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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-K/A

/x/  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2002.

                                       OR

/ / TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE ACT OF
    1934 For the transition period from __________ to __________

                         Commission file number 0-23970

                            FALCONSTOR SOFTWARE, INC.
             (Exact name of registrant as specified in its charter)

                DELAWARE                                       77-0216135
     (State or other jurisdiction of                        (I.R.S. Employer
     incorporation or organization)                        Identification No.)

             125 Baylis Road                                      11747
           Melville, New York                                  (Zip code)
(Address of principal executive offices)

        Registrant's telephone number, including area code: 631-777-5188

        Securities registered pursuant to Section 12(b) of the Act: None

Securities  registered pursuant to Section 12(g) of the Act: Common Stock, $.001
par value

       Indicate by check mark whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes  |X|    No
    -----     ----

       Indicate by check mark if  disclosure of  delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  Registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. |X|

       Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes |X| No
                                        ----   ----

       Aggregate  market  value of Common  Stock held by  non-affiliates  of the
Registrant  as of June 30, 2002 was  $90,962,009,  which  value,  solely for the
purposes of this  calculation  excludes  shares held by  Registrant's  officers,
directors,  and  their  affiliates.  Such  exclusion  should  not  be  deemed  a
determination by Registrant that all such  individuals are, in fact,  affiliates
of the  Registrant.  The number of shares of Common Stock issued and outstanding
as of March 7, 2003 was 45,805,826 and 45,570,826, respectively.

Item 6.   SELECTED FINANCIAL DATA

          The  selected   consolidated   financial  data  with  respect  to  our
          consolidated balance sheets as of December 31, 2002, 2001 and 2000 and
          the related consolidated  statements of operations for the years ended
          December 31, 2002 and 2001 and the period from inception (February 10,
          2000)  through  December  31, 2000 have been  derived from our audited
          consolidated  financial  statements  which are  included  herein.  The
          following  selected  consolidated  financial  data  should  be read in
          conjunction with the consolidated  financial  statements and the notes
          thereto  and  the  information  contained  in  Item  7,  "Management's
          Discussion  and  Analysis  of  Financial   Condition  and  Results  of
          Operations."

                                                                                Period  from
                                                                                 inception
                                                                                (February 10,
                                                 Year Ended    Year  Ended      2000) through
                                                December 31,   December  31,     December 31,
                                                   2002           2001              2000
                                                 -------        -------            ------
                                                   (In thousands, except per share data)

Consolidated Statements of Operations Data:

Revenues:
       Software license revenue                 $  8,667       $  4,714              --
       Software services and other revenue         1,962            878               143
                                                 -------        -------            ------
                                                  10,629          5,592               143
Operating expenses:

       Cost of revenues                            1,527            921               224
       Software development costs                  6,962          5,254             1,379
       Selling and marketing                       9,857          8,084               327
       General and administrative                  2,591          2,732               534
       Impairment of prepaid royalty                 483           --                --
                                                 -------        -------            ------
Total operating expenses                          21,420         16,991             2,464
                                                 -------        -------            ------
Operating loss                                   (10,791)       (11,399)           (2,321)

Interest and other income                          1,585          1,365               225
Impairment of long-lived assets                   (2,300)          --                --
                                                 -------        -------            ------
Loss before income taxes                         (11,506)       (10,034)           (2,096)
Provision for income taxes                            37             22              --
                                                 -------        -------            ------
Net loss                                        $(11,543)      $(10,056)         $ (2,096)
                                                 -------        -------            ------
Beneficial conversion feature attributable to
       convertible preferred stock                  --            3,896              --
                                                 -------        -------            ------
Net loss attributable to common shareholders    $(11,543)      $(13,952)         $ (2,096)
                                                ========       ========          ========
Basic and diluted net loss per share            $  (0.26)      $  (0.40)         $  (0.09)
                                                ========       ========          ========
Basic and diluted weighted average common
        shares outstanding                        45,233         35,264            24,383
                                                ========       ========          ========

                                                        December 31,   December 31,     December 31,
                                                           2002          2001              2000
                                                        -------          -------          -------
                                                                      (In thousands)
Consolidated Balance Sheet Data:

Cash and cash equivalents and marketable securities     $51,102          $64,527          $ 7,727
Working capital                                          47,746           57,518            7,254
Total assets                                             64,710           74,471            8,594
Long-term obligations                                      --                283             --
Stockholders' equity                                     55,901           63,562            8,057

                                   SIGNATURES

            Pursuant  to  the  requirements  of  Section  13  or  15(d)  of  the
Securities  Exchange Act of 1934,  the  registrant has signed this report by the
undersigned,  thereunto duly authorized in Melville,  State of New York on March
28, 2003.

FALCONSTOR SOFTWARE, INC.

By: /s/ ReiJane Huai                                 Date:  March 28, 2003
    ------------------------------------------
    ReiJane Huai, President, Chief  Executive
    Officer of FalconStor Software, Inc.
```