Operator: Good afternoon and thank you for joining us to discuss FalconStor Software's Q3, 2017 Earnings Call. Todd Brooks, FalconStor's Chief Executive Officer; and Patrick McClain, Chief Financial Officer will discuss the company's results and activities and we'll then open the call to your questions. The company would like to advise all participants that today's discussion may contain what some consider forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. These risks and uncertainties are discussed in FalconStor's reports on Forms 10-K, 10-Q, and other reports filed with the Securities and Exchange Commission and in the company's press release issued today. During today's call, there will be discussions that include non-GAAP results. A reconciliation of the non-GAAP results to GAAP has been posted on FalconStor's website at www.falconstor.com, under “Investor Relations”. After the close of business today, FalconStor released its Q3, 2017 earnings. Copies of the earnings release and supplemental financial information are available on FalconStor's website at www.falconstor.com. I am now pleased to turn the call over to Todd Brooks.

Todd Brooks: Thank you, René. Appreciate your introduction, and to all of those that are joining us today, I appreciate you taking your time. This is our first earnings call Pat and I’s first earnings call that we’ve had the pleasure to lead since joining the company in mid-August. And we’ve both spent a significant amount of time and significant portions of our careers working and rebuilding mature enterprise companies like FalconStor. As a result we are both excited by this opportunity, and have specifically been looking forward to today’s call. FalconStor has a long and storied history since its launch in 2000. Our products and solution play a valuable role in managing and protecting critical data within large organizations around the world. And while the company has certainly struggled over the last several years, it’s my sincere view that FalconStor still has the opportunity to excel and deliver long-term value to its shareholder base. Over the last three months, to begin this journey, we’ve been focused on four key initiatives. First, on assembling a leadership team that is aligned with our long-term strategic vision and the talents and the experience needed to execute on that vision. Second, we’ve been focused on adjusting our expense base to ensure we are operating on a profitable foundation going forward; third, we’ve been focused on re-engaging with our global partner and end user basis so that we have a clear understanding of the value that FalconStor products deliver within our customers’ organizations. And finally, fourth, we’ve been focused on securing the financing needed to enable long-term success of the company. So for the balance of today’s call, I will elaborate on each of these four key initiatives a bit more, and then I’ll turn it over to Pat for a more detailed review of Q3 financial results and then also a brief review of the $3 million financing commitment we just secured with Hale Capital. So back to the four key initiatives, to give a little more color on those, first on the -- on assembling the leadership team. First on, in addition to Pat and my appointments earlier in August, we were excited to add Carter McCrary, as our VP of Global Revenue back in the latter part of August. Carter has had a very accomplished leadership career, which has included extensive executive roles with organizations like Dell and several other enterprise software companies. Carter is leading our sales and our presales teams. Next, to round out our executive team, we expect to actually announce a new VP of Engineering before the end of this year, so we are excited about that. These leadership appointments are instrumental in transitioning our organization to one that operates against a clear set of disciplined processes, continually works to improve productivity, aggressively pursues operating metrics, which are set to deliver against our corporate objectives. These leaders will be key drivers, key-- key drivers for our future success at FalconStor. Next let’s dive a little bit more into our expense base, and what we’ve done in with that this quarter. I would say that probably, not probably, definitely the most exciting Q3 update that we will deliver today, is the progress our team has made in optimizing our expense base to ensure a profitable operating foundation. The strategic restructuring launched earlier in 2017 and additional efforts we have implemented this quarter have produced a return to profitability for FalconStor as we deliver non-GAAP net income in excess of $1.1 million during the quarter. And this is a sharp, sharp contrast to recent performance, which included a $419,000 loss in Q2 of this year, included a $935,000 loss in Q1 of this year, and then a $7.8 million loss in all of 2016. While we continue to look for additional ways to optimize in Q4, this adjusted expense base sets the company up for continued profitable performance. The foundation is critical, though as it gives us time or runway if you will to reengage our customer base, stabilize our revenue retention, and position the company for future growth. I do want to be, I want to pause for a moment though and be very clear. While these Q3 earnings are a good first step, no doubt about that. A significant amount of work remains to translate our operating profits into positive quarterly cash flow. Pat will provide some additional detail here in a minute regarding our immediate cash flow dynamics when we discuss the $3 million commitment, but he’ll dive into that in just a minute. Back to our key Q3 initiatives, thirdly, we’re focused on engaging our installed base, creating a stable financial foundation. This is simply driven by a profitable expense base. It is also a result of stable year-over-year bookings and resultant revenue retention and ideally obviously, growth. In my experience, mature enterprise software companies can only create commercial stability by returning to an installed base focus. This requires spending significant time with decision-makers from existing partners, and existing customers to uncover the business value they receive when utilizing FalconStor products. Fortunately, we continue to have a an extensive installed base, and we witnessed this firsthand as we spent several weeks during Q3 meeting face-to-face with customers across Europe, Asia, and North America. While we did uncover some limited product quality issues that we are currently addressing and will clean up as fast as we can, there was a consistent message that we received from our partners and our customers. And that is first of all they said, “thank you, thank you for taking your time to discuss your vision with us, to meet with us, because quite frankly we’ve heard little from FalconStor over the last several years.” Secondly, the message was that they continue to believe in our products. And finally, their message was if we can demonstrate long-term stability, they are more than willing to consider expanding their relationships, their relationship with FalconStor and use of our products. So we are obviously very encouraged by the progress that we made in Q3. As a final step to ensure long-term viability of the company, we have publicly disclosed on multiple occasions the need to raise additional financing. After an extensive pursuit of all available options, we announced this past Friday a $3 million financing commitment from Hale Capital. I’ll turn it over to Pat to discuss details of this commitment and to also give you a little more detail around Q3 results. Pat?

Patrick McClain: Thank you, Todd. As Todd mentioned, the financial highlight for the quarter was the delivery of $1.1 million in non-GAAP operating income which represents an 18% operating margin. Our revenues did continue to decline as we closed the quarter at $6.1 million, representing a quarterly decline of 9%. Bookings also trended lower at $3.5 million against $3.9 million for Q2. Our expectation is that bookings and resulting revenue will stabilize over the next few quarters as we re-engage our customer base and implement our refocused commercial strategy. Gross margin increased to 80% in Q3, from 74% the previous quarter. This increase is attributable to cost reductions and product mix. As a result of our cost control and realignment initiatives, our non-GAAP operating expenses ended at $5 million, which were representing an improvement of $2.2 million over Q2 and $3.9 million over Q3 2016. Now turning to the balance sheet, we ended the quarter with a cash balance of nearly $1.8 million, up slightly from $1.6 million at the end of Q2. However, net working capital excluding deferred revenue ended in a negative $300,000 which was down by $1.3 million from the previous quarter. Accounts receivable ended at $2.2 million down from $3 million at the end of Q2, putting additional pressure on fourth-quarter cash flows. Accounts payable and accrued expenses ended at $5.3 million with over $1.8 million coming due in the fourth quarter. As we discussed in previous filings to ensure that we can meet our operating cash flows and create a solid financial foundation for the future, we have been actively seeking financing. The principal terms of financing commitment we received from Hale Capital are set forth in the press release we issued on Friday and in 8-K we filed with the SEC this morning. We are pleased with Hale’s continued support of our efforts. Todd, I’ll turn it back to you for your final comments.

Todd Brooks: Thanks Pat. In summary as Pat said, we are extremely pleased. There has been a lot of hard work that we’ve undertaken in Q3 and we certainly have a significant amount of work ahead of us, but we do believe that Q3 marks a pivot point for the company. And to those of you on the phone that are shareholders, potentially even loyal customers, we are committed to returning FalconStor to its rightful position in the industry and to delivering value and -- to our customers and to our shareholders and we look very forward to that in the coming days. And so now I’m going to turn it back over to René, in just a second, René one second for Q&A. We did want to make sure that this being our first call that we left plenty of time for Q&A, and so we intentionally didn’t read through a lot of the detail in the press release that we’ve submitted, but we will open up the floor now for questions from any of that might have in. René

Operator: [Operator Instructions] And we’ll take our first question from Barry Rubenstein with Wheatley Partners.

Barry Rubenstein: Hi guys, I’m glad to see you there, and hopefully we could continue this positiveness. On the funding that’s coming in, I tried to decipher the release on that funding, and I had a tough time figuring out what exactly is going on, there’s something about 75% from Hale Capital and other shareholders participating in the total funding of 14.08 million [ph] and 10 million buying out Hale Capital’s part, and other shareholders participating, can you clarify any of those things?

Patrick McClain: Yes. Let me try to help a little bit with that. What Hale did for the company is a backstop of a private placement. The guaranteed funds from Hale Capital is $3 million. The private placement cap will be 4 million, so the company -- the good news for the company is we are guaranteed to have $3 million worth of funding, and other investors have an opportunity to participate with Hale. Hale has reserved at least 25% of the $4 million offering, and the $3 million of course is the 75% of the $4 million. That’s his backstop. There is a component that involves the purchase of preferred shares that Hale currently holds, so there will be selling shareholder as well as an investor in the transaction.

Todd Brooks: It is a good question, I know that one of the things that we wanted to make sure that we did was to give other folks an opportunity to participate too , and so there will be additional information that we released shortly, but I’d believe it’s probably best that we try not to get into complete details on this call, but happy to chat some more with you offline when we release some additional details or anyone else that would like to inquire, good question though.

Operator: [Operator Instructions] And our next question comes from Bill Dawkins with Burleson Dawkins Incorporated.

Bill Dawkins: Good afternoon, guys.

Todd Brooks: Good afternoon, Bill.

Bill Dawkins: I wanted to start by saying that you did a -- both of you did a wonderful job on explaining it all out; I thought it was very well done and I appreciate that.

Todd Brooks: Well thank you, Bill.

Bill Dawkins: I guess my question is, when you look at all of your partners across the world here we’re talking, what’s size market do you theoretically have in front of you?

Todd Brooks: Well, a great question Bill. You know there’s a set of questions that I commonly get from partners or customers or even shareholders, and that is one question, and another question is what is your roadmap, right. What are – how are you thinking about the product, and how are you planning to innovate. And my response is this, it would be very easy for us to just to throw out a strategic plan and a strategic roadmap and attempt to tie it to a bunch of industry numbers, but before we do that, Bill, what I’m going to focus on is talking to our customers, talking to our existing partners, because we have this fantastic asset at our disposal, it is called our installed base. And simply by getting back in touch with our installed base, there is a tremendous opportunity to not only increase stability within the company, but in my opinion to grow the company again. That’s been my experience with mature software companies in the past is, don’t worry about initially -- the innovations on the roadmap and whether the market is a $1 billion or $10 billion market on day one was focused on how we do we deliver more value to our clients and here’s what happens when you do that. As you have discussions, as you as you begin to listen to your customers and listen to your partners and understand what would drive more value, your -- our roadmap will become clear, right. And there there’s plenty of room for growth for this company simply to focus on that, and then we’ll begin to focus on the territory if you will outside of our installed base, but I don’t have an answer for you today and that’s because we’re just totally laser focused on our install base right now.

Bill Dawkins: Well, can you comment on how this product stacks up against the competition out there?

Todd Brooks: Well, I can comment on it from the perspective of our customers. I went through some of the recurring themes that we heard as we talk to them. And another recurring theme is, please don’t, please begin to grow again, please begin to show stability because if we have to unplug FalconStor, it’s not as easy as just plugging in one alternative vendor. In many cases we have to plug in two or three alternative vendors to replace what we provide at FalconStor. My view on the product is that in general, it’s very stable. As I mentioned earlier, we did run across one specific quality issue that we need to address with some customers, but in general the product is stable, and we hear from our customers that there is still some differentiation left in it, and so back to having runway or time, I believe that our product that matures is still incredibly powerful and provides some differentiation in the marketplace. So we’ve got some time before we need to introduce any significant innovation.

Bill Dawkins: Great. And then lastly Pat, on the gross margin, what would be a cap on that?

Patrick McClain: 80% is pretty high to be honest with you. What goes into the cost, that go into that calculation, are primarily our support organization, so I think that’s probably about as high as we want to drive that and still provide high level of customer support to our customers.

Bill Dawkins: Got it, quite impressive. Great job guys and I really appreciate the time. Good job on the call too.

Todd Brooks: Thank you, I appreciate Bill. René.

Operator: [Operator Instructions] It appears there are no further question. Mr. Brook’s I’ll turn the conference back to you.

Todd Brooks: Great summary. Thanks folks for once again for attending. We know you’re busy, but this is important, and FalconStor's future is important, and we're excited about it. As I said earlier, we are really happy by the result that we’ve been able to drive in the first three months, but we have a lot of work to do. And, but we are excited to do it and we think that long-term that this is going to be really exciting. So thanks again for joining, and we will let you return to your day. Thank you René.

Operator: Thank you. This does conclude today’s presentation. We thank you for your participation.