FORM 4 |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940 |
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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b). |
1. Name and Address of Reporting Person*
(Street)
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2. Issuer Name and Ticker or Trading Symbol
COATES INTERNATIONAL LTD \DE\ [ COTE ] |
5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
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3. Date of Earliest Transaction
(Month/Day/Year) 05/13/2014 | ||||||||||||||||||||||||||
4. If Amendment, Date of Original Filed
(Month/Day/Year) 05/01/2014 |
6. Individual or Joint/Group Filing (Check Applicable Line)
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Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned | ||||||||||
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1. Title of Security (Instr. 3) | 2. Transaction Date (Month/Day/Year) | 2A. Deemed Execution Date, if any (Month/Day/Year) | 3. Transaction Code (Instr. 8) | 4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5) | 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) | 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) | 7. Nature of Indirect Beneficial Ownership (Instr. 4) | |||
Code | V | Amount | (A) or (D) | Price | ||||||
Common Stock | 04/29/2014 | P | 39,682,540(1)(2)(3)(4) | A | $0.0252 | 261,761,625 | D | |||
Common Stock | 1,165,507 | I | By Self, as Trustee for The Coates Trust | |||||||
Common Stock | 1,956,960 | I | By Spouse |
Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities) | |||||||||||||||
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1. Title of Derivative Security (Instr. 3) | 2. Conversion or Exercise Price of Derivative Security | 3. Transaction Date (Month/Day/Year) | 3A. Deemed Execution Date, if any (Month/Day/Year) | 4. Transaction Code (Instr. 8) | 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) | 6. Date Exercisable and Expiration Date (Month/Day/Year) | 7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4) | 8. Price of Derivative Security (Instr. 5) | 9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) | 10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) | 11. Nature of Indirect Beneficial Ownership (Instr. 4) | ||||
Code | V | (A) | (D) | Date Exercisable | Expiration Date | Title | Amount or Number of Shares |
Explanation of Responses: |
1. On April 28, 2014, pursuant to a board resolution, $950,000 of additional paid-in capital was converted into a non-interest bearing promissory note due to George J. Coates. Initially, this conversion was characterized as repayment to Mr. Coates of cash outlays from his own personal funds to acquire the Company's headquarters, research and development and warehouse facility. Mr. Coates contributed this property to the Company and did not receive any consideration for this contribution. On April 29, 2014, Mr. Coates and the Company mutually agreed to convert this $950,000 promissory note together with $50,000 principal amount of 17% promissory notes due to Mr. Coates into shares of common stock of the Company at the closing price per share of $0.0252 per share on April 29, 2014. As a result, 39,682,540 shares of common stock were issued to Mr. Coates. |
2. After due consideration, on May 13, 2014, pursuant to a board resolution and the mutual agreement of the Company and Mr. Coates the treatment of this transaction was revised to reflect it as a payment due to Mr. Coates to cover his losses in relation to the transfer of title to the headquarters, research and development and warehouse facility to the Company. The Company has also agreed to be responsible for any of Mr. Coates' incremental personal income taxes attributable to this transaction. As a result of this transaction, the Company recorded stock-based compensation expense of $1,425,000, which includes the estimated liability for Mr. Coates' income taxes. The net effect on the Company's balance sheet of this stock-based common stock award and the conversion of $50,000 principal amount of 17% promissory notes due to Mr. Coates was to increase current liabilities by $425,000 and increase the stockholders' deficiency by $425,000. |
3. Although the estimated lost benefits of ownership to Mr. Coates exceeded the value of the award, including the income taxes to be paid by the Company, the parties mutually agreed not to increase the award amount and Mr. Coates did not request that any interest be paid to him. |
4. This amendment to the Form 4 originally filed on May 1, 2014 is being filed to describe the revised nature of this transaction resulting in the issuance of these shares of common stock to Mr. Coates. |
Remarks: |
/s/ George J. Coates | 05/15/2014 | |
** Signature of Reporting Person | Date | |
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly. | ||
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v). | ||
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a). | ||
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure. | ||
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number. |