**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
        10-QSB/A**





x
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934For
                the quarterly period ended March 31, 2007o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACTFor
                the transition period from _________________ to
                _________________





**Commission
      file number 000-33155**





**COATES
                INTERNATIONAL, LTD.**
              (Exact
                Name of Registrant as Specified in its
                Charter)




**Delaware**
            
            **22-2925432**(State
                or other Jurisdiction of
            
            (I.R.S.
                EmployerIncorporation
                or Organization)
            
            Identification
                No.)




**Highway
      34 & Ridgewood Road, Wall Township, New Jersey 07719**


(Address
      of Principal Executive Office) (Zip Code)





**(732)
      449-7717**


(Registrant's
      telephone number including area code)





Indicate
      by check mark whether the Registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the Registrant was required
      to file such reports) and (2) has been subject to such filing requirements
      for
      the past 90 days.




Yes x No o




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act.)




Yes o No x




As
      of May
      7, 2007, 269,894,278 shares of the Registrant’s common stock were issued and
      outstanding.




**EXPLANATORY
          NOTE: The issuer is amending its filing on Form 10-QSB made on May 15,
          2007 to
          reflect a revision in it’s accounting policy for licensing costs as described in
          Note 1** **SUMMARY
          OF SIGNIFICANT ACCOUNTING POLICIES- Licensing Costs and to add clarity
          to Note
          10. RELATED PARTY TRANSACTIONS** **in Part I, Financial Statements (Unaudited). In addition, the Company has
          updated the disclosures for additional subsequent events and added clarity
          and
          conformity to certain sections in Part II, Items 1 and
          2.**





**COATES
      INTERNATIONAL, LTD.**





**QUARTERLY
        REPORT ON FORM 10-QSB/A**





**CONTENTS**





**MARCH
      31, 2007**





**Page****Part
                I - FINANCIAL INFORMATION****Financial
                Statements (Unaudited):**Condensed
                Balance Sheet
            
            
            3Condensed
                Statements of Operations
            
            
            4Condensed
                Statements of Cash Flows
            
            
            5Notes
                to the Condensed Financial
                Statements
            
            
            6-11Item
                2. Management's Discussion and Analysis of
                Financial Condition and Results of Operations
            
            
            12-15Item
                3. Controls and Procedures
            
            
            16**PART
                II - OTHER INFORMATION**
            
            
            17Item
                1.LEGAL
                PROCEEDINGS
            
            
            17Item
                2. UNREGISTERED
                SALES OF EQUITY SECURITIES AND USE OF
                PROCEEDS
            
            
            17Item
                3. DEFAULTS
                UPON SENIOR SECURITIES.
            
            
            18Item
                4. SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY
                HOLDERS
            
            
            18Item
                5. OTHER
                INFORMATION
            
            
            18Item
                6.EXHIBITS
            
            
            18SIGNATURES
            
            
            19








2


**Coates
      International, Ltd.**


**Condensed
      Balance Sheet**


**March
      31, 2007**


**(Unaudited)**





**Assets**Current
                AssetsCash
            
            $
            255,059Inventory,
                net of reserve for obsolescence of $144,889
            
            
            376,723Prepaid
                and other assets
            
            
            37,363Total
                Current Assets
            
            
            669,145Investment
                in related party
            
            
            -Property,
                plant and equipment, net of accumulated depreciation of
                $774,912
            
            
            1,482,943Deferred
                licensing costs, net of accumulated amortization of $5,734
            
            
            86,426Security
                deposits
            
            
            197,500**Total
                Assets**
            
            $
            2,436,014**Liabilities
                and Stockholders’ Deficiency**


Current
                LiabilitiesAccounts
                payable and accrued liabilities
            
            $
            1,119,598Demand
                loan due to related party
            
            
            92,337Non-interest
                bearing promissory note
            
            
            49,573Total
                Current Liabilities
            
            
            1,261,508License
                deposits
            
            
            375,000Finance
                obligation
            
            
            3,876,60710%
                Convertible note, due March 2010
            
            
            100,000Total
                Liabilities
            
            
            5,613,115Commitments
                and Contingencies
            
            
            -Stockholders'
                DeficiencyPreferred
                stock, Series A, $0.001 par value 14,000,000 shares authorized, no
                shares
                issued or outstanding
            
            
            -Common
                stock, $.0001 par value, 1,000,000,000 shares authorized, 266,894,278
                shares issued and outstanding
            
            
            26,689Subscribed
                stock
            
            
            420,000Additional
                paid-in capital
            
            
            17,176,155Accumulated
                deficit
            
            
            (20,799,945
            )Total
                Stockholders' Deficiency
            
            
            (3,177,101
            )**Total
                Liabilities and Stockholders' Deficiency**
            
            $
            2,436,014




The
      accompanying notes are an integral part of this condensed balance
      sheet.






3





**Coates
      International, Ltd.**


**Condensed
      Statements of Operations**


**(Unaudited)**




Three
                Months Ended
              March
                31,2007
            
            2006Revenue
            
            $
            -
            
            $
            -Operating
                Expenses:Research
                and development costs
            
            
            80,508
            
            
            -General
                and administrative expenses
            
            
            425,811
            
            
            379,542Depreciation
                and amortization expense
            
            
            14,169
            
            
            12,637Total
                Operating Expenses
            
            
            520,488
            
            
            392,179Loss
                From Operations
            
            
            (520,488
            )
            
            (392,179
            )


Other
                Income (Expense)Interest
                expense, net of interest income of $1,600 and $69 in 2007 and 2006,
                respectively
            
            
            (95,900
            )
            
            (97,431
            )Total
                Other Expense
            
            
            (95,900
            )
            
            (97,431
            )Loss
                Before Income Taxes
            
            
            (616,388
            )
            
            (489,610
            )Provision
                for income taxes
            
            
            -
            
            
            -Net
                Loss
            
            $
            (616,388
            )
            $
            (489,610
            )Basic
                and Diluted Net Loss per share
            
            $
            (0.00
            )
            $
            (0.00
            )Basic
                and Diluted Weighted Average Number of Shares
            
            
            266,894,278
            
            
            266,894,278




The
      accompanying notes are an integral part of these condensed financial
      statements.






4




**Coates
      International, Ltd.**


**Condensed
      Statements of CashFlows**


**(Unaudited)**




Three
                Months Ended
              March,2007
            
            2006Cash
                Flow From Operating Activities
            
            $
            (512,686
            )
            $
            (334,732
            )Cash
                Flow From Investing ActivitiesDeferred
                licensing costs
            
            
            (6,497
            )
            
            (6,694
            )Net
                Cash Used for Investing Activities
            
            
            (6,497
            )
            
            (6,694
            )Cash
                Flow From Financing ActivitiesSubscribed
                stock
            
            
            420,000
            
            
            -Proceeds
                from issuance of 10% convertible note
            
            
            100,000
            
            
            -Deferred
                offering costs paid
            
            
            -
            
            
            (25,185
            )Repayment
                of related party loan
            
            
            -
            
            
            (45,300
            )Net
                Cash Provided by (Used for) Financing Activities
            
            
            520,000
            
            
            (70,485
            )Net
                Increase (Decrease) in Cash
            
            
            817
            
            
            (411,911
            )Cash
                - Beginning of Period
            
            
            254,242
            
            
            1,928,123Cash
                - End of Period
            
            $
            255,059
            
            $
            1,516,212Schedule
                of Supplemental Cash Flow Data:Cash
                paid for interest
            
            $
            130,000
            
            $
            -Non-cash
                financing activities:Note
              issued for accrued liabilities
            
            $
            49,573
            
            $
            -








The
      accompanying notes are an integral part of these condensed financial
      statements






5





**Coates
      International, Ltd.**


**Notes
      to Condensed Financial Statements**





**1.
      BASIS OF PRESENTATION**





The
      accompanying unaudited condensed financial statements have been prepared in
      accordance with generally accepted accounting principles for interim financial
      information and with the instructions to Item 310 of Regulation S-B.
      Accordingly, they do not include all of the information and notes required
      by
      generally accepted accounting principles for complete financial statements.
      In
      the opinion of management, all adjustments (consisting of normal recurring
      accruals) considered necessary for a fair presentation have been included.
      The
      results of operations for the three months ended March 31, 2007 and 2006 are
      not
      necessarily indicative of the results that may be expected for any other interim
      period or for the full year. The unaudited condensed financial statements should
      be read in conjunction with the consolidated financial statements and notes
      thereto included in the Company’s annual report on Form 10-KSB for the year
      ended December 31, 2006.





**2. ACCOUNTING
      POLICIES**





**Licensing
      Costs**





Under
        the
        CSRV Licensing Agreement for the CSRV technology, the Company is responsible
        for
        all costs in connection with applying for, obtaining and maintenance of patents
        to protect the CSRV System intellectual technology. Such costs are expensed
        as
        incurred. For the three months ended March 31, 2007 and years ended December
        31,
        2006 and 2005 only, the Company capitalized such licensing costs, which are
        being amortized on a straight-line basis over 20 years. The effect of
        capitalizing such costs for the three months ended March 31, 2007 and the
        years
        ended December 31, 2006 and 2005 was not material. Such amount is reflected
        in
        the accompanying balance sheet as Deferred Licensing Costs.





**Uncertainty
      in Income Taxes**





Effective
      January 1, 2007, the Company adopted Statement of Financial Accounting Standards
      (“SFAS”) Interpretation No. 48, "Accounting for Uncertainty in Income Taxes, an
      Interpretation of SFAS Statement No. 109" ("FIN 48"), which clarifies the
      accounting and disclosure for uncertain tax positions, as defined. Adoption
      of
      FIN 48 did not have a material impact on the financial position or results
      of
      operations of the Company.





**Use
      of Estimates**





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America (“generally accepted
      accounting principles”) requires management to make estimates and assumptions
      that affect the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements and
      the reported amounts of revenues and expenses during the reporting period.
      Actual results could differ from those estimates.





**3.
      SUBSCRIBED STOCK**




The
      Company commenced a private placement offering in December 2006 (the “Offering”)
      of “Units” consisting of (i) one share of the Company’s 6% Series A Convertible
      Preferred Stock (the “Preferred Stock”) and (ii) a Warrant to purchase five
      thousand shares of the Company’s Common Stock at an initial exercise price of
      $1.10 per share (the “Warrants”), and terminated the Offering in March 2007.
      Each share of Preferred Stock is convertible into ten shares of our common
      stock
      at any time. Aggregate net proceeds from this Offering, which amounted to
      $420,000 is being used for working capital purposes. There were no expenses
      incurred related to this offering. Certain of these investors have agreed to
      accept ten shares of our common stock in lieu of each share of Preferred Stock
      purchased through the private offering. The Company is seeking approval from
      the
      remaining investors to accept the common stock in lieu of the Preferred Stock.
      Upon obtaining such approval, the Company will issue in the aggregate 420,000
      shares of its common stock and 42 Warrants for the Units sold. If such approval
      cannot be obtained from the remaining investors then such investors will be
      issued the shares of Preferred Stock they originally purchased. At March 31,
      2007, no shares of either common stock or Preferred Stock had been issued to
      any
      of these investors. Accordingly, the accompanying balance sheet reflects the
      Subscribed Stock in the Stockholders’ Deficiency section in the amount of
      $420,000. Upon final determination of this matter with each investor, the
      appropriate number of shares of common stock and/or Preferred Stock, as the
      case
      may be, will be issued to the 14 accredited investors in this offering. Also,
      at
      that time, if any of the Investors insist on receiving Preferred Stock, then
      a
      determination of the amount of any beneficial conversion feature relating the
      Warrants will be made. The Company intends to register 630,000 of shares of
      common stock related to the subscribed stock and Warrants sold through this
      offering, in connection with a registration statement it plans to file related
      to the Equity Line of Credit transaction with Dutchess Private Equities Fund,
      Ltd. discussed in more detail in Note 12.







6


**Coates
        International, Ltd.**
 **Notes
        to Condensed Financial Statements**


**4.
      COMMON STOCK**





On
      February 26, 2007, the Company’s common stock commenced trading on the Over the
      Counter Bulletin Board market system under the ticker symbol COTE.





**5.
      SETTLEMENT AGREEMENT WITH PRIOR ACCOUNTANTS**





In
      February 2007, the Company entered into a settlement agreement with Rosenberg,
      Rich Baker Berman & Company (“RRBB”) which provided for a mutual release of
      any claims by the parties and that the balance of fees due RRBB would be
      converted to an approximately $50,000 principal amount, promissory note which
      is
      reflected as non-interest bearing promissory note on the accompanying balance
      sheet. Payment of this promissory note became accelerated and was paid in full
      in April 2007. RRBB served as the Company’s Independent Registered Public
      Accounting Firm for the year ended December 31, 2005.





**6.
      ISSUANCE OF 10% CONVERTIBLE NOTE**





In
      March
      2007, the Company issued $100,000 principal amount of 10% Convertible
      Subordinated Notes, due March 2010 (the “Convertible Notes”) to one of its
      outside directors and received cash proceeds of $100,000. This amount is
      included in non-current liabilities on the accompanying balance sheet. In April
      2007, the Company issued an additional $20,000 principal amount of Convertible
      Notes to another outside director and received cash proceeds of $20,000. The
      proceeds from the Convertible Notes are being used for working capital purposes.
      The Convertible Notes are convertible at the option of the holder into shares
      of
      the Company’s common stock at an initial conversion rate that is determined by
      dividing the principal amount of notes being convertible by $0.45. As the
      closing price of the Company’s common stock on the date of the transaction was
      $0.35 per share there was no beneficial conversion feature. Interest shall
      accrue at the rate of 10% per annum and shall be payable in cash only at
      maturity. All interest shall be forfeited upon conversion, in which case the
      holder would be entitled to dividends declared, if any, on the Company’s common
      stock during the time the convertible note was outstanding. The Company has reserved
      266,667 shares of its common stock for conversion of these notes. The Company
      intends to register this number of shares of common stock in connection with
      a
      registration statement it plans to file related to the Equity Line of Credit
      transaction with Dutchess Private Equities Fund, Ltd. discussed in more detail
      in Note 12.







7


**Coates
        International, Ltd.**
 **Notes
        to Condensed Financial Statements**






**7.
      LOSS PER SHARE**





Basic
        net
        loss per share is based on the weighted average number of common shares
        outstanding without consideration of potentially dilutive shares of common
        stock. There were no shares of preferred stock outstanding during the period.
        Diluted net loss per share is based on the weighted average number of common
        and
        potentially dilutive common shares outstanding. For the three months ended
        March
        31, 2007 and 2006, the Company had 222,222 and -0- shares of common stock
        potentially issuable upon assumed conversion of a 10% convertible note,
        respectively, that were not included in the dilutive calculation because
        the
        Company incurred a net loss for the period and the effect of including them
        in
        the calculation would have been anti-dilutive. There was no effect on net
        loss
        per share as a result of potential dilution. Had the Company issued any
        shares of Preferred Stock to investors in the private placement of Units
        discussed in Note 3, there would have been no effect on the loss per share
        because the Company incurred a net loss and the effect of including the
        potentially issuable shares of common stock upon an assumed conversion of
        the
        Preferred Stock would have been anti-dilutive.





**8.
      STOCK OPTIONS**





No
      stock
      options had been granted at March 31, 2007. The Company will begin to record
      compensation expense for 1,775,000 stock options granted its employees and
      non-employee directors on April 18, 2007 at an exercise price of $0.44 per
      share
      in the second quarter of 2007 over the vesting period of each stock option
      granted. The amount expected to be recorded as stock compensation expense for
      the second quarter of 2007 is approximately $273,000.





The
      Company granted 25,000 non-employee stock options to its corporate general
      counsel on April 18, 2007 at an exercise price of $0.44 per share, which will
      be
      accounted for in accordance with the guidance in Emerging Issues Task Force
      Issue No. 96-18. In accordance therewith, the fair value of each option is
      estimated on the balance sheet date for non-vested options and on the vesting
      date for vested options.





The
      weighted average fair value of the Company's stock-based compensation of $0.40
      per share was estimated using the Black-Scholes option pricing model which
      requires highly subjective assumptions including the expected stock price
      volatility. These assumptions were as follows:





Historical
                stock price volatility
            
            180%Risk-free
                interest rate
            
            4.56%-4.64%Expected
                life (in years)
            
            4Dividend
                yield
            
            0.00





The
      valuation assumptions were determined as follows:




·
            Historical
                stock price volatility: The Company obtained the volatility factor
                for
                another publicly traded engine manufacturer that was also in the
                research
                and development stage.





·
            Risk-free
                interest rate: The Company bases the risk-free interest rate on the
                interest rate payable on U.S. Treasury securities in effect at the
                time of
                the grant for a period that is commensurate with the assumed expected
                option life.




·
            Expected
                life: The expected life of the options represents the period of time
                options are expected to be outstanding. The Company has no historical
                data
                on which to base this estimate. Accordingly, the Company estimated
                the
                expected life based on its expectation that the executives will be
                subject
                to frequent black out periods options during which they will be
                exercisable and based on the Company’s expectation that it will complete
                its research and development phase and commence its initial production
                phase. The vesting period of these options was also considered in
                the
                determination of the expected life of each stock option
                grant.





No
      expected dividends.







8


**Coates
        International, Ltd.**
 **Notes
        to Condensed Financial Statements**




**9.
      INCOME TAXES**





Deferred
      income taxes are determined using the liability method for the temporary
      differences between the financial reporting basis and income tax basis of the
      Company’s assets and liabilities. Deferred income taxes are measured based on
      the tax rates expected to be in effect when the temporary differences are
      included in the Company’s tax return. Deferred tax assets and liabilities are
      recognized based on anticipated future tax consequences attributable to
      differences between financial statement carrying amounts of assets and
      liabilities and their respective tax bases.





The
      tax
      valuation allowance for the three months ended March 31, 2007 increased by
      approximately $137,000.





**10.
      RELATED PARTY TRANSACTIONS**





The
      Company owns approximately 30% of the outstanding shares of common stock of
      Coates Motorcycle Company, Ltd. (“Coates Motorcycle”), a company that researches
      and is developing a heavy cruiser motorcycle equipped with the Coates SRV
      engine. Gregory Coates, President, Technology Division of the Company is the
      majority stockholder of Coates Motorcycle.





The
      Company’s investment in Coates Motorcycle is being accounted for under the
      equity method of accounting for investments. As such, the investment is being
      carried at cost, adjusted for the Company’s proportionate share of the
      undistributed earnings and losses of Coates Motorcycle. The Company stopped
      recording its proportionate share of additional losses of Coates Motorcycle
      at
      the point at which its investment equaled $-0- from the recording of such prior
      proportionate losses. Had the Company continued to record its proportionate
      share of undistributed earning and losses after its investment was written
      down
      to $ -0-, it would have recorded an additional share of undistributed losses
      aggregating approximately $399,600 through March 31, 2007.





Summarized
      unaudited financial data for Coates Motorcycle is as follows:




March
                31, 2007Current
                assets
            
            $
            41,078Total
                assets
            
            
            79,960Current
                liabilities
            
            
            (523,904
            )Total
                liabilities
            
            
            (1,420,035
            )Stockholders’
                deficiency
            
            
            1,340,075







For
                the Three Months Ended March 31,
            
            2007
            
            2006Revenue
            
            $
            -
            
            $
            -Operating
                expenses
            
            
            171,642
            
            
            217,872Net
                loss
            
            
            (190,257
            )
            
            (223,727
            )





Mark
      Goldsmith, former Chief Executive Officer and President also previously served
      as the Chief Executive Officer, President and Interim Chief Financial Officer
      of
      Coates Motorcycle pursuant to an employment agreement. During the three month
      periods ended March 31, 2007 and 2006, Mr. Goldsmith received salary payments
      of
      $25,000 and $49,750, respectively, from Coates Motorcycle and was provided
      with
      a leased automobile and medical and dental benefits.





The
        Coates Trust has made loans to the Company at various times to provide working
        capital. George J. Coates, Bernadette Coates, wife of George J. Coates and
        Gregory Coates are beneficiaries of the Coates Trust. The net outstanding
        balance was $92,337 at March 31, 2007. Interest was not imputed on these
        borrowing because the amount was not considered to be material to the financial
        statements and there would not have been any effect on basic and diluted
        net
        loss per share. These borrowings were in the form of a non-interest bearing
        demand loan. It is the intention of the Coates Trust to assist the Company
        with
        its working capital requirements as needed in the future, even though it
        is not
        legally obligated to do so. In April 2007, this demand loan was converted
        to a
        6% promissory note due April 4, 2008.






9


**Coates
        International, Ltd.**
 **Notes
        to Condensed Financial Statements**






During
      the three months ended March 31, 2007 and 2006, the Company paid the same
      compensation to George J. Coates, Gregory Coates and Bernadette Coates amounting
      to approximately $44,000, $20,000 and $10,000, respectively.




Barry
      C.
      Kaye, Treasurer and Chief Financial Officer was paid consulting fees of $7,500
      and $2,000 during the three months ended March 31, 2007 and 2006,
      respectively.





The
      Company paid $5,250 and $10,250 during the three months ended March 31, 2007
      and
      2006, respectively, to Coates Precision Engineering, Ltd. a Company owned solely
      by George J. Coates, for services in connection with engineering certain
      materials for use in production.





**11.
      LITIGATION AND CONTINGENCIES**





The
      Company, certain of its officers and directors and other related and unrelated
      parties were named as defendants in a lawsuit brought in the Superior Court
      of
      New Jersey captioned H. Alton Neff v. George Coates, Coates International,
      Ltd.
      et al. Plaintiff contends that he is the assignee of 1107 North West Central
      Avenue Inc. ("1107"). Preliminary agreements and an amendment thereto relating
      to purchase of a certain license by 1107 from the Company provided, inter alia,
      that a $500,000 deposit made by 1107 to the Company would convert to stock
      of
      the Company if certain conditions were not met by 1107. The Company maintains
      that 1107 did not fulfill such conditions, and failed to make a certain payment,
      and therefore, the deposit converted into shares of the Company's restricted
      Common Stock. On February 13, 2007, the Superior Court of New Jersey dismissed
      the complaint “with prejudice.” The plaintiff and a third party defendant have
      since filed motions for reconsideration which were denied on March 30, 2007.
      It
      is anticipated that the plaintiffs and the third party defendant will appeal.
      The Company has proposed to dismiss, without prejudice, its counterclaim and
      third party complaint in order to avoid the costs associated with a proof
      hearing.


In
      April
      2007, the Company received a demand letter from a law firm requesting payment
      of
      approximately $77,000 in connection with a promissory note issued to the law
      firm as security for the payment of future services to the Company. The Company
      has notified the holder of this note that it does not intend to honor the
      promissory note because the law firm did not provide the services contemplated
      to be performed as consideration for the promissory note. No further action
      to
      pursue collection of this promissory note has been taken to date by the holder.
      At this time, it is not possible to reasonably estimate the outcome of this
      matter, and, accordingly, no amount has been accrued.





In
      late
      March 2007, at the request of the Company, Mark D. Goldsmith stepped down from
      his positions as Chief Executive Officer and President. Although the Company
      considered a possible future role for Mr. Goldsmith upon certain conditions
      being satisfied, it was unable to agree on the terms and conditions for such
      a
      future role. As a result of his departure, the Company may be obligated to
      make
      certain payments to Mr. Goldsmith under an employment agreement dated October
      18, 2006. On April 17, 2007, the Company notified Mr. Goldsmith in writing
      that
      he was being terminated as a director, officer and employee with “Cause”, as
      defined in his employment agreement. On May 11, through an attorney, Mr.
      Goldsmith notified the Company that he is disputing the Company’s position that
      his termination was with Cause. In his letter, he has taken the position that
      he
      has resigned for “Good Reason”, as defined in his employment agreement. At this
      time, it is too early to estimate the likely outcome of this dispute and,
      accordingly, no amounts have been accrued subsequent to the date of termination
      being asserted by the Company. If the Company’s position is upheld, then Mr.
      Goldsmith would not be entitled to any severance or stock options under his
      employment agreement.







10


**Coates
        International, Ltd.**
 **Notes
        to Condensed Financial Statements**






The
      total
      amount accrued and unpaid for this potential liability through March 28, 2007,
      the date the Company believes that Mr. Goldsmith was terminated with Cause,
      at
      March 31, 2007 was approximately $89,000, which is included in accounts payable
      and accrued liabilities in the accompanying balance sheet.





**12.
      SUBSEQUENT EVENTS**





**Sale
      of Common Stock**





In
      April
      2007, the Company sold 2,000,000 shares of its common stock to the son of a
      director of the Company and received aggregate gross proceeds of $500,000.
      In
      May 2007, the Company sold this son of a director an additional 1,000,000 shares
      of its common stock and received aggregate gross proceeds of $500,000. These
      transactions were private sales of unregistered securities pursuant to stock
      purchase agreements. The Company intends to register this 3,000,000 shares
      of
      common stock sold in connection with a registration statement it plans to file
      related to the Equity Line of Credit transaction with Dutchess Private Equities
      Fund, Ltd. discussed in more detail below.





**Issuance
      of 6% Promissory Note**





In
      April
      2007, the Company issued a $192,337 principal amount 6% Promissory Note, due
      April 4, 2008 to the Coates Trust in consideration for cash proceeds of $100,000
      and conversion of a non-interest bearing demand loan due to the Coates Trust
      in
      the amount of $92,337. George J. Coates, Bernadette Coates and Gregory Coates
      are beneficiaries of this Trust.





**Investment
      Agreement with Dutchess Private Equities Fund, Ltd.**





On
      April
      26, 2007, we entered into an Investment Agreement with Dutchess Private Equities
      Fund, Ltd. (the “Investor”). Pursuant to this Agreement, the Investor shall
      commit to purchase up to $10,000,000 of our common stock over the course of
      thirty-six (36) months. The amount that we shall be entitled to request from
      each purchase (“Puts”) shall be equal to, at our election, either (i) up to
      $500,000 or (ii) 200% of the average
      daily volume (U.S. market only) of the common stock for the ten (10) trading
      days prior to the applicable put notice date, multiplied by the average of
      the
      three (3) daily closing bid prices immediately preceding the put date. The
      put
      date shall be the date that the Investor receives a put notice of a draw down
      by
      us. The purchase price shall be set at ninety-three percent (93%) of the lowest
      closing Best Bid price of the common stock during the pricing period. The
      pricing period shall be the five (5) consecutive trading days immediately after
      the put notice date. There are put restrictions applied on days between the
      put
      date and the closing date with respect to that particular Put. During this
      time,
      we shall not be entitled to deliver another put notice. Further, we shall
      reserve the right to withdraw that portion of the Put that is below seventy-five
      percent (75%) of the lowest closing bid prices for the 10-trading day period
      immediately preceding each put notice.





We
      are
      obligated to file a registration statement with the Securities and Exchange
      Commission (“SEC”) covering 15,000,000 shares of the common stock underlying the
      Investment Agreement within 30 days after the April 26, 2007, closing date.
      In
      addition, we are obligated to use all commercially reasonable efforts to have
      the registration statement declared effective by the SEC within 90 days after
      the closing date. We shall have an ongoing obligation to register additional
      shares of our common stock as necessary underlying the draw downs. We also
      intend to register approximately 3,897,000 shares of common stock representing
      the 266,667 shares reserved for conversion of the 10% convertible notes
      discussed in Note 6, 630,000 shares of common stock related to the stock and
      warrants issued in connection with the private placement of securities discussed
      in Note 3 and 3,000,000 shares of common stock sold in April 2007.







11





**Item
      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
      CONDITION AND RESULTS OF OPERATIONS**




**Forward
      Looking Statements**




This
      quarterly report on Form 10-QSB contains forward-looking statements within
      the
      meaning of the Private Securities Litigation Reform Act of 1995 and Federal
      securities laws, and is subject to the safe-harbor created by such Act and
      laws.
      Forward-looking statements may include our statements regarding our goals,
      beliefs, strategies, objectives, plans, including product and service
      developments, current dependence on our contract with Well to Wire Energy,
      Inc.,
      future financial conditions, results or projections or current expectations.
      In
      some cases, you can identify forward-looking statements by terminology such
      as
      "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate,"
      "predict," "potential" or "continue," the negative of such terms, or other
      comparable terminology. These statements are subject to known and unknown risks,
      uncertainties, assumptions and other factors that may cause actual results
      to be
      materially different from those contemplated by the forward-looking statements.
      The business and operations of Coates International Ltd. are subject to
      substantial risks, which increase the uncertainty inherent in the
      forward-looking statements contained in this report. Except as required by
      law,
      we undertake no obligation to release publicly the result of any revision to
      these forward-looking statements that may be made to reflect events or
      circumstances after the date hereof or to reflect the occurrence of
      unanticipated events. Further information on potential factors that could affect
      our business is described in our various periodic reports filed with the SEC.
      Readers are also urged to carefully review and consider the various disclosures
      we have made in this and such previously filed reports.




**Background**




We
      have
      substantially completed the development of the Coates spherical rotary valve
      engine. We are now engaged in adapting our technology to manufacturing
      industrial engines to power electric generators with output of up to 300kw,
      depending on the primary fuel. Thereafter, we intend to manufacture engines
      for
      multiple other applications and uses.


**Significant
      Estimates**





The
        Company utilizes significant estimates in the preparation of its financial
        statements. These significant estimates include assigning useful lives to
        our
        property, plant and equipment, assigning an expected life to our outstanding
        stock options, selecting a volatility factor to be used in determining the
        fair
        market value of stock options on the date of grant and determining an
        appropriate amount to reserve for obsolete and slow moving inventory.





**Agreements
      with Well to Wire Energy, Inc.**





On
      September 29, 1999, CIL signed an agreement (the "WWE Agreement") with Well
      to
      Wire Energy, Inc. ("WWE"), an oil and gas company in Canada, relating to the
      distribution in Canada of V-8 cylinder engines modified with the Coates Rotary
      Valve System to be fueled by natural gas to generate electrical power for future
      payments, of which a deposit payment in the amount of $300,000 was made. A
      separate research and development agreement between CIL and WWE provides for
      development and delivery of certain prototype engines.





On
      July
      7, 2006, we signed a confirmation letter agreement with WWE that provides as
      follows:





·
            The
                Company expects to ship to WWE in the near term the third power unit
                of
                the Generator. Upon receipt of the Generator, and pending test results
                meeting WWE’s expectations, the balance of $3,800,000 on account of the
                research and development agreement mentioned above will become due
                to the
                Company by WWE. In addition, 180 days later, the balance of $4,700,000
                on
                account of the WWE agreement mentioned above will become due to the
                Company by WWE in 16 equal quarterly
                installments.






12




·
            WWE
                will have the exclusive right to use, lease, and sell the generators
                that
                are based on the CSRV System technology within
                Canada.





**·**
            WWE
                will have a right of first refusal to market the generators that
                are based
                on the CSRV System technology worldwide.





·
            The
                Company and WWE have agreed that the minimum annual number of Generators
                to be purchased by WWE in order to maintain exclusivity is 120. Until
                otherwise agreed between the parties, the price per Generator shall
                be US
                $150,000. The minimum purchase requirement shall start in
                2007.





·
            WWE
                shall not be required to pay any royalties to us as part of these
                agreements.





·
            Patent
                Rights. All patent and other intellectual property rights related
                to the
                engine will remain with CIL.





**Results
      of Operations - Three Months Ended March 31, 2007 Compared to Three Months
      Ended
      March 31, 2006**




No
      revenues were generated during the three month periods ended March 31, 2007
      and
      2006. Total operating expenses for the three month periods ended March 31,
      2007
      and 2006, were approximately $520,000 and $392,000, respectively, an increase
      of
      32.7%. Research and development costs were approximately $81,000 and $ -0-
      for
      the three month periods ended March 31, 2007 and 2006, respectively. Research
      and development costs included employee compensation of approximately $64,000
      and a write down
      of
      work in process inventory of approximately $17,000 in the 2007 period. This
      increase in research and development costs reflects the Company’s emphasis on
      R&D activities to complete development, make engineering refinements and
      perform testing of the technology for the third prototype production engine
      for
      Well-to-Wire.




General
        and administrative expenses increased to approximately $426,000 for the three
        months ended March 31, 2007 from approximately $380,000 in the corresponding
        three month period in 2006. This $46,000 or 12.2% increase primarily resulted
        from increased legal and professional fees of approximately $59,000,
        compensation expense in 2007 accrued for a former executive of approximately
        $48,000, a write off of deferred offering costs of approximately $15,000
        and an
        increase in testing fees in the amount of $10,000, offset by an allocation
        of
        compensation expense to research and development expenses in 2006 of
        approximately $(64,000).




Interest
      expense, net, decreased slightly to approximately $96,000 from approximately
      $97,000 for the three months ended March 31, 2007 and 2006, respectively, as
      a
      result of interest income earned. Interest expense of $97,500 in both periods
      related to the required use of the financing method of accounting for our
      sale/leaseback transaction discussed in more detail below.




The
      change in deferred taxes for the three months ended March 31, 2007 and 2006
      was
      fully offset by a valuation allowance, resulting in a $-0- net income tax
      provision. The Company experienced a net loss for the three month periods ended
      March 31, 2007 and 2006, of approximately $616,000 and $490,000, respectively.




**Liquidity
      and Capital Resources**




The
      Company’s cash position at March 31, 2007 was approximately $255,000, an
      increase of approximately $1,000 from the cash position of approximately
      $254,000 at December 31, 2006. We had a working capital deficiency of
      approximately $(592,000) at March 31, 2007 which represents an approximately
      $(73,000) increase from the approximately $(519,000) working capital deficiency
      at December 31, 2006. CIL’s current liabilities of approximately $1,262,000 at
      March 31, 2007 increased by approximately $137,000 from approximately $1,125,000
      at December 31, 2006.







13




Operating
      activities utilized cash of approximately $(513,000) in the three months ended
      March 31, 2007 and approximately $(335,000) in the three months ended March
      31,
      2006. Cash utilized by operating activities in the three months ended March
      31,
      2007 results primarily from a net loss of approximately $(616,000), an increase
      in inventory of approximately $(25,000), prepaid expenses of approximately
      $(37,000), offset by an increase in accrued expenses of approximately $87,000,
      the conversion of accounts payable to a non-interest bearing promissory note
      of
      approximately $50,000 and non-cash expenses of approximately
      $29,000.





Investing
      activities utilized cash of approximately $(7,000) for deferred licensing costs
      in the three months ended March 31, 2007 and 2006, respectively.





Financing
        activities generated cash of approximately $520,000 for the three months
        ended
        March 31, 2007 and utilized cash of approximately $(70,000) for the three
        months
        ended March 31, 2006. Cash generated from financing activities for the three
        month period ended March 31, 2007 consisted of cash proceeds from the sale
        of
        capital securities of $420,000 which had not been issued to the investors
        at
        March 31, 2007 and 10% convertible notes in the principal amount of $100,000.
        Cash utilized for financing activities in the 2006 corresponding period
        consisted of deferred offering costs of approximately $(25,000) and repayment
        of
        a related party loan of approximately $(45,000).


In
      connection with our agreements with WWE, we have completed the construction
      and
      testing of the last of the three prototype CSRV generators (the “Production
      Model”) to the satisfaction of our own production standards. We expect to
      deliver this third Production Model within the next several months. Upon testing
      and acceptance by WWE to ensure the production model complies with their
      specifications, the balance of $3,800,000 under the research and development
      agreement with WWE shall become due and payable. Under the distribution
      agreement, the balance due to us of $4,700,000 is payable in equal quarterly
      payments over a four year period, commencing 180 days following successful
      delivery and testing of the third prototype engine. In the opinion of
      management, we will be required to raise additional working capital to
      completely achieve our planned production phase of our operations. The source
      of
      such additional working capital is anticipated to come from the cash flows
      under
      the agreements with WWE and/or closing of a sale of our capital stock or other
      borrowings. We are actively pursuing additional working capital from both of
      these sources. If these additional sources of working capital are not realized,
      it may become necessary to alter our planned production phase of our operations.
      There can be no assurance, however, that these agreements will be consummated
      in
      accordance with the Company’s expectations or that payments will be received as
      called for in the agreements. Furthermore, there can be no assurance that we
      will be successful in raising additional working capital for our operations.





**Contractual
      Obligations and Commitments**





The
      following table summarizes our contractual obligations and commitments at March
      31, 2007:





Amount
                  Due WithinTotal
              
              2007
              
              2008
              
              2009
              
              2010
              
              2011Contractual
                  ObligationsSaSale/Leaseback
                  Arrangement(1)
              
              $
              1,820,000
              
              $
              292,500
              
              $
              390,000
              
              $
              390,000
              
              $
              390,000
              
              $
              357,500Employment
                  Agreements(2)
              
              
              1,200,250
              
              
              197,250
              
              
              263,000
              
              
              263,000
              
              
              263,000
              
              
              214,000Demand
                Loan due to related party(3)
              
              
              92,337
              
              
              -
              
              
              92,337
              
              
              -
              
              
              -
              
              
              -Total
              
              $
              3,112,587
              
              $
              489,750
              
              $
              745,337
              
              $
              653,000
              
              $
              653,000
              
              $
              571,500





(1)
            Although
                the total finance obligation reflected in the Company’s balance sheet at
                March 31, 2007 amounts to approximately $3,877,000, only the amounts
                reflected in the above table constitute a contractual commitment.
                This is
                a result of the required finance method of accounting treatment for
                the
                underlying sale/leaseback transaction. This accounting treatment
                is being
                applied because the Company’s option to repurchase this property through
                November 2008, represents a continuing interest in the property.
                Under
                this method, the property and the finance obligation continue to
                be
                reported on the Company’s balance sheet until the exercise or expiration
                of the repurchase option. The above payments, which will be charged
                to
                interest expense under this finance method of accounting equate to
                an
                annual interest rate of 10.06%.






14




(2)
            Our
                obligation under employment agreements would increase to $675,000
                per year
                through October 17, 2009 and to $550,000 per year from October 18,
                2009
                through October 23, 2011, upon the Company achieving an adequate
                level of
                working capital, as defined.





(3)
            In
                April 2007, this demand loan was converted into a 6% promissory note
                due
                April 4, 2008.




**Plan
      of Operation**


Currently,
      the prototypes of the CSRV System-based generator engine are undergoing
      performance and other tests. Initially, the Company intends to sell the
      engine/generators to a party that has expressed indications of interest to
      purchase Coates Engines upon the successful completion of the above tests.
      If
      these indications of interest become firm orders, the fulfillment of these
      orders may occur over a three to five year period. The Company intends to take
      advantage of the fact that essentially all the components of the CSRV generator
      engine may be readily sourced and acquired from subcontractors, and accordingly,
      intends to manufacture the generator engine in the two following
      ways:





·
            Assembly
                - to develop assembly lines within the Company’s premises. The Company has
                been evaluating various opportunities to expand or acquire additional
                manufacturing capacity. When the demand for our products justifies
                it, the
                Company will take the required steps in order to increase its work
                force.
                We may hire a significant number of new employees within the next
                12 to 24
                months after production commences.




·
            Licensing
                the technology to Original Equipment Manufacturers (“OEM”) - to take
                advantage of third party manufacturers’ production ability by signing OEM
                agreements.




**Going
      Concern**





As
      shown
      in the accompanying financial statements, the Company has incurred recurring
      losses from operations, and as of March 31, 2007, had a working capital
      deficiency of approximately $592,000 and a Stockholders’ Deficiency of
      approximately $3,177,000. These factors raise substantial doubt about the
      Company’s ability to continue as a going concern. Our independent registered
      public accounting firm has stated in their Auditor’s Report as of December 31,
      2006 and for the year then ended that this raises substantial doubt about our
      ability to continue as a going concern.





Management
        has instituted a cost reduction program intended to cut variable costs to
        only
        those expenses that are necessary to complete its activities related to making
        engineering refinements to the Coates Engine, identifying additional sources
        of
        working capital and general administrative costs in support of such activity.
        The Company has also been actively undertaking efforts to identify new sources
        of working capital. In April and May 2007, the Company raised $1,370,000
        of new
        working capital from the issuance of common stock and the issuance of 10%
        convertible notes. In April 2007, the Company entered into a definitive
        agreement with Dutchess Private Equities Fund, Ltd. that could provide up
        to $10
        million of additional funding to the Company, upon a registration statement
        filed with the Securities and Exchange Commission being declared effective.
        The
        Company continues to actively seek out new sources of working capital, however,
        there can be no assurance that it will be successful in these efforts. The
        accompanying financial statements do not include any adjustments that might
        be
        necessary if the Company is unable to continue as a going
        concern.






15




**Item
      3. Controls and Procedures.**




***Evaluation
      of Disclosure Controls and Procedures -*** We
      maintain a system of disclosure controls and procedures that are designed for
      the purposes of ensuring that information required to be disclosed in our
      Securities and Exchange Commission (“SEC”) reports is recorded, processed,
      summarized and reported within the time periods specified in the SEC's rules
      and
      forms, and that such information is accumulated and communicated to our
      management, including our Principal Executive Officer and Principal Financial
      Officer, as appropriate to allow timely decisions regarding required
      disclosures.




As
      of the
      end of the period covered by this report, we carried out an evaluation, under
      the supervision and with the participation of our Principal Executive Officer
      and Principal Financial Officer, of the effectiveness of our disclosure controls
      and procedures as defined in Rule 13a-15(e) of the Securities Exchange
      Act of 1934, as amended. Based on that evaluation, our Principal Executive
      Officer and Principal Financial Officer concluded that our disclosure controls
      and procedures are effective.




***Changes
      in Internal Control Over Financial Reporting*** - There
      has been no change in our internal control over financial reporting during
      the
      quarter ended on March 31, 2007 that has materially affected, or is reasonably
      likely to materially affect, our internal control over financial reporting.
      On
      October 25, 2006, we established an Audit Committee. The Audit Committee’s
      responsibilities include assessing the independence of our independent
      registered public accounting firm; overseeing the work of our independent
      registered public accounting firm, including the receipt and thorough
      consideration of reports from the independent registered public accounting
      firm; reviewing and discussing with management and our independent
      registered public accounting firm our annual and quarterly financial statements
      and related disclosures; monitoring our internal control over financial
      reporting, disclosure controls and procedures and additional responsibilities
      as
      set forth in the charter of our Audit Committee. The financial reports that
      are
      included in this Form 10-QSB were reviewed by our Audit Committee.






16




**PART
      II - OTHER INFORMATION**




Item
      1. Legal Proceedings




The
      Company, certain of its officers and directors and other related and unrelated
      parties were named as defendants in a lawsuit brought in the Superior Court
      of
      New Jersey captioned H. Alton Neff v. George Coates, Coates International,
      Ltd.
      et al. Plaintiff contends that he is the assignee of 1107 North West Central
      Avenue Inc. ("1107"). Preliminary agreements and an amendment thereto relating
      to purchase of a certain license by 1107 from the Company provided, inter alia,
      that a $500,000 deposit made by 1107 to the Company would convert to stock
      of
      the Company if certain conditions were not met by 1107. The Company maintains
      that 1107 did not fulfill such conditions, and failed to make a certain payment,
      and therefore, the deposit converted into shares of the Company's restricted
      Common Stock. On February 13, 2007, the Superior Court of New Jersey dismissed
      the complaint “with prejudice.” The plaintiff and a third party defendant have
      since filed motions for reconsideration which were denied on March 30, 2007.
      It
      is anticipated that the plaintiffs and the third party defendant will appeal.
      The Company has proposed to dismiss, without prejudice, its counterclaim and
      third party complaint in order to avoid the costs associated with a proof
      hearing. The
      plaintiffs and third party defendant filed notices of appeal on June 12 and
      June
      13, 2007. We intend to vigorously contest those appeals.





In
      April
      2007, the Company received a demand letter from a law firm requesting payment
      of
      approximately $77,000 in connection with a promissory note issued to the law
      firm as security for the payment of future services to the Company. The Company
      has notified the holder of this note that it does not intend to honor the
      promissory note because the law firm did not provide the services contemplated
      to be performed as consideration for the promissory note. No further action
      to
      pursue collection of this promissory note has been taken to date by the holder.
      At this time, it is not possible to reasonably estimate the outcome of this
      matter, and, accordingly, no amount has been accrued.





In
      late
      March 2007, at the request of the Company, Mark D. Goldsmith stepped down from
      his positions as Chief Executive Officer and President. Although the Company
      considered a possible future role for Mr. Goldsmith upon certain conditions
      being satisfied, it was unable to agree on the terms and conditions for such
      a
      future role. As a result of his departure, the Company may be obligated to
      make
      certain payments to Mr. Goldsmith under an employment agreement dated October
      18, 2006. On April 17, 2007, the Company notified Mr. Goldsmith in writing
      that
      he was being terminated as a director, officer and employee with “Cause”, as
      defined in his employment agreement. On May 11, through an attorney, Mr.
      Goldsmith notified the Company that he is disputing the Company’s position that
      his termination was with Cause. In his letter, he has taken the position that
      he
      has resigned for “Good Reason”, as defined in his employment agreement and
      asserted that we are liable to him for breach of his employment contract.
      Weare of
      the opinion that Mr. Goldsmith's claim is baseless because we had cause to
      terminate our relationship with him. We intend to vigorously contest any lawsuit
      instituted by Mr. Goldsmith and will likely assert a counterclaim against
      him. At this time, it is too early to estimate the likely outcome of this
      dispute and, accordingly, no amounts have been accrued subsequent to the date
      of
      termination being asserted by the Company. If the Company’s position is upheld,
      then Mr. Goldsmith would not be entitled to any severance or stock options
      under
      his employment agreement.





The
      total
      amount accrued and unpaid for this potential liability through March 28, 2007,
      the date the Company believes that Mr. Goldsmith was terminated with Cause,
      at
      March 31, 2007 was approximately $89,000, which is included in accounts payable
      and accrued liabilities in the accompanying balance sheet.




Item
      2. Unregistered Sales of Equity Securities and Use of
      Proceeds.





The
        Company commenced a private placement offering in December 2006 (the “Offering”)
        of “Units” consisting of (i) one share of the Company’s 6% Series A Convertible
        Preferred Stock (the “Preferred Stock”) and (ii) a Warrant to purchase five
        thousand shares of the Company’s Common Stock at an initial exercise price of
        $1.10 per share (the “Warrants”), and terminated the Offering in March 2007. Each
        share of Preferred Stock was to be convertible into ten shares of our common
        stock at any time. Aggregate net proceeds of this Offering from 14 accredited
        investors amounted to $420,000, which is being used for working capital
        purposes. There were no expenses incurred related to this offering. All of
        these
        investors have agreed to accept ten shares of our common stock in lieu of
        each
        share of Preferred Stock purchased through the private offering. On June
        1, 2007
        the Company issued in the aggregate 420,000 shares of its common stock and
        42
        Warrants for the Units sold. At March
        31, 2007, no shares of common stock had been issued to any of these investors.
        Accordingly, the accompanying balance sheet reflects the Subscribed Stock
        in the
        Stockholders’ Deficiency section in the amount of $420,000.






17




Item
      3. Defaults Upon Senior Securities.





None





Item
      4. Submission of Matters to a Vote of Security
      Holders.





No
      matter
      was submitted during the quarter ending March 31, 2007, covered by this report
      to a vote of the Company’s shareholders, through the solicitation of proxies or
      otherwise.





Item
      5. Other Information.




None





Item
      6. Exhibits




**Exhibit**
                  **Number**
                **Description**31.1
                    *
                Section
                    302 Certification of Principal Financial Officer pursuant to
                    Rule
                    13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934
                    as adopted
                    pursuant to Section 302 of the Sarbanes-Oxley Act of
                    2002.31.2
                    *
                Section
                    302 Certification of Chief Executive Officer pursuant to Rule
                    13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934
                    as adopted
                    pursuant to Section 302 of the Sarbanes-Oxley Act of
                    2002.32.1
                    *
                Certification
                    of Principal Financial Officer pursuant to 18 U.S.C. 1350, as
                    adopted
                    pursuant to Section 906 of the Sarbanes-Oxley Act of
                    2002.32.2
                    *
                Certification
                    of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted
                    pursuant
                    to Section 906 of the Sarbanes-Oxley Act of
                    2002.
 
 *
          Incorporated by reference from the Company’s Form 10-QSB for the quarter ended
          March 31, 2007.




18


**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, thereunto
      duly authorized.






**COATES
                  INTERNATIONAL, LTD.**Date:
                  June 15, 2007
              By:
              /s/
                  George J. CoatesGeorge
                  J. CoatesPresident,
                  Chief Executive Officer
                and
                  Principal Executive Officer




Date:
                  June 15, 2007
              By:
              /s/
                  Barry C. KayeBarry
                  C. KayeTreasurer,
                  Chief Financial Officer
                and
                  Principal Financial Officer









19