3D Systems Corporation

Item 1A. Risk Factors

In addition to the risk factors set forth below and the other information set forth in this Form 10-Q, you should carefully consider the factors discussed under Part I, Item 1A, Risk Factors in our 2023 Form 10-K and under Part II, Item 1A, "Risk Factors" in our Form 10-Q for the quarterly period ended June 30, 2024 ("Q2 2024 Form 10-Q"). These factors could materially adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by the forward-looking statements contained in this Form 10-Q. Except as disclosed below, there have been no material changes to the risk factors described in Part I, Item 1A, Risk Factors, included in of our 2023 Form 10-K.

We may not have sufficient cash or the ability to raise the funds necessary to settle conversions of the 0% Convertible Senior Notes due 2026 (the "Notes") and in Part II, Item 1A, "Risk Factors" in our Q2 2024 Form 10-Q.

Changes in cash, repay the Notes at maturity, or repurchabusiness conditions may cause the Notes as required following a fundamental change.

As of June 30, 2024, we had approximately $214.4 million of outstanding Notes. Our ability to serviceour goodwill, intangible assets, long-lived tangible assets, and/or refinance the Notes, or make cash paymenight-of-use assets in connection with any conversions of the Notes, depends on our future performance, whichto become impaired.

Goodwill is subject to economic, financial, competitive, and other factors beyond our control. Our business may not generate cash flow from operationan impairment test on an annual basis and when circumstances in the future sufficient to servicedicate the Notes. If we are unable to generate such cash flow, we may be required to adopt one or more alternatat an impairment is more likely than not. Long-lives, including selling d assets, refinanci consisting the Notes, or obtaining additional debt financing or equity capital on terms that may be onerous of tangible assets, intangible assets, and right-of-use assets are assessed for highly dilutive. Our recoverability to refinance the Notes will depend on the capital markets and our financial conditionand tested for impairment at such time. We may not be able to engage in any of these activities or engage in these activitithe asset group level, and testing is required when circumstances on desirablindicate terms, which could result in a default on our debt obligations. In addition, any of our future debt agreements may containhat the carrying value of an asset group is not restrictive ccovenants that may prohibit us from adopting any of these alternatives.

The Companys failure to file the 2023 Form 10-K and provide itrable. Circumstances that may require goodwill to the Trustee by April 1, 2024 represenbe tested a default under the terms of the indmore frequenture governing the Notes (tly than the "Indenture"). In addition, the Coannual impanys failure to file our Form 10-Q for the three months ended March 31, 2024 and provide it to the Trustee within 15 days of the filing deadline (after giving effect to any grace period provided by Rule 12b-25 under the Exchange Act) represented an incremental default under the terms of the Indenture. The Company filed its 2023 Form 10-K and provided a copy of this filing to the Trustee on August 13, 2024, curing the first default referenced above. The Company filed its Form 10-Q for the three months ended March 31, 2024 and provided a copy of this filiirment test, or indicate that a long-lived asset group is not recoverable, include a significant adverse change in the business climate, current-period operating to the Trustee on August 20, 2024, curing the incremental default referenced above. Although the Company curor cash flow losses combined these defaults and did not incur any special interest as a result of these defaultwith a history of operating or cash flow losses, our failure to comply with theseprojections or other covenanforecasts of the Indenture in the future could result in an event of default which, if not cured or waived, could result ithat demonstrate continuing losses, or a decision the accelerationo dispose of our debt or cause us to incur special interest payments. Fa business or further information regarding the non-compliance with the terms of the Indenture, refer to Note 9 to the Financial Statements.

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Inproduct line. We face some uncertainty the event the conditional conversion feature of the Notes is triggered, holders of Notes will be entitled to convert the Notes at any time during specified periods at their option. If one or more holders elect to convert their Notein our business environment due to a variety of challenges, we would be required to settle any converted principal through the payment of cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their Notes, we could be required under applicable accounting rules toincluding changes in customer demand and a recent decline in our market capitalization as a reclassify all orsult of a portiodecrease in of the outstandingur stock principal of the Notes as a current rather thce. While we recorded an long-term liability, which would result in a materialimpairment charges of $143.7 million reduction of our net working capital.

In addition, holders of the Notes have the lated to goodwill, intangible assets, tangible assets, and right to require us to repurchase all or a portion of -of-use assets during their Notes upon the occurrence of a Fundamental Change (as def three and nined in the I months endenture) at a repurchase price equal to 100% of the principal amount of the Notes to be repurchased. If the Notes have not previously been converted or repurchased, we will be required to repay such Notd September 30, 2024, we may experience additional unforeseen circumstances in cash that maturity.

Our ability to make required cash payments in connection with conversionsadversely affect the value of the Notes, repurchaseour the Notes in the event of a Fundamental Change, or to repay or refinancese assets and trigger an evaluation of the Notes at maturity will depend on market conditions and our fuir carrying amounts. Future performance, which is subject to economic, financial, competitive, and other factors beyond our control. As a result, we may not have enough available cash or be able to obtain financing at the time we are required to repurchase or repay the Notes or pay cash with respect to Notes being convertedimpairments of goodwill, intangible assets, long-lived tangible assets, and/or right-of-use assets could materially adversely affect our results of operations and financial condition.

As a result of the delayed filing of our 2023 Form 10-K, our Form 10-Q for the quarter ended March 31, 2024, and our Form 10-Q for the quarter ended June 30, 2024, and this Form 10-Q, the Company has experienced risks and costs and expects to experience additional risks and costs in the future, including with respect to the SEC's ongoing investigation.

As a result of the circumstances giving rise to the delayed filing of our 2023 Form 10-K, our Form 10-Q for the quarter ended March 31, 2024, and our Form 10-Q for the quarter ended June 30, 2024, and this Form 10-Q, the Company experienced risks and costs and expects to experience additional risks and costs in the future. The audit of the financial statements included in our 2023 Form 10-K was time-consuming, required the Company to incur additional incremental expenses and affected managements attention and resources. Further, the measures to strengthen internal controls being implemented continued to require and will likely require in the future greater management time and Company resources to implement and monitor. Although we have now filed our 2023 Form 10-K, our Form 10-Q for the quarter ended March 31, 2024, and our Form 10-Q for the quarter ended June 30, 2024, and this Form 10-Q, our failure to make these filings in a timely manner has led to further investigation and scrutiny by the SEC, which has been conducting a formal investigation of the Company since April 2022 as a follow on to the previously disclosed SEC voluntary request for documents. Although the Company is currently cooperating with the SEC, the Company cannot predict the ultimate outcome of the SECs investigation. Any allegations or adverse findings by the SEC could harm our reputation, negatively impact our stock price and have a material adverse effect on our business, financial condition and results of operations. Moreover, the expense and distraction to management of cooperating with and responding to the SEC could have a material adverse effect on the Company even if the investigation is ultimately closed or resolved in a manner favorable to the Company. See also the risk factor below entitled We are no longer eligible to use a Form S-3 registration statement, which could impair our capital-raising activities.

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We are no longer eligible to use a Form S-3 registration statement, which could impair our capital-raising activities.

As a result of our failure to timely file our 2023 Form 10-K, our Form 10-Q for the quarter ended March 31, 2024, and our Form 10-Q for the quarter ended June 30, 2024, and this Form 10-Q with the SEC, we are no longer eligible to use a Form S-3 registration statement. Further, as a result of the late 2023 Form 10-K filing, the late Form 10-Q filing for the quarter ended March 31, 2024 and , the late Form 10-Q for the quarter ended June 30, 2024, and this late Form 10-Q filing, we are also no longer a well-known seasoned issuer, as such term is used in the SECs regulations, which otherwise would allow us to, among other things, file automatically effective Form S-3 registration statements. Our eligibility to use a Form S-3 registration statement may not be restored until SeptDecember 1, 2025, and then only if we have not had any other filing delinquency that would preclude Form S-3 eligibility and satisfy all other requirements for Form S-3 eligibility. During any period when we are not eligible to use Form S-3 or qualify as a well known seasoned issuer, our capital-raising ability may be impaired. Under these circumstances, we would be required to conduct the offering on an exempt basis, such as in accordance with Rule 144A, or file a registration statement on Form S-1. Using a Form S-1 registration statement for a public offering would likely take significantly longer than using a registration statement on Form S-3 and increase our transaction costs, and could, to the extent we are not able to conduct offerings using alternative methods, adversely impact our ability to raise capital or complete acquisitions of other companies in a timely manner.

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