Hale Capital Partners Has a Penchant For FalconStor’s Preferred Stock

Hale Capital Partners: FalconStor Software, Inc. (NASDAQ:FALC) recently entered into a purchase agreement with Hale Capital Partners in terms of which, the latter acquired 900,000 shares of the company for a price of $10 a piece. Hale Capital Partners owns 7.3 million shares of FalconStor Software, which represents 13.2% of the company at a value of $10.5 million.

For the second quarter of the year, FalconStor Software reported a decline in its total revenues by 15% on the year to $14 million, against an amount of $16.5 million of revenues in the second quarter of 2012. The net loss of the company, however, narrowed to $5.2 million, or $0.11 per share, versus $6.6 million reported for the same period of last year.

Under the Certificate of Designations, Hale Capital Partners, as a holder of Preferred shares, will receive dividends at a prime rate plus 5% with the maximum amount raising to 10%, Hale Capital said in the filing.

In addition to Hale, John Zaro’s Bourgeon Capital, Ian P. Murray’s Lanexa Global Management and Gamco Investors, managed by Mario Gabelli, are all bullish on FalconStor.

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