3D SYSTEMS CORP

NOTE 1- BASIS OF PRESENTATION

3D Systems Corporation (“3D Systems” or the “Company” or “we,” “our” or “us”) markets our products and services through subsidiaries in North America and South America (“Americas”), Europe and the Middle East (“EMEA”) and Asia Pacific and Oceania (“APAC”). We provide comprehensive 3D printing and digital manufacturing solutions, including 3D printers for plastics and metals, materials, software, and services, including maintenance, advanced manufacturing and applications engineering. Our solutions support advanced applications intwo key industry verticals: Healthcare Solutions (which includes dental, medical devices, personalized health services and regenerative medicine) and Industrial Solutions (which includes aerospace, defense, transportation and general manufacturing). We have over 35 years of experience and expertise, which have proven vital to our development of an ecosystem and end-to-end digital workflow solutions that enable customers to optimize product designs, transform workflows, bring innovative products to market and drive new business models.

Consolidated Entities

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and all majority-owned and wholly-owned subsidiaries and entities in which a controlling interest is maintained. Intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim reports. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements and should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report on Form 10-K”). The Company believes that the disclosures included in this Form 10-Q are adequate to make the information presented not misleading. In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments, consisting of adjustments of a normal recurring nature, necessary to present fairly the Company's financial position, results of operations, and cash flows for the periods presented. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results may differ from those estimates and assumptions.

Our annual reporting period is the calendar year. The Company's results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of the results to be expected for the full year.

Summary of Significant Accounting Policies

There have been no significant changes to our accounting policies since those disclosed in the Company's 2025 Annual Report on Form 10-K, except as listed below.

Acquired Patents

During the three months ended September 30, 2026, the Company purchased certain patents, patent applications and related rights for a total of $2.3 million. These are recorded within Intangible assets, net on the Condensed Consolidated Balance Sheets. The weighted average amortization period of these acquired patents is 13.6 years.

Asset Impairment Charges

During the three months ended September 30, 2026, the Company determined that certain intangible assets associated with a certain product line within our Industrial Solutions segment were fully impaired. The impairment was triggered by the closure of a certain facility and a reduction in expected future cash flows associated with products produced at the facility. The Company recorded impairment expense of $2.9 million during the quarter; of the total impairment expense, $2.2 million related to acquired technology and $0.7 million related to trade names. The impairment expense is recorded within Asset impairment charges on the Condensed Consolidated Statements of Operations.

CEO Severance

On August 4, 2026, the Company entered into a separation agreement with its President and Chief Executive Officer ("CEO") (the "Agreement"). The CEO will remain in this role until a successor is appointed. Upon termination of employment, the CEO will be entitled to certain severance and other benefits pursuant to the Agreement. In addition, certain equity awards remain eligible to vest following termination, subject to the CEO's continued service as a consultant through the applicable vesting dates. During the three months ended September 30, 2026, the Company recorded $1.8 million of severance expense relating to the Agreement within Selling, general and administrative expense on the Condensed Consolidated Statements of Operations. As of September 30, 2026, the Company recorded an accrued liability of $1.2 million and $0.6 million within Accrued and other liabilities and Other liabilities, respectively, related to the Agreement on the Condensed Consolidated Balance Sheets.

Short-Term Investments

During the three months ended September 30, 2026, the Company invested a portion of its excess cash in short-term investments.

The Company's short-term investment accounting policy is that securities with maturities greater than 90 days at the time of purchase that are available for operations in the next 12 months are classified as short-term investments. The Company’s short-term investments typically have consisted of investment grade bonds, certificates of deposit, commercial paper, and short maturity bond funds, all with a remaining maturity of generally less than twelve months at the date of purchase and classified as available-for-sale. Interest and dividends on these investments are recorded as income when earned.

Available-for-sale securities, which consist of debt securities, are carried at fair value with unrealized gains and losses, net of related tax, reported in accumulated other comprehensive income (loss). Adjustments to the fair value of investments classified as available-for-sale are recorded as an increase or decrease in accumulated other comprehensive income (loss) in stockholders’ equity. Impairment of available-for-sale securities that is attributable to credit losses is recognized as an allowance for credit losses in the Condensed Consolidated Statement of Operations in the period in which a credit loss is identified. The Company periodically evaluates its investments for credit losses.

Equity Offering

During the three months ended June 30, 2026, the Company issued 18.9 million shares of our common stock, par value $0.001 per share, for $53.2 million in cash, net of offering costs.

Finance Leases

As of September 30, 2026 and December 31, 2025, short-term finance lease obligations of $1.8 million and $1.6 million, respectively, are included in Accrued and other liabilities, and long-term finance lease obligations of $8.4 million and $9.5 million, respectively, are included in Other liabilities on our Condensed Consolidated Balance Sheets.

Amortization of Intangible Assets

Amortization expense related to our intangible assets with finite lives was $0.5 million and $1.6 million for the three and nine months ended September 30, 2026, respectively, and $0.5 million and $1.7 million for the three and nine months ended September 30, 2025, respectively.

Redeemable Non-controlling Interest

For the year ended December 31, 2025, the Company held a 93.75% controlling interest in a consolidated foreign subsidiary that was acquired on April 1, 2022. Under the original agreement, the remaining 6.25% non-controlling interest in this foreign subsidiary was subject to redemption at a future date upon either (i) the exercise of a put option by the holder of the underlying shares or a call option by the Company, each of which is subject to the subsidiary achieving certain specified conditions, or (ii) the passage of time subsequent to the date on which this subsidiary was acquired.

In December 2025, the agreement was amended to allow for immediate exercise of the put option for $2.0 million, subject to the completion of three milestones, which will be paid inthree installments in 2026. Upon completion of the first milestone and initial payment of $0.5 million, which occurred in the first quarter of 2026, the remaining shares were assigned to the Company. This resulted in the removal of the Redeemable non-controlling interest during the quarter ended March 31, 2026. During the three months ended September 30, 2026, the Company paid $0.4 million relating to the second milestone. As of September 30, 2026, we maintained a short-term liability for the remaining amount to be paid related to the third milestone totaling $1.1 million in Accrued and other liabilities.

Recently Issued Accounting Standards Not Yet Adopted

In September 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2025-06,"Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software."The ASU revises the accounting and disclosure requirements for internally developed software, including moving website development guidance from Accounting Standards Codification ("ASC") 350-50 to ASC 350-40, eliminating the use of development stages, and introducing new capitalization criteria based on (1) management’s authorization and funding commitment, and (2) the probability of project completion and intended functionality. It also includes guidance for assessing significant development uncertainty. This update is effective for annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the effects of this ASU on our consolidated financial statements.

In November 2024, the FASB issued ASU No. 2024-03,"Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses." The amendments in this ASU require public entities to provide disaggregated disclosure of expenses included within relevant income statement expense captions, as well as additional disclosures about selling expenses. This update is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the effects of this ASU on our consolidated financial statements.

Recently Adopted Accounting Standards

In July 2025, the FASB issued ASU No. 2025-05,"Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets."The ASU introduces a practical expedient that allows entities to assume that current conditions as of the balance sheet date will remain unchanged over the remaining life of eligible accounts receivable and contract assets. Under this expedient, entities are not required to forecast future changes in conditions for these assets; however, they must continue to consider customer-specific information and any known or expected deviations from current conditions. The Company adopted this ASU in the first quarter of 2026. Adoption did not have a material impact on our consolidated financial statements or disclosures.

NOTE 2- REVENUES

Contract Assets

In certain circumstances, contract assets are recorded to include unbilled amounts typically resulting from sales under contracts when revenue recognized exceeds the amount billed to the customers and right to payment is subject to contractual performance obligations rather than subject only to the passage of time. Contract assets were $1.2 million and $1.6 million as of September 30, 2026 and December 31, 2025, respectively, and are included in Prepaid expenses and other current assets on the accompanying Condensed Consolidated Balance Sheets.

Contract Liabilities

Our contract liabilities consist of deferred revenue generally related to maintenance and service contracts, post-sale support and extended warranty sales, where we generally receive up-front payment and recognize revenue over the service or support term. We classify deferred revenue as current or non-current based on the timing of when we expect to recognize revenue. The current portion of deferred revenue is recorded within Customer deposits and deferred revenue on our Condensed Consolidated Balance Sheets. The non-current portion of deferred revenue is recorded within Other liabilities on our Condensed Consolidated Balance Sheets.

Our contract liabilities consisted of the following:

During the three and nine months ended September 30, 2026, the Company recognized $3.8 million and $15.7 million, respectively, of revenue related to the Company's contract liabilities at December 31, 2025. The change in contract liabilities from December 31, 2025 to September 30, 2026 was primarily due to the timing of cash receipts and sales of extended service contracts.

Collaborative Arrangements

The Company enters into collaborative arrangements with customers that provide for cost reimbursement of certain expenses and potential milestone payments.

The Company recognized $0.9 million and $2.8 million in product revenue and $0.9 million and $3.0 million in product cost of sales related to collaborative arrangements during the three and nine months ended September 30, 2026, respectively.

For the three and nine months ended September 30, 2025, the Company recognized $0.8 million and $7.2 million in product revenue and $2.3 million and $6.1 million in product cost of sales, respectively, related to collaborative arrangements.

Remaining Performance Obligations

Remaining performance obligations represent the transaction price allocated to performance obligations that are unsatisfied as of the end of the period. As of September 30, 2026, the Company had $6.4 million of remaining performance obligations, primarily related to maintenance and service contracts, post-sale support and extended warranties. We expect approximately 92% to be recognized as revenue within the nexttwo years, and the remaining thereafter. We have excluded performance obligations with an original expected duration of one year or less.

Revenue Concentration

Revenue, disaggregated by the geographic region in which a sale originated, was as follows:

For the three and nine months ended September 30, 2026, two customers within our Healthcare Solutions segment accounted for 14.5% and 14.2% and 10.7% and 11.1% of our consolidated revenue, respectively. For the three and nine months ended September 30, 2025, one customer within our Healthcare Solutions segment accounted for 11.2% and 10.9% of our consolidated revenue, respectively. We expect to maintain our relationships with these customers.

NOTE 3- INVENTORIES, NET

Components of inventories, net at September 30, 2026 and December 31, 2025 are summarized as follows:

The inventory reserve was $27.6 million and $26.5 million as of September 30, 2026 and December 31, 2025, respectively.

NOTE 4- DIVESTITURES

In September 2025, the Company entered into a definitive agreement for the sale of its 3DXpert and Oqton businesses, which were included in our Industrial Solutions segment, to Hubb Global Holdings, LLC. On October 31, 2025, the Company completed the sale of the 3DXpert and Oqton businesses for $3.3 million in cash, which reflected applicable purchase price adjustments, plus a revenue-based royalty receivable which had a present value of $7.4 million and $7.1 million, respectively, as of September 30, 2026 and December 31, 2025 and is recorded in Other assets on our Condensed Consolidated Balance Sheets.

In December 2024, the Company entered into a definitive agreement with Hexagon AB for the sale of its Geomagic software business ("Geomagic"), which was included in our Industrial Solutions segment. On April 1, 2025, the Company completed the sale of Geomagic and received $119.4 million in cash, which reflected applicable purchase price adjustments under the Asset Purchase Agreement and Business Transfer Agreement. The Company recorded a pre-tax gain of $125.7 million from the sale of Geomagic in the nine months ended September 30, 2025.

No loss was recognized to measure the disposal group at the lower of its carrying value or fair value less costs to sell. The disposal group was not presented as a discontinued operation in the accompanying condensed consolidated financial statements because the sale of 3DXpert, Oqton, and Geomagic did not represent a strategic shift that would have a major effect on the Company’s operations.

NOTE 5- INVESTMENTS AND NOTE RECEIVABLE

The Company holds various equity investments, which are recorded in Other assets on our Condensed Consolidated Balance Sheets. The following table summarizes our investment balances:

National Additive Manufacturing Innovation ("NAMI") Joint Venture

As of December 31, 2025, the Company owned 49% of NAMI’s common stock. In February 2026, the investee issued additional shares to another equity investor, which diluted our ownership share to 34.3% of the joint venture's common stock. The Company recognized a gain on the investee’s share issuance of $2.6 million, reported in Other income, net for the nine months ended September 30, 2026. The gain related to the difference between our share of the proceeds from the additional investment and the impact of the dilution on the carrying value of our investment.

In December 2024, the Company entered into a short-term, non-interest bearing loan agreement with NAMI whereby NAMI borrowed $2.0 million to finance its working capital and capital expenditures requirements. The loan originally matured on June 30, 2025. During the three months ended September 30, 2025, the parties amended the loan agreement to extend the maturity date to June 30, 2026, and increase the total related party note receivable to $4.4 million. NAMI did not repay the note receivable as of June 30, 2026 and the note was amended to extend the due date to December 31, 2026. The carrying value of the related party note receivable is $4.4 million as of September 30, 2026 and is recorded within Prepaid expenses and other current assets on our Condensed Consolidated Balance Sheets.

Additionally, during the three and nine months ended September 30, 2026 and 2025, the Company entered into related party transactions with NAMI in the ordinary course of business. During the three and nine months ended September 30, 2026, the Company recorded sales to NAMI of $0.1 million and $0.7 million, respectively. As of September 30, 2026, the outstanding related party receivable balances attributable to our sales with NAMI was $0.3 million. Related party transactions with NAMI, including purchases and sales, and related payable or receivable balances werenot material during the three and nine months ended September 30, 2025.

Enhatch Inc.

During the three and nine months ended September 30, 2026 and 2025, the Company entered into related party transactions with Enhatch Inc. ("Enhatch") in the ordinary course of business. During the three and nine months ended September 30, 2026, the Company made purchases from Enhatch of $0.3 million and $1.2 million, respectively. As of September 30, 2026, the outstanding related party payable balance attributable to our purchases from Enhatch wasnot material. Related party transactions with Enhatch, including purchases and sales, and related payable or receivable balances werenot material during the three and nine months ended September 30, 2025.

Other Assets

In February 2025, the Company provided financing of $1.0 million to Hull Legacy Media Corporation, a production company co-owned by Charles W. Hull, EVP, Chief Technology Officer for the Company's Regenerative Medicine business and a related party of the Company. The financing is recorded in Other assets on our Condensed Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025.

During the three months ended September 30, 2026, the Company invested in certain long-term variable rate corporate bonds maturing in 2028. The carrying value of these investments is $1.6 million as of September 30, 2026. These investments are reported in Other assets on our Condensed Consolidated Balance Sheets as of September 30, 2026.

Variable Interest Entities ("VIEs")

The Company concluded that three of its investments are VIEs. These investments are not consolidated as we concluded that the Company is not the primary beneficiary. As of September 30, 2026, our maximum exposure to losses associated with the VIEs is limited to the $20.1 million carrying value of our investments in the VIEs, $4.4 million of which is included in Prepaid expenses and other current assets, with the remaining in Other assets on our Condensed Consolidated Balance Sheets.

NOTE 6- BORROWINGS

The Company had the following debt outstanding as of:

The Company's long-term debt requires that the Company maintain certain financial covenants, including minimum qualified cash, accounts receivable and inventory balances, among others, and the Company was in compliance with all covenants as of September 30, 2026.

Convertible Senior Notes

Convertible senior secured notes due 2030 (the "2030 Notes")

The 2030 Notes are senior secured obligations, guaranteed by certain U.S. subsidiaries of the Company, and bear interest semiannually at a rate of 5.875%, payable on June 15 and December 15 of each year, beginning December 15, 2025. The 2030 Notes have an annual effective interest rate of 8.6%, reflecting original issue discounts, commissions, and offering expenses.

Convertible senior notes due 2026 (the "2026 Notes")

The 2026 Notes are scheduled to mature on November 15, 2026, unless earlier redeemed, repurchased, or converted in accordance with their terms.

The Company incurred debt issuance cost amortization of $0.6 million and $1.6 million and $0.3 million and $1.0 million for the three and nine months ended September 30, 2026 and 2025, respectively.

NOTE 7- STOCK-BASED COMPENSATION

2015 Incentive Plan

The Company is authorized to grant shares of restricted stock, restricted stock units (“RSUs”), stock appreciation rights, cash incentive awards and options to purchase shares of common stock to employees and non-employee directors pursuant to its 2015 Incentive Plan (the “2015 Plan”). The 2015 Plan also designates measures that may be used for performance awards and market-based awards.

During the nine months ended September 30, 2026 the Company granted 1.1 million performance-based RSUs ("PSUs") to employees with a weighted-average grant date fair value of $0.52 per share. The PSUs are subject tothree-year cliff vesting. Vesting is contingent upon continued service and market conditions that are met based on annual stock price growth goals.

During the nine months ended September 30, 2026, the Company granted 2.0 million shares of restricted stock to employees with a weighted-average grant date fair value of $2.62 per share. The restricted stock awards generally vest ratably over 3 years.

Stock-Based Compensation Activity and Expense

The following table shows the stock-based compensation expense recognized:

During the nine months ended September 30, 2025, the Company recognized a reversal of $6.6 million in previously recognized compensation expense, primarily due to the termination of annual incentive compensation.

As of September 30, 2026, there was $8.8 million of unrecognized stock-based compensation expense related to all unvested share-based payment awards that the Company expects to recognize over a weighted-average period of 2 years.

NOTE 8- INCOME TAXES

We maintain the exception under ASC 740-270-30-36(b), “Accounting for Income Taxes,” for jurisdictions that do not have reliable estimates of ordinary income. Accordingly, we have used a year-to-date methodology in determining the effective tax rate for the three and nine months ended September 30, 2026 and 2025.

For the three and nine months ended September 30, 2026, the Company's effective tax rate was (2.9)% and (6.0)%, respectively. For the three and nine months ended September 30, 2025, the Company's effective tax rate was 13.6% and 14.6%, respectively. The differences between the U.S. statutory tax rate and the effective tax rates for the three and nine months ended September 30, 2026 and 2025 were primarily driven by the recognition of a full deferred tax asset valuation allowance in various jurisdictions in both years.

NOTE 9 - NET (LOSS) INCOME PER SHARE

Basic net (loss) income per common share is calculated by dividing net (loss) income attributable to 3D Systems’ common stock by the weighted average number of shares of common stock outstanding during the applicable period. Diluted net (loss) income per common share incorporates the additional shares issuable upon the assumed exercise of stock options, the vesting of restricted stock and RSUs, and the assumed conversion of debt, except in such case when (1) the inclusion of such shares or potential shares would be anti-dilutive or (2) when the vesting of restricted stock or RSUs is contingent upon one or more performance conditions that have not been met as of the balance sheet date.

The following table presents the potentially dilutive shares that were excluded from the computation of diluted net loss per share attributable to common stockholders because their effect was considered anti-dilutive for the three and nine months ended September 30, 2026 and 2025.

Diluted income per common share was computed using the treasury stock method for restricted shares and RSUs and the if-converted method for convertible debt.

The 2026 and 2030 Notes’ impact to diluted shares is calculated using the if-converted method as prescribed in ASU No. 2020-06. The 2026 and 2030 Notes will increase the diluted share count when the average share price over a quarterly or annual reporting period is greater than $35.92 and $2.24, respectively, per share, the conversion price of the 2026 and 2030 Notes. For the three and nine months ending September 30, 2026, the 2026 Notes were anti-dilutive on a stand-alone basis because the average share price during this period did not exceed the conversion price. For the three and nine months ending September 30, 2026, the 2026 and 2030 Notes were anti-dilutive because we reported a net loss for each of the respective periods.

For the three months ending September 30, 2025, the 2026 and 2030 Notes were anti-dilutive because we reported a net loss for the period. For the nine months ending September 30, 2025, the 2026 Notes were anti-dilutive on a stand-alone basis because the average share price during this period did not exceed the conversion price.

NOTE 10- ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

The changes in the balances of accumulated other comprehensive (loss) income, net of tax, by component are as follows:

NOTE 11- SEGMENT INFORMATION

Our chief operating decision maker ("CODM"), who is our President and Chief Executive Officer, is responsible for reviewing segment performance and making decisions regarding resource allocation. Our CODM regularly reviews the results of our business throughtwo reportable segments: Healthcare Solutions and Industrial Solutions, which are based on the industry verticals they serve. For Healthcare Solutions, those industry verticals include dental, medical devices, personalized health services and regenerative medicine. For Industrial Solutions, those industry verticals include aerospace, defense, transportation and general manufacturing.

The CODM evaluates each segment’s performance based on gross profit, which is also utilized in the annual budgeting and forecasting processes, as well as in quarterly reviews of budget-to-actual results and period-over-period variances. Internal segment reporting and discussions of results with our CODM are based on segment gross profit.

The CODM does not review disaggregated asset information on the basis of the Company's segments; therefore, such information is not presented.

Revenue, cost of sales and gross profit for each of our reportable segments were as follows:

Depreciation and amortization included in the measurement of gross profit by segment were as follows:

NOTE 12- COMMITMENTS AND CONTINGENCIES

The Company has certain purchase commitments under agreements with remaining terms in excess of one year primarily related to printer assemblies, inventory, capital expenditures, and software licenses. As of September 30, 2026, such purchase commitments totaled$20.1 million, with$9.6 million of the purchase obligations expected to be due within the next twelve months.

Indemnification

In the normal course of business, we periodically enter into agreements to indemnify customers or suppliers against claims of intellectual property infringement made by third parties arising from the use of our products. Historically, costs related to these indemnification provisions have not been significant, and we are unable to estimate the maximum potential impact of these indemnification provisions on our future results of operations.

To the extent permitted under Delaware law, we indemnify our directors and officers for certain events or occurrences while the director or officer is, or was, serving at our request in such capacity, subject to limited exceptions. The maximum potential amount of future payments we could be required to make under these indemnification obligations is unlimited; however, we have directors and officers insurance coverage that may enable us to recover future amounts paid, subject to a deductible and the policy limits. There is no assurance that the policy limits will be sufficient to cover all damages, if any.

Other Commitments

Letter of Credit

On June 2, 2023, we issued $1.2 million of guarantees in the form of a standby letter of credit as security for a long-term real estate lease. The letter of credit had a maturity date of June 2026 and included automaticone-year extensions, which are not to continue beyond July 1, 2033. As of March 31, 2026, the letter of credit was reduced to $0.4 million. Effective June 11, 2026, the letter of credit was cancelled.

Litigation

For a description of certain lawsuits, claims, and proceedings, refer to Note 20 “Commitments and Contingencies” in our 2025 Annual Report on Form 10-K. During the nine months ended September 30, 2026, there were no material changes or developments to the litigation, claims, and proceedings described within our 2025 Annual Report on Form 10-K, except as listed below.

SEC Investigation

On April 15, 2022, the Company was informed that the SEC was conducting a formal investigation of the Company related to, among other things, allegations brought in a securities class action lawsuit against the Company in 2021 that settled in 2024, and the Company received subpoenas from the SEC for the production of documents and information related to its investigation as a follow on to a previous voluntary request for documents. The Company received its most recent subpoena from the SEC on August 20, 2024. The Company substantially completed its production in response to the subpoena on or about the deadline of October 4, 2024. The SEC took testimony from the Company’s former Chief Accounting Officer in January 2025, and from the Company’s former Chief Financial Officer in late March 2025. The Company intends to continue to cooperate with the SEC.

The Company and the SEC Staff are in ongoing discussions to resolve the investigation. We anticipate any penalty will not be material to the Company, and the Company fully accrued for the anticipated penalty.

Intrepid Automation

On May 19, 2021, 3D Systems, Inc., a subsidiary of the Company, initiated a lawsuit in the Superior Court of the State of California for the County of San Diego against five former employees and Intrepid Automation, Inc. ("Intrepid") (collectively, the "Intrepid Parties") alleging theft of trade secrets, unfair competition, breach of contract, and related claims ("2021 Lawsuit"). In June 2021, this lawsuit was removed to the United States District Court for the Southern District of California. In September 2022, the Intrepid Parties filed counterclaims against 3D Systems, Inc. In September 2022, the Company filed a motion to dismiss these counterclaims; this motion was granted in part in May 2023. The Intrepid Parties filed amended counterclaims in May 2023 alleging theft of trade secrets, fraudulent inducement, breach of contract, unfair competition, and related claims; this amended complaint sought damages in excess of $20 million as well as injunctive relief. These counterclaims were partially dismissed in March 2024 in response to a second motion to dismiss filed by the Company. The parties filed motions for summary judgment in April and May 2024. In March 2025, the Court granted the Intrepid Parties’ motion, dismissing the Company’s claims against the Intrepid Parties, but denied the Company’s motion for summary judgment with respect to the counterclaims brought by the Intrepid Parties in the 2021 Lawsuit. The trial on Intrepid’s counterclaims began on July 27, 2026.

The jury trial on Intrepid's remaining counterclaims concluded on August 6, 2026. The jury returned a verdict finding 3D Systems, Inc. liable for approximately $5.7 million in compensatory damages and $6.0 million in exemplary damages, as well as prejudgment interest on certain damages. The Court has not entered judgment and has directed the parties to submit post-trial briefings regarding damages and other post-trial issues before judgment is entered. The Company intends to seek appropriate post-trial relief and, if necessary, appellate review. The ultimate amount of any judgment remains subject to the Court's resolution of the pending post-trial matters. The Company expects to incur interest of approximately $0.7 million on past lost profits, assuming payment withinone year. An accrual of $12.5 million is recorded within Accrued and other liabilities on our Condensed Consolidated Balance Sheets as of September 30, 2026 relating to this matter. The related expense is recorded within Selling, general and administrative expenses on our Condensed Consolidated Statements of Operations.

On December 4, 2024, Intrepid filed a lawsuit in the United States District Court for the Southern District of California against 3D Systems Corporation and 3D Systems, Inc. alleging infringement of U.S. patents 11,014,301 and 11,338,511 ("2024 Lawsuit"); this complaint seeks unspecified damages and injunctive relief. In July 2025, the Company filed inter partes review ("IPR") petitions against the asserted patents, and on December 11, 2025, the U.S. Patent and Trademark Office granted review of the IPR petitions. On December 18, 2025, the Court granted a stay of the 2024 Lawsuit pending a final decision on the IPR petitions. The Company intends to defend itself vigorously against the 2024 Lawsuit.

Securities Class Action

The Company and certain of its executive officers were named as defendants in a putative securities class action filed on June 13, 2025 in the U.S. District Court for the District of Delaware. The action is styled Marcel F.M. Herbermann v. 3D Systems Corporation, et al., No. 1:25-cv-00734-GBW (D. Del.) (the "Securities Class Action"). The complaint in the Securities Class Action alleges defendants violated the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and SEC Rule 10b-5 promulgated thereunder by making false and misleading statements and omissions, and that the executive officers named as defendants are control persons under Section 20(a) of the Exchange Act. It was filed on behalf of stockholders who purchased the Company’s common stock from August 13, 2024 and May 12, 2025, and seeks monetary damages on behalf of the purported class.

On August 24, 2026, the Court denied a motion for reconsideration of its prior order denying the appointment of a lead plaintiff. Later that day, the plaintiff voluntarily dismissed this litigation.

Contingencies

Warranty

Changes in accrued product warranty liability balance are summarized as follows:

NOTE 13- FAIR VALUE MEASUREMENTS

Fair value is the exchange price to sell an asset or transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. Fair value measurements use market data or assumptions market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs may be readily observable, corroborated by market data, or generally unobservable. Valuation techniques maximize the use of observable inputs and minimize use of unobservable inputs. The accounting guidance for fair value measurements and disclosures establishes a three-level fair value hierarchy:

•Level 1 - Inputs are based on quoted prices in active markets for identical assets and liabilities.

•Level 2 - Inputs are based on observable inputs other than quoted prices in active markets for identical or similar assets and liabilities.

•Level 3 - One or more inputs are unobservable and significant.

Financial and nonfinancial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Recurring Fair Value Measurements

The following table summarizes financial assets and financial liabilities that are measured and recorded in the condensed consolidated financial statements at fair value on a recurring basis:

There were $28.7 million in transfers of assets from Level 1 to Level 2 of the fair value measurement hierarchy due to purchases of short-term and long-term investments during the three and nine months ended September 30, 2026. There were no transfers of assets and liabilities between Level 1, Level 2 and Level 3 of the fair value measurement hierarchy during the year ended December 31, 2025.

Cash equivalents, including money market funds, are valued utilizing the market approach for measuring the fair value of financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value as of September 30, 2026 and December 31, 2025 because of the relatively short duration of these instruments.

Fair Value of Financial Instruments

The following table summarizes the carrying amount and fair value of our financial instruments:

The estimated fair values of the 2026 Notes and the 2030 Notes were determined using quoted market prices in a market with limited activity and are therefore classified as Level 2 in the fair value hierarchy.

NOTE 14- RESTRUCTURING AND EXIT ACTIVITIES COSTS

The Company incurs restructuring charges in connection with strategic initiatives and cost-reduction efforts aimed at optimizing business operations. A description of significant restructuring plans and other restructuring charges is provided below.

2025 Restructuring Plan

In 2025, in response to continuing macroeconomic challenges impacting the Company’s financial performance, the Company implemented a series of cost savings and restructuring initiatives (the "2025 Restructuring Plan") as part of its ongoing multi-faceted transformation strategy.

Restructuring and other related charges under the 2025 Restructuring Plan were primarily cash charges related to severance, termination and other benefits incurred as a result of headcount reductions, which were generally recognized when probable and estimable consistent with the Company’s past practices or statutory law. The Company does not expect to incur significant additional restructuring charges in 2026 related to the 2025 Restructuring Plan.

These charges are reflected in the following captions in the accompanying Condensed Consolidated Statements of Operations as follows:

Restructuring and other related charges recorded in cost of sales by reportable segment for the three and nine months ended September 30, 2026 and September 30, 2025, respectively, were as follows:

The activity in the restructuring accrual related to the 2025 Restructuring Plan was as follows: