SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB


               [X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                      For Quarter Ended September 30, 1999

                                       OR

               [ ]TRANSITION REPORT PURSUANT O 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 (I.R.S. Employer
               Incorporation 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.
                                    Ye s X No

                 The number of  shares  of  Registrant's Preferred Stock
 Series A, $0.001 par value, outstanding as of September 30, 1999, was
 6,572,424 shares.


<PAGE>



                           COATES INTERNATIONAL, LTD.
                          [A DEVELOPMENT STAGE COMPANY]


                                      INDEX


                                                                   Page
                                                                  Number

PART  1  -  FINANCIAL INFORMATION

Item 1   Financial Statements (unaudited)

     Condensed Balance Sheet
     -September 30, 1999                                              3

    Condensed Statements of Operations
   - Nine  months ended September 30, 1999 and 1998
     and since inception                                              4

  Condensed  Statements of Cash Flows - Nine months ended
   September 30, 1999 and 1998
      and since inception                                             5

  Notes to The Condensed Financial Statements                         6

Item 2  Management's Discussion and Analysis of Financial
        Condition And Results of Operations                          7-8


PART II - OTHER INFORMATION                                           9

SIGNATURES                                                           10

FINANCIAL DATA SCHEDULE                                              11


<PAGE>



                           Coates International, Ltd.
                          (A Development Stage Company)
                             Condensed Balance Sheet
                               September 30, 1999
                                   (Unaudited)



      Assets
Current Assets
<TABLE>
<CAPTION>
<S>                                                                                             <C>
   Cash                                                                                         $         81,132
   Restricted cash                                                                                       112,000
   Inventories                                                                                            41,186
                                                                                                  --------------

      Total Current Assets                                                                               234,318
                                                                                                  --------------

Property, Plant and Equipment, Net of Accumulated Depreciation of $396,661                             1,559,123

Other Assets
   Mortgage Loan Costs, Net of Accumulated Amortization of $6,526                                         58,734
   Deferred costs                                                                                         20,000
   Deposit                                                                                                 2,500
                                                                                                  --------------

      Total Assets                                                                                     1,874,675
                                                                                                  ==============

      Liabilities and Stockholders' Equity

Current Liabilities
   Mortgage payable, current portion                                                                       4,197
   Accounts payable                                                                                      976,313
   Accrued interest payable                                                                              118,531
   Deferred revenue                                                                                      300,000
   Due to stockholders                                                                                     2,300
                                                                                                  --------------

        Total Current Liabilities                                                                      1,401,341
                                                                                                  --------------

Mortgage payable, non-current portion                                                                    894,307
                                                                                                  --------------

Stockholders'  Equity  Preferred  stock,  Series A, $.001 par value,  14,000,000
   shares authorized - voting,
      non-cumulative convertible, 6,572,424 shares issued and outstanding                                  6,572
   Common stock, $.001 par value, 20,000,000 shares authorized - no shares issued                              -
   Additional paid-in capital                                                                         10,991,824
   Deficit accumulated during the development stage                                                  (11,419,369)
                                                                                                  --------------

        Total Stockholders' Equity (Impairment)                                                         (420,973)
                                                                                                  --------------
                                                                                                $      1,874,675
        Total Liabilities and Stockholders' Equity
                                                                                                  ==============

</TABLE>

See notes to the condensed financial statements.

                                       3
<PAGE>



                           Coates International, Ltd.
                          (A Development Stage Company)
                       Condensed Statements of Operations


<TABLE>
<CAPTION>


                                                                                                                  Period From
                                                                                                                  August 31,
                                                                                                                 1988 (Date of
                                                                                                                  Inception)
                                                                                                                    Through
                                                                                                                 September 30,
                                                                                                                     1999
                                                                                                                 ---------------
                                                Three Months Ended                   Nine Months Ended
                                                  September 30,                        September 30,
                                         --------------------------------    ---------------------------------   -----------------
                                              1999             1998               1999              1998
                                         ---------------  ---------------    ---------------   ---------------   -----------------
                                           (Unaudited)      (Unaudited)        (Unaudited)       (Unaudited)        (Unaudited)
                                         ---------------  ---------------    ---------------   ---------------   -----------------

<S>                                    <C>               <C>                <C>               <C>              <C>
Revenue                                $               - $              -   $              -  $              - $           687,375
                                         ---------------  ---------------    ---------------   ---------------   -----------------

Operating Expenses:
   Research and development costs                 16,035           74,783             72,609           210,446           2,571,588
   Research and development costs -
        related party                                  -           23,627             48,189            72,512             977,577
   General and administrative
      expenses                                   196,338          171,247            308,297           384,055           7,871,690
   Depreciation and amortization
      expense                                      9,263            3,212             46,790             4,818             415,530
                                         ---------------  ---------------    ---------------   ---------------   -----------------

      Total Operating Expenses                   221,636          272,869            475,885           671,831          11,836,385
                                         ---------------  ---------------    ---------------   ---------------   -----------------

   Loss From Operations                         (221,636)        (272,869)          (475,885)         (671,831)        (11,149,010)
                                         ---------------  ---------------    ---------------   ---------------   -----------------

Other Income (Expense):
   Interest income                                   173              432                869               824             126,633
   Interest expense                              (48,211)         (29,157)           (98,883)          (36,538)           (396,992)
                                         ---------------  ---------------    ---------------   ---------------   -----------------

      Total Other Income (Expense)               (48,038)         (28,725)           (98,014)          (35,714)           (270,359)
                                         ---------------  ---------------    ---------------   ---------------   -----------------
                                                         $                                    $                $
Net Loss                               $        (269,674)        (301,594)  $       (573,899)         (707,545)        (11,419,369)
                                         ===============  ===============    ===============   ===============   =================

Loss Per Share                         $          (0.04) $         (0.05)   $         (0.09)  $         (0.11)
                                         ===============  ===============    ===============   ===============
                                               6,572,424        6,572,424          6,572,424         6,572,313
Weighted Average Number of Shares
   Outstanding
                                         ===============  ===============    ===============   ===============
</TABLE>



                                       4





See notes to the condensed financial statements.


<PAGE>



                           Coates International, Ltd.
                          (A Development Stage Company)
                       Condensed Statements of Cash Flows



<TABLE>
<CAPTION>



                                                                                                               Period From
                                                                                                               August 31,
                                                                                                              1988 (Date of
                                                                                                               Inception)
                                                                                                                 Through
                                                                                                              September 30,
                                                                                                                   1999
                                                                                                            -----------------
                                                                                 Nine Months Ended
                                                                                   September 30,
                                                                         ---------------------------------  -----------------
                                                                              1999              1998
                                                                         ---------------   ---------------  -----------------
                                                                           (Unaudited)       (Unaudited)       (Unaudited)
                                                                         ---------------   ---------------  -----------------
                                                                                         $                 $
<S>                                                                     <C>                       <C>              <C>
Cash Flows From Operating Activities                                    $       (428,120)         (642,920)        (9,692,807)
                                                                         ---------------   ---------------  -----------------

Cash Flows From Investing Activities                                             (19,564)                -         (1,206,635)
                                                                         ---------------   ---------------  -----------------

Cash Flows From Financing Activities
    Proceeds from mortgage payable                                               900,000           454,739          1,400,000
    Repayment of mortgage payable                                               (501,496)         (160,000)          (661,496)
    Payment for mortgage loan costs                                              (65,343)                -           (112,104)
    Proceeds of additional paid-in capital                                       171,742           289,247          2,854,141
    Proceeds from issuance of stock                                                    -           129,000          7,488,148
    Payment for treasury stock                                                         -                 -            (30,000)
    Proceeds from (repayment of) stockholder loans                                 9,338            (8,524)            41,885
                                                                         ---------------   ---------------  -----------------
    Net Cash Provided by Financing Activities                                    514,241           704,462         10,980,574
                                                                         ---------------   ---------------  -----------------

    Net Increase in Cash                                                          66,557            61,542             81,132
    Cash - Beginning of Periods                                                   14,575            35,249                  -
                                                                         ---------------   ---------------  -----------------
    Cash - End of Periods                                               $         81,132 $          96,791 $           81,132
                                                                         ===============   ===============  =================

</TABLE>






See notes to the condensed financial statements.

                                       5

<PAGE>



                           Coates International, Ltd.
                          (A Development Stage Company)
                   Notes to the Condensed Financial Statements


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 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 months and nine months ended
    September  30, 1999 and 1998 are not  necessarily  indicative of the results
    that may be  expected  for the  years  ended  December  31,  1999 and  1998,
    respectively. 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-KSB for the year ended
    December 31, 1998.

RELATED PARTY TRANSACTION

    Subcontract  Labor - The Company  subcontracts its project expense (payroll,
    insurance and supplies) from an entity in which George J. Coates is the sole
    stockholder.  During the nine  months  ended  September  30,  1999 and 1998,
    $48,189 and $72,512, respectively, were paid for these services.

COMMITMENTS AND CONTINGENCIES

    The  Company is a defendant  in various  lawsuits  incident to the  ordinary
    course of business which are not possible to determine the probable  outcome
    or the amount of liability,  if any, under these lawsuits.  However,  in the
    opinion of  management,  the  disposition  of these lawsuits will not have a
    material  adverse  effect on the Company's  financial  position,  results of
    operations, or cash flows.

OTHER

    On September 29, 1999,  the Company  entered into a license  agreement  with
    Well to Wire Energy, Inc. (WTW) a Canadian corporation with gas and oil
    operations,  whereby the Company is granting to WTW an exclusive license
    for the use of the Coates Engine in connection with the conversion of
    natural gas to electricity in Canada.  The licensing fee is $5,000,000 and
    the Company also receives a royalty equal to 5% of the gross profit which
    WTW derives from all sources.  The Company also retains the exclusive right
    to  manufacturing  both the engine and generator components for sale to WTW.

                                       6

<PAGE>

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

Coates  International  Ltd.  ("CIL" or the "Company") is a Delaware  corporation
organized in October 1991 by George J. Coates, as the successor in interest to a
Delaware  corporation  of  the  same  name  incorporated  in  August  1988  (the
"Predecessor   Entity").   As  a  result  of  a  dispute  with  certain   former
employee-directors  who  claimed  to  own  approximately  nine  percent  of  the
Predecessor  Entity's  outstanding  capital stock,  the  Predecessor  Entity was
reorganized  in  November  1991.  Pursuant  to  the  reorganization,  all of the
Predecessor  Entity's assets subject to liabilities were distributed to CIL, the
non-litigating stockholders of the Predecessor Entity became the stockholders of
CIL, and the Predecessor Entity was dissolved.

CIL 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 an exclusive license from George
J.  Coates  and  his  son  Gregory  Coates,  to  manufacture,   sell  and  grant
sub-licenses with respect to products based on the Coates Patents, within all of
the countries,  their  territories and  possessions,  comprising  North America,
South America and Central  America (the "License  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 moneys including  royalties  received from 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 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 much time attempting to
interest  various  persons and  entities in  acquiring  sub-licenses  to use the
technology.

CIL is  currently  manufacturing  components  for  high  performance  automotive
engines modified with the Coates System on a limited basis at its Wall Township,
New Jersey,  manufacturing facility.  Except as may be set forth herein, CIL has
not sold any automotive engines or components during the quarter ended September
30, 1999.  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. CIL intends to aggressively
pursue all inquiries  with the goal of obtaining  firm orders.  CIL's ability to
generate  revenues and achieve  profitable  operations is principally  dependent
upon the  execution of  sub-license  agreements  with engine  manufacturers  and
retrofitters  and upon the  Company's  successful  marketing  and  sales of high
performance  automotive,  motorcycle and marine racing engines.  Despite limited
success  to date  due  principally  to its lack of  funding,  CIL  continues  to
aggressively  pursue the  marketing  of Coates  System  technology  to potential
sub-licensees worldwide.

On August 6, 1999,  CIL entered into an agreement  with Well to Wire Energy Inc.
(WTW), a Canadian corporation,  whereby the Company is granting to WTW the right
to purchase an exclusive  license for the use of the Coates engine in connection
with the  conversion of natural gas to  electricity in the country of Canada and
its  territories.  The cost of the license is $5,000,000 and is payable $250,000
on August 16, 1999, $500,000 thirty days after the successful  validation of the
Coates engine,  and the balance  quarterly over the next four years. CIL retains
the  exclusive  right  to  manufacture  both the  Coates  engine  and  generator
components  for sale to WTW and CIL will also  receive  5% of the gross  profits
which WTW derives from all sources.

Results of Operations for the Nine Months Ended September 30, 1999 and 1998

No revenues were  recognized for the nine month periods ended September 30, 1999
and 1998. Total operating  expenses for the nine months ended September 30, 1999
were $475,885 compared to $671,831 for the same period in 1998. The decrease was
attributed to an increase in  depreciation  and  amortization  of  approximately
$42,000   offset  by  a  decrease   in  general  and   administrative   expenses
approximating  $76,000  and a decrease  in  research  and  development  costs of
approximately  162,000.  The decrease in general and administrative  expenses is
the result of  forgiveness  of debt in the current  year  approximating  $90,000
which offset other period general and administrative  expenses.  The forgiveness
of debt was the result of settlements in connection  with certain legal fees and
printing costs.

                                       7

<PAGE>


Total  operating  expenses for the three months  ended  September  30, 1999 were
$221,636 as compared  with  $272,869 for the same period in 1998.  This decrease
was  attributed  largely  to  a  decrease  in  research  and  development  costs
approximating  $82,000  offset by an  increase  in  general  and  administrative
expenses of approximately $25,000.

Interest  expense for the nine months  ended  September  30, 1999 was $98,883 as
compared to $36,538  for the same nine month  period in 1998.  This  increase of
approximately  $63,000 was due to a higher mortgage on the property in 1999. The
increase in interest expense of approximately  $19,000 for the nine months ended
September 30, 1999 was attributed also to the higher mortgage.

The net loss for the nine  months  ended  September  30,  1999 was  $573,899  as
compared  with a loss of $707,545 for the same period in 1998.  Once again,  the
main reason for this  decrease was the reduction in the current  year's  general
and  administrative  expenses  due to the  forgiveness  of debt coupled with the
decrease in research and development  costs of  approximately  $82,000.  The net
loss for the nine months ended  September 30, 1999 was $269,674 as compared to a
net loss for the nine months ended September 30, 1998 of $301,594. This decrease
was due to a decrease in research and development costs of approximately $82,000
coupled with an increase in general and administrative expenses of approximately
$25,000  and an increase in interest  expense of  approximately  $19,000.  Total
losses  since  inception  in August 1988  through  September  30, 1999 amount to
$11,419,369.

Liquidity and Capital Resources

The Company's  balance sheet and financial  condition did not change  materially
during the quarter.  However, the losses experienced during this period affected
cash flow and, therefore, the Company's cash position. Cash on hand currently is
insufficient to guaranty an orderly  retirement of liabilities  unless their due
dates are extended.

 On July 15, 1999, the Company commenced a private offering for the placement of
Series A Preferred Stock with certain  institutional and accredited investors in
reliance upon the exemption from applicable  registration  requirements provided
by Rule 506 of Regulation D promulgated  under the Securities Act of 1933. These
securities  are being  offered  solely to  accredited  investors as that term is
defined in Rule 501(a) of Regulation D. The Offering was  structured,  requiring
that a minimum of 150,000 shares be sold on a "best efforts,  all or none basis"
or all the subscription funds held in escrow were to be returned and the private
offering would be  terminated.  The maximum number of shares offered was 750,000
at a price of $20.00  per  share.  Accordingly,  the  Company  sought to raise a
minimum $3,000,000 and a maximum $15,000,000. After the expiration of the 90-day
offering  period,  the Company failed to achieve the acceptance of  subscription
agreements for the minimum  150,000  Series A Preferred  Shares and the offering
was  terminated.  On October 20,  1999,  the Company  recommenced  its  previous
private  placement  offering,  under  the same  terms and  conditions  and began
qualifying this private  placement under  applicable blue sky regulations of the
several States.  Assuming that this recommenced  private offering is successful,
the proceeds will be used for,  among other things,  to facilitate  the assembly
and production of the Company's  rotary valve parts and engines.  Management has
located a facility which would house the production and assembly  operations and
become the corporate headquarters,  while  the  existing   building  would
remain  a  research  and development facility.

On September 29, 1999, the Company entered into a License Agreement with Well to
Wire Energy, Inc. ("WTW"), a Canadian  corporation,  whereby the Company granted
to WTW a  license,  exclusive  in Canada,  for the use of the  Coates  spherical
rotary  valve  system  in  connection  with a natural  gas  fueled  engine  that
generates  electricity.  The licensing fee is $5,000,000 and the Company is also
to receive a royalty equal to 5% of the gross profits which WTW derives from all
sources. The Company,  which retains the exclusive right to manufacture both the
engine and generator  components  for sale to WTW,  received  orders from WTW in
October 1999  totaling  $41,000,000  comprising  both  cogeneration  systems and
engines. The consummation of the license agreement with WTW and the finalization
of WTW's orders for the  generator  engines is  contingent  upon the  successful
validation of the generator engine incorporating the Coates System.

The combination of the anticipated funds raised through the private offering and
the anticipated  proceeds to be derived from the sale of the $5,000,000  license
to Well to Wire Energy Inc.  following  successful  validation  should more than
offset the general and  administrative  expenses  for the twelve  months  ending
September  30, 2000 which are  estimated  at $100,000  per month or  $1,200,000.
Although  management is optimistic  that at least the minimum of $3,000,000 will
be raised  through the private  offering,  there can be no assurances  that this
successful subscription amount will be achieved.  Moreover,  although management
is  confident  that  its  generator   engine  developed  for  WTW  will  achieve
operational  validation,  there  can  be no  assurances  that  such  operational
validation will be achieved.


                                       8

<PAGE>



PART  II  -  OTHER INFORMATION


Item 1        LEGAL PROCEEDINGS

The response to this item can be found in the  Company's  annual  report on Form
10-KSB,  Item  3,  for  the  year  ended  December  31,  1998,  which  is  being
incorporated herein by reference to such report.


Item 2        CHANGES IN SECURITIES   -  None


Item 3        DEFAULTS ON SENIOR SECURITIES    -  None
              -----------------------------


Item 4        SUBMISSION OF MATTERS TO A VOTE OF
              SECURITIES' HOLDERS      -  None


Item 5        OTHER INFORMATION     -  None


Item 6        EXHIBITS AND REPORTS ON FORM 8-K

         (b) The  Company  did not file  any  current  reports  on Form 8-K
during the quarter ended September 30, 1999.


                                       9

<PAGE>



                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.




                               COATES INTERNATIONAL, LTD.



Date:  November 15, 1999        By:/s/ George J. Coates
                               --------------------------------------------
                                George J. Coates, President and Chief Executive
                                Officer and Principal Financial Officer



































coaQ9909
                                       10

<PAGE>