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 February 21, 2018, the Registrant received the net proceeds of a Securities Purchase Agreement and a related convertible promissory note, dated February 15, 2018 in the face amount of Forty Four Thousand ($44,000.00) Dollars and no cents issued to GS Capital Partners, LLC, (the “Holder”). The Registrant also issued a back-end collateralized, convertible promissory note, in the face amount of Forty Four Thousand ($44,000.00) Dollars and no cents issued to GS Capital Partners, LLC, which is not expected to be funded prior to the six month anniversary of the funding of the first convertible note. The back end note may be cancelled by the Registrant prior to being funded. The Promissory Notes mature in February 2019 and provides for interest at the rate of eight (8%) percent per annum. The Notes 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 Notes, at the option of the Holder. All outstanding principal and unpaid accrued interest is due at maturity, if not converted prior thereto. The Registrant is responsible for expenses amounting to $4,000 in connection with each of the two notes.
The Conversion Price shall be equal to 65% multiplied by the Market Price, as defined. The Market Price shall be equal to the average if the three lowest trading prices of the Registrant’s common stock on the OTC Pink Sheets during the twelve (12) trading-day period ending one trading day prior to the date of conversion by the Holder. The number of shares of common stock to be issued upon conversion shall be equal to the aggregate amount of principal, interest and penalties, if any divided by the Conversion Price. The Holder anticipates that upon any conversion, the shares of stock it receives from the Registrant will be tradable by relying on an exemption under Rule 144 of the U.S. Securities and Exchange Commission.
These note may be prepaid with a prepayment penalty equal to 15% during the first 60 days, 20% during the next 90 days and 30% during the next 30 days the note is outstanding. The Company has reserved 14,636,000 shares of its unissued common stock for potential conversion of the convertible notes.
The convertible promissory note was 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.
| Exhibit No. | Description |
| 10.1 | Convertible Promissory Note issued to GS Capital Partners, LLC, dated February 15, 2018. |
| 10.2 | Back-end, Collateralized, Convertible Promissory Note issued to GS Capital Partners, LLC, dated February 15, 2018. |
| 10.3 | Securities Purchase Agreement between the Registrant and GS Capital Partners, LLC, dated February 15, 2018. |
COATES INTERNATIONAL LTD DE ExhibitEX-10.1 2 f8k022118ex10-1_coatesinter.htm CONVERTIBLE PROMISSORY NOTE ISSUED TO GS CAPITAL PARTNERS,…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.
