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Coates International, Ltd. is Pleased to Announce the Commencement of Production and Its Third Quarter Stockholders General Upd

^{Published on 2008-12-30 04:09:04, Last Modified on 2008-12-30 04:10:44 - Market Wire}
 

WALL TOWNSHIP, N.J.--([ BUSINESS WIRE ])--Coates International, Ltd. (the "Company") (OTCBB: COTE) – We would like to extend our wishes to all of our stockholders for a joyous holiday season and a happy New Year.

The Company is pleased to announce that it has commenced limited production of its CSRV Natural Gas (CNG/LNG) Industrial Electric Power Generators in its existing industrial plant in New Jersey to start filling orders. A number of CSRV power units could ship to WWE by the end of the first quarter of 2009. The Company would receive immediate payment for units sold to WWE under WWE's financing commitment. The unexpected delays the Company experienced this year could not be avoided; however, management believes that if we achieve our short term goal with limited production of the CSRV Power Generators next quarter, it will represent a major milestone in our quest toward ramping up production, generating positive working capital and getting on the path to profitable operations.

Well To Wire Energy, Inc. ("WWE") of Canada has paid the Company to date non-refundable payments aggregating approximately $3,313,000 USD, leaving a balance of approximately $7,687,000 USD which is required to meet the terms of the Escrow Release Payment. There is also a balance of $49,000,000 USD to be paid to the Company over the next five years in connection with WWE's exclusive US license. The exclusive Canadian license and the exclusive US license permit the use, sell, and leasing of products incorporating the Coates Spherical Rotary Valve ("CSRV") technology in pumping and compression activities and industrial electric power generation in the oil and gas industry and backup power generation in other industrial applications. WWE has financing in place of approximately $2,200,000,000 from Canada West Corporate Financing, Inc., which may only be drawn upon for the purchase from the company of 7,404 Coates CSRV Electric Power Natural Gas Generator Units ("Power Generators") over a five year period in accordance with WWE's business plan. When WWE fulfills its business plan, this would equate to aggregate Power Generator sales of approximately $1,200,000,000 over the five year period.

Update on projects for other applications of our patented CSRV technology:

• Development of the Heavy Truck Tractor Trailer Diesel Engine has been completed for some time, and we have completed the redesign of certain integrated engine functions. We expect to commence testing soon.
• The CSRV Domestic 35KW Stand-Alone Propane Generator is completed and performing to expectations. We intend to focus on marketing this product in 2009.
• We have de-emphasized our efforts toward the goal of establishing a new piston engine land speed record in order to pursue application of our technology to most profitable products with high expected market potential. We have developed a streamline model, built to one-fifth scale, which is undergoing testing in a wind tunnel. Results of testing will enable us to make refinements to the design, if needed, and improve the racing vehicles aerodynamics.
• We have been asked to retrofit two Chevy V8 350 engines with our CSRV technology that were provided to us by one of WWE's customers. These engines were previously employed in pumping and compression activities in the oil and gas industry in Canada. We will be preparing a feasibility analysis to determine the cost/benefit of retrofitting all engines owned by this WWE customer on a large scale basis.
• The Company is very excited about its continued progress in negotiations for tax and finance incentives with business development agencies in certain interested states in the US, intended to attract the Company to agree to establish large scale manufacturing and production plants within their state.
• The Company has signed a new agreement with Stonegate Securities, our placement agent, to undertake an additional equity capital raise for the purpose of funding our start-up costs to commence large scale manufacturing and production of our products. These efforts will be coordinated with our finalization of an agreement specifying the location and providing for a package of financial and tax incentives with one of the aforementioned interested parties. Significant proposals have been presented to the Company and are under review by management at this time.
• The original Mercedes 280SE car that the Company retrofitted with the CSRV engine in 1993 has been inspected for wear and tear. After many thousands of miles, it was determined to be in excellent condition. The engine oil has not been changed, and the vehicle has not been serviced over the ensuring 15 year period. The vehicle continues to be registered and operates in accordance with expectations.
• The large Industrial CSRV Electric Power Natural Gas Generators which were completed last year are regularly run under load conditions and demonstration for interested parties. The technology uniqueness and superiority of the CSRV generators are self evident upon witnessing our demonstration.
• The Company plans to recruit new plant workers at its New Jersey plant in connection with the aforementioned limited production of Power Generators.

It is the Company's intention to continue to provide periodic, general updates to its shareholders and make specific announcements of matters of interest as they occur or when finalized.

Additional information, including photos and videos are available at our Coates News website, [ www.mostadvancedengine.com ]. Readers may also visit our corporate website at [ www.coatesengine.com ].

About Coates International, Ltd.: Coates has been developing, over a period of more than 15 years, a patented spherical rotary valve CSRV Internal Combustion Engine, invented by George J. Coates and his son Gregory. The CSRV system is adaptable to combustion engines of many types. This technology is currently adapted to a number of practical applications, including industrial generators powered by engines incorporating the CSRV technology and designed to run on flare-off gas from oil wells, landfill gas and raw natural gas. The Company is actively engaged in making final refinements and performance testing in preparation for its launch of this product.

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. By their nature, forward-looking statements and forecasts involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the near future. There are a number of factors that could cause actual results and developments to differ materially from forecasted results. These risks and uncertainties include market conditions, regulatory approvals, and other risks inherent in our operations. For a discussion of these risks and uncertainties, 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 ].