WALL TOWNSHIP, N.J., July 24, 2012 /PRNewswire/ -- Coates International, Ltd. (NASDAQ OTCBB: COTE) – Coates International Ltd. (the "Company"). Management has been in discussions with state representatives and local businesspersons from a pro-business state which we are not permitted to name at this time, and has applied for a package of various business and tax incentives. Acquisition of a suitable 250,000 square foot manufacturing plant in that state, with room for expansion, is under consideration, contingent upon approval of our application.
- Company management is determined to establish manufacturing and production of its CSRV products here in the USA as one of our primary company goals, with the intention of creating a number new jobs by the end of the first year of production, contributing to the local and U.S. economy and which would also involve the export of a portion of the U.S. manufactured CSRV products.
- The Company has engaged a local business financial group ("AFG") to: (i) assist the Company in its negotiations with the state representatives for business and tax incentives that we would be eligible to earn if we establish manufacturing and production operations in that state, and (ii) raise new working capital from private investors in conjunction with the state approval for our business and tax incentive package.
- The Company has a $20,000,000 Equity Line of Credit in place with Dutchess Opportunity Fund II, Ltd., approximately $19,500,000 of which has not been utilized. Funds received under the terms of this equity line of credit are intended to be utilized to manufacture CSRV natural gas generator sets and for working capital.
- While the Company is continuing to progress with negotiation with the state, it has resumed building CSRV industrial electric power natural gas generators on a limited basis at its headquarters in New Jersey for delivery to Almont Energy, Inc. in Canada.
- In consideration of the delay in delivery of CSRV products to Almont Energy, Inc., our licensed distributor, the Company has extended the payment deadlines under the sub-license agreements and related escrow agreement with Almont for an additional two years.
- Almont Energy and Well to Wire have to date, paid the Company $5,153,000 for the exclusive Canadian use and sale sub-license covering the patented CSRV system technology and a related research and development services agreement. There remains a balance due to the Company of $4,847,000. In addition, Almont is required to remit a down payment on an additional sub-license agreement for the territory of the U.S. The U.S. sub-license has not yet been granted to Almont and is currently being held in escrow until the deposit is paid. After remitting the deposit to the Company, Almont will be obligated to pay the balance of the sub-license fees amounting to $49,000,000 over an approximately four-year period.
- Regarding the potential joint venture for manufacturing CSRV products in China with SWT, once CSRV electric power industrial natural gas engine generators are operating in the oil fields in Canada, SWT's management intends to visit Canada to observe their operation, as a condition of proceeding with a joint venture operation. A $1,000,000 good- faith deposit that is earmarked to cover initial costs of the joint venture has previously been deposited by SWT into a Chinese bank escrow account. The Company has only utilized $10,000 USD of that deposit to date, for transaction costs.
There can be no assurance given that the Company will be successful in any of these endeavors.
Safe Harbor Statement:
This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please see our filings with the Securities and Exchange Commission. Our public filings with the SEC may be viewed and printed on the website maintained by the SEC at http://www.sec.gov.
Investor Relations Contact:
Equiti-trend Advisors, LLC
SOURCE Coates International Ltd.