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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~November 9, 2017, 16,158,619~~August 7, 2019, 16,414,411 shares of common stock, par value $0.01, were outstanding.

Since our initial public offering, we have continued to qualify as an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An EGC may take advantage of specified reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies.

We may choose to take advantage of some, but not all, of these reduced burdens. We will continue to operate under these provisions until December 31, 2018, or such earlier time that we are no longer an EGC. We would cease to be an EGC if we have more than $1.07 billion in annual revenues, qualify as a “large accelerated filer” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which requires us to have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period.

Condensed Statement of Consolidated Operations and Comprehensive Loss (Unaudited)

	Quarter Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30,						September 30,						June 30,						June 30,
	2017			2016			2017			2016			2019			2018			2019			2018
Revenue	$	15,887		$	12,988		$	37,555		$	33,157		$	15,279		$	10,857		$	24,858		$	22,750
Cost of sales		11,790			9,428			29,829			24,215			10,137			9,267			17,074			18,544
Gross profit		4,097			3,560			7,726			8,942			5,142			1,590			7,784			4,206
Operating expenses
Research and development		2,871			1,898			7,219			5,737			2,537			3,235			4,969			6,030
Selling, general and administrative		6,062			5,234			18,338			15,222			6,167			6,353			11,590			12,555
		8,933			7,132			25,557			20,959			8,704			9,588			16,559			18,585
Loss from operations		(4,836	)		(3,572	)		(17,831	)		(12,017	)		(3,562	)		(7,998	)		(8,775	)		(14,379	)
Other expense (income)
Interest expense		24			22			69			276			71			73			142			106
Other (income) expense ̶ net		(11	)		(8	)		134			(306	)
Other expense (income) ̶ net														57			(52	)		69			(98	)
		13			14			203			(30	)		128			21			211			8
Loss before income taxes		(4,849	)		(3,586	)		(18,034	)		(11,987	)		(3,690	)		(8,019	)		(8,986	)		(14,387	)
Provision for income taxes		14			25			23			43
Provision (benefit) for income taxes														99			18			(701	)		35
Net loss	$	(4,863	)	$	(3,611	)	$	(18,057	)	$	(12,030	)	$	(3,789	)	$	(8,037	)	$	(8,285	)	$	(14,422	)
Net loss per common share:
Basic	$	(0.30	)	$	(0.23	)	$	(1.13	)	$	(0.76	)	$	(0.23	)	$	(0.50	)	$	(0.51	)	$	(0.89	)
Diluted	$	(0.30	)	$	(0.23	)	$	(1.13	)	$	(0.76	)	$	(0.23	)	$	(0.50	)	$	(0.51	)	$	(0.89	)
Comprehensive loss:
Net loss	$	(4,863	)	$	(3,611	)	$	(18,057	)	$	(12,030	)	$	(3,789	)	$	(8,037	)	$	(8,285	)	$	(14,422	)
Other comprehensive income:
Other comprehensive income (loss):
Foreign currency translation adjustments		1,194			489			4,713			2,288			583			(2,240	)		(193	)		(838	)
Comprehensive loss	$	(3,669	)	$	(3,122	)	$	(13,344	)	$	(9,742	)	$	(3,206	)	$	(10,277	)	$	(8,478	)	$	(15,260	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

	September 30,			December 31,			June 30,			December 31,
	2017			2016			2019			2018
Assets
Current assets:
Cash and cash equivalents	$	17,706		$	27,825		$	5,462		$	7,592
Restricted cash		1,098			330			1,790			1,548
Accounts receivable ̶ net of allowance of $1,494 (2017) and $1,566 (2016)		6,539			6,447
Accounts receivable ̶ net								4,667			6,393
Current portion of net investment in sales-type leases								293			302
Inventories ̶ net		16,643			15,838			16,183			15,930
Prepaid expenses and other current assets		2,293			1,159			2,736			2,438
Total current assets		44,279			51,599			31,131			34,203
Property and equipment ̶ net		49,489			51,134			40,879			41,906
Intangible assets ̶ net		152			668
Net investment in sales-type leases ̶ net of current portion								1,204			1,351
Other noncurrent assets		781			777			484			222
Total assets	$	94,701		$	104,178		$	73,698		$	77,682
Liabilities
Current liabilities:
Current portion of long-term debt	$	135		$	132		$	149		$	144
Current portion of capital leases		25			72
Accounts payable		4,311			2,036			5,339			4,376
Accrued expenses and other current liabilities		5,033			5,124			4,525			6,049
Deferred revenue and customer prepayments		7,533			7,371
Current portion of contract liabilities								6,204			2,343
Total current liabilities		17,037			14,735			16,217			12,912
Long-term debt ̶ net of current portion		1,543			1,644			1,288			1,364
Capital leases ̶ net of current portion		41			10
Contract liabilities ̶ net of current portion								341			527
Other noncurrent liabilities		9			9			280			104
Total liabilities		18,630			16,398			18,126			14,907
Contingencies and commitments
Stockholders' equity
Common stock, $0.01 par value, 200,000,000 shares authorized, 16,092,114 (2017) and 16,017,115 (2016) shares issued and outstanding		161			160
Common stock, $0.01 par value, 200,000,000 shares authorized, 16,318,147 (2019) and 16,234,201 (2018) shares issued and outstanding								163			162
Additional paid-in capital		173,158			171,116			176,488			175,214
Accumulated deficit		(87,226	)		(68,761	)		(110,138	)		(101,853	)
Accumulated other comprehensive loss		(10,022	)		(14,735	)		(10,941	)		(10,748	)
Total stockholders' equity		76,071			87,780			55,572			62,775
Total liabilities and stockholders' equity	$	94,701		$	104,178		$	73,698		$	77,682

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

	Nine Months Ended						Six Months Ended
	September 30,						June 30,
	2017			2016			2019			2018
Operating activities
Net loss	$	(18,057	)	$	(12,030	)	$	(8,285	)	$	(14,422	)
Adjustments to reconcile net loss to net cash used for operations:
Depreciation and amortization		4,966			4,280			2,349			2,829
Equity-based compensation		2,043			1,104			1,081			374
Amortization of debt issuance costs		4			209			47			27
Deferred income taxes		—			(29	)
Recoveries for bad debts ̶ net		(51	)		(256	)		(150	)		(37	)
Provision (recoveries) for slow-moving, obsolete and lower of cost or market inventories ̶ net		1,872			(356	)
(Gain) loss from disposal of property and equipment ̶ net		(322	)		163
(Recoveries) provision for slow-moving, obsolete and lower of cost or net realizable value inventories ̶ net								(27	)		771
Gain from disposal of property and equipment ̶ net								(2	)		(41	)
Changes in assets and liabilities, excluding effects of foreign currency translation adjustments:
Decrease in accounts receivable		288			4,681			1,879			3,661
(Increase) decrease in inventories		(2,772	)		399
(Increase) decrease in prepaid expenses and other assets		(1,438	)		795
Increase (decrease) in accounts payable		2,032			(1,296	)
Decrease in accrued expenses and other liabilities		(522	)		(1,259	)
(Decrease) increase in deferred revenue and customer prepayments		(938	)		1,687
Decrease in net investment in sales-type leases								153			102
Increase in inventories								(1,167	)		(7,060	)
Increase in prepaid expenses and other assets								(221	)		(658	)
Increase in accounts payable								927			445
(Decrease) increase in accrued expenses and other liabilities								(1,689	)		730
Increase in contract liabilities								3,608			5,406
Net cash used for operating activities		(12,895	)		(1,908	)		(1,497	)		(7,873	)
Investing activities
Capital expenditures		(874	)		(690	)		(423	)		(819	)
Proceeds from sale of property and equipment		3,702			52			3			25
Net cash provided by (used for) investing activities		2,828			(638	)
Net cash used for investing activities								(420	)		(794	)
Financing activities
Net proceeds from issuance of common stock ̶ registered direct offering to a related party		—			12,447
Net proceeds from issuance of common stock ̶ at the market offerings		—			595
Payments on long-term debt		(102	)		(102	)		(74	)		(70	)
Payments on capital leases		(64	)		(61	)
Net cash (used for) provided by financing activities		(166	)		12,879
Proceeds from exercise of employee stock options								171			—
Taxes related to the net share settlement of equity-based awards								(68	)		—
Debt issuance costs								—			(188	)
Other								(7	)		(9	)
Net cash provided by (used for) financing activities								22			(267	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		882			138			7			(197	)
Net change in cash, cash equivalents, and restricted cash		(9,351	)		10,471			(1,888	)		(9,131	)
Cash, cash equivalents, and restricted cash at beginning of period		28,155			19,672			9,140			22,178
Cash, cash equivalents, and restricted cash at end of period	$	18,804		$	30,143		$	7,252		$	13,047

Supplemental disclosure of noncash investing and financing activities
Transfer of internally developed 3D printing machines from inventories to property and equipment for internal use or leasing activities	$	2,363		$	2,666		$	1,066		$	895
Transfer of internally developed 3D printing machines from property and equipment to inventories for sale	$	597		$	1,276		$	182		$	424
Property and equipment acquired through financing arrangements	$	48		$	—
Property and equipment included in accounts payable	$	94		$	15		$	110		$	95
Property and equipment included in accrued expenses and other current liabilities	$	84		$	—		$	48		$	23
Advance deposits on property and equipment	$	12		$	203
Property and equipment acquired through financing arrangements							$	—		$	14
Unsettled proceeds from sale of property and equipment							$	—		$	51
Unsettled proceeds from exercise of employee stock options							$	91		$	—
Debt issuance costs included in accrued expenses and other current liabilities							$	—		$	76

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Condensed Statement of Changes in Consolidated Stockholders’ Equity (Unaudited)

Accumulated

other

Total

Common stock

Additional

Accumulated

comprehensive

stockholders'

Shares

$

paid-in capital

deficit

loss

equity

Balance at December 31, 2015

14,447

$
144

$
156,627

$
(54,163
)

$
(13,535
)

$
89,073

Registered direct offering of common stock to a
   related party, net of issuance costs

1,424

15

12,432

—

—

12,447

At the market offerings of common stock, net
   of issuance costs

92

1

��

594

—

—

595

Net loss

—

—

—

(12,030
)

—

(12,030
)
Other comprehensive income

—

—

—

—

2,288

2,288

Equity-based compensation

32

—

1,104

—

—

1,104

Balance at September 30, 2016

15,995

$
160

$
170,757

$
(66,193
)

$
(11,247
)

$
93,477

Balance at December 31, 2016

16,017

$
160

$
171,116

$
(68,761
)

$
(14,735
)

$
87,780

Cumulative-effect adjustment due to the adoption of
   Financial Accounting Standards Board
   Accounting Standards Update 2016-16

—

—

—

(408
)

—

(408
)
Net loss

—

—

—

(18,057
)

—

(18,057
)
Other comprehensive income

—

—

—

—

4,713

4,713

Equity-based compensation

75

1

2,042

—

—

2,043

Balance at September 30, 2017

16,092

$
161

$
173,158

$
(87,226
)

$
(10,022
)

$
76,071

											Accumulated
											other			Total
	Common stock				Additional			Accumulated			comprehensive			stockholders'
	Shares		$		paid-in capital			deficit			loss			equity
Balance at December 31, 2017		16,125	$	161	$	173,718		$	(89,186	)	$	(9,484	)	$	75,209
Net loss		—		—		—			(6,385	)		—			(6,385	)
Other comprehensive income		—		—		—			—			1,402			1,402
Equity-based compensation		—		—		379			—			—			379
Common stock issued from equity incentive plan		25		—		—			—			—			—
Balance at March 31, 2018		16,150	$	161	$	174,097		$	(95,571	)	$	(8,082	)	$	70,605
Net loss		—		—		—			(8,037	)		—			(8,037	)
Other comprehensive loss		—		—		—			—			(2,240	)		(2,240	)
Equity-based compensation		—		—		(5	)		—			—			(5	)
Balance at June 30, 2018		16,150	$	161	$	174,092		$	(103,608	)	$	(10,322	)	$	60,323

Balance at December 31, 2018		16,234	$	162	$	175,214		$	(101,853	)	$	(10,748	)	$	62,775
Net loss		—		—		—			(4,496	)		—			(4,496	)
Other comprehensive loss		—		—		—			—			(776	)		(776	)
Equity-based compensation		—		—		439			—			—			439
Exercise of employee stock options		23		1		164			—			—			165
Taxes related to the net share settlement of equity-based awards		—		—		(68	)		—			—			(68	)
Common stock issued from equity incentive plan		38		—		—			—			—			—
Balance at March 31, 2019		16,295	$	163	$	175,749		$	(106,349	)	$	(11,524	)	$	58,039
Net loss		—		—		—			(3,789	)		—			(3,789	)
Other comprehensive income		—		—		—			—			583			583
Equity-based compensation		—		—		642			—			—			642
Exercise of employee stock options		13		—		97			—			—			97
Common stock issued from equity incentive plan		10		—		—			—			—			—
Balance at June 30, 2019		16,318	$	163	$	176,488		$	(110,138	)	$	(10,941	)	$	55,572

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The ExOne Company (“ExOne”) is a corporation organized under the laws of the state of Delaware. ExOne was formed on January 1, 2013, when The Ex One Company, LLC, a Delaware limited liability company, merged with and into a Delaware corporation, which survived and changed its name to The ExOne Company (the “Reorganization”). As a result of the Reorganization, The Ex One Company, LLC became ExOne, the common and preferred interest holders of The Ex One Company, LLC became holders of common stock and preferred stock, respectively, of ExOne, and the subsidiaries of The Ex One Company, LLC became the subsidiaries of ExOne. The condensed consolidated financial statements include the accounts of ExOne, its wholly-owned subsidiaries, ExOne Americas LLC (United States); ExOne GmbH (Germany); ExOne Property GmbH (Germany); ExOne KK (Japan); and through December 2018, ExOne Italy S.r.l (Italy)~~; ExOne Sweden AB (Sweden); and through September 2016, MWT—Gesellschaft für Industrielle Mikrowellentechnik mbH (Germany)~~. Collectively, the consolidated group is referred to as the “Company”.

On September 15, 2016, the Company completed a transaction merging its MWT—Gesellschaft für Industrielle Mikrowellentechnik mbH (Germany) subsidiary with and into its ExOne GmbH (Germany) subsidiary. The purpose of this transaction was to further simplify the Company’s legal structure. There were no significant accounting or tax related impacts associated with the merger of these wholly owned subsidiaries.

The Company filed a registration statement on Form S-3 ~~(No. 333-203353)~~(No. 333-223690) with the Securities and Exchange Commission (“SEC”) on ~~April 10, 2015.~~March 15, 2018. The purpose of the Form S-3 was to register, among other securities, debt securities. ~~Certain subsidiaries~~Subsidiaries of the Company ~~(other than any minor subsidiary)~~ are co-registrants with the Company (“Subsidiary Guarantors”), and the registration statement registered guarantees of debt securities by one or more of the Subsidiary Guarantors. The Subsidiary Guarantors are 100% owned by the Company and any guarantees by the Subsidiary Guarantors will be full and unconditional. There have been no transactions undertaken subject to the Form S-3 since its initial filing.

The condensed consolidated financial statements of the Company are unaudited. The condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary by management to fairly state the results of operations, financial position and cash flows of the Company. All material intercompany transactions and balances have been eliminated in consolidation. The results reported in these condensed consolidated financial statements are not necessarily indicative of the results that may be expected for the entire year. The December 31, ~~2016~~2018 condensed consolidated balance sheet data was derived from the audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). This Quarterly Report on Form 10-Q should be read in connection with the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2018, which includes all disclosures required by GAAP.

The preparation of these condensed consolidated financial statements requires the Company to make certain judgments, estimates and assumptions regarding uncertainties that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosure of contingent assets and liabilities. Areas that require significant judgments, estimates and assumptions include accounting for accounts receivable (including the allowance for doubtful accounts); inventories (including the allowance for slow-moving and obsolete inventories); product warranty reserves; contingencies; income taxes (including the valuation allowance on certain deferred tax assets and liabilities for uncertain tax positions); equity-based compensation (including the valuation of certain equity-based compensation awards issued by the Company); and testing for impairment of long-lived assets (including the identification of asset groups by management, estimates of future cash flows of identified asset groups and fair value estimates used in connection with assessing the valuation of identified asset groups). The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Certain amounts relating to ~~restricted cash ($330) and intangible assets~~contract liabilities – net of current portion ($~~668)~~527) in the accompanying condensed consolidated balance sheet at December 31, ~~2016,~~2018, have been reclassified from ~~prepaid expenses~~other noncurrent liabilities to conform to current period presentation, following the adoption of Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-09 (further described below).

Certain amounts relating to the lessor current portion of net investment in sales-type leases ($302) and ~~other~~lessor net investment in sales-type leases – net of current ~~assets~~portion ($1,351) in the accompanying condensed consolidated balance sheet at December 31, 2018, have been reclassified from accounts receivable and other noncurrent assets, respectively, to conform to current period ~~presentation. Certain~~presentation following the adoption of FASB ASU 2016-02 (further described below).

Related to the reclassifications further described above, amounts ~~relating to provision (recoveries) for slow-moving, obsolete and lower of cost or market inventories – net ($356) and amortization of debt issuance costs ($5) in~~within the ~~accompanying~~ condensed statement of consolidated cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2018 associated with these changes have also been reclassified ~~from decrease in inventories and decrease in prepaid expenses and other assets, respectively,~~ to conform to current period presentation.

On January 1, ~~2017,~~2019, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-16, “Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory.” This ASU modifies existing guidance and is intended to reduce diversity in practice with respect to the accounting for the income tax consequences of intra-entity transfers of assets. The ASU indicates that the former exception to income tax accounting that requires companies to defer the income tax effects of certain intercompany transactions would apply only to intercompany inventory transactions. That is, the exception no longer applies

~~to intercompany sales and transfers of other assets (e.g.~~, property and equipment or intangible assets). Under the former exception, income tax expense associated with intra-entity profits in an intercompany sale or transfer of assets was eliminated from earnings. Instead, that cost was deferred and recorded on the balance sheet (~~e.g.~~, as a prepaid asset) until the assets left the consolidated group. Similarly, the entity was prohibited from recognizing deferred tax assets for the increases in tax bases due to the intercompany sale or transfer. A modified retrospective basis of adoption was required for this ASU. As a result, a cumulative-effect adjustment of approximately $408 has been recorded to accumulated deficit on January 1, 2017, in connection with this adoption. This cumulative-effect adjustment relates to the prepaid expense associated with intra-entity transfers of property and equipment included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheet at December 31, 2016.

~~On January 1, 2017, the Company adopted~~ FASB ASU 2016-17, “Consolidation: Interests Held through Related Parties That Are under Common Control.” This ASU modifies former guidance with respect to how a decision maker that holds an indirect interest in a variable interest entity (“VIE”) through a common control party determines whether it is the primary beneficiary of the VIE as part of the analysis of whether the VIE would need to be consolidated. Under the ASU, a decision maker needs to consider only its proportionate indirect interest in the VIE held through a common control party. Previous guidance had required the decision maker to treat the common control party’s interest in the VIE as if the decision maker held the interest itself. The Company does not have significant involvement with entities subject to consolidation considerations impacted by VIE model factors addressed by this ASU. Management has determined that the adoption of this ASU did not have an impact on the condensed consolidated financial statements of the Company.

On January 1, 2017, the Company adopted FASB ASU 2015-11, “Inventory: Simplifying the Measurement of Inventory.” This ASU requires inventories to be measured at the lower of cost and net realizable value, with net realizable value defined as the estimated selling price in the normal course of business, less reasonably predictable costs of completion, disposal and transportation. ~~Management has determined that the adoption of this ASU did not have an impact on the condensed consolidated financial statements of the Company.~~

The Company considers the applicability and impact of all ASUs issued by the FASB. Recently issued ASUs not listed below were assessed and determined to be either not applicable or are currently expected to have no impact on the consolidated financial statements of the Company.

In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation: Scope of Modification Accounting.” This ASU requires registrants to apply modification accounting unless three specific criteria are met. The three criteria are: the fair value of the award is the same before and after the modification, the vesting conditions are the same before and after the modification and the classification as a debt or equity award is the same before and after the modification. This ASU becomes effective for the Company on January 1, 2018, and is to be applied prospectively to new awards granted after adoption. ~~Early adoption is permitted.~~ ~~Management is currently evaluating the potential impact of this ASU on the consolidated financial statements of the Company.~~

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments.” This ASU is intended to reduce diversity in practice in how certain cash receipts and payments are presented and classified in the statement of cash flows. The standard provides guidance in a number of situations including, among others, settlement of zero-coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and distributions received from equity method investees. The ASU also provides guidance for classifying cash receipts and payments that have aspects of more than one class of cash flows. This ASU becomes effective for the Company on January 1, 2019. Early adoption is permitted. Management is currently evaluating the potential impact of this ASU on the consolidated financial statements of the Company.

In February 2016, the FASB issued ASU 2016-02, “Leases.” As a result of this ASU, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. As a result of this ASU, lessor accounting is largely unchanged and lessees will no longer be provided with a source of off-balance sheet financing. This ASU becomes effective for the Company on January 1, 2019. Early adoption is permitted. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. Management is currently evaluating the potential impact of this ASU on the consolidated financial statements of the Company.

~~In May 2014, the FASB issued~~ ASU 2014-09, “Revenue from Contracts with Customers.” This ASU created a comprehensive framework for all entities in all industries to apply in the determination of when to recognize revenue and, therefore, supersedes virtually all existing revenue recognition requirements and guidance. This framework is expected to provide a consistent

and comparable methodology for revenue recognition. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this principle, an entity should apply the following steps: identify the

contract(s) with a customer, identify the performance obligations in the contract(s), determine the transaction price, allocate the transaction price to the performance obligations in the contract(s), and recognize revenue when, or as, the entity satisfies a performance obligation. The Company adopted this guidance using the modified retrospective approach. Revenue from the Company’s sale of three-dimensional (“3D”) printing machines and 3D printed and other products, materials and services continues to generally be recognized when the related machines, products or materials are delivered or accepted by the Company’s customers or as the related services are performed by the Company. As such, the adoption of this guidance did not have a material impact on the Company’s financial position or results of operations. The Company has included the enhanced disclosures required by this guidance in its condensed consolidated financial statements (Note 5).

On January 1, 2019, the Company adopted FASB ASU 2016-02, “Leases.” This ASU requires lessees to recognize a right-of-use asset and lease liability on the consolidated balance sheet for leases classified as operating leases. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize a right-of-use asset and lease liability. Additionally, when measuring assets and liabilities arising from a lease, optional payments should be included only if the lessee is reasonably certain to exercise an option to extend the lease, exercise a purchase option, or not exercise an option to terminate the lease. A right-of-use asset represents an entity’s right to use the underlying asset for the lease term, and a lease liability represents an entity’s obligation to make lease payments. Currently, an asset and liability only are recorded for leases classified as capital leases (financing leases). The measurement, recognition, and presentation of expenses and cash flows arising from leases by a lessee remains the same. In ~~August 2015,~~connection with the adoption of this guidance, the Company has completed an assessment resulting in an accumulation of all of its leasing arrangements and has validated the information for accuracy and completeness. Upon adoption of the new lease guidance, management recorded a right-of-use asset and lease liability, each in the amount of approximately $400, on the Company’s consolidated balance sheet for various types of operating leases, including certain machinery and other equipment and vehicles. This amount is equivalent to the aggregate future minimum lease payments on a discounted basis. The Company has also elected to apply the package of transitional practical expedients of the new lease guidance by allowing the Company to not: (1) reassess if expired or existing contracts are, or contain, leases; (2) reassess lease classification for any expired or existing leases; and (3) reassess initial direct costs for any existing leases. Additionally, in July 2018, the FASB issued guidance to provide for an alternative transition method to the new lease guidance, whereby an entity can choose to not reflect the impact of the new lease guidance in the prior periods included in its consolidated financial statements. The Company has utilized this alternative transition method in connection with its adoption on January 1, 2019. The Company has included the enhanced disclosures required by this guidance in its condensed consolidated financial statements (Note 11).

On January 1, 2019, the Company adopted FASB ASU 2016-15, “Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments.” This ASU is intended to reduce diversity in practice in how certain cash receipts and payments are presented and classified in the statement of consolidated cash flows. The standard provides guidance in a number of situations including, among others, settlement of zero-coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and distributions received from equity method investees. The ASU also provides guidance for classifying cash receipts and payments that have aspects of more than one class of cash flows. The adoption of this ASU did not have an effect on the consolidated financial statements of the Company.

The Company considers the applicability and impact of all ASUs issued by the FASB. Recently issued ASUs not listed below either were assessed and determined to be not applicable or are currently expected to have no impact on the consolidated financial statements of the Company.

In June 2016, the FASB issued ASU ~~2015-14, “Revenue from Contracts with Customers: Deferral~~2016-13, “Financial Instruments – Credit Losses.” This ASU added a new impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of ~~the Effective Date,” which deferred the~~expected credit losses. The CECL model applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments. The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss. These changes become effective ~~date of this guidance~~ for the Company ~~until~~on January 1, 2019, or January 1, 2018, in the event that the Company no longer qualifies as an EGC. Early adoption is permitted, but the Company may adopt the changes no earlier than January 1, 2017 (regardless of EGC status).2020. Management is currently evaluating the potential impact of these ~~collective~~ changes on the consolidated financial statements of the Company.

On February 6, 2013, the Company commenced an initial public offering of 6,095,000 shares of its common stock at a price to the public of $18.00 per share, of which 5,483,333 shares of common stock were sold by the Company and 611,667 shares of common stock were sold by a selling stockholder (including consideration of the exercise of the underwriters’ over-allotment option). The Company received approximately $90,371 in unrestricted net proceeds in connection with this offering (net of underwriting commissions and offering costs).

On September 9, 2013, the Company commenced a secondary public offering of 3,054,400 shares of its common stock at a price to the public of $62.00 per share, of which 1,106,000 shares of common stock were sold by the Company and 1,948,400 shares of common stock were sold by selling stockholders (including consideration of the exercise of the underwriters’ over-allotment option). The Company received approximately $64,948 in unrestricted net proceeds in connection with this offering (net of underwriting commissions and offering costs).

On January 8, 2016, the Company announced that it had entered into an At Market Issuance Sales Agreement (“ATM”) with FBR Capital Markets & Co. (“FBR”) and MLV & Co. LLC (“MLV”) pursuant to which FBR and MLV agreed to act as distribution agents in the sale of up to $50,000 in the aggregate of ExOne common stock ~~in “at the market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”).~~ Both FBR and MLV were identified as related parties to the Company on the basis of significant influence in that a member of the Board of Directors of the Company also served as a member of the Board of Directors of FBR (which controlled MLV). The terms of the ATM were reviewed and approved by a sub-committee of the Board of Directors of the Company (which included each of the members of the Audit Committee of the Board of Directors except for the identified director who also held a position on the Board of Directors of FBR). This related party determination ended on June 1, 2017, when the identified director ceased serving as a member of the Board of Directors of FBR. Terms of the ATM require a 3.0% commission on the sale of common stock under the ATM and an initial reimbursement of certain legal expenses of $25. During the quarter ended March 31, 2016, the Company sold 91,940 shares of common stock under the ATM at a weighted average selling price of approximately $9.17 per share resulting in gross proceeds to the Company of approximately $843. Unrestricted net proceeds to the Company from the sale of common stock under the ATM during the quarter ended March 31, 2016 were approximately $595 (after deducting offering costs of approximately $248, including certain legal, accounting and administrative costs associated with the ATM, of which approximately $50 was paid to FBR or MLV relating to the aforementioned initial reimbursement of certain legal expenses and commissions on the sale of common stock under the ATM). There have been no sales of shares of common stock under the ATM during any periods subsequent to the quarter ended March 31, 2016.

On January 11, 2016, the Company announced that it had entered into a subscription agreement with Rockwell Forest Products, Inc. and S. Kent Rockwell for the registered direct offering and sale of 1,423,877 shares of ExOne common stock at a per share price of $9.13 (a $0.50 premium from the closing price on the close of business on January 8, 2016). Both Rockwell Forest Products, Inc. and S. Kent Rockwell were identified as related parties to the Company as S. Kent Rockwell served as Chairman and CEO of the Company and was the controlling shareholder of Rockwell Forest Products, Inc. at the time of the transaction. The terms of this transaction were reviewed and approved by a sub-committee of independent members of the Board of Directors of the Company (which included each of the members of the Audit Committee of the Board of Directors). The sub-committee of independent members of the Board of Directors of the Company were advised on the transaction by an independent financial advisor and independent legal counsel. Concurrent with the approval of this sale of common stock under the terms identified, a separate sub-committee of independent members of the Board of Directors of the Company approved the termination of the Company’s revolving credit facility with RHI Investments, LLC. Following completion of the registered direct offering on January 13, 2016, the Company received gross proceeds of approximately $13,000. Unrestricted net proceeds to the Company from the sale of common stock in the registered direct offering were approximately $12,447 (after deducting offering costs of approximately $553).

The Company has incurred a net loss in each of its annual periods since its inception. As shown in the accompanying condensed statement of consolidated operations and comprehensive loss, the Company incurred a net loss of approximately ~~$4,863~~$3,789 and ~~$18,057~~$8,285 for the ~~quarter~~three months and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, respectively. ~~As noted above,~~At June 30, 2019, the Company had approximately $5,462 in unrestricted cash and cash equivalents.

Since its inception the Company has received cumulative unrestricted net proceeds from the sale of its common stock (through its initial public offering and subsequent secondary offerings) of approximately $168,361 to fund its operations. ~~At September 30, 2017,~~In March 2018, the Company ~~had approximately $17,706~~entered into a three-year, $15,000 revolving credit facility with a related party (Note 13) to provide additional funding for working capital and general corporate purposes. In June 2018, the Company initiated a 2018 global cost realignment program focused on a reduction in ~~unrestricted cash~~the Company’s production overhead costs and ~~cash equivalents.~~operating expenses in an effort to drive efficiency in its operations and preserve capital.

Management believes that the Company’s existing capital resources will be sufficient to support the Company’s operating plan. If management anticipates that the Company’s actual results will differ from its operating plan, management believes it has sufficient capabilities to enact cost savings measures to preserve ~~capital. Further,~~capital (in addition to the costs savings measures associated with the Company’s 2018 global cost realignment program further described above). The Company may also seek to raise additional capital to support its growth through additional debt, equity or other alternatives (including asset sales) or a combination thereof.

The following table summarizes changes in the components of accumulated other comprehensive ~~loss:~~loss for the periods indicated:

Foreign currency translation adjustments consist of the effect of translation of functional currency financial statements (denominated in the euro and Japanese yen) to the reporting currency of the Company (United States dollar) and certain long-term intercompany transactions between subsidiaries for which settlement is not planned or anticipated in the foreseeable future.

There were no tax impacts related to income tax rate changes and no amounts were reclassified to earnings for either of the periods presented.

The Company presents basic and diluted loss per common share amounts. Basic loss per common share is calculated by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the applicable period. Diluted loss per common share is calculated by dividing net loss available to common stockholders by the weighted average number of common shares and common equivalent shares outstanding during the applicable period.

As the Company incurred a net loss during each of the ~~quarters~~three months and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018, basic average common shares outstanding and diluted average common shares outstanding were the same because the effect of potential shares of common stock, including stock options ~~(696,137~~(608,787 – ~~2017~~2019 and ~~317,637~~536,635 – ~~2016)~~2018) and unvested restricted stock issued ~~(67,505~~(96,264 – ~~2017~~2019 and ~~112,504~~52,502 – ~~2016)~~2018), was anti-dilutive.

The information used to compute basic and diluted net loss per common share was as ~~follows:~~follows for the periods indicated:

~~On January 26, 2017,~~The Company derives revenue from the sale of 3D printing machines and 3D printed and other products, materials and services. Revenue is recognized when the Company ~~committed~~satisfies its performance obligation(s) under a contract (either implicit or explicit) by transferring the promised product or service to a ~~plan~~customer either when (or as) the customer obtains control of the product or service. A

performance obligation is a promise in a contract to ~~consolidate certain~~transfer a distinct product or service to a customer. A contract’s transaction price is allocated to each distinct performance obligation.

Revenue is measured as the amount of ~~its three-dimensional (“3D”) printing operations~~consideration the Company expects to receive in exchange for transferring products or providing services. As such, revenue is recorded net of returns, allowances, customer discounts, and incentives. Sales, value add, and other taxes collected from ~~its North Las Vegas, Nevada facility into its Troy, Michigan~~customers and ~~Houston, Texas facilities~~remitted to governmental authorities are accounted for on a net (excluded from revenue) basis. Shipping and ~~exit its non-core specialty machining operations~~handling costs are included in ~~its Chesterfield, Michigan facility. These actions were taken as a result~~cost of t~~he accelerating adoption rate~~sales.

Certain of the Company’s ~~sand~~contracts with customers provide for multiple performance obligations. Sales of 3D printing ~~technology~~machines may also include optional equipment, materials, replacement components and services (installation, training and other services, including maintenance services and/or an extended warranty). Certain other contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in ~~North America~~the contract and, therefore, not distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the Company’s best estimate of stand-alone selling price for each distinct product or service in the contract, which is generally based on an observable price.

The Company’s revenue from products is transferred to customers at a point in time. The Company’s contracts for 3D printing machines generally include substantive customer acceptance provisions. Revenue under these contracts is recognized when customer acceptance provisions have been satisfied. For all other product sales, the Company recognizes revenue at the point in time in which the customer obtains control of the product, which is generally when product title passes to the customer upon delivery. In limited cases, title does not transfer and revenue is not recognized until the customer has ~~resulted~~received the products at its physical location.

The Company’s revenue from service arrangements includes deferred maintenance contracts and extended warranties that can be purchased at the customer’s option. The Company generally provides a standard one-year warranty on the Company’s 3D printing machines, which is considered an assurance type warranty, and not considered a separate performance obligation (Note 10). Revenue associated with deferred maintenance contracts is generally recognized at a point in time when the related services are performed where sufficient historical evidence indicates that the costs of performing the related services under the contract are not incurred on a ~~refocus~~straight-line basis, with such revenue recognized in proportion to the costs expected to be incurred. Revenue associated with extended warranties is generally recognized over time on a straight-line basis over the related contract period.

The Company’s revenue from service arrangements includes contracts with the Federal government under fixed-fee, cost reimbursable and time and materials arrangements (certain of which may have periods of performance greater than one year). Revenue under these contracts is generally recognized over time using an input measure based upon labor hours incurred and provisional rates provided under the contracts. As such, the nature of these contracts may give rise to variable consideration, primarily based upon completion of the Company’s ~~operational strategy.~~annual Incurred Cost Submission filing as required by the Federal government. Historically, amounts associated with variable consideration have not been significant.

~~As a result of these actions, during~~The Company’s revenue from service arrangements includes certain research and development services. Revenue under research and development service contracts is generally recognized over time using an output measure, specifically units or parts delivered, based upon certain customer acceptance and delivery requirements. Revenue recognized over time using an output measure is not significant.

The following table summarizes the ~~quarter ended March 31, 2017,~~Company’s revenue by product group for the periods indicated:

Revenue from 3D printing machines includes leasing revenue whereby the Company ~~recorded charges~~is the lessor of ~~approximately $984, including approximately $110 associated with involuntary employee terminations, approximately $7 associated with other exit costs~~3D printing machines to its customers. Leasing revenue is accounted for under ASU 2016-02 (Note 11).

The timing of revenue recognition, billings and ~~approximately $867 associated with asset impairments. Charges associated with involuntary employee terminations~~cash collections results in billed receivables, unbilled receivables (contract assets) and ~~other exit costs were recorded to cost of sales~~deferred revenue and customer prepayments (contract liabilities) in the accompanying condensed ~~statement~~consolidated balance sheet. The Company considers a number of ~~operations~~factors in its evaluation of the creditworthiness of its customers, including past due amounts, past payment history, and ~~comprehensive loss. Charges~~current economic conditions. For 3D printing machines, the Company’s terms of sale vary by transaction. To reduce credit risk in connection with 3D printing machine sales, the Company may, depending upon the circumstances, require customers to furnish letters of credit or bank guarantees or to provide advanced payment (either partial or in full). For 3D printed and other products and materials, the Company’s terms of sale generally require payment within 30 to 60 days after delivery, although the Company also recognizes that longer payment periods are customary in certain countries where it transacts business. Service arrangements are generally billed in accordance with specific contract terms and are typically billed in advance or in proportion to

performance of the related services. There were no other significant changes in contract liabilities during the three months or six months ended June 30, 2019. Contract assets are not significant.

For the six months ended June 30, 2019, the Company recognized revenue of approximately $1,573 related to contract liabilities at January 1, 2019.

At June 30, 2019, the Company had approximately $23,100 of remaining performance obligations (including contract liabilities), which is also referred to as backlog, of which approximately $19,700 was expected to be fulfilled during the twelve months following such date.

The Company has elected to apply the practical expedient associated with ~~asset impairments were split between cost~~incremental costs of obtaining a contract, and as such, sales ~~($598), as a component of depreciation~~commission expense ~~and~~is generally expensed when incurred because the amortization period would be one year or less. These costs are recorded within selling, general and administrative ~~expenses ($269),~~expenses.

Accounts receivable are reported at their net realizable value. The Company’s estimate of the allowance for doubtful accounts related to trade receivables is based on the Company’s evaluation of customer accounts with past-due outstanding balances or specific accounts for which it has information that the customer may be unable to meet its financial obligations. Based upon review of these accounts, and management’s analysis and judgment, the Company records a specific allowance for that customer’s accounts receivable balance to reduce the outstanding receivable balance to the amount expected to be collected. The allowance is re-evaluated and adjusted periodically as ~~a component of amortization expense, in~~additional information is received that impacts the ~~accompanying condensed statement of operations~~allowance amount reserved. At June 30, 2019 and ~~comprehensive loss.~~December 31, 2018, the allowance for doubtful accounts was approximately $73 and $225, respectively. During the ~~quarter~~three months ended June 30, ~~2017,~~2019 and 2018, the Company recorded ~~a charge~~net recoveries for bad debts of approximately ~~$32 associated with an additional involuntary employee termination which required a service commitment through April 2017. This charge was recorded to cost of sales in~~$77 and $46, respectively. During the ~~accompanying condensed statement of operations~~six months ended June 30, 2019 and ~~comprehensive loss. There have been no additional charges recorded associated with this plan in subsequent periods.~~ ~~There are no additional charges expected to be incurred associated with this plan in future periods.~~ ~~The Company has settled all amounts associated with involuntary employee terminations and other exit costs.~~

Charges associated with asset impairments relate principally to the Company’s plan to exit its non-core specialty machining operations in its Chesterfield, Michigan facility. On April 21, 2017, the Company sold to a third party certain assets associated with these operations including inventories (approximately $79), property and equipment (approximately $2,475) and other contractual

~~rights (approximately $269). Total gross proceeds from the sale of these assets were approximately $2,050. After deducting costs directly attributable to the sale of these assets (approximately $128),~~2018, the Company recorded ~~an impairment loss during the quarter ended March 31, 2017,~~net recoveries for bad debts of approximately ~~$859 split between property~~$150 and equipment ($590) and intangible assets ($269) based on the excess of the carrying value over the estimated fair value of the related assets at March 31, 2017, and a loss on disposal (recorded to cost of sales in the accompanying condensed statement of operations and comprehensive loss) during the quarter ended June 30, 2017, of approximately $42. Additionally, the Company recorded an impairment loss during the quarter ended March 31, 2017, of approximately $8 associated with certain property and equipment which was abandoned in connection with the Company’s exit of its North Las Vegas, Nevada facility.$37, respectively.

Separate from the transaction described above, on May 9, 2017, the Company sold to a third party certain property and equipment (principally land and building) associated with its North Las Vegas, Nevada facility. Total gross proceeds from the sale of these assets were approximately $1,950. After deducting costs directly attributable to the sale of these assets (approximately $137), the Company recorded a gain on disposal (recorded to cost of sales in the accompanying condensed statement of operations and comprehensive loss) during the quarter ended June 30, 2017, of approximately $347.Note 6. Restructuring

In ~~April 2016,~~December 2017 the Company committed to a plan to consolidate certain of its 3D printing operations infrom its ~~Auburn, Washington~~Desenzano del Garda, Italy facility into its ~~North Las Vegas, Nevada facility and reorganize certain of its corporate departments~~Gersthofen, Germany facility. These actions were taken as part of the Company’s efforts to optimize its ~~2016 operating plan. As a result of these actions, during~~business model and maximize its facility utilization. During the ~~quarter~~three months ended ~~June 30, 2016,~~December 31, 2017, the Company ~~incurred~~recorded a ~~net~~ charge of approximately ~~$170 including, $57~~$72 split between cost of sales ($19) and selling, general and administrative expense ($53) associated with involuntary employee terminations ~~and $113~~related to this plan. During the three months ended March 31, 2018, the Company recorded an additional charge of approximately $245 associated with other exit costs ($17) and asset impairments ($228) related to this plan. During the three months ended June 30, 2018, the Company recorded an additional charge of approximately $13 associated with asset impairments related to this plan. In addition, during the three months ended June 30, 2018, the Company recorded a gain from disposal of certain property and equipment ~~related~~of approximately $51 (recorded to ~~the Auburn, Washington facility which was either sold or abandoned. This net charge was split between~~ cost of sales ~~($129), research and development ($2) and selling, general and administrative expenses ($39)~~ in the accompanying condensed statement of consolidated operations and comprehensive loss). Charges associated with other exit costs recorded during the six months ended June 30, 2018 were recorded to cost of sales in the accompanying condensed statement of consolidated operations and comprehensive loss. ~~In addition~~Charges associated with asset impairments recorded during the three and six months ended June 30, 2018 were recorded to cost of sales as a component of depreciation expense in the accompanying condensed statement of consolidated operations and comprehensive loss. Other exit costs relate to the ~~net charge incurred~~remaining facility rent due under a non-cancellable operating lease following the cessation of operations at the facility in January 2018. Asset impairment charges relate to certain leasehold improvements associated with the exited facility and other equipment which was abandoned by the Company in connection with this plan, the Company also has an operating lease commitment for the Auburn, Washington facility with a lease term through December 2018. At the time of closure of this facility, the Company was able to secure a firmly committed sublease arrangement with a third party which fully offsets its remaining contractual operating lease liability. ~~There have been no additional charges recorded associated with this plan in subsequent periods.~~ Company. There are no additional charges expected to be incurred associated with this plan in future periods. The Company ~~has~~ settled all amounts associated with involuntary employee ~~terminations.~~terminations and other exit costs (remaining facility rent payments) during 2018.

During the ~~quarter~~three months ended ~~September~~June 30, ~~2017,~~2019, as a result of continued operating losses and cash flow deficiencies, the Company identified a triggering event requiring a test for the recoverability of long-lived assets held ~~for use~~and used at the asset group level. Assessing the recoverability of long-lived assets held ~~for use~~and used requires significant judgments and estimates by management.

For purposes of testing long-lived assets for recoverability, the Company operates as three separate asset groups: United States, Europe and Japan. In assessing the recoverability of long-lived assets held ~~for use,~~and used, the Company determined the carrying amount of long-lived assets held ~~for use~~and used to be in excess of the estimated future undiscounted net cash flows of the related assets. The Company proceeded to determine the fair value of its long-lived assets held ~~for use,~~and used, principally through use of the market approach. The Company’s use of the market approach included consideration of market transactions for comparable assets. Management concluded that the fair value of long-lived assets held ~~for use~~and used exceeded their carrying value, and as such, no impairment loss was recorded.

A significant decrease in the market price of a long-lived asset, adverse change in the use or condition of a long-lived asset, adverse change in the business climate or legal or regulatory factors impacting a long-lived asset and continued operating losses and cash flow deficiencies associated with a long-lived asset, among other indicators, could cause a future assessment to be performed which may

result in an impairment of long-lived assets held ~~for use,~~and used, resulting in a material adverse effect on the financial position and results of operations of the Company.

The following provides a reconciliation of cash, cash equivalents, and restricted cash as reported in the accompanying condensed consolidated balance sheet to the same such amounts shown in the accompanying condensed statement of consolidated cash ~~flows:~~flows as of the dates indicated:

Restricted cash at ~~September~~June 30, ~~2017~~2019 and December 31, 2018 includes approximately ~~$768~~$1,284 and $1,044, respectively, associated with cash collateral required by a German bank for ashort-term financial ~~guarantee~~guarantees issued by ExOne GmbH in connection with acertain commercial ~~transaction~~transactions requiring ~~security.~~security (Note 12). Restricted cash at ~~both September~~June 30, ~~2017~~2019 and December 31, ~~2016~~2018 includes approximately ~~$330~~$506 and $504, respectively, associated with cash collateral required by a United States bank to offset certain short-term, unsecured lending commitments associated with the Company’s corporate credit card program. Each of the balances described are considered legally restricted by the Company.

Inventories ~~consist~~consisted of the ~~following:~~following as of the dates indicated:

Raw materials and components consist of consumable materials and component parts and subassemblies associated with 3D printing machine manufacturing and support activities. Work in process consists of 3D printing machines and other products in varying stages of completion. Finished goods consist of 3D printing machines and other products prepared for sale in accordance with customer specifications.

At ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, the allowance for slow-moving and obsolete inventories was approximately ~~$3,364~~$4,149 and ~~$1,517,~~$4,143, respectively, and has been reflected as a reduction to inventories (principally raw materials and components). Included in the allowance for slow-moving and obsolete inventories at September 30, 2017, is approximately $1,631 related to certain raw material and component inventories associated with the Company’s Exerial 3D printing machine platform (see further discussion below).

During the ~~quarter~~three months ended June 30, ~~2017,~~2018, the Company recorded a charge of approximately ~~$1,460~~$561 to cost of sales in the accompanying condensed statement of consolidated operations and comprehensive loss attributable to certain ~~raw material and component~~industrial microwave inventories ~~(principally machine frames and other fabricated components) associated with the Company’s Exerial 3D printing machine platform~~ based on ~~decisions made~~a sustained absence of demand for such curing solutions and a decision by the Company ~~during the period related~~ to ~~certain design changes and improvements to the underlying platform (rendering certain elements of the previous design obsolete).~~

During the quarter ended June 30, 2016, the Company recorded a credit of approximately $507 to cost of sales in the accompanying condensed statement of consolidated operations and comprehensive loss attributable to the reversal of a previously recorded reserve for certain inventories associated with the Company’s laser micromachining product line which was discontinued at the end of 2014, based on the salediscontinue future manufacturing of such ~~laser micromachining inventories during the period.~~ industrial microwaves.

During the quarter and nine months ended September 30, 2017, the Company recorded a (credit) charge of approximately ($11) and $116, respectively, to cost of sales in the accompanying condensed statement of consolidated operations and comprehensive loss associated with certain work in process inventories for which cost was determined to exceed net realizable value. There were no such credits or charges recorded by the Company during the quarter or nine months ended September 30, 2016.

Substantially all of the Company’s 3D printing machines are covered by a standard ~~twelve~~twelve- month warranty. Generally, at the time of sale, a liability is recorded (with an offset to cost of sales) based upon the expected cost of replacement parts and labor to be incurred over the life of the standard warranty. Expected cost is estimated using historical experience for similar products. The Company periodically assesses the adequacy of the product warranty reserves based on changes in these factors and records any necessary adjustments if actual experience indicates that adjustments are necessary. Future claims experience could be materially different from prior results because of the introduction of new, more complex products, a change in the Company’s warranty policy in response to industry trends, competition or other external forces, or manufacturing changes that could impact product quality. In the event that the Company determines that its current or future product repair and replacement costs exceed estimates, an adjustment to these reserves would be charged to cost of sales in the period such a determination is made.

The following table summarizes changes in product warranty reserves, ~~(such~~which amounts were reflected in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheet for ~~each respective period):~~the periods indicated:

The Company leases machinery and other equipment and vehicles under operating lease arrangements (with initial terms greater than twelve months), expiring in various years through 2026. In addition, the Company leases certain equipment and vehicles under finance (previously capital) lease arrangements, which are not significant.

For all operating lease arrangements (with the exception of short-term lease arrangements), the Company presents at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

The Company has elected, as a practical expedient, not to separate non-lease components from lease components, and instead account for each separate component as a single lease component for all lease arrangements, as lessee. In addition, the Company has elected, as a practical expedient, not to apply lease recognition requirements to short-term lease arrangements, generally those with a lease term of less than twelve months, for all classes of underlying assets. In determination of the lease term, the Company considers the likelihood of lease renewal options and lease termination provisions. As a result, lease payments under these short-term lease arrangements are recognized in the accompanying condensed statement of consolidated operations and comprehensive loss on a straight-line basis over the lease term.

The Company uses its incremental borrowing rate in determining the present value of lease payments, as the implicit rate of the lease arrangements is generally not readily determinable.

Certain of the Company’s operating lease arrangements are with related parties under common control (Note 18). Lease cost under operating lease agreements with related parties, included within short-term lease cost below, was approximately $12 and $24 for the three months and six months ended June 30, 2019.

Future minimum lease payments of operating lease arrangements (with initial terms greater than twelve months) at June 30, 2019, were approximately as follows:

For the three months and six months ended June 30, 2019, lease cost under operating lease arrangements was approximately $98 (including $47 relating to short-term lease arrangements) and $211 (including $112 relating to short-term lease arrangements), respectively.

Supplemental information related to operating lease arrangements (with initial terms greater than twelve months) was as follows at and for the six months ended June 30, 2019:

As previously disclosed under the prior lease accounting standard, future minimum lease payments of operating lease arrangements (with initial terms greater than twelve months) at December 31, 2018, were approximately as follows:

The Company leases machinery and equipment to customers (principally 3D printing machines and related equipment) under lease arrangements classified as either operating leases or sales-type leases. The Company’s operating lease arrangements have initial terms generally ranging from one to five years, certain of which may contain extension or termination clauses, or both. Such operating lease arrangements also generally include a purchase option to acquire the related machinery and equipment at the end of the lease term for either a fixed amount as determined at inception, or a subsequently negotiated fair market value. At June 30, 2019, the Company estimated that the total fair market value significantly exceeded the related net book value of the machinery and equipment held under the Company’s operating lease arrangements. The Company’s sales-type lease arrangements generally include transfer of ownership at the end of the lease term, and as such, the Company’s net investment in sale-type lease arrangements presented in the Company’s accompanying condensed consolidated balance sheet generally does not include an amount of unguaranteed residual value.

The Company has elected, as a practical expedient, not to separate non-lease components from lease components, and instead account for each separate component as a single lease component for all lease arrangements, as lessor. Sales, value add, and other taxes collected from customers and remitted to governmental authorities are accounted for on a net (excluded from lease income) basis. In determination of the lease term, the Company considers the likelihood of lease renewal options and lease termination provisions. Additionally, certain of the Company’s lease arrangements do not qualify as sale-type leases as collectability is not reasonably assured.

The Company recognized the following components under operating and sales-type lease arrangements in the accompanying condensed statement of consolidated operations and comprehensive loss for the periods indicated:

The Company’s net investment in sales-type leases consisted of the following as of the dates indicated:

Future minimum lease payments of non-cancellable operating and sales-type lease arrangements at June 30, 2019, were approximately as follows:

As previously disclosed under the prior lease accounting standard, minimum future rentals under non-cancellable operating and sales-type lease arrangements at December 31, 2018, were approximately as follows:

On ~~July~~March 1, ~~2017,~~2018, the Company’s ExOne GmbH subsidiary notified Voxeljet AG that it had materially breached a 2003 Patent and Know-How Transfer Agreement and asserted its rights to set-off damages as a result of the breaches against the annual license fee due from the Company (through its ExOne GmbH subsidiary) entered into a Settlement Agreement with Kocel Foundry Limited (also known as Kocel CSR Casting Company, Limited) and Kocel Group (Hong Kong) Limited (collectively, “Kocel”) relating to settlement ofunder the ~~arbitration case (no. 100019-2017) administered by the Swiss Chambers’ Arbitration Institution Notice of Arbitration, as filed by~~agreement. At this time, the Company ~~on January 25, 2017. Among other things, the Settlement Agreement provided for~~cannot reasonably estimate a ~~cash payment from ExOne GmbH to Kocel of approximately $811 and a settlement and release of claims~~contingency, if any, related to ~~a sales agreement between the parties for certain 3D printing machines and related equipment (the “Sales Agreement”).~~ Based on the terms of the Settlement Agreement, including the final acceptance by Kocel of the 3D printing machines and related equipment, and relief from further obligation, liability or warranty for both parties (excluding certain intellectual property considerations), the Company recorded revenue of approximately $2,762 associated with the Sales Agreement (net of the cash payment made by ExOne GmbH to Kocel, such payment made on July 5, 2017) and the related cost of sales, during the quarter ending September 30, 2017.this matter.

The Company and its subsidiaries are subject to various litigation, claims, and proceedings which have been or may be instituted or asserted from time to time in the ordinary course of business. ~~Other than the matter further described above, management~~Management does not believe that the outcome of any pending or threatened matters will have a material adverse effect, individually or in the aggregate, on the financial position, results of operations or cash flows of the Company.

In the normal course of its operations, ExOne GmbH issues short-term financial guarantees and letters of credit to third parties in connection with certain commercial transactions requiring security. ExOne GmbH maintains a credit facility ~~agreement~~ with a German bank which provides for various short-term financings in the form of overdraft credit, financial guarantees, letters of credit and collateral security for commercial transactions for an aggregate of approximately ~~$1,500~~$1,400 (€1,300). In addition, ExOne GmbH may use the credit facility ~~agreement~~ for short-term, fixed-rate loans in minimum increments of approximately $100 (€100) with minimum terms of at least ~~thirty~~30 days. The overdraft credit interest rate is fixed at 10.2% while the interest rate associated with commercial transactions requiring security (financial guarantees, letters of credit or collateral security) is fixed at 1.75%. The credit facility ~~agreement~~ has an indefinite term and is subject to cancellation by either party at any time upon repayment of amounts outstanding or expiration of commercial transactions requiring security. There is no commitment fee associated with the credit ~~facility agreement.~~facility. There are no negative covenants associated with the credit ~~facility agreement.~~facility. The credit facility ~~agreement~~ has been guaranteed by the Company. At ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, there were no outstanding borrowings in the form of overdraft credit or short-term loans under the credit facility. At June 30, 2019, total outstanding financial

guarantees and letters of credit issued by ExOne GmbH under the credit facility ~~agreement.~~were approximately $1,284 (€1,129) with expiration dates ranging from July 2019 through November 2019. At ~~September 30, 2017,~~December 31, 2018, total outstanding financial guarantees and letters of credit issued by ExOne GmbH under the credit facility ~~agreement~~ were approximately ~~$865~~$1,044 (€~~732)~~912). ~~Included in the total outstanding financial guarantees and letters of credit issued by ExOne GmbH are approximately $584 (€494) with expiration dates ranging from~~ ~~October~~ 2017 through July 2018 and approximately $281 (€238) which have no expiration date. At December 31, 2016, total outstanding guarantees and letters of credit issued by ExOne GmbH under the credit facility agreement were approximately $400 (€380).

In addition to amounts issued by ExOne GmbH under the credit facility, ~~agreement, during the quarter ended March 31, 2017,~~from time to time, ExOne GmbH ~~entered~~enters into separate agreements with the same German bank for additional capacity for financial guarantees and letters of credit associated with certain commercial transactions requiring security. Terms of the separate agreements are substantially similar to those of the existing credit ~~security~~facility. At June 30, 2019, ExOne GmbH had a singular financial guarantee outstanding under a separate agreement ~~except that~~for approximately $91 (€80) with an expiration date of February 2023. Related to this separate agreement, the requirement for cash collateral was waived by the German bank ~~required cash collateral to be posted by ExOne GmbH~~as it also represents the counterparty in ~~connection with any~~the related issuance. At September 30, 2017, total outstanding financial guarantees and letters of credit issued by ExOne GmbH under these separate agreements were approximately $768 (€650) which expired in October 2017.transaction.

On March 12, 2018, ExOne and its ExOne Americas LLC and ExOne GmbH subsidiaries, as guarantors (collectively, the “Loan Parties”), entered into a Credit Agreement and related ancillary agreements with LBM Holdings, LLC (“LBM”), a company controlled by S. Kent Rockwell, who was the Executive Chairman of the Company (a related party) at such date and is currently Chairman of the Board of Directors (the “Board”) of the Company, relating to a $15,000 revolving credit facility (the “LBM Credit Agreement”) to provide additional funding for working capital and general corporate purposes. The LBM Credit Agreement provides for a term of three years (through March 12, 2021) and bears interest at a rate of one month LIBOR plus an applicable margin of 500 basis points (approximately 7.4% and 7.5% at June 30, 2019 and December 31, 2018, respectively). The LBM Credit Agreement requires a commitment fee of 75 basis points, or 0.75%, on the unused portion of the facility, payable monthly in arrears. In addition, an up-front commitment fee of 125 basis points, or 1.25% (approximately $188), was required at closing. Borrowings under the LBM Credit Agreement are required to be in minimum increments of $1,000. ExOne may terminate or reduce the credit commitment at any time during the term of the LBM Credit Agreement without penalty. ExOne may also make prepayments against outstanding borrowings under the LBM Credit Agreement at any time without penalty. Borrowings under the LBM Credit Agreement have been collateralized by the accounts receivable, inventories and machinery and equipment of the Loan Parties. At June 30, 2019 and December 31, 2018, the total estimated value of collateral was in significant excess of the maximum borrowing capacity under the LBM Credit Agreement.

The LBM Credit Agreement contains several affirmative covenants including prompt payment of liabilities and taxes; maintenance of insurance, properties, and licenses; and compliance with laws. The LBM Credit Agreement also contains several negative covenants including restricting the incurrence of certain additional debt; prohibiting future liens (other than permitted liens); prohibiting investment in third parties; limiting the ability to pay dividends; limiting mergers, acquisitions, and dispositions; and limiting the sale of certain property and equipment of the Loan Parties. The LBM Credit Agreement does not contain any financial covenants. The LBM Credit Agreement also contains events of default, including, but not limited to, cross-default to certain other debt, breaches of representations and warranties, change of control events and breaches of covenants.

LBM was determined to be a related party based on common control by S. Kent Rockwell. Accordingly, the Company does not consider the LBM Credit Agreement indicative of a fair market value lending. Prior to execution, the LBM Credit Agreement was reviewed and approved by the Audit Committee of the Board and subsequently by a sub-committee of independent members of the Board. At the time of execution of the LBM Credit Agreement, the $15,000 in available loan proceeds was deposited into an escrow account with an unrelated, third party financial institution acting as escrow agent pursuant to a separate Escrow Agreement by and among the parties. Loan proceeds held in escrow are available to the Company upon its submission to the escrow agent of a loan request. Such proceeds will not be available to LBM until payment in-full of the obligations under the LBM Credit Agreement and termination of the LBM Credit Agreement. Payments of principal and other obligations will be made to the escrow agent, while interest payments will be made directly to LBM. Provided there exists no potential default or event of default, the LBM Credit Agreement and Escrow Agreement prohibit any acceleration of repayment of any amount outstanding under the LBM Credit Agreement and prohibit termination of the LBM Credit Agreement or withdrawal from escrow of any unused portion of the available loan proceeds under the credit facility, by LBM.

There have been no borrowings by the Company under the LBM Credit Agreement from March 12, 2018 (inception) through June 30, 2019.

The Company incurred approximately $265 in debt issuance costs associated with the LBM Credit Agreement (including the aforementioned up front commitment fee paid at closing to LBM).

During the three months and six months ended June 30, 2019, the Company recorded interest expense relating to the LBM Credit Agreement of approximately $50 and $100, respectively. Included in interest expense for the three months and six months ended June 30, 2019 was approximately $22 and $44, respectively, associated with amortization of debt issuance costs. At June 30, 2019 and December 31, 2018, remaining debt issuance costs were approximately $151 and $195, respectively (of which approximately $88 was included in prepaid expenses and other current assets for both periods and approximately $63 and $107, respectively, was included in other noncurrent assets in the accompanying condensed consolidated balance sheet). Also included in interest expense for the three months and six months ended June 30, 2019 was approximately $28 and $56, respectively, associated with the commitment fee on the

unused portion of the revolving credit facility. At June 30, 2019 and December 31, 2018, approximately $9 and $10, respectively, was included in accounts payable in the accompanying condensed consolidated balance sheet. Amounts payable to LBM at June 30, 2019 and December 2018 were settled by the Company in July 2019 and January 2019, respectively.

During the three months and six months ended June 30, 2018, the Company recorded interest expense relating to the LBM Credit Agreement of approximately $49 and $59, respectively.

The provision (benefit) for income taxes for the ~~quarters~~three months ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018 was ~~$14~~approximately $99 and ~~$25,~~$18, respectively. The provision (benefit) for income taxes for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018 was ~~$23~~approximately ($701) and ~~$43,~~$35, respectively. The Company has completed a discrete period computation of its provision (benefit) for income taxes for each of the periods presented. ~~Discrete~~The discrete period computation iswas required as a result of jurisdictions with losses before income taxes for which no tax benefit can be recognized and an inability to generate reliable estimates for results in certain jurisdictions as a result of inconsistencies in generating net operating profits (losses) in those jurisdictions.

The effective tax rate for the ~~quarters~~three months ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018 was ~~0.3%~~2.7% (provision on a loss) and ~~0.7%~~0.2% (provision on a loss), respectively. The effective tax rate for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018 was ~~0.1% (provision~~7.8% (benefit on a loss) and ~~0.4%~~0.2% (provision on a loss), respectively. ~~The~~For the three months ended June 30, 2019 and 2018, the effective tax rate differs from the United States federal statutory rate of ~~34.0% for each of the periods presented~~21.0% primarily due to net changes in valuation allowances for the periods. For the six months ended June 30, 2019, the effective tax rate differs from the United States federal statutory rate of 21.0% primarily due to the reversal of previously recorded liabilities for uncertain tax positions (further described below) and net changes in valuation allowances for the period. For the six months ended June 30, 2018, the effective tax rate differs from the United States federal statutory rate of 21.0% primarily due to net changes in valuation allowances for the periods.

The Company has provided a valuation allowance for its net deferred tax assets as a result of the Company not generating consistent net operating profits in jurisdictions in which it operates. As such, any benefit from deferred taxes in any of the periods presented has been fully offset by changes in the valuation allowance for net deferred tax assets. The Company continues to assess its future taxable income by jurisdiction based on recent historical operating results, the expected timing of reversal of temporary differences, various tax planning strategies that the Company may be able to enact in future periods, the impact of potential operating changes on the business and forecast results from operations in future periods based on available information at the end of each reporting period. To the extent that the Company is able to reach the conclusion that its net deferred tax assets are realizable based on any combination of the above factors in a single, or in multiple, taxing jurisdictions, a reversal of the related portion of the Company’s existing valuation allowances may occur.

The Company has a liability for uncertain tax positions related to certain ~~capitalized expenses~~intercompany transactions.

A reconciliation of the beginning and ~~intercompany transactions.~~ ending amount of unrecognized tax benefits (including accrued interest and penalties) was as follows for the periods indicated:

The Company includes interest and penalties related to income taxes as a component of the provision (benefit) for income taxes in the accompanying condensed statement of consolidated operations and comprehensive loss. There were no such interest or penalties included in the provision (benefit) for income taxes for any of the periods presented.

At ~~September 30, 2017 and~~ December 31, ~~2016, the liability for uncertain tax positions~~2018, there was approximately ~~$846~~$820 in unrecognized tax benefits (including accrued interest and ~~$754, respectively, and is~~penalties) that if recognized would affect the annual effective tax rate. Such amounts were included in accrued expenses and other current liabilities in the accompanying condensed consolidated balance ~~sheet. At September 30, 2017 and~~sheet at December 31, ~~2016, the Company had an additional liability for uncertain~~2018. There were no such unrecognized tax ~~positions related to its ExOne GmbH (Germany) subsidiary of approximately $304 and $232, respectively, which were fully offset against net operating loss carryforwards. At September~~benefits at June 30, ~~2017 and~~2019.

At December 31, 2016, the Company had an additional liability for uncertain tax positions related to its ExOne KK (Japan) subsidiary of approximately $554 and $416, respectively, which were fully offset against net operating loss carryforwards.

In July 2017, local taxing authorities in Japan completed their examination of the Company’s ExOne KK (2014-2016) subsidiary, resulting in an income tax obligation of approximately $5, which was reflected in the provision for income taxes in the accompanying condensed statement of consolidated operations during the quarter ended June 30, 2017. At September 30, 2017,2018, the Company’s ExOne GmbH (2010-2013) and ExOne Property GmbH (2013) subsidiaries were under examination by local taxing ~~authorities. The Company is unable to reasonably predict an outcome related to~~authorities in Germany. In January 2019, this examination was concluded by the local taxing authorities in Germany without significant adjustment to previously established tax positions. As a result, during the three months ended March 31, 2019, the Company recorded a reversal of certain of its previously recorded liabilities for uncertain tax positions of approximately $1,075, of which ~~may be material in a future period to the financial position, results from operations and cash flows of the Company.~~approximately $257 was offset against net operating loss carryforwards.

On January 24, 2013, the Board ~~of Directors of the Company~~ adopted the 2013 Equity Incentive Plan (the “Plan”). In connection with the adoption of the Plan, 500,000 shares of common stock were reserved for issuance pursuant to the Plan, with automatic increases in such reserve available each year annually on January 1 from 2014 through 2023 equal to the lesser of 3.0% of the total outstanding shares of common stock as of December 31 of the immediately preceding year, or a number of shares of common stock determined by the Board, ~~of Directors,~~ provided that the maximum number of shares authorized under the Plan ~~will~~could not exceed 1,992,241 shares, subject to certain adjustments. The maximum number of shares authorized under the Plan was reached on January 1, 2017. At June 30, 2019, 865,506 shares remained available for future issuance under the Plan.

Stock options and restricted stock issued by the Company under the Plan are generally subject to service conditions resulting in annual vesting on the anniversary of the date of grant over a period typically ranging between one and three years. Certain stock options and restricted stock issued by the Company under the Plan vest immediately upon issuance. Stock options issued by the Company under the Plan have a contractual ~~life~~lives which ~~expires~~expire over a period typically ranging between five and ten years from the date of grant subject to continued service to the Company by the participant.

On February 7, 2018, the Compensation Committee of the Board adopted the 2018 Annual Incentive Program (the “Program”) as a subplan under the Plan. The Program provided an opportunity for performance-based compensation to senior executive officers of the Company, among others. The target annual incentive for each Program participant. was expressed as a percentage of base salary and was conditioned on the achievement of certain financial goals (as approved by the Compensation Committee of the Board) or a combination of financial and non-financial goals. The Compensation Committee of the Board retained negative discretion over amounts payable under the Program.

The following table summarizes the total equity-based compensation expense recognized by the Company for ~~awards issued under~~ the ~~Plan:~~periods indicated:

At ~~September~~June 30, ~~2017,~~2019, total future compensation expense related to unvested awards yet to be recognized by the Company was approximately ~~$1,145~~$541 for stock options and ~~$449~~$498 for restricted stock. Total future compensation expense related to unvested awards

yet to be recognized by the Company is expected to be recognized over a weighted-average remaining vesting period of approximately ~~1.3~~1.2 years.

~~During the nine months ended September 30, 2017, the~~The fair value of stock options granted was estimated on the date of grant using the Black-Scholes option pricing model with the following ~~assumptions:~~assumptions for the periods indicated:

~~During the nine months ended September 30, 2016, the fair value of stock options granted was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions:~~

For certain stock option awards ~~volatility is estimated based on the historical volatility of the Company when~~in which the expected term of the award is less than the period for which the Company has been publicly ~~traded. For certain stock option awards,~~traded, volatility is estimated based on the historical ~~volatilities~~volatility of the Company. For certain ~~peer group companies when~~stock option awards in which the expected term of the award exceeds the period for which the Company has been publicly ~~traded.~~traded, volatility is estimated based on the historical volatilities of certain peer group companies. The average risk-free rate is based on a weighted average yield curve of risk-free interest rates consistent with the expected term of the awards. Expected dividend yield is based on historical dividend data as well as future expectations. Expected term is calculated using the simplified method as the Company does not have sufficient historical exercise experience upon which to base an estimate.

	Nine Months Ended														Six Months Ended June 30,
	2017							2016							2019							2018
	Number of Options			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Number of Options			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Number of Options			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Number of Options			Weighted Average Exercise Price		Weighted Average Grant Date Fair Value
Outstanding at beginning of period		314,303		$	15.62	$	9.38		210,970		$	17.43	$	10.67		621,986		$	10.66	$	5.52		674,470		$	11.58	$	6.41
Stock options granted		389,000		$	8.16	$	3.89		139,000		$	13.72	$	8.00		57,610		$	8.33	$	3.67		24,000		$	8.36	$	3.77
Stock options exercised		—		$	—	$	—		—		$	—	$	—		(36,370	)	$	7.22	$	3.03		—		$	—	$	—
Stock options forfeited		(500	)	$	15.74	$	9.60		(6,001	)	$	15.74	$	9.60		(9,773	)	$	7.67	$	3.70		(133,835	)	$	9.44	$	5.15
Stock options expired		(6,666	)	$	17.43	$	10.67		(26,332	)	$	17.74	$	10.87		(24,666	)	$	17.10	$	10.45		(28,000	)	$	10.03	$	5.19
Outstanding at end of period		696,137		$	11.51	$	6.35		317,637		$	15.77	$	9.48		608,787		$	10.43	$	5.33		536,635		$	12.05	$	6.68
Stock options exercisable at end of period		427,953		$	12.67	$	7.16		178,304		$	17.01	$	10.32		385,709		$	11.56	$	6.20		396,627		$	13.14	$	7.53
Stock options expected to vest at end of period		268,184		$	9.66	$	5.06		132,908		$	14.18	$	8.38		223,078		$	8.48	$	3.82		140,008		$	8.96	$	4.29

At ~~September~~June 30, ~~2017,~~2019, intrinsic value associated with stock options exercisable ~~was approximately $586. At September 30, 2017, intrinsic value associated with stock options~~and expected to vest was approximately ~~$659.~~$289 and $251, respectively. The weighted average remaining contractual term of both stock options exercisable and expected to vest at ~~September~~June 30, ~~2017,~~2019, was approximately ~~6.7 years and 7.2 years, respectively.~~4.3 years. Stock options with an aggregate intrinsic value of approximately $326 were exercised by employees during the six months ended June 30, 2019, resulting in proceeds to the Company from the exercise of stock options of approximately $263 (of which, at June 30, 2019, approximately $91 remained unsettled). The Company received no income tax benefit related to these exercises. There were no stock option exercises during the ~~nine~~six months ended ~~September~~June 30, ~~2017 or 2016.~~2018.

Restricted stock that vested during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018, had a fair value of approximately ~~$670~~$356 and ~~$351,~~$205, respectively.

During the six months ended June 30, 2019, the Company made cash payments for taxes of approximately $68 relating to the net settlement of certain equity-based awards. There were no cash payments for taxes or net settlement of equity-based awards during the six months ended June 30, 2018.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.

The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

The Company is required to disclose its estimate of the fair value of material financial instruments, including those recorded as assets or liabilities in its consolidated financial statements, in accordance with GAAP.

~~During the quarter ended March~~At June 30, 2019 and December 31, ~~2017,~~2018, the Company ~~entered into two separate foreign exchange forward contracts with a German bank in an effort to hedge the variability of certain foreign exchange risks~~ between the Euro (the functional currency of the Company’s ExOne GmbH subsidiary) and British Pound Sterling (the currency basis for cash flows resulting from a commercial sales arrangement with a customer). The first of the two foreign exchange forward contracts was both entered into and settled (in connection with cash received from the customer) during the quarter ended March 31, 2017, resulting in a realized gain on settlement of approximately $16 (€15). The second of the two foreign exchange forward contracts was settled on August 31, 2017, resulting in a realized gain on settlement of approximately $14 (€12). Neither of the contracts was designated as a hedging instrument and accordingly, realized and unrealized gains (losses) for all periods have been recorded to other (income) expense – net in the accompanying condensed statement of consolidated operations and comprehensive loss. The Company has classified both contracts as Level 2had no financial instruments (assets or liabilities) measured at fair value ~~measurements.~~ on a recurring basis.

The carrying values and fair values of other financial instruments (assets and liabilities) not required to be recorded at fair value were as ~~follows:~~follows as of the dates indicated:

September 30,

December 31,

2017

2016

Carrying
Value

Fair
Value

Carrying
Value

Fair
Value

Cash and cash equivalents

$
17,706

$
17,706

$
27,825

$
27,825

Restricted cash

$
1,098

$
1,098

$
330

$
330

Current portion of long-term debt*

$
135

$
140

$
132

$
138

Current portion of capital leases

$
25

$
25

$
72

$
72

Long-term debt ̶ net of current portion*

$
1,543

$
1,570

$
1,644

$
1,674

Capital leases ̶ net of current portion

$
41

$
41

$
10

$
10

	June 30,				December 31,
	2019				2018
	Carrying Value		Fair Value		Carrying Value		Fair Value
Cash and cash equivalents	$	5,462	$	5,462	$	7,592	$	7,592
Restricted cash	$	1,790	$	1,790	$	1,548	$	1,548
Debt issuance costs^(a)	$	151	$	—	$	195	$	—
Current portion of long-term debt^(b)	$	149	$	153	$	144	$	149
Long-term debt ̶ net of current portion^(b)	$	1,288	$	1,306	$	1,364	$	1,384

* ~~Carrying values at September 30, 2017 and December 31, 2016 are net of unamortized debt issuance costs of approximately $32 and $36, respectively.~~

The carrying amounts of cash and cash equivalents, restricted cash and current portion of long-term debt ~~and current portion of capital leases~~ approximate fair value due to their short-term maturities. The fair value of long-term debt – net of current portion ~~and capital leases – net of current portion have~~has been estimated by management based on the consideration of applicable interest rates (including certain instruments at variable or floating rates) and other available information (including quoted prices of similar instruments available to the Company). Cash and cash equivalents and restricted cash ~~are~~were classified inas Level 1; ~~current~~Current portion of long-term debt ~~current portion of capital leases,~~and long-term debt – net of current portion ~~and capital leases – net of current portion are~~were classified inas Level 2.2.

During the ~~quarters~~three months and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018, the Company conducted a significant portion of its business with a limited number of customers, though not necessarily the same customers for each respective period. For the ~~quarters~~three months ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018, the Company’s five most significant customers represented approximately ~~46.0%~~46.4% and ~~36.0%~~33.0% of total revenue, respectively. For the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018, the Company’s five most significant customers represented approximately ~~22.2%~~33.0% and ~~21.4%~~25.2% of total revenue, respectively. At ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016,~~2018, accounts receivable from the Company’s five most significant customers were approximately ~~$2,293~~$1,681 and ~~$1,867,~~$2,344, respectively.

~~Sales~~Purchases of products and/or services tofrom related parties ~~for~~during the ~~quarters~~three months ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018, were approximately $8$43 and ~~$1,~~$6, respectively. ~~Sales~~Purchases of products and/or services tofrom related parties ~~for~~during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016~~2018, were approximately ~~$25~~$58 and ~~$73,~~$12, respectively. Purchases of products and/or services by the Company during each of the respective periods primarily included website design services and leased office space (through August 2019) from related parties under common control by S. Kent Rockwell (currently the Chairman of the Board of the Company and previously the Executive

Chairman and Chief Executive Officer of the Company). In addition, during the three months ended June 30, 2019, the Company purchased a 3D printing machine and certain ancillary equipment for approximately $30 from an educational institution determined to be a related party on the basis that S. Kent Rockwell serves as a trustee of the educational institution.

None of the transactions met a threshold requiring review and approval by the Audit Committee of the Board of Directors of the Company.

~~There were no amounts~~Amounts due ~~from~~to related parties ~~at September 30, 2017.Amounts due from related parties~~associated with the purchase of products and/or services at December 31, ~~2016,~~2018 were approximately $1 and are reflected in accounts receivable – net in the accompanying condensed consolidated balance sheet. In addition, the Company has received prepayments for certain undelivered services to a related party of approximately $8 at September 30, 2017, which are reflected in deferred revenue and customer prepaymentspayable in the accompanying condensed consolidated balance sheet. There were no ~~prepayments received from~~amounts due to related parties associated with the purchase of products and/or services at ~~December 31, 2016.~~June 30, 2019.

During the quarters ended September 30, 2017 and 2016, purchases from related parties were approximately $4 and $3, respectively. During the nine months ended September 30, 2017 and 2016, purchases from related parties were approximately $12 and $13, respectively. Purchases by the Company during the quarters and nine months ended September 30, 2017 and 2016 included website design services and leased office space from related parties under common control by the Executive Chairman of the Company (formerly the Chairman and CEO of the Company through August 19, 2016). None of the transactions met a threshold requiring review and approval by the Audit Committee of the Board of Directors of the Company.

The Company also receives the benefit of the corporate use of an airplane from a related party under common control by ~~the Executive Chairman of the Company (formerly the Chairman and CEO of the Company through August 19, 2016)~~S. Kent Rockwell for no ~~consideration.~~ consideration. The Company estimates the fair market value of the benefits received during each of the ~~quarter~~three months and ~~nine~~six months ended ~~September~~June 30, ~~2016 were~~2019 was approximately ~~$17 and $21, respectively.~~$3. There were no such benefits received during the ~~quarter or nine~~three months and six months ended ~~September~~June 30, ~~2017.~~

Amounts due to related parties at September 30, 2017 and December 31, 2016, were approximately $1 and $1, respectively. Amounts due to related parties for both periods are reflected in accounts payable in the accompanying condensed consolidated balance sheet.

On October 23, 2015, ExOne and its ExOne Americas LLC and ExOne GmbH subsidiaries, as guarantors, entered into a Credit Agreement (the “Credit Agreement”) with RHI Investments, LLC (“RHI”), a related party, on a $15,000 revolving credit facility to (i) assist the Company in its efforts to finance customer acquisition of its 3D printing machines and 3D printed and other products and services and (ii) provide additional funding for working capital and general corporate purposes. RHI was determined to be a related party based on common control by the former Chairman and CEO of the Company (the Executive Chairman of the Company effective August 19, 2016). Prior to execution, the Credit Agreement was subject to review and approval by a sub-committee of independent members of the Board of Directors of the Company (which included each of the members of the Audit Committee of the Board of Directors). The Company incurred approximately $215 in debt issuance costs associated with the Credit Agreement.

On January 10, 2016, the Company delivered notice to RHI of its intent to terminate the Credit Agreement in connection with the closing of a registered direct offering of common stock to an entity under common control by the former Chairman and CEO of the Company ~~(the Executive Chairman of the Company effective August 19, 2016)~~. There were no borrowings under the Credit Agreement from January 1, 2016 through the effective date of its termination, January 13, 2016. In connection with the termination, the Company settled its remaining accrued interest under the Credit Agreement of approximately $5 relating to the commitment fee on the unused portion of the revolving credit facility ~~(100 basis points, or 1.0% on the unused portion of the revolving credit facility)~~. In addition, during the quarter ended March 31, 2016, the Company recorded approximately $204 to interest expense related to the accelerated amortization of debt issuance costs. Upon termination of the Credit Agreement, all liens and guaranties in respect thereof were released.

Refer to Note 213 for further discussion relating to ~~two separate equity offerings during the quarter ended March 31, 2016, certain elements of which qualified as~~a revolving credit facility with a related party ~~transactions.~~ entered into in March 2018.

Other expense (income) – net consisted of the following for the periods indicated:

The Company has evaluated all of its activities and concluded that no subsequent events have occurred that would require recognition in the condensed consolidated financial statements or disclosure in the notes to the condensed consolidated financial statements.

The following discussion and analysis should be read together with our unaudited condensed consolidated financial statements and related notes thereto set forth in this Quarterly Report on Form 10-Q as well as our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018.

This Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to our future financial or business performance, strategies, or expectations. Forward-looking statements typically are identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” as well as similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could” and “may.”

We caution that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made and we assume no duty to and do not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

In addition to items described under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2018, the following factors, among others, could cause results to differ materially from forward-looking statements or historical performance: our ability to consistently generate operating profits; fluctuations in our revenue and operating results; our competitive environment and our competitive position; our ability to enhance our current 3D printing machinesand technology and develop new 3D printing machines; our ability to qualify more industrial materials in which we can print; ~~timing and length of sales of3D printing machines;~~ demand for our products; ~~our ability to achieve cost savings through consolidation~~ ~~or exiting of certain North American operations; the impact of increases in operating expenses and expenses relating to proposed investments and alliances;~~ the availability of skilled personnel; the impact of loss of key management; the impact of market conditions and other factors on the ~~carrying~~carrying value of long-lived assets;~~our competitive environment and our competitive position;~~ our ability to continue as a going concern; ~~individual customer contractual requirements;~~ the impact of customer specific terms in machine sale agreements on the ~~period~~period in which we recognize revenue; ~~the impact of loss of key management;~~ risks related to global operations including effects of foreign ~~currency~~currency; the adequacy of sources of liquidity; the amount and ~~risks related to the situation in the Ukraineand the United Kingdom’s referendum to withdraw from the European Union;~~demand for aerospace, automotive, heavy equipment, energy/oil/gas and other industrial products; our plans regarding increased international operations in additional international locations; the scope, nature or impact of alliances and strateg ~~ic investments and our ability to integrate strategic investments;~~ sufficiency of funds for required capital expenditures, working capital, and debt service; ~~the adequacy~~dependency on certain critical suppliers; nature or impact of ~~sources of liquidity;~~alliances and strategic investments; reliance on critical information technology systems; the effect of litigation, contingencies and warranty claims;liabilities under laws and regulations protecting the environment; the impact of governmental laws and regulations; operating hazards, war, terrorism and cancellation or unavailability of insurance coverage; the impact of disruption of our manufacturing facilities ~~production service centers (“PSCs”)~~ or ExOne ~~adoption centers~~Adoption Centers (“EACs”); the adequacy of our protection of our intellectual property; and expectations regarding demand for our industrial products, operating ~~revenues,~~revenue, operating and maintenance expenses, ~~insuran~~ceinsurance expenses and deductibles, interest expenses, debt levels, and other matters with regard to ~~outlook; andmaterial weaknesses in our internal control over financial reporting~~outlook.

We are a global provider of 3D printing machines and 3D printed and other products, materials and services to industrial customers. Our business primarily consists of manufacturing and selling 3D printing machines and printing products to specification for our customers using our installed base of 3D printing machines. Our machines serve direct and indirect applications. Direct printing produces a component; indirect printing makes a tool to produce a component. We offer pre-production collaboration and print products for customers through our network of ~~PSCs and~~ EACs. We also supply the associated materials, including consumables and replacement parts, and other services, including training and technical support, that isare necessary for purchasers of our 3D printing machines to print products. We believe that our ability to print in a variety of industrial materials, as well as our industry-leading volumetric output (as measured by build box size and printing speed), uniquely position us to serve the needs of industrial customers..

On January 26, 2017, we committed to a plan to consolidate certain of our 3D printing operations from our North Las Vegas, Nevada facility into our Troy, Michigan and Houston, Texas facilities and exit our non-core specialty machining operations in our Chesterfield, Michigan facility. These actions were taken as a result of t~~he accelerating adoption rate of our sand printing technology in North America which has resulted in a refocus of our operational strategy.~~

As a result of these actions, during the quarter ended March 31, 2017, we recorded charges of approximately $984, including approximately $110 associated with involuntary employee terminations, approximately $7 associated with other exit costs and approximately $867 associated with asset impairments. Charges associated with involuntary employee terminations and other exit costs were recorded tolower cost of ~~sales in the accompanying condensed statement of operations~~adoption versus other competing technologies, our faster printing speeds and comprehensive loss. Charges associated with asset impairments were split between cost of sales ($598), as a component of depreciation expense, and selling, general and administrative expenses ($269), as a component of amortization expense, in the accompanying condensed statement of operations and comprehensive loss. During the quarter ended June 30, 2017, we recorded a charge of approximately $32 associated with an additional involuntary employee termination which required a service commitment through April 2017. This charge was recordedour scalability to cost of sales in the accompanying condensed statement of operations and comprehensive loss. There have been no additional charges recorded associated with this plan in subsequent periods. There are no additional charges expected to be incurred associated with this plan in future periods. We have settled all amounts associated with involuntary employee terminations and other exit costs.larger product size.

Charges associated with asset impairments relate principally to our plan to exit our non-core specialty machining operations in our Chesterfield, Michigan facility. On April 21, 2017, we sold to a third party certain assets associated with these operations including inventories (approximately $79), property and equipment (approximately $2,475) and other contractual rights (approximately $269). Total gross proceeds from the sale of these assets were approximately $2,050. After deducting costs directly attributable to the sale of these assets (approximately $128), we recorded an impairment loss during the quarter ended March 31, 2017, of approximately $859 split between property and equipment ($590) and intangible assets ($269) based on the excess of the carrying value over the estimated fair value of the related assets at March 31, 2017, and a loss on disposal (recorded to cost of sales in the accompanying condensed statement of operations and comprehensive loss) during the quarter ended June 30, 2017, of approximately $42. Additionally, we recorded an impairment loss during the quarter ended March 31, 2017, of approximately $8 associated with certain property and equipment which was abandoned in connection with our plan to exit our North Las Vegas, Nevada facility.Backlog

Separate from the transaction described above, on May 9, 2017, we sold to a third party certain property and equipment (principally land and building) associated with our North Las Vegas, Nevada facility. Total gross proceeds from the sale of these assets were approximately $1,950. After deducting costs directly attributable to the sale of these assets (approximately $137), we recorded a gain on disposal (recorded to cost of sales in the accompanying condensed statement of operations and comprehensive loss) during the quarter ended June 30, 2017, of approximately $347.21

The consolidation of our 3D printing operations from our North Las Vegas, Nevada facility into our Troy, Michigan and Houston, Texas facilities is not expected to have a significant impact on our revenues in future periods. We expect annualized cost savings related to this consolidation of approximately $600, with approximately $570 in the form of cash cost savings (principally employee and facility maintenance costs) and approximately $30 in the form of reduced depreciation expense. All cost savings associated with this consolidation are expected to benefit cost of sales. We expect to invest these cost savings into technological or process advancements that support either long-term cost benefits or revenue growth.

~~We expect annualized reductions in revenue related to our exit of our non-core specialty machining operations in our Chesterfield, Michigan facility of approximately $1,400.~~ ~~Revenues associated with our non-core specialty machining operations in our Chesterfield, Michigan facility were approximately $346 for the nine months ended September~~At June 30, 2017 and approximately $427 and $1,075 for the quarter and nine months ended September 30, 2016, respectively. We expect annualized cost savings related to this exit of approximately $500, with approximately $200 in the form of cash cost savings (principally employee-related and other operating costs), approximately $200 in the form of reduced depreciation expense and approximately $100 in the form of reduced amortization expense. Cost savings associated with the exit of this facility are expected to benefit cost of sales by approximately $400 and selling, general and administrative expenses by approximately $100. We expect to invest these cost savings into technological or process advancements that support either long-term cost benefits or revenue growth.

On March 22, 2017, we terminated our Cooperation Agreement with Swerea SWECAST AB (“Swerea”), resulting in an exit of our PSC operations in Jönköping, Sweden, effective April 1, 2017. Also on March 22, 2017, we agreed to a leasing agreement with Beijer Industri AB, effective April 1, 2017, related to our 3D printing machine and related equipment located on the Swerea premises, previously covered under our Cooperation Agreement with Swerea. Both of these actions were taken in connection with our continuing evaluation of our business model in an effort to both streamline our existing European operations, and to take strategic advantage of our existing relationship with Beijer Industri AB in promoting indirect binder jet technologies in Scandinavia. There were no penalties or other adverse effects associated with our termination of our Cooperation Agreement with Swerea. There were no significant effects on our results of operations or financial position associated with these actions.

During the quarter ended September 30, 2017, as a result of continued operating losses and cash flow deficiencies, we identified a triggering event requiring a test for the recoverability of long-lived assets held for use at the asset group level. Assessing the recoverability of long-lived assets held for use requires significant judgments and estimates by management.

For purposes of testing long-lived assets for recoverability, we operate as three separate asset groups: United States, Europe and Japan. In assessing the recoverability of long-lived assets held for use, we determined the carrying amount of long-lived assets held for use to be in excess of the estimated future undiscounted net cash flows of the related assets. We proceeded to determine the fair value of our long-lived assets held for use, principally through use of the market approach. Our use of the market approach included consideration of market transactions for comparable assets. Management concluded that the fair value of long-lived assets held for use exceeded their carrying value and as such no impairment loss was recorded.

~~At September 30, 2017,~~2019, our backlog was approximately ~~$20,900~~$23,100 of which approximately ~~$17,900 is~~$19,700 was expected to be fulfilled during the ~~next~~ twelve ~~months.~~months following such date. At December 31, ~~2016,~~2018, our backlog was approximately ~~$19,700.~~$12,300.

Purchases of our 3D printing machines are often subject to the capital expenditure cycles of our customers. Generally, 3D printing machine sales are higher in our third and fourth quarters than in our first and second quarters; however, as acceptance of our 3D printing machines as a credible alternative to traditional methods of production grows, we expect to limit the seasonality we experience.

Net loss for the ~~quarter~~three months ended ~~September~~June 30, ~~2017,~~2019 was ~~$4,863,~~$3,789, or ~~$0.30~~$0.23 per basic and diluted share, compared with a net loss of ~~$3,611~~$8,037 or ~~$0.23~~$0.50 per basic and diluted share, for the ~~quarter~~three months ended ~~September~~June 30, ~~2016.~~2018. Net loss for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, was ~~$18,057,~~$8,285, or ~~$1.13~~$0.51 per basic and diluted share, compared with a net loss of ~~$12,030~~$14,422 or ~~$0.76~~$0.89 per basic and diluted share, for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2018. The ~~increase~~decrease in our net loss for both periods was principally due to ~~a net decrease~~an increase in our gross profit ~~(as a percentage of sales) along~~(driven by higher revenues) combined with ~~increases~~decreases in ~~research~~our operating expenses (research and development and selling, general and administrative ~~expenses~~expense) mostly due to our 2018 global cost realignment program (all changes further described below).

Revenue for the ~~quarter~~three months ended ~~September~~June 30, ~~2017,~~2019 was ~~$15,887~~$15,279, compared with revenue of ~~$12,988~~$10,857 for the ~~quarter~~three months ended ~~September~~June 30, ~~2016,~~2018, an increase of ~~$2,899,~~$4,422, or ~~22.3%~~40.7%. The increase in revenue ~~was as a result of increases~~resulted from an increase in revenue attributable to ~~both of~~ our ~~product lines (3D~~3D printing machines ~~and~~product group, offset by a decrease in revenue attributable to our 3D printed and other products, materials and ~~services).~~services product group. The increase in revenues from 3D printing machines resulted from a ~~slightly~~ higher volume of units sold ~~(12~~(13 3D printing machines sold during the ~~quarter~~three months ended ~~September~~June 30, ~~2017,~~2019, as compared to 11seven 3D printing machines sold during the ~~quarter~~three months ended ~~September~~June 30, ~~2016)~~2018), and a favorable mix of ~~3D printing~~ machines sold, ~~(as we sold eight~~with a greater share of indirect printers ~~during the quarter ended September 30, 2017,~~sold as compared to ~~six~~direct printers (such indirect ~~printers during the quarter ended September 30, 2016, indirect printers~~machines generally bearing a higher average selling price ~~than~~as compared to direct ~~printers)~~machines). The ~~increase~~decrease in revenues from 3D printed and other products, materials and services principally resulted from ~~an increase~~a decrease in revenues from our direct ~~PSC~~EAC printing operations as(mostly due to the timing of orders from a ~~result~~key customer), indirect EAC printing operations (mostly due to lower volumes of ~~increased customer acceptance~~sale of printed products and the impact of our ~~binder jet technologies~~exit of our Houston, Texas facility in August 2018, such facility contributing approximately $400 in revenue during the three months ended June 30, 2018) and materials (mostly due reductions in pricing and the timing of certain customer orders). Revenue was also impacted by approximately $200 due to unfavorable exchange rates (principally the euro versus the United States dollar) during the three months ended June 30, 2019.

Revenue for the six months ended June 30, 2019, was $24,858 compared with revenue of $22,750 for the six months ended June 30, 2018, an increase of $2,108, or 9.3%. The increase in revenue resulted from an increase in ~~service revenues (maintenance services and replacement components for~~revenue attributable to our 3D printing ~~machines) based on an increased global installed base of 3D printing machines. These increases~~machines product group, offset by a decrease in ~~revenues from~~revenue attributable to our 3D printed and other products, materials and services ~~were offset by a decrease in~~ product sales associated with our former specialty machining operation located in our Chesterfield, Michigan facility (approximately $427) following the sale of certain assets associated with this operation in April 2017.

Revenue for the nine months ended September 30, 2017, was $37,555 compared with revenue of $33,157 for the nine months ended September 30, 2016, an increase of $4,398, or 13.3%. The increase in revenue was as a result of increases in revenue attributable to both of our product lines (3D printing machines and 3D printed and other products, materials and services).group. The increase in revenues from 3D printing machines resulted ~~primarily~~ from ~~an increase in~~a higher volume of ~~3D printing machines~~units sold ~~(25~~(21 3D printing machines sold during the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, as compared to 2113 3D printing machines sold during the ~~nine~~six months ended ~~September~~June 30, ~~2016)~~2018), and a favorable mix of ~~3D printing~~ machines sold, ~~(as we sold 14~~with a greater share of indirect printers ~~during the quarter ended September 30, 2017,~~sold as compared to 11direct printers (such indirect ~~printers during the quarter ended September 30, 2016, indirect printers~~machines generally bearing a higher average selling price ~~than~~as compared to direct ~~printers)~~machines). The ~~increase~~decrease in revenues from 3D printed and other products, materials and services principally resulted from ~~an increase~~a decrease in revenues from our direct ~~PSC~~EAC printing operations as(mostly due to the timing of orders from a ~~result~~key customer), indirect EAC printing operations (mostly due to lower volumes of ~~increased customer acceptance~~sale of printed products and the impact of our ~~binder jet technologies and an increase~~exit of our Houston, Texas facility in ~~service revenues (maintenance services and replacement components for 3D printing machines) based on an increased global installed base of 3D printing machines. These increases~~August 2018, such facility contributing approximately $800 in revenues from 3D printed and other products, materials and services were offset by a decrease in product sales associated with our former specialty machining operation located in our Chesterfield, Michigan facility (approximately $729) following the sale of certain assets associated with this operation in April 2017 and the absence of the sale of remaining inventories associated with our former laser micromachining product line (approximately $475)revenue during the ~~quarter~~six months ended June 30, ~~2016.~~

~~The following table summarizes 3D printing machines sold~~2018) and materials (mostly due reductions in pricing and the timing of customer orders). Revenue was also impacted by ~~type (refer~~approximately $600 due to unfavorable exchange rates (principally the ~~“Our Machines and Machine Platforms” section of Part I, Item 1 of our Annual Report on Form 10-K for~~euro versus the ~~year~~United States dollar) during the six months ended ~~December 31, 2016, for a description of 3D printing machines by type):~~June 30, 2019.

Cost of sales for the ~~quarter~~three months ended ~~September~~June 30, ~~2017,~~2019 was ~~$11,790~~$10,137, compared with cost of sales of ~~$9,428~~$9,267 for the ~~quarter~~three months ended ~~September~~June 30, ~~2016,~~2018, an increase of ~~$2,362,~~$870, or ~~25.1%~~9.4%. Gross profit for the three months ended June 30, 2019 was $5,142, compared with gross profit of $1,590 for the three months ended June 30, 2018. Gross profit percentage was 33.7% for the three months ended June 30, 2019, compared with 14.6% for the three months ended June 30, 2018. The increase in ~~cost of sales~~our gross profit was primarily due to an increase in our ~~variable cost~~volume of ~~sales associated with our increase~~products sold resulting in ~~revenues.~~

Gross profit for the quarter ended September 30, 2017, was $4,097 compared with gross profit of $3,560 for the quarter ended September 30, 2016. Gross profit percentage was 25.8% for the quarter ended September 30, 2017, compared with 27.4% for the quarter ended September 30, 2016. The change in gross profit was the result of the increase in revenues net of the increase in cost of sales as further described above. This includes our recognition of four Exerial 3D printing machines during the quarter ended September 30, 2017 (approximately $2,762), which yielded a break-even result on a contribution margin basis. Excluding these unit sales, we benefitted from overall higher realized pricing on 3D printing machine sales and betterimproved leverage of our fixed cost base ~~due to higher sales~~and cost savings associated with our 2018 global cost realignment program (primarily costs associated with our former Houston, Texas facility and a reduction in consulting and professional fees of ~~3D printed and other products, materials and services.~~

~~Cost of sales for the nine months ended September 30, 2017, was $29,829 compared with cost of sales of $24,215 for the nine months ended September 30, 2016,~~approximately $28), offset by an ~~increase of $5,614, or 23.2%. The increase~~unfavorable product mix. In addition, we realized a net benefit in ~~cost of sales was primarily due to an increase in our variable~~ cost of sales associated with ~~our increase~~a reduction in ~~revenues. In addition, we recognized a~~ net ~~charge~~charges associated with slow-moving, obsolete and lower of cost or ~~market~~net realizable value inventories of approximately ~~$1,872 during~~$889 (principally due to the ~~nine months ended September 30, 2017, compared to a net recovery of approximately $356 during the nine months ended September 30, 2016. The net~~$561 charge associated with our industrial microwave inventories recorded during the ~~nine~~three months ended September 30, 2017, was primarily attributable to certain raw material and component inventories (principally machine frames and other fabricated components) of approximately $1,460 recorded during the quarter ended June 30, ~~2017,~~2018). Offsetting this net benefit in cost of sales was net negative experience related to product warranties of approximately $336.

Cost of sales for the six months ended June 30, 2019 was $17,074, compared with cost of sales of $18,544 for the six months ended June 30, 2018, a decrease of $1,470, or 7.9%. Gross profit for the six months ended June 30, 2019 was $7,784, compared with gross profit of $4,206 for the six months ended June 30, 2018. Gross profit percentage was 31.3% for the six months ended June 30, 2019, compared with 18.5% for the six months ended June 30, 2018. The increase in our gross profit was primarily due to an increase in our volume of products sold resulting in improved leverage of our fixed cost base and cost savings associated with our Exerial 3D printing machine platform based on decisions made by us during the period related to certain design changes and improvements to the underlying platform (rendering certain elements of the previous design obsolete). The net recovery recorded during the nine months ended September 30, 2016, principally relates to the sale of certain inventories2018 global cost realignment program (primarily costs associated with our former ~~laser micromachining~~Houston, Texas facility and a reduction in consulting and professional fees of approximately $167), offset by an unfavorable product ~~line (approximately $507)~~mix. In addition, we realized net benefits in cost of sales associated with a reduction in net charges associated with slow-moving, obsolete and lower of cost or net realizable value inventories of approximately $798 (principally due to the $561 charge associated with our industrial microwave inventories recorded during the ~~quarter~~three months ended June 30, ~~2016. Also, during~~2018) and the ~~nine months ended September 30, 2017, we incurred costs~~absence of approximately ~~$747~~$258 (approximately ~~$142 in employee termination costs, $7~~$17 in other exit costs and ~~$598~~$241 in asset impairments) in charges associated with our consolidation of our 3D printing operations from our facility in ~~North Las Vegas, Nevada~~Desenzano del Garda, Italy into our ~~Troy, Michigan and Houston, Texas facilities and our plan to exit our non-core specialty machining operations in Chesterfield, Michigan. These increases were offset by~~Gersthofen, Germany facility. Offsetting these net gains on disposal of property and equipment recorded during the nine months ended September 30, 2017 (approximately $286), compared to net losses on disposal of property and equipment recorded during the nine months ended September 30, 2016 (approximately $169). Net gains on disposal of property and equipment recorded during the nine months ended September 30, 2017, primarily related to our sale of certain property and equipment (principally land and building) associated with our consolidation and exit of our North Las Vegas, Nevada PSC. Net losses on disposal of property and equipment recorded during the nine months ended September 30, 2016, primarily related to our sale and abandonment of certain property and equipment associated with our consolidation and exit of our Auburn, Washington PSC and the sale of certain machinery and equipment associated with our former specialty machining operations in Chesterfield, Michigan.

Gross profit for the nine months ended September 30, 2017, was $7,726 compared with gross profit of $8,942 for the nine months ended September 30, 2016. Gross profit percentage was 20.6% for the nine months ended September 30, 2017, compared with 27.0% for the nine months ended September 30, 2016. The decrease in gross profit was the result of the increase in revenues net of the increasebenefits in cost of sales ~~as further described above. This includes the aforementioned recognition~~was net negative experience related to product warranties of Exerial units during the quarter ended September 30, 2017. Excluding these unit sales, we benefitted from overall higher realized pricing on 3D printing machine sales and better leverage of our fixed cost base (net of the items further described above) due to higher sales of 3D printed and other products, materials and services.approximately $536.

Research and development expenses for the ~~quarter~~three months ended ~~September~~June 30, ~~2017,~~2019 were ~~$2,871~~$2,537, compared with research and development expenses of ~~$1,898~~$3,235 for the ~~quarter~~three months ended ~~September~~June 30, ~~2016, an increase~~2018, a decrease of ~~$973,~~$698, or ~~51.3%~~21.6%. The ~~increase~~ decrease in research and development expenses was primarily due to ~~increases~~decreases in employee-related costs ~~(salaries, benefits~~(principally salaries and ~~equity-based compensation)~~benefits) of approximately ~~$295~~

$277 and consulting and professional fees of approximately $519 (both reductions primarily as a result of our 2018 global cost realignment program). These decreases were offset by an increase in material costs of approximately $144, primarily associated with ~~certain~~our development of the X1 25PRO^TM direct 3D printing machine ~~development~~ and ~~other organizational development activities of approximately $521.~~S-MAX PRO^TM indirect 3D printing machine.

Research and development expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, were ~~$7,219~~$4,969 compared with research and development expenses of ~~$5,737~~$6,030 for the ~~nine~~six months ended ~~September~~June 30, ~~2016, an increase~~2018, a decrease of ~~$1,482,~~$1,061, or ~~25.8%~~17.6%. The ~~increase~~ decrease in research and development expenses was primarily due to ~~increases~~decreases in employee-related costs ~~(salaries, benefits~~(principally salaries and ~~equity-based compensation)~~benefits) of approximately ~~$362,~~$460 and consulting and professional fees ~~associated with certain machine development and other organizational development activities~~ of approximately ~~$852 and~~$779 (both reductions primarily as a result of our 2018 global cost realignment program). These decreases were offset by an increase in material costs of approximately ~~$193 (primarily~~$154, primarily associated with ~~fine powder~~our development of the X1 25PRO^TM direct 3D printing ~~development activities).~~machine and S-MAX PRO^TM indirect 3D printing machine.

Selling, general and administrative expenses for the ~~quarter~~three months ended ~~September~~June 30, ~~2017,~~2019 were ~~$6,062~~$6,167, compared with selling, general and administrative expenses of ~~$5,234~~$6,353 for the ~~quarter~~three months ended ~~September~~June 30, ~~2016, an increase~~2018, a decrease of ~~$828,~~$186, or ~~15.8%~~2.9%. The ~~increase~~decrease in selling, general and administrative expenses was principally due to ~~increases~~a decrease in employee-related costs ~~(principally salaries, benefits~~(salaries and ~~equity-based compensation)~~benefits) of approximately ~~$933~~$1,172 (including approximately $708 in employee termination costs associated with the change in our Chief Executive Officer and our 2018 global cost realignment program recorded during the three months ended June 2018) as well as a reduction in consulting and professional fees (primarily as a result of our 2018 global cost realignment program) of approximately $72. These decreases were offset by increases associated with equity-based compensation of approximately $648 (primarily due to pre-vesting forfeitures associated with the change in our Chief Executive Officer in June 2018), and an increase in costs associated with trade show related activities of approximately $469, primarily associated with our investment in our commercial leadership team and executive severance costs, and consulting and professional fees of approximately $324 (principally executive consulting, legal and other administrative arrangements). These increases were offset by decreasesthe GIFA international foundry show in trade show expenses of approximately $148 and a decrease in our provision for bad debts from customers (net recoveries of approximately $183 during the quarter ended September 30, 2017, compared to a net provision of approximately $15 during the quarter ended September 30, 2016)Dusseldorf, Germany (a once every four-year event).

Selling, general and administrative expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019 were ~~$18,338~~$11,590, compared with selling, general and administrative expenses of ~~$15,222~~$12,555 for the ~~nine~~six months ended ~~September~~June 30, ~~2016, an increase~~2018, a decrease of ~~$3,116,~~$965, or ~~20.5%~~7.7%. The ~~increase~~decrease in selling, general and administrative expenses was principally due to ~~increases~~a decrease in employee-related costs (salaries ~~benefits~~ and ~~equity-based compensation)~~benefits) of approximately ~~$1,522~~$1,648 (including approximately $708 in employee termination costs associated with the change in our Chief Executive Officer and our 2018 global cost realignment program, recorded during the three months ended June 2018), a reduction in consulting and professional fees (primarily as a result of our 2018 global cost realignment program) of approximately $182 and an increase in net recoveries for bad debts of approximately $113. These decreases were offset by increases associated with equity-based compensation of approximately $704 (primarily due to pre-vesting forfeitures associated with the change in our Chief Executive Officer in June 2018), and an increase in costs associated with trade show related activities of approximately $481, primarily associated with our investment in our commercial leadership team and executive severance costs, consulting and professional fees of approximately $819 (principally executive consulting, legal and other administrative arrangements), lower net recoveries for bad debts from customers (net recoveries of approximately $51 during the ~~nine months ended September 30, 2017, compared to net recoveries of approximately $256 during the nine months ended September 30,~~

~~2016), an impairment of intangible assets of approximately $269 during the quarter ended March 31, 2017,~~GIFA international foundry show in connection with our plan to exit our non-core specialty machining operations at our Chesterfield, Michigan facility, and an increase in selling costs of approximately $175 (promotional expenses, trade show activities and sales commissions on 3D printing machine sales)Dusseldorf, Germany (a once every four-year event).

Interest expense for the ~~quarter~~three months ended ~~September~~June 30, ~~2017,~~2019 was ~~$24~~$71, compared with interest expense of ~~$22~~$73 for the ~~quarter~~three months ended ~~September~~June 30, ~~2016, an increase~~2018, a decrease of $2, or ~~9.1%~~2.7%. Amounts for both periods consisted principally of ~~periodic~~ interest expense associated with ~~long-term debt~~our revolving credit facility with a related party and ~~capital lease obligations.~~the building note payable associated with our global headquarters in North Huntingdon, Pennsylvania.

Interest expense for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019 was ~~$69~~$142, compared with interest expense of ~~$276~~$106 for the ~~nine~~six months ended ~~September~~June 30, ~~2016, a decrease~~2018, an increase of ~~$207,~~$36, or ~~75.0%~~34.0%. The ~~decrease~~ increase in interest expense was principally due to ~~the effect of the termination of the~~interest incurred in connection with our revolving credit facility with a related party entered into on March 12, 2018 (approximately $100 during the ~~quarter~~six months ended ~~March 31, 2016, which resulted in an acceleration of amortization of debt issuance costs of approximately $204.~~June 30, 2019 as compared to $59 during the six months ended June 30, 2018).

Other expense (income) ~~expense~~ – net for the ~~quarter~~three months ended ~~September~~June 30, ~~2017,~~2019 was ~~($11)~~$57, compared with other expense (income) ~~expense~~ – net of ($8)52) for the ~~quarter~~three months ended ~~September~~June 30, ~~2016.~~2018. Other expense (income) – net for the six months ended June 30, 2019 was $69, compared with other expense (income) – net of ($98) for the six months ended June 30, 2018. Amounts for ~~both~~each of the periods consisted principally of interest income on cash and cash equivalents balances ~~offset by~~and net foreign exchange losses (gains) on commercial transactions and certain intercompany transactions between subsidiaries either settled or planned for settlement in the foreseeable future.

~~Other (income) expense –~~ Changes between each of the periods consisted principally of changes in net for the nine months ended September 30, 2017, was $134 compared with other (income) expense – net of ($306) for the nine months ended September 30, 2016. The change of $440 was principally due to net currencyforeign exchange losses (gains) based principally on ~~certain intercompany transactions between subsidiaries either settled or planned for settlement~~changes in the ~~foreseeable future, for~~euro and Japanese yen against the ~~nine months ended September 30, 2017, as compared to net currency exchange gains during the nine months ended September 30, 2016.~~United States dollar.

The provision (benefit) for income taxes for the ~~quarters~~three months ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018 was ~~$14~~$99 and ~~$25,~~$18, respectively. The provision (benefit) for income taxes for the six months ended June 30, 2019 and 2018 was ($701) and $35, respectively. We have completed a discrete period computation of our provision (benefit) for income taxes for each of the periods presented. The discrete period computation was required as a result of jurisdictions with losses before income taxes for which no tax benefit can be

recognized and an inability to generate reliable estimates for results in certain jurisdictions as a result of inconsistencies in generating net operating profits (losses) in those jurisdictions.

The effective tax rate for the three months ended June 30, 2019 and 2018 was 2.7% (provision on a loss) and 0.2% (provision on a loss), respectively. The effective tax rate for the ~~quarters~~six months ended ~~September~~June 30, ~~2017~~2019 and ~~2016,~~2018 was ~~0.3% (provision~~7.8% (benefit on a loss) and ~~0.7%~~0.2% (provision on a loss), respectively. ~~The provision for income taxes for~~For the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2019 and 2016, was $23 and $43, respectively. The effective tax rate for the nine months ended September 30, 2017 and 2016, was 0.1% (provision on a loss) and 0.4% (provision on a loss), respectively. For each of the quarters and nine months ended September 30, 2017 and 2016,2018, the effective tax rate differs from the ~~U.S.~~United States federal statutory rate of ~~34.0%~~21.0% primarily due to net changes in valuation allowances for the periods. For the six months ended June 30, 2019, the effective tax rate differs from the United States federal statutory rate of 21.0% primarily due to the reversal of previously recorded liabilities for uncertain tax positions (further described below) and net changes in valuation allowances for the period. For the six months ended June 30, 2018, the effective tax rate differs from the United States federal statutory rate of 21.0% primarily due to net changes in valuation allowances for the periods.

We have provided a valuation allowance for our net deferred tax assets as a result of our inability to generate consistent net operating profits in jurisdictions in which we operate. As such, any benefit from deferred taxes in any of the periods presented in our condensed consolidated financial statements has been fully offset by changes in the valuation allowance for net deferred tax assets. We continue to assess our future taxable income by jurisdiction based on our recent historical operating results, the expected timing of reversal of temporary differences, various tax planning strategies that we may be able to enact in future periods, the impact of potential operating changes on our business and our forecast results from operations in future periods based on available information at the end of each reporting period. To the extent that we are able to reach the conclusion that net deferred tax assets are realizable based on any combination of the above factors in a single, or multiple, taxing jurisdictions, a reversal of the related portion of our existing valuation allowances may occur.

At December 31, 2018, our ExOne GmbH (2010-2013) and ExOne Property GmbH (2013) subsidiaries were under examination by local taxing authorities in Germany. In January 2019, this examination was concluded by the local taxing authorities in Germany without significant adjustment to previously established tax positions. As a result, during the three months ended March 31, 2019, we recorded a reversal of certain of our previously recorded liabilities for uncertain tax positions of approximately $1,075, of which approximately $257 was offset against net operating loss carryforwards.

In December 2017 we committed to a plan to consolidate certain of our 3D printing operations from our Desenzano del Garda, Italy facility into our Gersthofen, Germany facility. These actions were taken as part of our efforts to optimize our business model and maximize our facility utilization. As a result of these actions, during the three months ended December 31, 2017, we recorded a charge of approximately $72 split between cost of sales ($19) and selling, general and administrative expense ($53) associated with involuntary employee terminations related to this plan. During the three months ended March 31, 2018, we recorded an additional charge of approximately $245 associated with other exit costs ($17) and asset impairments ($228) related to this plan. During the three months ended June 30, 2018, we recorded an additional charge of approximately $13 associated with asset impairments related to this plan. In addition, during the three months ended June 30, 2018, we recorded a gain from disposal of certain property and equipment of approximately $51 (recorded to cost of sales in the accompanying condensed statement of consolidated operations and comprehensive loss). Charges associated with other exit costs recorded during the six months ended June 30, 2018 were recorded to cost of sales in the accompanying condensed statement of consolidated operations and comprehensive loss. Charges associated with asset impairments recorded during the three and six months ended June 30, 2018 were recorded to cost of sales as a component of depreciation expense in the accompanying condensed statement of consolidated operations and comprehensive loss. Other exit costs relate to the remaining facility rent due under a non-cancellable operating lease following the cessation of operations at the facility in January 2018. Asset impairment charges relate to certain leasehold improvements associated with the exited facility and other equipment which we abandoned. There are no additional charges expected to be incurred associated with this plan in future periods. We settled all amounts associated with involuntary employee terminations and other exit costs (remaining facility rent payments) during 2018.

The consolidation of our 3D printing operations from our Desenzano del Garda, Italy facility into our Gersthofen, Germany facility is not expected to have a significant impact on our revenues in future periods. We expect annualized cost savings related to this consolidation of approximately $875, with approximately $600 in the form of cash cost savings (principally employee-related and other operating costs) and approximately $275 in the form of reduced depreciation expense. Cost savings associated with the exit of this facility are expected to benefit cost of sales by approximately $625 and selling, general and administrative expenses by approximately $250. We expect to invest these cost savings into technological or process advancements that support either long-term cost benefits or revenue growth.

During the three months ended June 30, 2019, as a result of continued operating losses and cash flow deficiencies, we identified a triggering event requiring a test for the recoverability of long-lived assets held and used at the asset group level. Assessing the recoverability of long-lived assets held and used requires significant judgments and estimates by management.

For purposes of testing long-lived assets for recoverability, we operate as three separate asset groups: United States, Europe and Japan. In assessing the recoverability of long-lived assets held and used, we determined the carrying amount of long-lived assets held and used to be in excess of the estimated future undiscounted net cash flows of the related assets. We proceeded to determine the fair value of our long-lived assets held and used, principally through use of the market approach. Our use of the market approach included consideration of market transactions for comparable assets. Management concluded that the fair value of long-lived assets held and used exceeded their carrying value and as such no impairment loss was recorded.

Our results of operations and financial condition are presented based on historical cost. While it is difficult to accurately measure the impact of inflation due to the imprecise nature of the estimates required, we believe the effects of inflation, if any, on our results of operations and financial condition are not significant.

We have incurred a net loss in each of our annual periods since our inception. In addition, we incurred a net loss of approximately ~~$4,863~~$3,789 and ~~$18,057~~$8,285 for the ~~quarter~~three months and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019, respectively. ~~In connection with the completion of our initial public offering~~At June 30, 2019, we had approximately $5,462 in unrestricted cash and ~~subsequent secondary offerings (including our ATM), we~~cash equivalents.

We have received cumulative unrestricted net proceeds from the sale of our common stock (through our initial public offering and subsequent secondary offerings) of approximately $168,361 to fund our operations. ~~At September 30, 2017,~~In March 2018, we ~~had approximately $17,706~~entered into a three-year, $15,000 revolving credit facility with a related party (further described below) to provide additional funding for working capital and general corporate purposes. In June 2018, we initiated a 2018 global cost realignment program focused on a reduction in ~~unrestricted cash~~our production overhead costs and ~~cash equivalents.~~ operating expenses in an effort to drive efficiency in our operations and preserve capital.

We believe that our existing capital resources will be sufficient to support our operating plan. If we anticipate that our actual results will differ from our operating plan, we believe we have sufficient capabilities to enact cost savings measures to preserve

~~capital. Further, we~~ capital (in addition to the costs savings measures associated with our 2018 global cost realignment program further described above). We may also seek to raise additional capital to support our growth through additional debt, equity or other alternatives (including asset sales) or a combination ~~thereof.~~thereof.

On March 12, 2018, we and our ExOne Americas LLC and ExOne GmbH subsidiaries, as guarantors (collectively, the “Loan Parties”), entered into a Credit Agreement and related ancillary agreements with LBM Holdings, LLC (“LBM”), a company controlled by S. Kent Rockwell, who was our Executive Chairman (a related party) at such date and is currently Chairman of our Board of Directors (the “Board”), relating to a $15,000 revolving credit facility (the “LBM Credit Agreement”) to provide additional funding for working capital and general corporate purposes. The LBM Credit Agreement provides for a term of three years (through March 12, 2021) and bears interest at a rate of one month LIBOR plus an applicable margin of 500 basis points (approximately 7.4% and 7.5% at June 30, 2019 and December 31, 2018, respectively). The LBM Credit Agreement requires a commitment fee of 75 basis points, or 0.75%, on the unused portion of the facility, payable monthly in arrears. In addition, an up-front commitment fee of 125 basis points, or 1.25% (approximately $188), was required at closing. Borrowings under the LBM Credit Agreement are required to be in minimum increments of $1,000. We may terminate or reduce the credit commitment at any time during the term of the LBM Credit Agreement without penalty. We may also make prepayments against outstanding borrowings under the LBM Credit Agreement at any time without penalty. Borrowings under the LBM Credit Agreement have been collateralized by the accounts receivable, inventories and machinery and equipment of the Loan Parties. At inception and June 30, 2019 the total estimated value of collateral was in significant excess of the maximum borrowing capacity under the LBM Credit Agreement.

covenants. The LBM Credit Agreement also contains events of default, including, but not limited to, cross-default to certain other debt, breaches of representations and warranties, change of control events and breaches of covenants.

LBM was determined to be a related party based on common control by S. Kent Rockwell. Accordingly, we do not consider the LBM Credit Agreement indicative of a fair market value lending. Prior to execution, the LBM Credit Agreement was reviewed and approved by the Audit Committee of the Board and subsequently by a sub-committee of independent members of the Board. At the time of execution of the LBM Credit Agreement, the $15,000 in available loan proceeds was deposited into an escrow account with an unrelated, third party financial institution acting as escrow agent pursuant to a separate Escrow Agreement by and among the parties. Loan proceeds held in escrow are available to us upon our submission to the escrow agent of a loan request. Such proceeds will not be available to LBM until payment in-full of the obligations under the LBM Credit Agreement and termination of the LBM Credit Agreement. Payments of principal and other obligations will be made to the escrow agent, while interest payments will be made directly to LBM. Provided there exists no potential default or event of default, the LBM Credit Agreement and Escrow Agreement prohibit any acceleration of repayment of any amount outstanding under the LBM Credit Agreement and prohibit termination of the LBM Credit Agreement or withdrawal from escrow of any unused portion of the available loan proceeds under the credit facility, by LBM.

There were no borrowings by us under the LBM Credit Agreement from March 12, 2018 (inception) through June 30, 2019.

The following table summarizes the significant components of cash flows for each of the ~~nine~~six month periods ended ~~September~~June 30, 2019 and 2018, and our cash, cash equivalents, and restricted cash balances at ~~September~~June 30, ~~2017~~2019 and December 31, ~~2016:~~2018:

Net cash used for operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019 was ~~$12,895~~$1,497, compared with net cash used for operating activities of ~~$1,908~~$7,873 for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2018. The ~~change~~net decrease in outflows of ~~$10,987~~ $6,376 was due to ~~an increase~~a decrease in our net loss ~~combined with~~net of noncash items (changes further described above) and a net decrease in working capital attributable to a decrease in net cash outflows related to inventory production of our 3D printing machines and the timing of payments to our suppliers and vendors for our production and operating expenses, partially offset by a decrease in net cash inflows from ~~changes in assets and liabilities, including a decrease in cash inflows from~~ customers (principally due to ~~the implementation~~timing of ~~more favorable liquidity terms with customers during the nine months ended September 30, 2016) and an increase in~~ cash ~~outflows related to inventories (based~~collections on ~~our operating plans for delivery of~~ 3D printing ~~machines to customers). These changes were partially offset by a reduction in cash outflows to vendors (based on the timing of payment)~~machine sales).

Net cash ~~provided by~~used for investing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2019 was ~~$2,828~~$420, compared with net cash used for investing activities of ~~$638~~$794 for the ~~nine~~six months ~~ended September 30, 2016.~~

Net cash provided by investing activities for the nine months ended September 30, 2017, included cash inflows of approximately $3,702 in proceeds from the sale of property and equipment, mostly attributable to our sale of assets associated with our non-core specialty machining operation in Chesterfield, Michigan and our PSC in North Las Vegas, Nevada during the quarter ended June 30, ~~2017. Remaining activity~~2018.

Activity for both periods included cash outflows for capital expenditures ~~consistent~~(consistent with our operating ~~plans.~~plans), offset by proceeds from the sale of property and equipment.

We expect our remaining ~~2017~~2019 capital expenditures to be limited to spending associated with sustaining our existing operations and strategic asset acquisition and deployment (additional estimated spending of approximately less than $1,000). We also expect to receive net proceeds from the sale of our former Houston, Texas facility of approximately $1,000 during 2019..

Net cash provided by financing activities for the six months ended June 30, 2019 was $22, compared with net cash used for financing activities of $267 for the ~~nine~~six months ended ~~September~~June 30, ~~2017, was $166 compared with~~2018.

For the six months ended June 30, 2019, net cash provided by financing activities included approximately $171 in cash inflows associated with proceeds from the exercise of ~~$12,879~~stock options by employees. This amount was offset by approximately $68 in cash outflows associated with taxes related to the net settlement of equity-based awards. Net cash outflows for the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~

~~Uses~~2018 included cash outflows of ~~cash~~approximately $188 in debt issuance costs associated with our revolving credit facility with a related party (further described above). Activity for ~~the nine months ended September 30, 2017,~~both periods also included principal payments on outstanding debt ~~and capital leases.~~

Sources of cash for the nine months ended September 30, 2016, included net proceeds from the issuance of common stock of approximately $12,447 in connection with our registered direct offering to a related party and approximately $595 in connection with our ATM. Uses of cash for the nine months ended September 30, 2016, included principal payments on outstanding debt and capital leases..

In the normal course of our operations, our ExOne GmbH subsidiary issues financial guarantees and letters of credit to third parties in connection with certain commercial transactions requiring security. At ~~September~~June 30, ~~2017,~~2019, total outstanding financial guarantees and letters of credit issued by us were approximately ~~$1,633~~$1,375 (€~~1,382).~~ ~~Included in the total outstanding financial guarantees and letters of credit issued by us are approximately $1,352 (€1,144)~~1,209) with expiration dates ranging from ~~October 2017~~July 2019 through ~~July 2018 and approximately $281 (€238) which have no expiration date.~~February 2023. At December 31, ~~2016,~~2018, total outstanding financial guarantees and letters of credit issued by us were approximately ~~$400~~$1,136 (€~~380)~~992). For further discussion related to financial guarantees

and letters of credit issued by us, refer to Note 1012 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form ~~10-Q~~.10-Q.

Refer to Note 1 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Refer to Note 1 ofto the consolidated financial statements in Part I,II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018.

We are exposed to market risk from fluctuations in foreign currency exchange rates which may adversely affect our results of operations and financial condition. We seek to minimize these risks through regular operating and financing activities and, when we consider it to be appropriate, through the use of derivative financial instruments. We do not purchase, hold or sell derivative financial instruments for trading or speculative purposes.

~~The local currency is the functional currency for significant operations outside~~a smaller reporting company as defined by Rule 12b-2 of the ~~United States. The determination~~Securities Exchange Act of ~~the functional currency of an operation is made based on the appropriate economic and management indicators.~~

~~Foreign currency assets and liabilities are translated into their United States dollar equivalents based on period end spot exchange rates,~~1934, as amended (the “Exchange Act”) and are included in stockholders’ equity as a component of other comprehensive income (loss). Revenues and expenses are translated at average exchange rates. Transaction gains and losses that arise from exchange rate fluctuations are chargednot required to ~~operations as incurred, except for gains and losses associated with certain long-term intercompany transactions for which settlement is not planned or anticipated in~~provide the ~~foreseeable future, which are included in accumulated other comprehensive loss in the condensed consolidated balance sheet.~~information under this item.

We transact business globally and are subject to risks associated with fluctuating foreign exchange rates. Approximately 68.2% and 59.3% of our consolidated revenue was derived from transactions outside the United States for the quarters ended September 30, 2017 and 2016, respectively. Approximately 61.2% and 54.0% of our consolidated revenue was derived from transactions outside the United States for the nine months ended September 30, 2017 and 2016, respectively. This revenue is generated primarily from wholly-owned subsidiaries operating in their respective countries and surrounding geographic areas. This revenue is primarily denominated in each subsidiary’s local functional currency, including the euro and Japanese yen. A hypothetical change in foreign exchange rates of +/- 10.0% for the quarter and nine months ended September 30, 2017, would result in an increase (decrease) in revenue of approximately $1,100 and $2,300, respectively. These subsidiaries incur most of their expenses (other than intercompany expenses) in their local functional currencies.

~~At September 30, 2017, we held approximately $18,804 in cash, cash equivalents, and restricted cash, of which approximately $15,366 was held by certain of our subsidiaries in United States dollars.~~

Our management, ~~with the participation of~~including our Chief Executive Officer and ~~our~~ Chief Financial Officer, ~~evaluated~~performed an evaluation of the effectiveness of our disclosure controls and procedures as of ~~September~~June 30, ~~2017. The term “disclosure~~2019. These controls and procedures~~” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that~~ are designed to ~~ensure~~provide reasonable assurance that the information required to be disclosed ~~by a company~~ in the reports that ~~it files~~we file or ~~submits~~submit under the Exchange Act isare recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and ~~forms. Disclosure controls~~forms and ~~procedures include, without limitation, controls and procedures designed to ensure~~ that such information ~~required to be disclosed by a company in the reports that it files or submits under the Exchange Act~~ is accumulated and communicated to ~~the company’s~~our management, including ~~its principal executive~~our Chief Executive Officer and ~~principal financial officers, as appropriate~~Chief Financial Officer, in a manner to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures.disclosures. Based on ~~this~~that evaluation, ~~management~~our Chief Executive Officer and Chief Financial Officer concluded ~~as of September 30, 2017,~~ that our disclosure controls and procedures as of June 30, 2019 were not effective at the reasonable assurance level due to a material weakness in our internal control over financial reporting as discussed in the Company’s Annual Report on Form 10-K filed on March 16, 2017.effective.

As a result of the material weakness described in our Annual Report on Form 10-K, we performed additional analysis and other post-closing procedures to ensure our condensed consolidated financial statements were prepared in accordance with GAAP. Accordingly, management believes that the financial statements and related notes thereto included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

~~With oversight from our executive management and Audit Committee of our Board of Directors, we continue to address the identified material weakness~~There were no changes in our ~~information technology system platform specific~~internal controls over financial reporting during the three months ended June 30, 2019, that have materially affected, or are reasonably likely to our ExOne GmbH subsidiary, in particular, how this information technology system platform impacts our accounting for inventories specific to ExOne GmbH. Our approach includes the identification and remediation of known errors in the original implementation of, and subsequent changes to, this information technology system platform in an effort to reduce certain manual processes and controls necessary to ensure accurate and timely reporting of operating results associated with this subsidiary. We expect this process to be completed by December 31, 2017.

~~We can provide no assurance at this time that management will be able to report that~~materially affect, our internal control over financial reporting will be effective as of December 31, 2017. As an EGC, we are exempt from the requirement to obtain an attestation report from our independent registered public accounting firm on the assessment of our internal controls pursuant to the Sarbanes-Oxley Act of 2002 until such time that we no longer qualify as an EGC.reporting.

On July 1, 2017, the Company (through its ExOne GmbH subsidiary) entered into a Settlement Agreement with Kocel Foundry Limited (also known as Kocel CSR Casting Company, Limited) and Kocel Group (Hong Kong) Limited (collectively, “Kocel”) relating to settlement of the arbitration case (no. 100019-2017) administered by the Swiss Chambers’ Arbitration Institution Notice of Arbitration, as filed by the Company on January 25, 2017. Among other things, the Settlement Agreement provided for a cash payment from ExOne GmbH to Kocel of approximately $811,335 and a settlement and release of claims related to a sales agreement between the parties for certain 3D printing machines and related equipment.

We are subject to various litigation, claims, and proceedings which have been or may be instituted or asserted from time to time in the ordinary course of business. ~~Other than the matter further described above, management~~Management does not believe that the outcome of any pending or threatened matters will have a material adverse effect, individually or in the aggregate, on our financial position, results of operations or cash flows.

There have been no material changes from the risk factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018.

The Exhibits listed on the accompanying Index to Exhibits are filed as part of this Quarterly Report on Form 10-Q.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Title of each class	Trading symbol	Name of each exchange on which registered
Common stock	XONE	NASDAQ Stock Market

Large accelerated filer		☐		Accelerated filer	☒
Non-accelerated filer	☐		Smaller reporting company	☒

~~Non-accelerated filer~~		☐ ~~(Do not check if a small reporting company)~~		~~Small reporting company~~		☐

Emerging growth company		☒			☐

	Quarter Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30,						September 30,						June 30,						June 30,
	2017			2016			2017			2016			2019			2018			2019			2018
Balance at beginning of period	$	1,075		$	992		$	1,115		$	1,308		$	1,251		$	1,148		$	1,670		$	1,300
Provisions for new issuances		243			403			763			699			383			167			529			386
Payments		(174	)		(146	)		(427	)		(648	)		(457	)		(120	)		(848	)		(328	)
Reserve adjustments		(100	)		(89	)		(466	)		(235	)		36			(252	)		(123	)		(439	)
Foreign currency translation adjustments		14			4			73			40			10			(34	)		(5	)		(10	)
Balance at end of period	$	1,058		$	1,164		$	1,058		$	1,164		$	1,223		$	909		$	1,223		$	909

Operating lease right-of-use assets included in other noncurrent assets	$	310
Operating lease liabilities included in accrued expenses and other current liabilities	$	131
Operating lease liabilities included in other noncurrent liabilities	$	179
Right-of-use assets obtained in exchange for new operating lease liabilities	$	9
Cash paid for amounts included in the measurement of operating lease liabilities	$	99
Weighted average remaining lease term (in years)		3.0
Weighted average discount rate		6.5	%

	June 30,			December 31,
	2019			2018
Future minimum lease payments receivable	$	1,757		$	1,969
Less: Unearned interest income		(260	)		(316	)
Net investment in sales-type leases	$	1,497		$	1,653

2019	$	90
2020		109
2021		72
2022		58
2023		9
Thereafter		4
Total minimum lease payments		342
Less: Present value discount		(32	)
Total operating lease liabilities	$	310


(a)	Interest income relating to sales-type leases is recorded as a component of revenue in the accompanying condensed statement of consolidated operations and comprehensive loss for each of the periods presented.

	Operating		Sales-type
2019	$	566	$	200
2020		138		381
2021		48		381
2022		—		381
2023		—		414
Thereafter		—		—
Total minimum lease payments	$	752	$	1,757
Less: Present value discount				(260	)
Future minimum lease payments receivable			$	1,497


*(a)	Other represents expense associated with the Program and other employee contractual amounts to be settled in equity.
(b)	The benefit for income taxes from equity-based compensation for each of the periods presented has been determined to be $0 based on valuation allowances against net deferred tax assets.

			Six Months Ended
			June 30,
	February 10, 2017	August 14, 2017	2019	2018
Weighted average fair value per stock option	$5.46 - $5.75	$3.40 - $4.38	$3.48 - $3.68	$3.77
Volatility	62.89% - 63.75%	61.68% - 67.92%	54.0% - 60.1%	62.6%
Average risk-free interest rate	1.89% - 1.94%	1.40% - 1.82%	2.2% - 2.5%	2.5%
Dividend yield	0.00%	0.00%	0.0%	0.0%
Expected term (years)	5.0 - 5.5	2.5 - 5.5	2.5 - 3.5	3.3

	August 12, 2016		August 19, 2016
Weighted average fair value per stock option	$8.07		$7.97
Volatility		66.43%		66.24%
Average risk-free interest rate		1.18%		1.20%
Dividend yield		0.00%		0.00%
Expected term (years)		6.0		5.5

Level 1		Observable inputs such as quoted prices in active markets for identical investments that the Company has the ability to access.

Level 2		Inputs include:

		Quoted prices for similar assets or liabilities in active markets;

		Quoted prices for identical or similar assets or liabilities in inactive markets;

		Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and

		Inputs that are derived principally from, or corroborated by, observable market data by correlation or other means.

Level 3		Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.

Exhibit Number	Description	Method of Filing

10.1	Employment Agreement dated May 15, 2019 between the Company and John F. Hartner.	Filed herewith.

~~10.1~~	~~Executive At-Will Employment Agreement dated August 4, 2017, by and between The ExOne Company and JoEllen Lyons Dillon.~~	~~Filed herewith.~~
~~10.2~~	~~The ExOne Company Change of Control Severance Plan dated August 8, 2017.~~	~~Filed herewith.~~
31.1	Rule 13(a)-14(a) Certification of Principal Executive Officer.	Filed herewith.

31.2	Rule 13(a)-14(a) Certification of Principal Financial Officer.	Filed herewith.

32	Section 1350 Certification of Principal Executive Officer and Principal Financial Officer.	Filed herewith.

101.INS	XBRL Instance Document.	Filed herewith.

101.SCH	XBRL Taxonomy Extension Schema Document.	Filed herewith.

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.	Filed herewith.

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.	Filed herewith.

101.LAB	XBRL Taxonomy Extension Label Linkbase Document.	Filed herewith.

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.	Filed herewith.

The ExOne Company

By:		/s/ ~~James L. McCarley~~John F. Hartner
		~~James L. McCarley~~John F. Hartner
		Chief Executive Officer
		(Principal Executive Officer)

Date:		~~November 9, 2017~~August 7, 2019

By:		/s/ ~~Brian W. Smith~~Douglas D. Zemba
		~~Brian W. Smith~~Douglas D. Zemba
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

Date:		~~November 9, 2017~~August 7, 2019