910638--3/17/2008--3D_SYSTEMS

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{system, service, information}

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{financial, litigation, operation}

{stock, price, operating}

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{operation, international, foreign}

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Cautionary Statements and Risk Factors If we were unable to generate net cash flow from operations or if we were unable to raise additional capital, our financial condition would be adversely affected. Our balance sheet contains several categories of intangible assets totaling $52.9 million that we could be required to write off or write down in the event of the impairment of certain of those assets arising from any deterioration in our future performance or other circumstances, which could adversely impact our future earnings and stock price, our ability to obtain financing and adversely affect our customer relationships. A risk exists that we may have to restate our financial statements If we do not make future filings with the SEC in a timely manner, our stock may be delisted. We rely significantly on enterprise resource technology systems to operate our business, and any failure, inadequacy, interruption, or security lapse of those systems or their related technology could adversely affect our ability to effectively operate our business. We face continuing risks from transitioning our inventory management and distribution to a third-party service provider. We have identified material weaknesses in our internal control over financial reporting, which could continue to impact negatively our ability to report our results of operations and financial condition accurately and in a timely manner. We face risks in connection with our ability to successfully centralize the administrative functions for all of our European subsidiaries at a new shared service center. We face risks in connection with changes in energy-related expenses. We face risks in connection with the effect of new pronouncements by accounting authorities. We face risks in connection with our success in acquiring and integrating new businesses. The variety of products that we sell could cause significant quarterly fluctuations in our gross profit margins, and those fluctuations in margins could cause fluctuations in operating income or loss and net income or net loss. We may be subject to product liability claims, which could result in material expense, diversion of management time and attention and damage to our business reputation. We face significant competition in many aspects of our business, which could cause our revenue and gross profit margins to decline. The competition in our industry could cause us to reduce sales prices or to incur additional marketing or production costs, which could result in decreased revenue, increased costs and reduced margins. We believe that our future success may depend on our ability to deliver products that meet changing technology and customer needs. We depend on a single or limited number of suppliers for components and sub-assemblies used in our systems and raw materials used in our materials. If these relationships were to terminate, our business could be disrupted while we locate an alternative supplier and our expenses may increase. If any of our suppliers suffers business disruptions or financial difficulties, or if there is any significant change in the condition of our relationship with the supplier, our cost of goods sold may increase and we may be unable to obtain these components from alternative sources quickly. We face risks in connection with the outsourcing of the assembly of our equipment models to selected design and manufacturing companies. Many factors, many of which are beyond our control, may cause fluctuations in our operating results. We face risks associated with conducting business outside of the U.S., and, if we do not manage these risks, our costs may increase, our revenue from operations outside of the U.S. may decline, and we may suffer other adverse effects to our results of operations and financial condition. Political and economic events and the uncertainty resulting from them may have a material adverse effect on our market opportunities and operating results. Laws that inhibit takeovers may adversely affect the market price of our common stock. Our operating results vary from quarter to quarter, which could impact our stock price. Historically, our common stock has been characterized by generally low daily trading volume, and our common stock price has been volatile. The number of shares of common stock issuable upon the exercise of outstanding stock options could dilute your ownership and negatively impact the market price for our common stock. Our Board of Directors is authorized to issue up to 5 million shares of preferred stock. Our debt level could adversely affect our financial health and our ability to run our business.

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910638--3/17/2008--3D_SYSTEMS_CORP