(dollars in thousands, except per-share amounts)



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, 2020.

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, 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 the risk factors previously disclosed in our filings with the
Securities and Exchange Commission (the "SEC"), including the items described
under "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for
the year ended December 31, 2020, the following factors, among others, could
cause results to differ materially from forward-looking statements or historical
performance: the severity and duration of world health events, including the
COVID-19 outbreak and the related economic repercussions and operational
challenges; the ability of Desktop Metal, Inc., a Delaware corporate ("DM") and
us to consummate the proposed transaction (the planned merger transaction with
DM further described in the "Merger Transaction" section below) in a timely
manner or at all, including the ability to secure regulatory approvals; impact
to our business if the transaction is not consummated; successful integration of
DM's and our businesses and realization of synergies and benefits; the ability
of DM to implement business plans, forecasts and other expectations following
the completion of the transaction; risk that actual performance and financial
results following completion of the transaction differ from projected
performance and results; business disruption following the transaction; our
ability to consistently generate operating profits; fluctuations in our revenues
and operating results; our competitive environment and its competitive position;
our ability to enhance our current 3D printing machines and technology and to
develop and introduce new 3D printing machines; our ability to qualify more
industrial materials in which it can print; demand for our products; the
availability of skilled personnel; the impact of loss of key management; the
impact of customer specific terms in machine sale agreements in determining the
period in which we recognize revenue; risks related to global operations
including effects of foreign currency and COVID-19; dependency on certain
critical suppliers; nature or impact of 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, cyberattacks, war, terrorism and cancellation or
unavailability of insurance coverage; the impact of disruption of our
manufacturing facilities or ExOne Adoption Centers; the adequacy of our
protection of our intellectual property; expectations regarding demand for our
industrial products, and other matters with regard to outlook; and other factors
beyond our control, including the impact of COVID-19. For additional information
about other risks and uncertainties that could cause actual results of the
proposed transaction to differ materially from those described in the
forward-looking statements in this communication of ExOne's business, financial
condition, results of operations and prospects generally, please refer to the
Company's reports filed with the SEC, including without limitation the "Risk
Factors" and/or other information included in the Company's proxy statement on
Schedule 14A relating to the proposed transaction filed with the SEC on October
8, 2021, definitive additional materials and other filings by the Company in
connection with the proposed transaction and such other reports as ExOne has
filed or may file with the SEC from time to time. For additional information
about risks and uncertainties that may cause actual results of the proposed
transaction to differ materially from those described, please refer to DM's
reports filed with the SEC, including without limitation the "Risk Factors"
and/or other information included in such reports. While the list of factors
presented here is, and the list of factors presented in the proxy
statement/prospectus will be considered representative, no such list should be
considered to be a complete statement of all risks and uncertainties. Unlisted
factors may present significant additional obstacles to the realization of
forward-looking statements. Except as required by applicable law, neither DM nor
ExOne will update any forward-looking statements to reflect new information,
future events, changed circumstances or otherwise.

Overview



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 global installed base of 3D
printing machines. Our machines serve direct (metal) and indirect (sand)
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 EACs. We also supply the
associated materials, including consumables and replacement parts, and other
services, including training and technical support, that are 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

                                       17

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industry-leading volumetric output (as measured by build box size and printing speed), uniquely position us to serve the needs of industrial customers.

Outlook

We are the global leader in industrial 3D printers utilizing binder jetting technology. Our continued focus is to achieve profitable growth via three strategic initiatives:

- Expand Both Our Customer and Application Focus. We intend to leverage our

substantial experience in binder jetting technology to focus on the highest

value industries and applications. We have made a significant investment in

our global commercial operations to drive our growth in this area.

- Extend the Capabilities of Our Core Technology. We intend to expand our core

binder jetting technology through our machine platforms while at the same

time lowering the total cost of ownership of our systems for our customers.


      We are also focused on driving modularity among our various machine
      platforms for both direct (metal) and indirect (sand) applications.


   -  Execute on Recurring Revenue Growth. We intend to execute on our plan to
      expand our offerings for 3D printed and other products, materials and
      services while better leveraging our growing global installed base of 3D
      printers.


The impact of COVID-19 and the related economic, business and market disruptions
were wide-ranging and continue to be significant. As a result of COVID-19, we
were required to temporarily close our operations at our North Huntingdon,
Pennsylvania facility for the period from March 23 through March 30, 2020. In
response to COVID-19, we have incurred incremental costs associated with
protecting the health and safety of our global workforce, enhanced sanitization
of our global operating facilities, and information technology capabilities for
employees operating remotely. Beginning in March 2020, restrictions imposed by
various governmental authorities on both domestic and international shipping and
travel have caused disruptions to the timing of delivery and installation of our
3D printing machines, resulting in negative impacts to our financial position,
results of operations and cash flows. The duration and severity of the outbreak
and its long-term impact on our business remain uncertain. We are unable to
predict the impact that COVID-19 will have on our future financial position,
results of operations and cash flows.

Our operating results continue to be impacted by a prolonged downturn in global
manufacturing trends as a result of COVID-19 which has influenced the capital
expenditure investments of our customers. Despite these headwinds, we ended the
third quarter of 2021 with a backlog balance of approximately $57,300. We expect
the combination of our backlog at September 30, 2021 and an acceleration in
market adoption of our binder jetting technology, including our latest printer
platforms (our X1 25Pro, X1 160Pro and InnoventPro® for metal applications, our
S-Max Pro for sand applications, and the office-friendly ExOne Metal DesignlabTM
printer for metal or ceramic parts), to provide the basis for our operating
stability and growth for the remainder of 2021 and into 2022 despite continuing
negative macroeconomic trends for global manufacturing, including the impact of
COVID-19.

Merger Transaction

On August 11, 2021, we entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Desktop Metal, Inc., a Delaware corporation ("DM"), Texas
Merger Sub I, Inc., a Delaware corporation and wholly-owned subsidiary of DM
("Merger Sub I") and Texas Merger Sub II, LLC, a Delaware limited liability
company and wholly-owned subsidiary of DM ("Merger Sub II").

Upon the terms and subject to the conditions set forth in the Merger Agreement,
Merger Sub I will merge with and into us, with ExOne surviving the merger as a
wholly owned subsidiary of DM (the "First Merger") and immediately thereafter,
we will merge with and into Merger Sub II, with Merger Sub II surviving the
subsequent merger (the "Second Merger", and, together with the First Merger, the
"Mergers").

Subject to the terms and conditions of the Merger Agreement, our stockholders
will receive, in exchange for each share of our common stock held immediately
prior to the Mergers, (i) $8.50 in cash and (ii) a number of shares of DM common
stock, equal to the Exchange Ratio (defined below).

The "Exchange Ratio" shall be determined based on DM's 20-day average closing
stock price three trading days prior to closing: (i) if the average closing DM
stock price is greater than or equal to $9.70, then the Exchange Ratio shall be
set at 1.7522; (ii) if the average closing DM stock price is less than or equal
to $7.94, then the Exchange Ratio shall be set at 2.1416; (iii) if the average
closing DM stock price is less than $9.70 but greater than $7.94, then the
Exchange Ratio shall be equal to 1.9274 multiplied by the quotient of (x) $8.82
divided by (y) the average closing DM stock price.

On October 20, 2021, we and DM received clearance from the German Federal
Ministry for Economic Affairs and Energy, a foreign investment regulatory
authority, that the transactions contemplated by the Merger Agreement have been
cleared pursuant to section 58a paragraph 1 of the German Foreign Trade and
Payments Ordinance. Additionally, the waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, expired on October 28, 2021 at
11:59 p.m. Eastern Time. Accordingly, we and DM have now received all regulatory
approvals required as a condition to consummate the Mergers.

On November 9, 2021, we held a special meeting of stockholders. At that special
meeting, our stockholders voted to approve the Merger Agreement. Pursuant to the
Merger Agreement, the proposed transaction may close as soon as three business
days following the date of the special meeting of our stockholders, subject to
customary closing conditions.

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During the three months and nine months ended September 30, 2021, we incurred
expenses associated with the planned merger transaction of $3,376 and $3,477,
respectively, all of which are included in selling, general and administrative
expenses in the accompany condensed statement of consolidated operations and
comprehensive loss.

Backlog

At September 30, 2021, our backlog was approximately $57,300 of which
approximately $50,700 is expected to be fulfilled during the next twelve months
notwithstanding uncertainty related to the impact of COVID-19 (further discussed
above) including, but not limited to, domestic and international shipping and
travel restrictions brought about by COVID-19, which could have an adverse
effect on the timing of delivery and installation of products and/or services to
customers. At December 31, 2020, our backlog was approximately $39,400 and at
September 30, 2020 our backlog was approximately $42,600.

Seasonality



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.

We believe that COVID-19 may have an adverse effect on the future capital expenditure decisions of our customers outside of their normal spending cycles, which may impact the timing and extent of such decisions.

Results of Operations

Net Loss



Net loss for the three months ended September 30, 2021 was $4,907, or $0.22 per
basic and diluted share, compared with a net loss of $3,273, or $0.19 per basic
and diluted share, for the three months ended September 30, 2020. The increase
in our net loss was primarily due to increases in both selling, general and
administrative expenses and research and development expenses (further described
below), partially offset by a $2,220 gain on the extinguishment of the Paycheck
Protection Program (the "PPP") loan and increases in gross margin (further
described below).

Net loss for the nine months ended September 30, 2021 was $16,621, or $0.76 per
basic and diluted share, compared with a net loss of $10,944, or $0.65 per basic
and diluted share, for the nine months ended September 30, 2020. The increase in
our net loss was primarily due to increases in both selling, general and
administrative expenses and research and development expenses (further described
below) and the absence of a gain of $1,462 recognized during the three months
ended March 31, 2020 associated with the sale-leaseback of our European
headquarters and operating facility in Gersthofen, Germany. Partially offsetting
these increases in net loss was a $2,220 gain on the extinguishment of the PPP
loan and increases in gross margin (further described below).

Revenue



The following table summarizes revenue by product group for the periods
indicated:





                                      Three Months Ended                                 Nine Months Ended
                                         September 30,                                     September 30,
                                 2021                     2020                     2021                     2020
3D printing machines     $ 10,792        56.7 %   $ 10,488        60.3 %   $ 26,200        51.5 %   $ 21,703        51.8 %
3D printed and other
products,
  materials and
services                    8,251        43.3 %      6,911        39.7 %     24,646        48.5 %     20,178        48.2 %
                         $ 19,043       100.0 %   $ 17,399       100.0 %   $ 50,846       100.0 %   $ 41,881       100.0 %




Revenue for the three months ended September 30, 2021 was $19,043, compared with
revenue of $17,399 for the three months ended September 30, 2020, an increase of
$1,644, or 9.4%. The increase in revenue resulted from an increase in revenue
attributable to both of our product groups.

The increase in revenue from 3D printing machines of $304 for the three months
ended September 30, 2021, or 2.9%, as compared to the same period in the prior
year, resulted primarily from higher volumes (21 units sold during the three
months ended September 30, 2021 versus 13 units sold during the three months
ended September 30, 2020), partially offset by an unfavorable mix of machines
sold.

The increase in revenue from 3D printed and other products, materials and
services for the three months ended September 30, 2021 of $1,340, or 19.4%,
resulted primarily from an increase of $680 associated with funded research and
development arrangements primarily related to work performed in connection with
two larger government projects and an automotive project, an increase of $463

                                       19

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in consumable materials and aftermarket revenues based on growth in our global
installed base of 3D printing machines and an increase of $383 in sand EAC
revenues based on higher customer demand for indirect printed products.
Offsetting these increases was a reduction of revenue of $282 from our global
metal EACs based on lower customer demand for direct printed products.

Revenue for the nine months ended September 30, 2021 was $50,846, compared with
revenue of $41,881 for the same period in the prior year, an increase of $8,965,
or 21.4%. The increase in revenue resulted from an increase in revenue
attributable to both of our product groups.

The increase in revenue from 3D printing machines of $4,497 for the nine months
ended September 30, 2021, or 20.7%, resulted primarily from higher volumes (46
units sold during the nine months ended September 30, 2021 versus 35 units sold
during the nine months ended September 30, 2020), partially offset by an
unfavorable mix of machines sold.

The increase in revenue from 3D printed and other products, materials and
services of $4,468 for the nine months ended September 30, 2021, or 22.1%,
resulted primarily from an increase of $2,734 in consumable materials and
aftermarket revenues based on growth in our global installed base of 3D printing
machines and an increase of $2,005 associated with funded research and
development arrangements (related to work performed on multiple government and
commercial projects). Offsetting these increases were reductions in revenue of
$490 from our global EACs (primarily driven by reductions in revenue at the
metal EACs) based on lower customer demand for printed products.

Revenue for both product groups was negatively impacted by COVID-19, including
disruptions to domestic and international shipping and travel (which caused
delays in the timing of delivery and installation of 3D printing machines,
driving corresponding delays in revenue recognition) in addition to negative
macroeconomic effects on global manufacturing.

Cost of Sales and Gross Profit



Cost of sales for the three months ended September 30, 2021 was $13,721,
compared with cost of sales of $13,500 for the three months ended September 30,
2020, an increase of $221, or 1.6%. Gross profit for the three months ended
September 30, 2021 was $5,322, compared with gross profit of $3,899 for the
three months ended September 30, 2020, an increase of $1,423. Gross profit
percentage was 27.9% for the three months ended September 30, 2021, compared
with 22.4% for the three months ended September 30, 2020.

The increase in gross profit was primarily due to higher revenue volumes,
favorable product warranty experience and higher contribution margin from 3D
printing machine sales based on the mix of machines sold, partially offset by
higher overhead costs, including higher productive workforce costs due to
increased headcount, and the continued impact of operating inefficiencies and
challenges driven by the COVID-19 operating environment, resulting in higher
input costs.

Cost of sales for the nine months ended September 30, 2021 was $38,648, compared
with cost of sales of $31,263 for the nine months ended September 30, 2020, an
increase of $7,385, or 23.6%. Gross profit for the nine months ended September
30, 2021 was $12,198, compared with gross profit of $10,618 for the nine months
ended September 30, 2020, an increase of $1,580. Gross profit percentage was
24.0% for the nine months ended September 30, 2021, compared with 25.4% for the
nine months ended September 30, 2020.

The increase in gross profit during the nine months ended September 30, 2021 was
primarily due to higher revenue volumes and favorable product warranty
experience, partially offset by higher overhead costs, including higher
productive workforce costs due to increased headcount, and the continued impact
of operating inefficiencies and challenges driven by the COVID-19 operating
environment, resulting in higher input costs.

Research and Development



Research and development expenses for the three months ended September 30, 2021
were $2,909, compared with research and development expenses of $2,013 for the
three months ended September 30, 2020, an increase of $896, or 44.5%. The
increase in research and development expenses was primarily due to an increase
of $376 in material-related costs incurred associated with systems and materials
development of binder jetting technology and an increase of $369 in
employee-related costs, principally due to headcount increases.

Research and development expenses for the nine months ended September 30, 2021
were $8,541, compared with research and development expenses of $6,858 for the
nine months ended September 30, 2020, an increase of $1,683, or 24.5%. The
increase in research and development expenses was primarily due to an increase
of $952 in material-related costs incurred associated with systems and materials
development of binder jetting technology and an increase of $819 in
employee-related costs, principally due to headcount increases.

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Selling, General and Administrative



Selling, general and administrative expenses for the three months ended
September 30, 2021 were $9,585, compared with selling, general and
administrative expenses of $4,825 for the three months ended September 30, 2020,
an increase of $4,760, or 98.7%. The increase in selling, general and
administrative expenses was primarily due an increase of $3,431 in consulting
and professional fees (principally due to $3,376 in expenses related to the
planned merger transaction), an increase in employee-related costs of $949 due
to investments in our commercial infrastructure, an increase of $148 in sales
promotion and trade show expenses, and an increase of $107 in travel-related
expenses.

Selling, general and administrative expenses for the nine months ended September
30, 2021 were $22,676, compared with selling, general and administrative
expenses of $15,476 for the nine months ended September 30, 2020, an increase of
$7,200, or 46.5%. The increase in selling, general and administrative expenses
was primarily due to an increase of $4,197 in consulting and professional fees
(principally due to $3,477 in expenses related to the planned merger
transaction), an increase in employee-related costs of $1,239 due to investments
in our commercial infrastructure, and an increase in commissions of $468 based
on higher revenues. There was also an increase of $434 in sales promotion and
trade show expenses, a $267 increase in equity-based compensation expense, and a
$251 increase in insurance expense due to increased coverage and higher premiums
for the nine months ended September 30, 2021.

Interest Expense



Interest expense for the three months ended September 30, 2021 was $2, compared
with interest expense of $54 for the three months ended September 30, 2020, a
decrease of $52, or 96.3%. The decrease in interest expense was primarily due to
the absence of $34 in interest expense associated with the related party
revolving credit facility recognized during the three months ended September 30,
2020 and the absence of $18 in interest expense associated with the building
note payable recognized during the three months ended September 30, 2020. The
related party revolving credit facility was terminated (Note 10) and the
building note payable was extinguished (Note 11) during the three months ended
March 31, 2021.

Interest expense for the nine months ended September 30, 2021 was $169, compared
with interest expense of $171 for the nine months ended September 30, 2020, a
decrease of $2, or 1.2%. The decrease in interest expense was primarily due to
the absence of interest expense associated with the related party revolving
credit facility following its termination during the three months ended March
31, 2021 (Note 10) and the absence of interest expense associated with the
building note payable following its extinguishment during the three months ended
March 31, 2021 (Note 11). We recognized interest expense of $113 associated with
the related party revolving credit facility and $55 of interest expense
associated with the building note payable during the nine months ended September
30, 2020. These decreases in interest expense were mostly offset by a $105 loss
on the extinguishment of debt recognized during the nine months ended September
30, 2021 due to the termination of the related party revolving credit facility
and a $14 loss on extinguishment of debt recognized during the nine months ended
September 30, 2021 due to the extinguishment of the building note payable.

Additionally, during the three months ended September 30, 2021, the Company
received notice of full forgiveness of the PPP loan. As a result, the Company
recognized a gain on extinguishment of the PPP loan of $2,220 during the three
months ended September 30, 2021 (Note 11). The total gain on extinguishment of
debt of $2,220 was comprised of $2,194 related to the forgiveness of principal
and $26 related to the forgiveness of accrued interest.





Other (Income) Expense - Net

Other (income) expense - net for the three months ended September 30, 2021 was
($48), compared with other expense (income) - net of $314 for the three months
ended September 30, 2020. The change of $362 was principally due to favorable
foreign exchange rate changes and the related impact on certain intercompany
transactions between subsidiaries for which settlement has occurred or is
planned.

Other expense (income) - net for the nine months ended September 30, 2021 was
$63, compared with other expense (income) - net of $319 for the nine months
ended September 30, 2020. The decrease of $256 was principally due to favorable
foreign exchange rate changes and the related impact on certain intercompany
transactions between subsidiaries for which settlement has occurred or is
planned.

Provision (Benefit) for Income Taxes



The provision (benefit) for income taxes for the three months ended September
30, 2021 and 2020 was $1 and ($34), respectively. The (benefit) provision for
income taxes for the nine months ended September 30, 2021 and 2020 was ($410)
and $200, 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.

                                       21

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The effective tax rate for the three months ended September 30, 2021 and 2020
was 0.0% (provision on a loss) and 1.0% (benefit on a loss), respectively. The
effective tax rate for the nine months ended September 30, 2021 and 2020 was
2.4% (benefit on a loss) and 1.9% (provision on a loss), respectively.

For the three months ended September 30, 2021 and the three months and nine months ended September 30, 2020, the effective tax rate differed from the United States federal statutory tax rate of 21.0% primarily due to net changes in valuation allowances for the period.



For the nine months ended September 30, 2021, the effective tax rate differed
from the United States federal statutory rate of 21.0% primarily due to net
changes in valuation allowances for the period and recognition of a discrete
income tax benefit of $412 related to the carryback of net operating losses in
Japan. During the three months ended March 31, 2021, we received confirmation
from Japanese tax authorities that ExOne KK met the definition of a small or
medium-sized enterprise (SME) under Japanese tax regulations, eliminating
certain restrictions on the use of net operating losses to offset taxable
income. ExOne KK filed amended tax returns related to tax years 2016 through
2019 to carryback net operating losses, resulting in total tax refunds of $412.

We have provided a valuation allowance for certain of our net deferred tax
assets as a result of our inability to generate consistent net operating profits
in certain jurisdictions in which we operate. As such, certain benefits from
deferred taxes in the periods presented have been fully offset by changes in the
valuation allowance for the related 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.

Impact of Inflation

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.

Liquidity and Capital Resources



We have incurred a net loss in each of our annual periods since our inception.
We incurred a net loss of $4,907 and $16,621 for the three months and nine
months ended September 30, 2021, respectively. At September 30, 2021, we had
$122,809 in unrestricted cash and cash equivalents.

Common Stock Offerings



Since our inception we have received cumulative unrestricted net proceeds from
the sale of our common stock (through our initial public offering and subsequent
public offerings, including at-the-market offerings) of $303,255 to fund our
operations.

In September 2020, we entered into an Equity Distribution Agreement with
Canaccord Genuity LLC ("Canaccord") pursuant to which Canaccord agreed to act as
sales agent in the sale of up to $25,000 in the aggregate of our common stock in
"at-the-market offerings" as defined in Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"). In February 2021, we terminated the
Equity Distribution Agreement. At the time of the termination of the Equity
Distribution Agreement, the remaining maximum offering capacity was $9,269. We
did not sell any shares of our common stock under the Equity Distribution
Agreement during 2021 prior to its termination. There were no fees or penalties
incurred by us in connection with the termination of the Equity Distribution
Agreement.

In February 2021, following the termination of the Equity Distribution
Agreement, we entered into an underwriting agreement with Stifel, Nicolaus &
Company, Incorporated, Canaccord and certain other underwriters pursuant to
which we agreed to issue and sell up to 1,666,667 shares of our common stock at
a public offering price of $54.00 per share. Under the agreement, we agreed to
pay underwriting discounts and commissions of $2.835 per share, as well as
reimburse the underwriters for certain expenses. In addition, we granted the
underwriters a 30-day option to purchase up to an additional 205,907 shares of
our common stock at the public offering price, less underwriting discounts and
commissions. The underwriters exercised their option to purchase 205,907 shares
of our stock in-full.

                                       22


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As a result of this common stock offering, during February 2021, we sold
1,872,574 shares of our common stock and received net proceeds (after deducting
underwriting discounts and commissions) of $95,725. We incurred expenses (other
than underwriting discounts and commissions) associated with the common stock
offering of $266, all of which was recognized during the three months ended
March 31, 2021.

We have not sold any shares of our common stock through common stock offerings subsequent to the February 2021 common stock offering.

Related Party Revolving Credit Facility





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 our Chairman, relating to a $15,000 revolving
credit facility (the "Credit Agreement") to provide additional funding to us for
working capital and general corporate purposes. The Credit Agreement provided a
credit facility for a term of three years (through March 12, 2021), bearing
interest at a rate of one-month LIBOR plus an applicable margin of 500 basis
points. The Credit Agreement required 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% ($188), was
required at closing. Borrowings under the Credit Agreement were collateralized
by the accounts receivable, inventories and machinery and equipment of the Loan
Parties.



On February 18, 2020, the Loan Parties and LBM entered into a First Amendment to
the Credit Agreement (the "Amendment") which (i) reduced the available capacity
under the revolving credit facility to $10,000, (ii) extended the term of the
credit facility until March 31, 2024, (iii) increased the commitment fee to 100
basis points, or 1.00%, on the unused portion of the revolving credit facility,
and (iv) provided a process for the replacement of the LIBOR index after 2021.
In addition, the accounts receivable of ExOne GmbH no longer served as
collateral for borrowings under the amended revolving credit facility.

Under the terms of the amended credit facility, we could make prepayments against outstanding borrowings, reduce the credit commitment or terminate the credit commitment at any time without penalty.





On March 5, 2021, we terminated the related party revolving credit facility.
There were no penalties associated with our termination of the related party
revolving credit facility. Due to the termination, we accelerated the
amortization of the remaining debt issuance costs associated with the related
party revolving credit facility, resulting in recognition of a $105 loss on the
extinguishment of debt during the three months ended March 31, 2021.



As the credit facility was terminated in March 2021, we did not recognize any
interest expense related to the credit facility recognized subsequent to the
three months ended March 31, 2021. There were no borrowings under the credit
facility during 2021 prior to its termination.

Paycheck Protection Program





On April 18, 2020, we entered into an unsecured promissory note (the "Note")
with an unrelated United States bank (the "Lender") reflecting a loan in the
principal amount of $2,194 (the "Loan"). The Loan was granted pursuant to the
Paycheck Protection Program (the "PPP") administered by the United States Small
Business Administration (the "SBA") as part of the Coronavirus Aid, Relief, and
Economic Security Act (the "CARES Act").

Pursuant to the terms of the Note, the Loan bore interest at a rate of 1.00% per
annum and matured on April 18, 2022 (the "Maturity Date"). Under the terms of
the Note, principal and interest payments on the Loan were deferred until
November 18, 2020, at which time equal installments of principal and interest
would have been due and payable monthly through the Maturity Date. Subsequent to
us entering into the Note, in June 2020, the Paycheck Protection Program
Flexibility Act of 2020 was enacted, which extended the deferral of principal
and interest payments on the Loan from November 2020 to August 2021. Pursuant to
the terms of the PPP, the Loan, or a portion thereof, could be forgiven if Loan
proceeds are used for qualifying expenses as described in the CARES Act, such as
payroll costs, costs used to continue group health care benefits, mortgage
interest payments, rent and utilities. We used all of the Loan proceeds for
qualifying expenses.

During June 2021, we submitted an application to the SBA requesting full
forgiveness of the Loan. On July 8, 2021, we received notice from the SBA that
the Loan had been forgiven in full, including forgiveness of all interest
accrued to date. This formal notice from the SBA legally released us of any
obligations under the Loan. As a result, we recognized a gain on extinguishment
of the PPP loan of $2,220 during the three months ended September 30, 2021. The
total gain on extinguishment of debt of $2,220 was comprised of $2,194 related
to the forgiveness of principal and $26 related to the forgiveness of accrued
interest.

Building Note Payable

On May 21, 2012, we entered into a building note payable with an unrelated
United States bank. Terms of the building note payable included monthly payments
of $18, including interest at 4.00% through May 2017, and subsequently, monthly
payments of $19

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including interest at the monthly average yield on United States Treasury Securities plus 3.25% for the remainder of the term through May 2027.



On February 26, 2021, we extinguished our building note payable in-full through
cash payment of $1,199. We did not incur any prepayment penalties related to the
extinguishment of the building note payable in advance of the maturity date (May
2027). At the extinguishment date, the net carrying amount of the building note
payable was $1,185. As a result, during the three months ended March 31, 2021,
we recognized a loss on the extinguishment of debt of $14 (included in interest
expense in the accompanying condensed statement of consolidated operations and
comprehensive loss), which represented the write-off of unamortized debt
issuance costs.

As the building note payable was terminated in February 2021, we did not recognize any interest expense related to the building note payable subsequent to the three months ended March 31, 2021.

Cash Flows



The following table summarizes the significant components of cash flows for the
periods indicated, and our cash, cash equivalents, and restricted cash balances
at the end of each of the periods indicated:



                                                                  Nine Months Ended
                                                                    September 30,
                                                             2021                 2020
Net cash used for operating activities                  $      (18,046 )   $           (12,615 )
Net cash (used for) provided by investing activities            (3,451 )                15,457
Net cash provided by financing activities                       96,460                  30,556
Effect of exchange rate changes on cash, cash
equivalents, and restricted cash                                  (460 )                   295
Net change in cash, cash equivalents, and restricted
cash                                                    $       74,503     $            33,693

                                                        September 30,
                                                             2021           December 31, 2020
Cash and cash equivalents                               $      122,809     $            49,668
Restricted cash                                                  1,870                     508
Cash, cash equivalents, and restricted cash             $      124,679     $            50,176




Operating Activities

Net cash used for operating activities for the nine months ended September 30,
2021 was $18,046, compared with net cash used for operating activities of
$12,615 for the nine months ended September 30, 2020. The increase in net cash
outflows of $5,431 was due principally to an increase in our net loss, net of
noncash items, a decrease in net cash inflows from customers (principally due to
the timing of cash collections on 3D printing machine sales) and an increase in
net cash outflows related to inventories. Partially offsetting these increases
in net cash outflows was an increase in net cash inflows related to the timing
of payments to our suppliers and vendors for our production and operating
expenses.

Investing Activities

Net cash used for investing activities for the nine months ended September 30, 2021 was $3,451, compared with net cash provided by investing activities of $15,457 for the nine months ended September 30, 2020.

Activity for both periods included cash outflows for capital expenditures (consistent with our operating plans).



For the nine months ended September 30, 2020, net cash provided by investing
activities included $16,229 in proceeds from the sale of property and equipment,
including the sale-leaseback of our European headquarters and operating facility
in Gersthofen, Germany.

Financing Activities

Net cash provided by financing activities for the nine months ended September
30, 2021 was $96,460, compared with net cash provided by financing activities of
$30,556 for the nine months ended September 30, 2020.

For the nine months ended September 30, 2021, net cash provided by financing
activities primarily included cash inflows of $95,288 in proceeds from our
common stock offerings, net of issuance costs (further discussed above) and
$2,429 in proceeds from the exercise of stock options by employees, partially
offset by $1,226 in cash outflows associated with the extinguishment of the
building note payable (further discussed above).

For the nine months ended September 30, 2020, net cash provided by financing activities included cash inflows of $27,699 in proceeds from at-the-market offerings of common stock, net of issuance costs (further discussed above), $2,194 in proceeds from


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borrowings on long-term debt associated with our PPP Loan (further discussed above) and $858 in proceeds from the exercise of stock options by employees.

Financial Condition

The following summarizes the material changes in our financial condition from December 31, 2020 to September 30, 2021:



Restricted cash increased by $1,362 due to an increase in financial guarantees
and letters of credit issued through our credit facility with a German bank,
resulting in an increase of $1,270 in required cash collateral associated with
those financial guarantees and letters of credit, and due to $92 in additional
cash collateral required by a United States bank related to our corporate credit
card program.

Accounts receivable increased by $3,487 based on the timing of cash payments by
customers (principally the timing of cash collections on 3D printing machine
sales).

Inventories increased by $4,516 due to increases in raw material inventories and work in process inventories consistent with our growth in backlog.



Prepaid expenses and other current assets increased by $1,862, primarily due to
increases in prepayments to suppliers for 3D printing machine components and
subassemblies and increases in prepaid insurance (primarily due to increased
coverage and higher premiums).

Property and equipment - net increased by $1,515, mostly due to capital
expenditures of $3,201 and net transfers of 3D printing machines from inventory
to property and equipment of $1,610, partially offset by a decrease due to
depreciation expense of $2,720 recognized during the period. The remaining
decrease was primarily due to the effect of changes in foreign exchange rates on
property and equipment balances recorded in Germany and Japan.

Operating lease right-of-use assets decreased by $1,554, principally due to the
amortization of the right-of-use asset associated with the lease for our
European headquarters and operating facility in Gersthofen, Germany during the
period.

Accounts payable increased by $3,156 due to the timing of payments to our suppliers and vendors for our production and operating expenses.



Accrued expenses and other current liabilities increased by $1,788, principally
due to an increase of $1,668 in accrued professional services fees (primarily
the accrual of expenses incurred in connection with the planned merger
transaction).

Operating lease liabilities decreased by $1,554, principally due to payments made under the lease agreement for our European headquarters and operating facility in Gersthofen, Germany during the period.



Contract liabilities increased $3,015 based on the timing of cash payments by
customers (principally the timing of cash collections on 3D printing machine
sales consistent with growth in our backlog). Contract liabilities have also
been impacted as a result of disruptions in delivery and installation of our 3D
printing machines as a result of COVID-19.

Off Balance Sheet Arrangements



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 through a credit facility with a
German bank.

At September 30, 2021, total outstanding financial guarantees and letters of
credit issued by us were $2,522 (€2,176), of which $2,429 (€2,096) were issued
through the credit facility with a German bank. Cash collateral of $1,270
(€1,096) was required for financial guarantees and letters of credit issued
under the credit facility. The outstanding financial guarantees and letters of
credit include expiration dates ranging from November 2021 through March 2023.

At December 31, 2020, total outstanding financial guarantees and letters of
credit issued by us were $1,026 (€836), of which $928 (€756) were issued through
the credit facility with a German bank. At December 31, 2020, no cash collateral
was required for financial guarantees and letters of credits issued under the
credit facility.

For further discussion related to financial guarantees and letters of credit
issued by ExOne GmbH, refer to Note 9 to the condensed consolidated financial
statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Recently Issued and Adopted Accounting Guidance

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

Critical Accounting Policies and Estimates

Refer to Note 1 to the consolidated financial statements included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2020.





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