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EX-99.1 - PRESS RELEASE DATED MARCH 10, 2010. - COATES INTERNATIONAL LTD \DE\ | ex991.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date
of report (Date of earliest event reported): March 10, 2010 (March 10,
2010)
|
COATES
INTERNATIONAL, LTD.
(Exact
Name of Registrant as Specified in Its Charter)
|
Delaware
|
000-33155
|
22-2925432
|
(State
or Other Jurisdiction of Incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
Highway
34 & Ridgewood Road, Wall Township, New Jersey 07719
(Address
of principal executive offices)
(732) 449-7717
(Registrant's
telephone number including area
code)
|
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[_]
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
[_]
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
[_]
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
[_]
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
FORWARD
LOOKING STATEMENTS
This Form
8-K and other reports filed by Registrant from time to time with the Securities
and Exchange Commission (collectively the "Filings") contain or may contain
forward looking statements and information that are based upon beliefs of, and
information currently available to, Registrant's management as well as estimates
and assumptions made by Registrant's management. When used in the filings the
words "anticipate", "believe", "estimate", "expect", "future", "intend", "plan"
or the negative of these terms and similar expressions as they relate to
Registrant or Registrant's management identify forward looking statements. Such
statements reflect the current view of Registrant with respect to future events
and are subject to risks, uncertainties, assumptions and other factors relating
to Registrant's industry, Registrant's operations and results of operations and
any businesses that may be acquired by Registrant. Should one or more of these
risks or uncertainties materialize, or should the underlying assumptions prove
incorrect, actual results may differ significantly from those anticipated,
believed, estimated, expected, intended or planned.
Although
Registrant believes that the expectations reflected in the forward looking
statements are reasonable, Registrant cannot guarantee future results, levels of
activity, performance or achievements. Except as required by applicable law,
including the securities laws of the United States, Registrant does not intend
to update any of the forward-looking statements to conform these statements to
actual results.
ITEM
1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
Coates
International, Ltd. (the “Company” or “Coates”) has entered into an agreement
consenting to an assignment of its Canadian License and the rights to its US
License Agreements, subject to the provisions of the Escrow Agreement with Well
to Wire Energy, Inc. (“WWE”) to Almont Energy Inc, (“Almont”) a privately held,
newly formed independent third party entity based in Alberta, Canada. Almont has
made two payments to Coates in February 2010 totaling $700,000 as a prerequisite
condition to our consent to the assignment.
Coates
has also received a deposit from Almont towards the first shipment of engines
expected to be ready for shipment in April 2010. Almont will deliver and install
these units.
Almont’s
management advised us that the new company was formed for the sole purpose of
pursuing its business plan to deploy the Coates Spherical Rotary Valve (“CSRV”)
system technology. This decision was based on a number of factors, which
included:
1.
|
Almont
management’s expectation is that it is more advantageous to separate the
“clean energy” business from the other WWE business activities and that
doing so, creates a single focus on the Coates CSRV system technology
business plan.
|
2.
|
Almont
management believes that as a single focused company it will be able to
facilitate the process of funding its
operations.
|
A new
management team has been installed at Almont to commercialize the CSRV system
technology. The management of Almont has stated that it intends to follow and
execute the original business plan of WWE very closely.
Almont
stated that it was initially capitalized by the management group together with
funds raised from a small group of high net worth investors with a track record
of proven business and financial success.
2
In
connection with the assignment of the Canadian License and the rights to the US
License, Almont has also assumed all of the obligations set forth in the Escrow
Agreement between the Company and WWE, with the following
modifications:
·
|
The
Release Payment Date as defined in the Escrow Agreement has been extended
to March 19, 2012. The remaining unpaid balance of the Release Payment is
approximately $6 million. Provided that Almont remits this entire unpaid
balance to the Company on or before the Release Payment Date, the US
License will be released from escrow and granted to Almont. Almont is
required to remit to the Company 60% of all monies it raises from future
equity or debt transactions, exclusive of proceeds from equipment purchase
financing transactions, until the Release Payment is paid in
full.
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·
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Almont
has also become obligated to pay the $49 million balance of the US License
Fee to the Company. Payment shall be made quarterly in an amount equal to
5% of Almont’s quarterly net profits. In addition, Almont is required to
remit a portion of the proceeds it receives from equity or debt
transactions, exclusive of equipment financing transactions to the Company
until the entire balance of the US License Fee is paid in full. However,
the entire $49 million licensing fee is required to be paid on or before
February 19, 2015.
|
The
business plan of Almont assumes the purchase of a substantial number of CSRV
units over the next 5 years. Almont’s purchase of CSRV units from the Company
will be made by way of standard purchase orders, issued based on market and
customer demand. Over the 5-year period, Almont anticipates that the volume of
total purchases from the Company will be similar to, or potentially exceed the
quantities contemplated in our previous arrangement with WWE. Almont plans to
finance its purchases from cash flow and by way of project and/or equipment
financing, proceeds from issuance of equity or corporate debt instruments and
conventional bank financing.
ITEM
9.01. FINANCIAL
STATEMENTS AND EXHIBITS.
(a)
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Financial
statements of business acquired:
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None
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(b)
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Exhibits
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Exhibit
No.
|
Description
|
99.1
|
Press
release dated March 10, 2010.
|
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this Report to be signed on its behalf by the undersigned hereunto
duly authorized.
COATES INTERNATIONAL, LTD. | |||
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Dated:
March 10, 2010
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By:
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/s/ George J. Coates | |
George
J. Coates
President
and Chief Executive Officer
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