5MH is the Chief Executive Officer of HCP. MH is also (i) the sole owner and managing member of Hale Fund Partners, LLC, a Delaware limited liability company ("HFP"), the general partner of HCP and (ii) the sole owner and Chief Executive Officer of Hale Fund Management, LLC, a Delaware limited liability company ("HFM"). HFM is (i) the general partner of Hale Capital Management, LP ("HCM"), the manager of HCP and (ii) the manager of HCP-FVA. Each of MH, HFP, HFM and HCM disclaims beneficial ownership of the securities reported herein, except to the extent of his or its pecuniary interest.
- F6Represents shares of vested Restricted Stock previously granted to MH under the Issuer's 2016 Outside Direct Equity Compensation Plan in consideration for services performed as a member of the Board of Directors of the Issuer. MH holds these shares for the benefit of HCP.
Remarks
MH serves as a director on the board of directors of the Issuer as a representative of HCP-FVA. Accordingly, HCP, HFP, HFM, HCM and HCP-FVA are directors by deputization by virtue of the fact that MH currently serves on the board of directors of the Issuer.