SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                 --------------

                                   FORM 10-QSB

|X|    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934.

       For the quarterly period ended September 30, 1996

                                       AND

|_|    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934

       For the Transition period from____________to______________

                         Commission File Number 33-94884

                            COATES INTERNATIONAL LTD.
             (Exact name of registrant as specified in its charter)

    Delaware                                           22-2925432
(State or other jurisdiction of                 (IRS Employer
 incorporation or organization)                  Identification No.)

Highway 34 & Ridgewood Road, Wall Township, New Jersey                07719
(Address of principal executive offices)                             (Zip Code)

Registrant's telephone number, including area code (908) 449-7717


------------------------------------------------------------------------------
(Former name, former address and formal fiscal year if changed since last 
report)

Check 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 past 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       No  X

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the  registrant  filed all  documents  and reports  required to be
filed by Section  12, 13 or 15(d) of the  Securities  and  Exchange  Act of 1934
after the distribution of securities under a plan confirmed by a court.
                    Yes ___   No ___

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity,  as of the  latest  practicable  date:  5,963,600  shares  of  Series  A
Preferred Stock at September 30, 1996




<PAGE>





                            COATES INTERNATIONAL LTD.

        Quarterly Report on Form 10Q for Quarter Ended September 30, 1996

                         PART I - FINANCIAL INFORMATION


Item 1.Financial Statements

       Attached.




                                        1

<PAGE>



COATES INTERNATIONAL, LTD.
[A DEVELOPMENT STAGE COMPANY]
------------------------------------------------------------------------------


CONDENSED BALANCE SHEETS
------------------------------------------------------------------------------
<TABLE>


                                                                                 September 30,
                                                                            1 9 9 6           1 9 9 5

Assets:
Current Assets:
<S>                                                                      <C>              <C>        
  Cash and Cash Equivalents                                              $    3,518       $    13,558
  Inventory                                                                 132,792                --
                                                                         ----------       -----------

  Total Current Assets                                                      136,310            13,558
                                                                         ----------       -----------

Property, Plant and Equipment - Net                                       1,616,968         1,651,556
                                                                         ----------       -----------

Other Assets:
  Deposits                                                                    2,500             2,500
  Due from Stockholder                                                       39,116             3,462
  Due from Affiliated Companies                                               2,116             1,516
                                                                         ----------       -----------

  Total Other Assets                                                         43,732             7,478
                                                                         ----------       -----------

  Total Assets                                                           $1,797,010       $ 1,672,592
                                                                         ==========       ===========

Liabilities and Stockholders' Equity [Deficit]:
Current Liabilities:
  Redeemable Series A Preferred Stock                                    $  496,970       $   496,970
  Mortgage Payable                                                          210,000           300,000
  Accrued Legal Fees                                                      1,041,153           558,250
  Accounts Payable                                                           37,184            32,888
  Accrued Interest                                                          109,408           142,943
  Other Accrued Expenses                                                     88,616            14,241
  Due to Stockholder                                                          3,000         5,500,000
                                                                         ----------       -----------

  Total Current Liabilities                                               1,986,331         7,045,292
                                                                         ----------       -----------

Commitments and Contingencies                                                    --                --
                                                                         ----------       -----------

Stockholders' Equity [Deficit]:
  Common Stock, $.001 Par Value, 20,000,000 Shares
   Authorized - No Shares Issued                                                 --                --

  Preferred Stock, Series A, $.001 Par Value, 14,000,000 Shares
   Authorized - Voting, Non-Cumulative Convertible, 5,963,600
   and 5,688,600 Shares Issued and Outstanding at September 30, 1996
   and 1995, Respectively                                                     5,963             5,688

  Additional Paid-in Capital                                             12,669,739         5,870,189

  Deficit Accumulated During the Development Stage                      (12,865,023)      (11,248,577)

  Total Stockholders' Equity [Deficit]                                     (189,321)       (5,372,700)
                                                                         ----------       -----------

  Total Liabilities and Stockholders' Equity [Deficit]                   $1,797,010       $ 1,672,592
                                                                         ==========       ===========
</TABLE>

See Notes to Condensed Financial Statements.

                                         2

<PAGE>



COATES INTERNATIONAL, LTD.
[A DEVELOPMENT STAGE COMPANY]
------------------------------------------------------------------------------


CONDENSED STATEMENTS OF OPERATIONS
------------------------------------------------------------------------------
<TABLE>



                                                                                             For the
                                                                                            Period from
                                                                                             August 31,
                                                                                           1988 [Date of
                                                                                             Inception]
                                    Three months ended            Nine months ended          through
                                       September 30,                September 30,          September 30,
                                       -------------                -------------          -------------
                                  1 9 9 6        1 9 9 5        1 9 9 6        1 9 9 5        1 9 9 6
                                  -------        -------        -------        -------        -------

<S>                            <C>             <C>            <C>            <C>            <C>        
Revenues                       $       --      $      --      $   37,375     $       --     $   687,375
                               ----------      ---------      ----------     ----------     -----------

Expenses:
  Research and Development
   Costs                           38,983      5,670,823         199,447      5,749,218       7,406,728
  General and Administrative
   Expenses                       304,923        485,659         864,344        674,397       5,771,303
  Depreciation Expense             10,308         33,101          30,606         49,652         269,069
                               ----------      ---------      ----------     ----------     -----------

  Total Operating Expenses        354,214      6,189,583       1,094,397      6,473,267      13,447,100
                               ----------      ---------      ----------     ----------     -----------

  Loss From Operations           (354,214)    (6,189,583)     (1,057,022)    (6,473,267)    (12,759,725)

Other Income [Expense]:
  Interest Income                      55          3,650             615          6,541         113,098
  Interest Expense                 (3,975)       (45,250)        (31,834)       (67,875)       (218,396)
                               ----------      ---------      ----------     ----------     -----------

  Net Other [Expense]              (3,920)       (41,600)        (31,219)       (61,334)       (105,298)
                               ----------      ---------      ----------     ----------     -----------

  Net Loss                     $ (358,134)   $(6,231,183)    $(1,088,241)   $(6,534,601)   $(12,865,023)
                               ==========    ===========     ===========    ===========    ============

  Net Loss Per Share           $     (.06)     $   (1.10)     $     (.18)    $    (1.15)
                               ==========      =========      ==========     ==========

  Weighted Average Number
   of Shares                    5,963,600      5,688,600       5,963,600      5,688,600
                               ==========      =========      ==========      =========


</TABLE>

See Notes to Condensed Financial Statements.


                                         3

<PAGE>



COATES INTERNATIONAL, LTD.
[A DEVELOPMENT STAGE COMPANY]
------------------------------------------------------------------------------


CONDENSED STATEMENTS OF CASH FLOWS
------------------------------------------------------------------------------
<TABLE>



                                                                                      For the
                                                                                     Period from
                                                                                     August 31,
                                                                                    1988 [Date of
                                                                                     Inception]
                                                          Nine months ended           through
                                                             September 30,          September 30,
                                                       1 9 9 6         1 9 9 5        1 9 9 6

<S>                                                 <C>             <C>             <C>         
  Net Cash - Operating Activities                   $  (823,263     $  (471,365)    $(5,063,457)
                                                    -----------     -----------     -----------

Investing Activities:
  Payments for Property and Equipment                    (5,252)             --        (413,032)
  Payments on Loans to Stockholders                          --         332,343              --
  Loans to Stockholders                                  (3,430)             --      (1,204,621)
                                                    -----------     -----------     -----------

  Net Cash - Investing Activities                        (8,682)        332,343      (1,617,653)
                                                    -----------     -----------     -----------

Financing Activities:
  Proceeds of Additional Paid-in Capital                     --              --         352,049
  Proceeds from Issuance of Stock                       804,694          22,199       7,182,842
  Payment for Treasury Stock                                 --              --         (30,000)
  Payment on Stockholders' Loans                             --          (4,538)             --
  Loans from Stockholder                                  3,000              --           3,000
                                                    -----------     -----------     -----------

  Net Cash - Financing Activities                       807,694          17,661       7,507,891
                                                    -----------     -----------     -----------

  Net [Decrease] Increase in Cash and Cash
   Equivalents                                          (24,251)       (121,361)        826,781

Cash and Cash Equivalents - Beginning of Periods         27,769         134,919              --
                                                    -----------     -----------     -----------

  Cash and Cash Equivalents - End of Periods        $     3,518     $    13,558     $   826,781
                                                    ===========     ===========     ===========

Supplemental Disclosures of Cash Flow Information:
  Cash paid during the periods for:
   Interest Paid                                    $    15,037     $    20,250     $    42,781
   Taxes Paid                                       $        --     $        --     $        --

</TABLE>

See Notes to Condensed Financial Statements.

                                         4

<PAGE>



COATES INTERNATIONAL, LTD.
[A DEVELOPMENT STAGE COMPANY]
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 Form 10-Q and Article 10 of Regulation
S-X.  Accordingly,  they do not include  all of the  information  and  footnotes
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. Operating results for the three and nine month periods ended September
30, 1996 and 1995 are not  necessarily  indicative  of the  results  that may be
expected for the years ended December 31, 1996 and 1995. The unaudited condensed
financial  statements  should  be  read in  conjunction  with  the  consolidated
financial  statements  and footnotes  thereto  included in the Company's  annual
report on Form 10-K for the year ended December 31, 1995.

[2] Additional Paid-in Capital

The  accompanying  financial  statements  have been prepared in conformity  with
generally accepted accounting principles, which contemplates continuation of the
Company  as a  going  concern  and  realization  of  assets  and  settlement  of
liabilities  and  commitments in the normal course of business.  The Company has
met its obligations in 1995 and 1996 primarily  through  capital  infusions from
one of its principal stockholders, Gregory Coates.

[3] Related Party Transaction

Subcontract  Labor - The  Company  subcontracts  its project  expense  [payroll,
insurance  and  supplies]  from an entity  which  George  J.  Coates is the sole
stockholder.  During the nine months ended September 30, 1996 and 1995, $142,968
and $124,000, respectively, were paid for these services.

[4] Patents and Licenses

Development  of the Coates System  technology was initiated by George J. Coates,
CIL's  founder,  principal  and  controlling  stockholder  and  chief  executive
officer,  in the  late  1970's  and  development  efforts  have  been  conducted
continuously  since such time.  From July 1982  through May 1993,  seven  United
States patents [the "Coates  Patents"][as  well as a number of foreign patents],
were issued to George J. Coates with respect to the Coates  System.  The consent
order allowed  George J. Coates the  alternative to elect to retain title to his
patents on the  condition  that he  either:  (a) grant to CIL an  exclusive  and
irrevocable license to utilize and exploit the patents, or (b) reimburse CIL for
all monies expended in the preparation,  application  and/or  prosecution of the
patents,  including  but not limit to, legal fees paid by CIL.  George J. Coates
elected to reimburse CIL and retain  possession of the patents and did so during
1995. In February 1995, George J. Coates and his son Gregory Coates each granted
CIL a non-exclusive  license to  manufacture,  sell and grant  sublicenses  with
respect to products based on the Coates  Patents  within the United States,  its
territories  and  possessions   [the  "Licensed   Areas"].   The  licenses  were
non-exclusive  so  that  neither  George  J.  Coates  nor  Gregory  Coates  were
prohibited from granting  similar  licenses to other parties within the Licenses
Areas or to otherwise  compete  directly  with CIL.  The licenses  expire in the
event of bankruptcy or similar insolvency of CIL. CIL agreed to pay a $5,500,000
license  fee to George J.  Coates in  consideration  for his grant to CIL of the
non-exclusive  license payable at management's  discretion but in no event later
than February 17, 1998. In September  1995, this  arrangement was modified.  CIL
and George J. Coates agreed that instead of the  $5,500,000  payment,  CIL would
issue  275,000  shares of Series A Stock to Mr.  Coates,  which cost the Company
charged to research and  development  for the year ended  December 31, 1995. The
stock was issued to George J. Coates in November 1995.


                                        5

<PAGE>



COATES INTERNATIONAL, LTD.
[A DEVELOPMENT STAGE COMPANY]
NOTES TO CONDENSED FINANCIAL STATEMENTS, Sheet #2
------------------------------------------------------------------------------



[5] Commitments and Contingencies

As more fully  discussed in Note 4 to the  financial  statements at December 31,
1995,  George  J.  Coates,  principal  and  controlling  shareholder  and  chief
executive  officer of CIL,  per the  original  consent  order of the Court,  was
ordered  to  pay  up  to  the  first  $773,500  of  amounts  due  to  Rescinding
Shareholders. Per the August 19, 1996, court order, new Potential Investors have
taken the place of the Rescinding Shareholders. To the extent that Mr. Coates is
unable to pay any such amounts to the  Potential  Investors,  CIL is required to
pay same and is thus contingently  liable for such amounts as it may have to pay
should Mr.  Coates not fulfill all or part of his primary  commitment on amounts
due to Potential  Investors.  It is at least reasonably  possible that the above
circumstances  will change in the near term due to future  confirming events and
the effect of any such change would be material to the financial statements.





                  .   .   .   .   .   .   .   .   .   .   .   .

                                        6

<PAGE>




Item 2.     Management's Discussion and Analysis or Plan of Operation

  Coates  International  Ltd.  ("CIL" or the  "Company") has completed the basic
development  of a spherical  rotary  valve  system (the  "Coates  System"),  the
development of which was initiated by its founder,  George J. Coates, for use in
internal  combustion  engines of all types.  With respect to the Coates  System,
seven applicable  United States patents (the "Coates  Patents") have been issued
to George J. Coates. CIL holds a non-exclusive license from George J. Coates and
his son Gregory Coates, to manufacture,  sell and grant sublicenses with respect
to  products  based  on the  Coates  Patents,  within  the  United  States,  its
territories and possessions (the "Licensed Areas"). George J. Coates and Gregory
Coates have also agreed, as long as CIL remains  independent and viable,  not to
compete  with  CIL  in  the  manufacture,  assembly,  use or  sale  of  internal
combustion  engines  utilizing the  technology  falling  within the scope of the
Coates  Patents  in the  Licensed  Areas,  or to grant  any other  exclusive  or
non-exclusive  license in the Licensed  Areas  except  through CIL. In addition,
George J. Coates and Gregory Coates have executed an agreement  granting CIL the
right to retain any monies including  royalties  received from Nicholson McLaren
Engines   Ltd.   (U.K.)   ("Nicholson   McLaren")  or  from  Noble  Motor  Sport
(manufacturer of Ascari racing cars) for  manufacture,  sale, use or assembly of
internal  combustion  engines anywhere in the world using the technology falling
within the scope of the Coates Patents.

  CIL has had a short  operating  history during which it has primarily  devoted
its attention to developing  the technology  associated  with the Coates System.
During such time CIL has also  arranged  for certain  tests in order to evaluate
the  effectiveness  of the  technology.  CIL has also  devoted  such  time in an
attempt to interest  various  persons and entities in acquiring  sub-licenses to
use the technology.

  CIL is currently  manufacturing  high performance  automotive engines modified
with the  Coates  System on a limited  basis at its Wall  Township,  New  Jersey
manufacturing facility. Except as set forth herein, none of the engines has been
sold.  CIL has  received  numerous  oral and written  inquiries  from  potential
customers,  expressing  an interest in  acquiring  high  performance  automotive
racing engines modified with the Coates System.  No assurances can be given that
these  inquiries  will  result  in  binding  sales  orders.  After it  completes
manufacture of a sufficient  backlog of such engines,  CIL intends to attempt to
convert these inquiries into binding sales orders,  to fill such orders from its
limited  inventory of engines and to continue to  manufacture on a limited basis
and market high  performance  automotive,  motorcycle  and marine racing engines
using the Coates  System  technology.  CIL also intends to attempt to sublicense
such technology.

Results of Operations from Inception August 31, 1988 through September 30, 1996

  Virtually no revenues were  realized from the inception of operations  through
September  30, 1996,  as the  principal  operations  were those of a development
stage company. In July 1991, CIL signed a prototype manufacturing agreement with
Harley-Davidson, Inc. ("Harley Davidson") and commenced to attempt to retrofit a
Harley  Davidson  motorcycle  engine  using the  Coates  technology.  An initial
$150,000 engineering and development fee was paid to CIL by Harley Davidson. CIL
has not, as yet, developed a retrofitted Harley Davidson motorcycle engine using
the Coates technology that is acceptable to Harley Davidson.

  Under the terms of a February  1994  license  agreement,  a  $500,000  initial
payment  was made by  Millwest  Corporation  ("Millwest")  for a license  of the
technology  and  was  held  in a bank  account  entitled  "Coates  International
Licensing." This sum was subsequently paid over to CIL. Pursuant to the terms of
the license  agreement,  Millwest was obligated to make another  payment of $9.5
Million to CIL on or before May 4, 1994. Millwest did not make such payment. CIL
placed  Millwest  on  notice  that it was in  default.  In June  1995,  Millwest
informed CIL of an intention to activate the license  agreement and claimed that
financing has been  arranged to do so but to date,  no additional  payments have
been  received  by CIL from  Millwest  and no  assurances  can be given that any
additional payments will be made.

  CIL did not recognize any revenues during the quarter ended September 30, 1996
or in the  corresponding  quarter in the prior year.  Research  and  development
expenses  totaled $38,983 in the quarter ended September 30, 1996 as compared to
$5,670,823 in the  corresponding  quarter in 1995.  The 1995 expense  included a
$5,500,000  license  fee  payable  to George J.  Coates  which was  subsequently
converted  into  275,000  shares  of CIL  Series A  Preferred  Stock.  Loss from
operations  and net loss  aggregated  ($354,214) and ($358,134) in the September
30, 1996 quarter as compared to ($6,189,583)

                                        7

<PAGE>



and  ($6,231,183)  in the  September  30, 1995  quarter,  the  difference  being
principally  attributable  to the said license fee.  General and  administrative
expenses  during the  quarter  ended  September  30, 1996  totalled  $304,923 as
compared  to  $485,659  in  the   corresponding   quarter  in  1995,   primarily
attributable to higher legal expenses in the earlier quarter.

  For the nine months  ended  September  30,  1996,  CIL  recognized  $37,375 in
revenues paid by Nicholson  McLaren in partial payment for two high  performance
racing car engines  modified  with the Coates  System and  shipped to  Nicholson
McLaren by CIL.  CIL did not  recognize  any  revenues for the nine months ended
September 30, 1995. Loss from  operations and net loss  aggregated  ($1,057,022)
and  ($1,088,241)  for the nine months ended  September  30, 1996 as compared to
($6,473,267)  and ($6,534,601) for the nine months ended September 30, 1995. The
difference in results was principally  attributable to a $5,500,000  license fee
expensed as a research and  development  expense in the prior period  payable to
George J. Coates which was subsequently  satisfied by issuance of 275,000 shares
of CIL Series A Preferred Stock to George J. Coates.

Liquidity and Capital Resources

  Since its  inception,  all of the  development  costs and related  operational
costs of CIL have  primarily  been paid through the cash  generated  through the
sale of stock,  through  capital  contributions  made by George J.  Coates' son,
Gregory  Coates and the  $500,000  initial  license  payment  made by  Millwest.
Capital  contributions  advanced  to CIL by  Gregory  Coates in 1995  aggregated
$404,549.  Harley  Davidson  paid CIL $150,000 as an initial  deposit  towards a
license  agreement;  that money has also been  expended  by CIL.  Certain of the
aforesaid funds generated income from bank accounts in a depository institution;
that  interest  income was also  expended by CIL. CIL has  incurred  losses as a
development  stage  company from  inception,  August 31, 1988,  to September 30,
1996,  of  ($12,856,023)  and at September  30, 1996 had a negative net worth of
($189,321) and negative working capital of ($1,850,021).

  At  September  30,  1995,  CIL had a negative  net worth of  ($5,372,700)  and
negative working capital of ($7,031,734) of which $5,500,000 was attributable to
the license fee owed to George J. Coates and carried as a current liability. The
improvement  in CIL's net worth and working  capital  position at September  30,
1996  was  principally  attributable  to the  satisfaction  of the  license  fee
obligation  through  the  issuance  of 275,000  shares of CIL Series A Preferred
Stock to Mr. Coates in November 1995.

  CIL's  ability to generate  revenues  and  achieve  profitable  operations  is
principally  dependent upon the execution and funding of sub-license  agreements
with engine manufacturers or retrofitters, and upon the manufacture and sale, by
CIL, of high performance  automotive,  motorcycle and marine racing engines. CIL
is actively  attempting to market its  technology and is in  communication  with
various persons and entities who may be interested in acquiring  sub-licenses to
use the technology.

  CIL is currently  manufacturing  high performance  automotive engines modified
with the  Coates  System on a limited  basis at its Wall  Township,  New  Jersey
manufacturing facility. Except as set forth herein, none of the engines has been
sold.  CIL has  received  numerous  oral and written  inquiries  from  potential
customers,  expressing  an interest in  acquiring  high  performance  automotive
racing engines modified with the Coates System.  After it completes  manufacture
of a sufficient backlog of such engines, CIL intends to attempt to convert these
inquiries  into  binding  sales  orders,  to fill such  orders  from its limited
inventory  of engines  and to  continue to  manufacture  on a limited  basis and
market high performance  automotive,  motorcycle and marine racing engines using
the Coates System technology.  Assuming CIL obtains  sufficient  financing and a
sufficient  number of orders,  CIL  management  believes that it will be able to
produce racing  engines using the Coates System  technology at its Wall Township
facility on a limited basis at the rate of  approximately  30 engines per month.
CIL expects that the bulk of its initial  sales of engines,  to the extent it is
able to effectuate  same,  will be at a base sales price in the range of $25,000
to $30,000 per engine  although  depending on type and size, some of the engines
may be priced as high as $75,000. To achieve such production levels, CIL will be
required to expand its production work force to  approximately  15-20 production
workers.

  Assuming its sales develop to a sufficiently  increased  level, CIL intends to
establish a full scale production  facility  (presumably in central New Jersey),
significantly  larger than its present  facility,  at which it will  manufacture
high  performance  racing engines modified with the Coates System on an assembly
line basis. Management estimates that CIL will require approximately  $7,500,000
of additional

                                        8

<PAGE>



funding to establish and operate such a facility. Such funding would be required
to acquire the larger  facility and production  machinery,  to prepare  assembly
lines,  castings and molds for  manufacturing,  to acquire  inventory  including
engine  blocks and heads,  crank shafts and  bearings  and to employ  additional
production workers, mechanics,  machine tool operators and assembly personnel as
well as marketing personnel.

  It is the  intention of CIL to fund its business  plan by  borrowings  and the
sale of equity and/or debt  instruments,  and through the sale of  sub-licenses.
All of  these  financing  vehicles  will be  pursued  simultaneously.  It is not
presently known which, if any, of these  alternatives will be utilized,  whether
they are available to CIL, and if available, in what mixture or in what amounts.

  In view of its minimal  revenues and recurring  losses from  operations  since
inception,  its deficit accumulated during its development stage and its limited
liquid  assets,  no assurances  can be given that CIL will be able to pursue its
business plan. If it does not obtain sufficient liquid assets to fund such plan,
CIL may be  forced  to sell its  assets  or to seek  protection  from  creditors
through a bankruptcy or similar filing.

Note Regarding Forward-Looking Statements

  This   Quarterly   Report   contains   historical   information   as  well  as
forward-looking  statements.  Statements looking forward in time are included in
this Quarterly  Report  pursuant to the "safe harbor"  provisions of the Private
Securities  Litigation  Reform Act of 1995.  Such  statements  involve known and
unknown risks and  uncertainties  that may cause the Company's actual results in
future periods to be materially different from any future performance  suggested
herein.


                                        9

<PAGE>




                           PART II - OTHER INFORMATION


Item 6.     Exhibits and Reports on Form 8-K

  (b) During the quarter ended September 30, 1996, the Company filed one current
report on Form 8-K for August 7, 1996  reporting  pursuant to Item 4 therein,  a
change in the Company's Certifying Accountant and in Item 7 therein, providing a
copy  of a  letter  from  the  Company's  former  accountants  addressed  to the
Securities and Exchange Commission.



                                       10

<PAGE>


                                   SIGNATURES

  In accordance with the requirements of the Exchange Act, the registrant caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                COATES INTERNATIONAL LTD.



                                By   /s/ George J. Coates, President
                                     George J. Coates, President,
                                     Chief Executive and Chief Financial Officer

Dated: October,   1997

                                       11

<PAGE>