Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

On one or more occasions, we may make forward-looking statements in this Quarterly Report on Form 10-Q, including statements regarding our assumptions, projections, expectations, targets, intentions or beliefs about future events or other statements that are not historical facts. Forward-looking statements in this Quarterly Report on Form 10-Q include, without limitation, statements regarding management’s plans; trends in demand for renewable fuels; trends in market conditions with respect to prices for inputs for our products versus prices for our products; our ability to leverage approved feedstock pathways; our ability to leverage our location and infrastructure; our ability to incorporate lower-cost, non-food advanced biofuels feedstock at the Keyes plant; our ability to adopt value-add by-product processing systems; our ability to expand into alternative markets for biodiesel and its by-products, including continuing to expand our sales into international markets; the impact of changes in regulatory policies on our performance, including the Indian government’s recent changes to tax policies, diesel prices and related subsidies; our ability to continue to develop new, and to maintain and protect new and existing, intellectual property rights; our ability to adopt, develop and commercialize new technologies; our ability to refinance our senior debt on more commercial terms or at all; our ability to continue to fund operations and our future sources of liquidity and capital resources; our ability to sell additional notes under our EB-5 note program and our expectations regarding the release of funds from escrow under our EB-5 note program; our ability to improve margins; and our ability to raise additional capital. Words or phrases such as “anticipates,” “may,” “will,” “should,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “targets,” “will likely result,” “will continue” or similar expressions are intended to identify forward-looking statements. These forward-looking statements are based on current assumptions and predictions and are subject to numerous risks and uncertainties. Actual results or events could differ materially from those set forth or implied by such forward-looking statements and related assumptions due to certain factors, including, without limitation, the risks set forth under the caption “Risk Factors” below, which are incorporated herein by reference as well as those business risks and factors described elsewhere in this report and in our other filings with the Securities and Exchange Commission (the “SEC”)SEC), including without limitation, our most recent Annual Report on Form 10-K.

The accompanying consolidated condensed balance sheet as of March 31, 2017,2018, the consolidated condensed statements of operations and comprehensive loss for the three months ended March 31, 20172018 and 2016,2017, and the consolidated condensed statements of cash flows for the three months ended March 31, 20172018 and 20162017 are unaudited. The consolidated condensed balance sheet as of December 31, 20162017 was derived from the 20162017 audited consolidated financial statements and notes thereto. The consolidated condensed financial statements in this report should be read in conjunction with the 20162017 audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2016.

In the opinion of management, the unaudited interim consolidated condensed financial statements for the three months ended March 31, 20172018 and 20162017 have been prepared on the same basis as the audited consolidated statements as of December 31, 20162017 and reflect all adjustments, consisting primarily of normal recurring adjustments, necessary for the fair presentation of its statement of financial position, results of operations and cash flows. The results of operations for the three months ended March 31, 20172018 are not necessarily indicative of the operating results for any subsequent quarter, for the full fiscal year or any future periods.

In India where the by-product is contemplatedwe sell product on purchase orders (written or verbal) or by contract with governmental or international parties, the performance obligation is satisfied by delivery and acceptance of the physical product. When contracts are sufficiently similar in nature, we have assessed these contracts as a portfolio of similar contracts as allowed under the practical expedient. Doing so does not result in a materially different outcome compared to provide value,individually accounting for each contract. All domestic and international deliveries are subject to certain specifications as identified in contracts. The transaction price is recognizeddetermined based on reference market prices for biodiesel and refined glycerin every day net of taxes. There is no transaction price allocation needed.

In North America, we buy corn as feedstock in producing ethanol from our working capital partner J.D. Heiskell and we sell all ethanol, WDG, and corn oil produced in this process to J.D. Heiskell. Our finished goods tank is leased by J.D. Heiskell and they require us to transfer legal title to the product upon transfer of our finished ethanol to this location. We consider the purchase of corn as a cost of goods sold and the sale of ethanol upon transfer to the finished goods tank as revenue on the basis that (i) we control and bear the risk of gain or loss on the processing of corn which is purchased at market prices into ethanol and (ii) we have a legal title to the goods during the processing time. Revenues from sales of ethanol and its co-products are billed net of the related transportation and marketing charges. The transportation component is accounted for in cost of goods sold and the marketing component is accounted for in sales, general and administrative expense. Transportation and marketing charges are known within days of the transaction and are recorded at the quoted marketactual amounts. The Company has elected an accounting policy under which these charges have been treated as fulfillment activities provided after control has transferred. As a result, these charges are recognized as expenses when revenue is recognized. Revenues are recorded at the gross invoiced amount.

We have elected to adopt the practical expedient that allows for ignoring the significant financing component of a contract when estimating the transaction price when the transfer of thosepromised goods received or by-products.to the customer and customer payment for such goods are expected to be within one year of contract inception. Further, we have elected to adopt the practical expedient in which incremental costs of obtaining a contract are expensed when the amortization period would otherwise be less than one year.

The Company maintains an allowance for doubtful accounts for balances that appear to have specific collection issues. The collection process is based on the age of the invoice and it requires attempted contacts with the customer at specified intervals. If, after a specified number of days, the Company has been unsuccessful in its collection efforts, a bad debt allowance is recorded for the balance in question. Delinquent accounts receivable are charged against the allowance for doubtful accounts once un-collectability has been determined. The factors considered in reaching this determination are the apparent financial condition of the customer and the Company’s success in contacting and negotiating with the customer. If the financial condition of the Company’s customers were to deteriorate, additional allowances may be required. We did not reserve any balance for allowances for doubtful accounts as of March 31, 20172018 and December 31, 2016.2017.

The following table shows the number of potentially dilutive shares excluded from the diluted net loss per share calculation as of March 31, 20172018 and 2016:2017:

The “North America” operating segment includes the Company’s 60 million gallons per year capacity Keyes plant in Keyes, California, the GAFI plant in Goodland, Kansas and itsthe research facilitiesand development facility in College Park, Maryland.St. Paul, Minnesota`.

The “India” operating segment encompasses the Company’s 50 million gallon per year capacity biodieselKakinada plant in Kakinada, India, itsthe administrative offices in Hyderabad, India, and the holding companies in Nevada and Mauritius.

Inventories consist of the following:

Property, plant and equipment consist of the following:

Depreciation on the components of property, plant and equipment is calculated using the straight-line method over their estimated useful lives as follows:

For the three months ended March 31, 20172018 and March 31, 2016,2017, the Company recorded depreciation expense of $1.1$1.2 million and $1.2$1.1 million, respectively.

Management is required to evaluate these long-lived assets for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Management determined there was no impairment on the long-lived assets during the three months ended March 31, 2018 and 2017.

On July 6, 2012, Aemetis, Inc. and Aemetis Advanced Fuels Keyes, Inc. (“AAFK”)(AAFK), entered into an Amended and Restated Note Purchase Agreement with Third Eye Capital (the “NoteNote Purchase Agreement”)Agreement). Pursuant to the Note Purchase Agreement, Third Eye Capital extended credit in the form of (i) senior secured term loans in an aggregate principal amount of approximately $7.2 million to replace existing notes held by Third Eye Capital (the “Term Notes”)Term Notes); (ii) senior secured revolving loans in an aggregate principal amount of $18.0 million (“Revolving(Revolving Credit Facility”)Facility); (iii) senior secured term loans in the principal amount of $10.0 million to convert the prior revenue participation agreement to a note (“Revenue(Revenue Participation Term Notes”)Notes); and (iv) senior secured term loans in an aggregate principal amount of $15.0 million (“Acquisition(Acquisition Term Notes”)Notes) used to fund the cash portion of the acquisition of Cilion, Inc. (the Term Notes, Revolving Credit Facility, Revenue Participation Term Notes and Acquisition Term Notes are referred to herein collectively as the Original Third Eye Capital Notes). After this financing transaction, Third Eye Capital obtained sufficient equity ownership in the Company to be considered a related party. The Original Third Eye Capital Notes have a maturity date of April 1, 2018.

On January 31, 2017,4, 2018, a Promissory Note (the “January 2017 Note”January 2018 Note) for $160 thousand was advanced by Third Eye Capital to Aemetis, Inc., as a short-term credit facility for working capital and other general corporate purposes with an interest rate of 14% per annum maturing on the earlier of (a) receipt of proceeds from any financing, refinancing, or other similar transaction, (b) extension of credit by payee, as lender or as agent on behalf of certain lenders, to the Company or its affiliates, or (c) April 1, 2018. In consideration of the January 2018 Note, $10 thousand of the total proceeds were paid to Third Eye Capital as financing charges. As of March 31, 2018, the outstanding balance of principal and interest on the January 2018 note was $162 thousand. On April 1, 2018, the January 2018 Note was paid in full.

On February 27 2018, a Promissory Note (the February 2018 Note, together with the Original Third Eye Capital Notes, the “ThirdThird Eye Capital Notes”)Notes) for $2.1 million was advanced by Third Eye Capital to Aemetis, Inc., as a short-term credit facility for working capital and other general corporate purposes with an interest rate of 14% per annum maturing on the earlier of (a) receipt of proceeds from any financing, refinancing, or other similar transaction, (b) extension of credit by payee, as lender or as agent on behalf of certain lenders, to the Company or its affiliates, or (c) MayApril 30, 2017. In addition, as part of the January 2017 Note agreement, Aemetis used $0.5 million of the total proceeds to buy back 275 thousand common shares that were held by Third Eye Capital.2018. In consideration of the January 2017February 2018 Note, $133 thousand$0.1 million of the total proceeds were paid to Third Eye Capital as financing charges. As of March 31, 2017,2018, the outstanding balance of principal and interest on the January 2017 NoteFebruary 2018 note was $2.1 million.

On January 19, 2017, 637725 thousand stock option grants were issued toon January 18, 2018 for employees and directorsDirectors under the Company Stock Plans. As of March 31, 2017, 171 thousand options were vested and 2.12018, 2.5 million options are outstanding under the Company Stock Plans.

In March 2015, the board of directorsDirectors of the Company approved an Inducement Equity Plan authorizing the issuance of 100 thousand0.1 million non-statutory stock options to purchase common stock. As of March 31, 2017, 372018, 35 thousand options were outstanding.are outstanding under the Inducement Equity Plan.

Stock-based compensation is accounted for in accordance with the provisions of ASC 718 Compensation-Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. We estimate the fair value of stock-based awards on the date of grant using the Black-Scholes option pricingoption-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method.

For the three months ended March 31, 20172018 and 2016,2017, the Company recorded stock compensationoption expense in the amount of $409$264 thousand and $117$409 thousand, respectively.

The J.D. Heiskell sales and purchases activity associated with the Purchasing Agreement, and the Corn Procurement and Working Capital Agreement during the three months ended March 31, 20172018, and 20162017 were as follows:

Aemetis recognizes two reportable geographic segments: “North America” and “India.” The “North America” operating segment includes the Company’s owned ethanol60 million gallons per year capacity Keyes plant in Keyes, California, the GAFI plant in Goodland, Kansas and its technology labthe research and development facility in College Park, Maryland.St. Paul, Minnesota. As the Company’s technology gains market acceptance, this business segment is expected towill also include its domestic commercial application of cellulosic ethanol technology, its plant construction projects and any acquisitions of ethanol or ethanol related technology facilities in North America.

The “India” operating segment includesencompasses the Company’s 50 million gallon per year nameplate capacity biodiesel manufacturingKakinada plant in Kakinada, India, the administrative offices in Hyderabad, India, and the holding companies in Nevada and Mauritius. The Company’s biodiesel is marketed and sold primarily to customers in India through brokers and by the Company directly.

Summarized financial information by reportable segment for the three months ended March 31, 20172018 and 20162017 follows:

Total assets by segment consist of the following:

The Company owes Eric McAfee, the Company’s Chairman and CEO, and McAfee Capital, solely owned by Eric McAfee, amounts of $0.4 million and $0.4 million in connection with employment agreements and expense reimbursements included inpreviously accrued expensesas salaries expense and accounts payable on theaccrued liabilities. The balance sheetaccrued related to these employment agreements was $0.4 million as of March 31, 20172018 and December 31, 2016.2017. For the three months ended March 31, 20172018 and 2016,2017, the Company expensed $17$9 thousand and $22$17 thousand, respectively, to reimburse actual expenses incurred for McAfee Capital and related entities. The Company previously prepaid $0.2 million to Redwood Capital, a company controlled by Eric McAfee, for the Company’s use of flight time on a corporate jet. As of March 31, 2017,2018, $0.1 million remained as a prepaid expense.expense related to Redwood Capital. As consideration for the reaffirmation of guarantiesguarantees required by Amendment No. 1213 to the Note Purchase Agreement, which the Company entered into with Third Eye Capital on March 21, 2016,1, 2017, the Company also agreed to pay $0.2 million in consideration to McAfee Capital in exchange for theirits willingness to provide the guarantees. As partThe balance of the$304 thousand and $342 thousand for guarantee fee agreement, $0.2 million isremained as accrued liability as of March 31, 20172018 and December 31, 2016.

Management believes that through the above mentioned actions, it will be able to fund company operations and continue to operate the secured assets for at least a year. There can be no assurance that the existing credit facilities and cash from operations will be sufficient or that the Company will be successful at maintaining adequate relationships withhave the senior lenders or significant shareholders. Shouldability to generate capital liquidity to carry out the Company require additional financing, there can be no assurances that the additional financing will be available on terms satisfactory to the Company.business plan for 2018.

Headquartered in Cupertino, California, weWe are an advancedinternational renewable fuels and biochemicals company focused on the production of advanced renewable fuels and chemicals through the acquisition, development, and commercialization of innovative technologies that replace traditional petroleum-based products through the conversion of second-generationfirst-generation ethanol and biodiesel plants into advanced biorefineries. FoundedWe operate in 2006, wetwo reportable geographic segments: “North America” and “India.”

We own and operate a 60 million gallon per year ethanol production facility located in Keyes, California (the Keyes plant). The Keyes plant produces its own combined heat and power through the use of a natural gas-powered steam turbine, and reuses 100% of its process water with zero water discharge. In addition to ethanol, the Keyes plant produces Wet Distillers Grains (WDG), Distillers Corn Oil (DCO), and Condensed Distillers Solubles or corn syrup (CDS), all of which are sold to local dairies and feedlots as animal feed. The primary feedstock used for the production of low carbon renewable fuel ethanol at the Keyes plant is number #2 yellow dent corn. The corn is procured by J.D. Heiskell from various Midwestern grain facilities and shipped, via Union Pacific Rail Road, to an unloading facility adjacent to the Keyes plant. During the third quarter of 2017, we entered into an agreement with a major industrial gas company to sell CO2 produced at the Keyes ethanol plant, which will add incremental income for the North America segment in the California Central Valleyfuture.

We also lease a site in Riverbank, CA, near Modestothe Keyes plant, where we manufactureplan to utilize biomass-to-fuel technology that we have licensed from LanzaTech and produceInEnTec to build the Riverbank Cellulosic Ethanol Facility capable of converting local California surplus biomass – principally agricultural waste – into ultra-low carbon renewable cellulosic ethanol. The Riverbank Cellulosic Ethanol Facility plans to utilize the existing distillation and logistics infrastructure at our nearby Keyes plant. By producing ultra-low carbon intensity renewable cellulosic fuel ethanol, wet distillers’ grains (“WDG”), condensed distillers solubles (“CDS”),we expect to capture higher value D3 cellulosic renewable identification numbers (RINs) and distillers’ corn oil. California’s Low Carbon Fuel Standard (LCFS) carbon credits. Renewable fuels such as corn-based ethanol (D6 RIN) and cellulosic-based ethanol (D3 RIN) receive a higher price in the marketplace when RINs and LCFS incentives are sold with the renewable fuel based on the unique carbon score attributed to the plant generating the fuel. D3 RINs have a higher value in the marketplace than D6 RINs due to D3 RINs’ relative scarcity.

We also own and operate a biodiesel production facility in Kakinada, India with a nameplate capacity of 150 thousand metric tons per year, which is equal to about 50 million gallongallons per year renewable chemicalyear. We believe the Kakinada plant is one of the largest biodiesel production facilities in India on a nameplate capacity basis. The Kakinada plant is capable of processing a variety of vegetable oil and advanced fuel production facilityanimal fat waste feedstocks into biodiesel that meet international product standards. The Kakinada Plant also distills the crude glycerin byproduct from the biodiesel refining process into refined glycerin, and sells the valuable lubricant to the pharmaceutical, lotions, paint, adhesive and other industries. Our objective is to continue to capitalize on the East Coastsubstantial growth potential of India producing high quality distilledthe biodiesel and refined glycerin for customersindustry in India and Europe. We operateaddress established markets in the European Union (EU) and United States of America (U.S.) by leveraging relationships with a researchlarge oil company and development laboratory at the Maryland Biotech Center and hold a portfolio of patents and related technology licenses for the production of renewable fuels and biochemicals.

Our revenues are derived primarily from sales of ethanol and WDG in North America and biodiesel and refined glycerin in India.

The R&D expense in our North America segment was consistentdecreased for the three months ended March 31, 20172018 compared to the three months ended March 31, 2016.2017 due to decreases in salaries, supplies, and other expense of $37 thousand driven by the relocation of our research and development facility from Maryland to Minnesota in the beginning of 2018 offset by increases in relocation charges and professional fees of $13 thousand.

SG&A expenses consist primarily of salaries and related expenses for employees, marketing expenses related to sales of ethanol and WDG in North America and biodiesel and other products in India, as well as professional fees, other corporate expenses, and related facilities expenses.

Cash and cash equivalents were $0.2$0.4 million at March 31, 2017,2018, of which $57 thousand$0.3 million was held in our North American entities, including $0.2 million held by GAFI, and $174 thousand$0.1 million was held in our Indian subsidiary. Our current ratio at March 31, 20172018 was 0.17,0.20, compared to a current ratio of 0.260.32 at December 31, 2016.2017. We expect that our future available capital resources will consist primarily of cash generated from operations, remaining cash balances, EB-5 program borrowings, amounts available for borrowing, if any, under our senior debt facilities and our subordinated debt facilities, and any additional funds raised through sales of equity.

Cash and cash equivalents, current assets, current liabilities and debt at the end of each period were as follows (in thousands):

Our principal sources of liquidity have been cash provided by operations and borrowings under various debt arrangements. As of March 31, 2017,2018, the EB-5 escrow account is holding funds in the amount of $1.0 million from two investors pending approval by the USCIS. These funds represent $1.0The funding of $0.5 million was released to the Company on April 26, 2018 and the rest of funding that$0.5 million is expected to be released from the escrow account induring the first halfsecond quarter of 2017. On October 16, 2016, we2018. We launched a new EB-5 Phase II funding in 2016, under which we expect to issue $50.0 million in additional EB-5 Notes on substantially similar terms and conditions as those issued under our EB-5 Phase I funding. Our principal uses of cash have been to servicerefinance indebtedness, fund operations, and for capital expenditures. We anticipate these uses will continue to be our principal uses of cash in the future. Global financial and credit markets have been volatile in recent years, and future adverse conditions of these markets could negatively affect our ability to secure funds or raise capital at a reasonable cost, or at all.

We operate in a volatile market in which we have littlelimited control over the major components of productioninput costs and product revenues.revenues, and are making investments in future facilities and facility upgrades that improve the overall margin while lessening the impact of these volatile markets.  As such, we expect cash provided by operating activities to fluctuate in future periods primarily as a resultbecause of changes in the prices for corn, ethanol, WDG, distillers’ corn oil,DCO, CDS, biodiesel, waste fats and oils, non-refined palm oil and natural gas. To the extent that we experience periods in which the spread between ethanol prices and corn and energy costs narrow or the spread between biodiesel prices and waste fats and oils or palm oil and energy costs narrow, we may require additional working capital to fund operations. 

Management believes that through:  (i) operatingthrough the following actions, the Company will have the ability to generate capital liquidity to carry out the business plan for 2018:

At March 31, 2017,2018, the outstanding balance of principal, interest and fees, net of discounts, on all Third Eye Capital Notes equaled $64.5 million.$80.7 million, not including the GAFI Loans. The current maturity date for all of the Third Eye Capital financing arrangementsNotes is April 1, 2018;2020; provided, however, that pursuant to Amendment No. 13, dated March 1, 2017,14, we have the right to extend the maturity date of the Third Eye Capital Notes to April 1, 20192021 upon notice and payment of a 5% extension fee. We intend to payrepay the Third Eye Capital Notes through operational cash flow, proceeds from the issuance of the EB-5 Notes, a senior debt refinancing and/or equity financing.

As ofAt March 31, 2017, the2018, GAFI’s outstanding balance of principal, interest and fees, net of discounts, on the promissory note with Third Eye Capital was $2.1 million with aall GAFI Loans equaled $24.5 million. The current maturity date for the GAFI Loans is July 10, 2019. GAFI intends to repay the GAFI Loans through proceeds from the issuance of May 30, 2017.

We also rely on our working capital lines with J.D. Heiskell in California, and Gemini and Secunderabad Oils in India to fund our commercial arrangements for the acquisitions of feedstock. J.D. Heiskell currently provides us with working capital for the Keyes plant, and Secunderabad OilsGemini currently provides us with working capital for the Kakinada plant.plant and Secunderabad Oils provides us inter-corporate deposit for our BP Operations.  The ability of both J.D. Heiskell, Gemini, and Secunderabad Oils to continue to provide us with working capital depends in part on both of their respective financial strength and banking relationships.

DuringThe below table (in thousands) describes the changes in current and long-term debt during the three months ended March 31, 2017, current and long term debt increased by $4.8 million, primarily2018:

Working capital changes resulted in (i) accrued interest of $2.7 million, (ii) payment of a $0.7 million waiver fee, $3.1increase in inventories due to the procurement of imported crude glycerin in the end of March 2018 for processing by India operations and (ii) a $0.7 million maturity date extension fee,decrease in prepaid expenses and $2.1other assets mainly due to recognition of $0.4 million promissory note for operations to our senior lender, (iii)prepaid interest on GAFI Term Loan and $0.3 million in subordinated debt extension fees, and (iv) $1.6 million drawnother prepaid of Aemetis, Inc. classified to pay a raw material vendor working capital loan fromlong-term as the Secunderabad Oil working capital loan. The increaseCompany did not intend to use it in current and longshort term debt was partiallybasis offset by decreases due to: (i) $2.0 millionan increase of principal payments to a raw material vendor working capital loan and Secunderabad working capital loan in India, (ii) payments of interest of $1.0 million, and (iii) $2.7$0.1 million in net discount issuance costsadvances to be amortized. Current assets decreasedvendors by $2.1 million, primarily due to a (i) $0.5 million decrease in inventories, (ii) $1.2 million decrease in cash and (ii) $0.5 millionIndia operations, decrease in accounts receivable partially offset byof $96 thousand in Aemetis, Inc. and $154 thousand in India operations respectively, and a $0.1 million increase$35 thousand decrease in prepaids.cash.

Net cash used byin operating activities during the three months ended March 31, 20172018 was $2.5 million,$27 thousand, consisting of non-cash charges of $3.3$6.2 million, net changes in operating assets and liabilities of $2.8$4.9 million, and net loss of $8.6$11.1 million. The non-cash charges consisted of: (i) $1.7$4.8 million in amortization of debt issuance costs and patents, (ii) $1.1$1.2 million in depreciation expenses, and (iii) $0.4$0.3 million in stock-based compensation expense.expense and stock compensation for services. Net changes in operating assets and liabilities consisted primarily of decreasesan increase in (i) inventories of $0.8 million, (ii) other assets of $0.4 million, offset by (iii) decrease in accounts receivable of $0.6$0.2 million, inventory of $0.5 million, and(iv) an increase in accounts payable of $0.3$1.3 million partially offset by increasesand (v) an increase in other liabilities of $0.2$0.9 million, (vi) decrease in prepaid expense of $0.7 million, and (vii) an accrued interest of $2.0$2.9 million.

Cash used by investing activities was minimal.$1.0 million, of which $0.5 million were capital improvements made by India operations and $0.5 million were used by North America entities.

Cash provided by financing activities was $1.0 million, consisting primarily consisting of $2.2 million received from Third Eye Capital Notes and $3.0 million from working capital partners in India for UBPL operations, partially offset by payments of $4.2 million in principal and interest onto working capital loanspartners in India of $2.1 million, partially offset by borrowings of $3.0 million.for UBPL operations.

Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of net sales and expenses for each period. We believe that of our most significant accounting policies, defined as those policies that we believe are the most important to the portrayal of our financial condition and results of operations and that require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain are: revenue recognition; recoverability of long-lived assets, and debt modification and extinguishment accounting. These significant accounting principles are more fully described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, 2016.2017.

None reported beyond those disclosed in our 20162017 annual report.

Not Applicable.

Management (with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act). Based on this evaluation, our CEO and CFO concluded that, as of the end of the period covered in this report, our disclosure controls and procedures along with the related internal controls over financial reporting were effective to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Our management, including our CEO and CFO, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Our controls and procedures are designed to provide reasonable assurance that our control system’s objective will be met and our CEO and CFO have concluded that our disclosure controls and procedures are effective at the reasonable assurance level. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls in future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

There were no changes in our internal controls over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

No change in risk factors since the Company’s Annual Report on Form 10-K for the year ended December 31, 20162017 filed with the SEC on March 17, 2017.29, 2018.

The above issuance was exempt from registration under Section 4(2) of the Securities Act of 1933, as amended, as sales of securities not involving any public offering.

No unresolved defaults on senior securities occurred during the three months ended March 31, 2017.2018.

None

None