COATES INTERNATIONAL, LTD. (OTCMKTS:COTE) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a RegistrantITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
On September 20, 2017, the Registrant received proceeds of $29,350, net of financing costs of $3,650, in connection with a Securities Purchase Agreement and related convertible promissory note, dated September 20, 2017, in the face amount of Thirty Three Thousand ($33,000.00) Dollars and no cents issued to APG Capital Holdings, LLC, an independent third party accredited investor (the “Holder”). The Promissory Note matures in September 2018 and provides for interest at the rate of ten (10%) percent per annum. The Note may be converted into unregistered shares of the Registrant’s common stock, par value $0.0001 per share, at the Conversion Price, as defined, in whole, or in part, at any time beginning 180 days after the date of the Note, at the option of the Holder. All outstanding principal and unpaid accrued interest is due at maturity, if not converted prior thereto.
The Conversion Price shall be equal to 62% multiplied by the Market Price, as defined. The Market Price shall be equal to the lowest trading price of the Registrant’s common stock on the OTC Pink during the twenty-five (25) trading-day period ending one trading day prior to the date of conversion by the Holder. The Holder anticipates that upon any conversion, the shares of stock it receives from the Registrant will be freely tradable in reliance on an exemption from registration under Rule 144 of the U.S. Securities and Exchange Commission.
The Registrant also issued a $33,000 back-end convertible promissory note on the same terms and conditions as the above convertible promissory note. This note may be funded in the future upon mutual agreement of the parties. This note is collateralized by a $33,000 promissory note issued by the Holder to the Registrant, dated September 20, 2017. If funded, the back-end note may be converted at any time commencing six months after September 20, 2017.
These notes may be prepaid during the six month period beginning September 20, 2017 by paying a prepayment penalty of 50%. The Registrant has reserved 709,677,000 shares of its unissued common stock for potential conversion of the convertible note.
The convertible promissory notes are privately offered and sold to the Holder in reliance on specific exemptions from the registration requirements of the United States federal and state securities laws which the Registrant believes are available to cover this transaction based on representations, warranties, agreements, acknowledgements and understandings provided to the Registrant by the Holder.
ITEM 9.01 FINANCIAL STATEMENT AND EXHIBITS.
(a) Financial Statements of Business Acquired.
N/A
(b) Pro Forma Financial Information.
N/A
(c) Exhibits.
COATES INTERNATIONAL LTD DE ExhibitEX-10.1 2 f8k092017ex10-1_coatesinter.htm CONVERTIBLE PROMISSORY NOTE ISSUED TO APG CAPITAL HOLDINGS,…To view the full exhibit click here
About COATES INTERNATIONAL, LTD. (OTCMKTS:COTE)
Coates International, Ltd. is engaged in developing the Coates Spherical Rotary Valve (CSRV) system technology, which is adaptable for use in piston-driven internal combustion engines of various types. The Company’s CSRV Engines produce only ultra-low levels of harmful emissions while in operation. Engines operating on the CSRV system technology can be powered by a selection of fuels. The CSRV system is designed to replace the intake and exhaust conventional poppet valves used in almost all piston-driven stationary, automotive, motorcycle and marine engines. Unlike conventional valves, which protrude into the engine combustion chamber, the Coates rotary valve system utilizes spherical valves that rotate in a cavity formed between an over two-piece cylinder head. The Coates rotary valve system uses approximately 1/10th the moving parts of conventional poppet valve assemblies. The Company has adapted its technology to industrial engines to power electric generators.
