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 Registrant

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 Registrant

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On January 10, 2017, the Registrant received the net proceeds of
a Securities Purchase Agreement and related convertible
promissory note, dated January 5, 2017, in the face amount of
Forty Three Thousand ($43,000.00) Dollars and no cents issued to
Power Up Funding Group, Ltd., (the Holder). The Promissory Note
matures in October 2017 and provides for interest at the rate of
eight (8%) percent per annum. The Note may be converted into
unregistered shares of the Registrants 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 Registrant incurred expenses amounting to
$3,000 in connection with this transaction.

The Conversion Price shall be equal to 61% multiplied by the
Market Price, as defined. The Market Price shall be equal to the
average of the three (3) lowest closing bid prices of the
Registrants common stock on the OTC Pink Sheets during the ten
(10) trading-day period ending one trading day prior to the date
of conversion by the Holder. The Conversion Price is subject to
adjustment for changes in the capital structure such as stock
dividends, stock splits or rights offerings. 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.

The Conversion Price is subject to adjustment in the event of any
of the following:

1. During the period when a Major Announcement by the Registrant
relating to a merger, consolidation, sale of the Registrant
or substantially all of its assets or tender offer is in
effect, as defined.
2. A merger, consolidation, exchange of shares,
recapitalization, reorganization or other similar event being

The Registrant is not permitted to pay dividends or make other
distributions of capital or repurchase or otherwise acquire any
shares of its capital stock without the Holders consent and is
subject to certain restrictions on new borrowings, while there is
a remaining outstanding balance related to the convertible
promissory note.

These notes may be prepaid during the first six months the notes
are outstanding by paying a prepayment penalty equal to 30%
during the first 60 days, increasing in 5% increments each month
thereafter, to a maximum of 50%. The Company has reserved
939,980,710 shares of its unissued common stock for potential
conversion of the convertible note.

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.


(a) Financial Statements of Business Acquired.


(b) Pro Forma Financial Information.


(c) Exhibits.

Exhibit No. Description
10.1 Convertible Promissory Note issued to Power Up Funding Group,
Ltd., dated January 5, 2017.
10.2 Securities Purchase Agreement between the Registrant and
Power Up Funding Group, Ltd., dated January 5, 2017.


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.


COATES INTERNATIONAL, LTD. (OTCMKTS:COTE) closed its last trading session 00.00000 at 0.00070 with 1,714,285 shares trading hands.

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