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, 2004

                                       Or

[_]   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 33-948884

                           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.

                                 Yes [X] No [_]

As of September 30, 2004, there were 265,860,564 shares of the Registrant's
common stock were issued and outstanding.


<PAGE>

                           Coates International, Ltd.
                        Index to the Financial Statements
                                  June 30, 2004

                                                                            Page

Financial Statements

     Condensed Balance Sheet...................................................2

     Condensed Statements of Operations........................................3

     Condensed Statements of Cash Flows........................................4

     Notes to the Condensed Financial Statements...............................5

Item 2   Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                           6-9

Item 3   Controls and Procedures                                              10

PART II  -  OTHER INFORMATION                                                 10

Item 1.     LEGAL PROCEEDINGS                                                 10

Item 2.     CHANGES IN SECURITIES                                             10

Item 3.     DEFAULTS ON SENIOR SECURITIES                                     11


Item 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS               11

Item 5.     OTHER INFORMATION                                                 11

Item 6.     EXHIBITS AND REPORTS ON FORM 8-K                                  11

SIGNATURES                                                                    12


                                        2
<PAGE>

                           Coates International, Ltd.
                             Condensed Balance Sheet
                               September 30, 2004
                                   (Unaudited)

<TABLE>
<CAPTION>
Assets

Current Assets
<S>                                                                     <C>
   Cash                                                                 $    102,365
   Inventory                                                                 302,706
   Due from related party                                                    342,337
    Prepaid expenses                                                           4,240
                                                                        ------------
      Total Current Assets                                                   751,648

Property, Plant and Equipment -                                            1,570,401
  net of accumulated depreciation of $637,377

Other Assets                                                                   2,500
                                                                        ------------

      Total Assets                                                         2,324,549
                                                                        ============


Liabilities and Stockholders' Equity

Current Liabilities
   Current portion of mortgage payable                                         4,770
   Accounts payable                                                           44,765
   Accrued interest payable                                                   12,075
   Accrued expenses                                                          426,987
   License deposits                                                          940,000
                                                                        ------------
        Total Current Liabilities                                          1,428,597

   Mortgage payable, net of current portion                                  864,226
                                                                        ------------

        Total Liabilities                                                  2,292,823

Stockholders' Equity
    Common stock, $.00001 par value, 1,000,000,000 shares authorized,          2,659
       265,860,564 shares issued and outstanding
    Additional paid-in capital
                                                                          17,025,185
    Retained earnings (deficit)                                          (16,996,118)
                                                                        ------------
           Total Stockholders' Equity                                         31,726
                                                                        ------------

        Total Liabilities and Stockholders' Equity                      $  2,324,549
                                                                        ============
</TABLE>


See notes to the condensed financial statements.


                                        2
<PAGE>

                           Coates International, Ltd.
                       Condensed Statements of Operations

<TABLE>
<CAPTION>
                                                         Three Months Ended                 Nine Months Ended
                                                            September 30,                     September 30,
                                                             (Unaudited)                       (Unaudited)
                                                   ------------------------------    ------------------------------
                                                        2004             2003             2004             2003
                                                   -------------    -------------    -------------    -------------
<S>                                                <C>              <C>              <C>             <C>

                         Revenue                   $          --    $          --    $          --    $          --

Operating Expenses:
  Research and development                                19,410          150,057           70,164          190,115
  Research and development costs - related party          23,911           23,000           69,823           95,000
  General and administrative expenses                    265,522          400,945          810,026        1,008,713
  Depreciation and amortization expense                   15,816           19,058           50,688           53,922
                                                   -------------    -------------    -------------    -------------
      Total Operating Expenses                           324,659          593,060        1,000,701        1,347,750
                                                   -------------    -------------    -------------    -------------

(Loss) From Operations                                  (324,659)        (593,060)      (1,000,701)      (1,347,750)

Other Income (Expense)
   Interest income                                         4,459              762            4,747            2,876
   Interest expense                                           --          (30,550)              --         (116,797)
   Other income - legal settlement                       485,336               --          485,336               --
                                                   -------------    -------------    -------------    -------------
      Total Other Income (Expense)                       489,795          (29,788)         490,083         (113,921)

Minority interest in subsidiary                               --           56,119               --          100,000
                                                   -------------    -------------    -------------    -------------

Net Income (Loss) Before Income Taxes                    165,136         (566,729)        (510,618)      (1,361,671)

Income Taxes                                                  --               --               --               --
                                                   -------------    -------------    -------------    -------------

Net Income (Loss)                                  $     165,136    $    (566,729)   $    (510,618)   $  (1,361,671)
                                                   =============    =============    =============    =============
                                                   $        .001    $       (.002)   $       (.002)   $       (.005)
Income (Loss) per share
                                                   =============    =============    =============    =============
Weighted Average Number of Common
Shares Outstanding                                   265,860,564      265,251,573      265,657,425      265,214,484
                                                   -------------    -------------    -------------    -------------
</TABLE>

See notes to the condensed financial statements.


                                        3
<PAGE>


                           Coates International, Ltd.
                       Condensed Statements of Cash Flows

<TABLE>
<CAPTION>
                                                           Nine Months Ended
                                                             September 30,
                                                   --------------------------------
                                                         2004              2003
                                                     (Unaudited)       (Unaudited)
                                                   --------------    --------------

<S>                                                <C>               <C>
Cash Flow From Operating Activities                $     (850,485)   $   (1,360,116)


Cash Flow From Investing Activities
    Loans to related party                               (314,955)               --


Cash Flow From Financing Activities
    Repayment of mortgage                                  (2,149)          (19,072)
    Proceeds and repayment of related party loan         (100,000)          100,000
    Proceeds from issuance of stock                       815,000           895,015
                                                   --------------    --------------
    Net Cash provided by Financing Activities             712,851           975,943


                                                   --------------    --------------
    Net (Decrease) in Cash                               (452,589)         (384,173)

    Cash - Beginning of Period                            554,954         1,079,267
                                                   --------------    --------------

    Cash - End of Period                            $      102,365    $      695,094
                                                   ==============    ==============
</TABLE>


See notes to the condensed financial statements.


                                        4
<PAGE>

                           Coates International, Ltd.
                   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 and nine months ended September 30, 2004 and
2003 are not necessarily indicative of the results that may be expected for the
year ended December 31, 2004. 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, 2003, and its quarterly reports on Form 10-QSB for the
related periods ended March 31, 2004 and June 30, 2004.

RELATED PARTY

On April 30, 2003, the Company entered into a sublicense agreement with Coates
Motorcycle Company, Ltd. Prior to the agreement, Coates Motorcycle, Ltd. was
owned 100% by Gregory Coates, an officer of the Company. Pursuant to the
agreement, the Company granted certain exclusive licenses in exchange for
approximately 51% of common shares of Coates Motorcycle Company, Ltd. In
addition, the Company had an anti-dilution right.

During the quarter ended March 31, 2004 the Company amended its license
agreement with Coates Motorcycle Company, Ltd. to expand the license rights
granted and to remove the anti-dilution provision in exchange for an additional
1,000,000 common shares of Coates Motorcycle Company, Ltd. As a result of these
transactions, the Company currently owns 3,558,000 shares of Coates Motorcycle,
representing a 30% ownership interest and Coates Motorcycle is no longer a
subsidiary.

As of September 30, 2004, the Company has outstanding loans and interest
receivable from Coates Motorcycle in the amount of $342,337.

SALE OF COMMON STOCK

In July 2004 the Company issued 50,000 shares of its common stock at $5.00 per
share to an accredited investor for $250,000 in cash.

SETTLEMENT OF LITIGATION

In July 2004 the Company agreed to settle its claims against an accounting firm
for $225,000. In connection therewith, the Company and its attorneys agreed to
evenly divide the insurance proceeds to satisfy the expenses and legal fees owed
to the attorneys pertaining to this litigation. In addition, its attorney also
waived $260,363 of its legal fees. The Company realized net proceeds in the
amount of $107,500.

                                       5
<PAGE>

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

         Except for historical information, the Company's reports to the
         Securities and Exchange Commission on Form 10-KSB and Form 10-QSB and
         periodic press releases, as well as other public documents and
         statements, contain "forward-looking statements" within the meaning of
         Section 21E of the Securities Exchange Act of 1934. Forward-looking
         statements are subject to risks and uncertainties that could cause
         actual results to differ materially from those expressed or implied by
         the statements. These risks and uncertainties include general economic
         and business conditions, development and market acceptance of the
         Company's products, current dependence on Well to Wire Energy, Inc. and
         other risks and uncertainties identified in the Company's reports to
         the Securities and Exchange Commission, periodic press releases, or
         other public documents or statements.

         Readers are cautioned not to place undue reliance on forward-looking
         statements. The Company undertakes no obligation to republish or revise
         forward-looking statements to reflect events or circumstances after the
         date hereof or to reflect the occurrences of unanticipated events.

         Background

         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. CIL has completed the development of a
         spherical rotary valve SRV Engine (the "Coates SRV Engine"), 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 SRV Engine, 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"). Agreements between George J. Coates,
         Gregory Coates, and CIL also contain certain non-compete clauses and
         rights relative to royalties received from Nicholson McLaren or from
         Noble Motor Sport.

         CIL has a 14-year operating history, during which it has primarily
         devoted its attention to developing the technology associated with the
         Coates SRV Engine.

         Agreements with Well to Wire Energy, Inc.

         On September 29, 1999, CIL signed a license agreement (the "License
         Agreement") with Well to Wire Energy, Inc. ("WWE"), an oil and gas
         company in Canada, to license the exclusive use of V-8 cylinder engines
         modified with the Coates System to be fueled by natural gas to generate
         electrical power for the Country of Canada (the "License Agreement")
         against payment of $5,000.000, of which a deposit payment in the amount
         of $300,000 was made. The agreement also provides for development and
         delivery of certain prototype engines under a separate research and
         development agreement between CIL and WWE, referred to as the "R&D
         Agreement", and stipulates that following the testing and delivery of
         the third prototype - a production model Coates Generator Engine - the
         balance of the license fee in the amount of $4,700,000 would be paid in
         16 quarterly payments beginning 180 days after delivery.

                                       6
<PAGE>

                    Following due diligence investigation of the proposed
         applications for the production of electrical energy and the location
         of the engines in the natural gas fields or generation sites, it was
         agreed between CIL and Well to Wire Energy, Inc. that a larger engine
         modified with the Coates System would be more appropriate. Accordingly,
         CIL and Well to Wire agreed that CIL would research and develop a
         natural gas fed, 855 cubic inch, 6 cylinder, industrial electric
         generator engine (the "Coates Generator Engine").

         Pursuant to further negotiations, CIL and WWE agreed that WWE would pay
         to CIL a $5,000,000 fee to research and develop a production model of
         the Coates Generator Engine. As part of the understanding between CIL
         and WWE under the R&D Agreement, CIL would develop a total of three
         prototype engines meeting these new specifications: two testing
         prototypes and one production model prototype. To date, Well to Wire
         Energy, Inc. has made aggregate payments of $1,200,000 to CIL for these
         prototypes, $250,000 of which was paid in calendar 1999; $845,000 of
         which was paid in fiscal year 2000, and $105,000 was paid during the
         first quarter in fiscal year 2001. The balance of $3,800,000 is due to
         be paid by from Well to Wire Energy, Inc. 180 days after delivery of
         the production model.

         CIL has completed the construction and delivery of the first two
         prototypes and the basic construction of the third prototype,
         representing the production version of the Coates Generator Engine. The
         first two prototype Coates Generator Engines were delivered to Well to
         Wire Energy, Inc. in December, 2000 and April, 2001, respectively. The
         third prototype engine has been completed and has been undergoing
         testing over the last two years. We have been unable to finalize our
         third prototype production model Coates Generator Engine due to lack of
         funds to test the functionality, design and components through what we
         believe to be our final evaluation protocol.

         Agreement with McLean, England and Associates, LLC

         During the first quarter of 2002 CIL negotiated a license arrangement
         with McLean, England and Associates, LLC ("McLean") which, on April 12,
         2002, produced a final agreement that calls for $25,000,000 in license
         fees for specific uses of the Coates CSRV engine technology in certain
         applications, within the United States of America. Payment of the
         license fee is contingent upon the successful completion of tests of
         two prototype engines fitted with the CSRV system. The two prototype
         engines are currently in development. At the time of this submission,
         McLean has paid CIL a non-refundable deposit of $565,000 against the
         license fee, of which $25,000 and $540,000 were received during the
         first and second quarters of 2002, respectively. The entire amount of
         $565,000 has been recognized in the balance sheet at September 30,
         2003, as a current liability, to be re-classified in subsequent periods
         as income.

         On April 1, 2004, the Company amended its license agreement with
         McLean, England and Associates, LLC. Pursuant to this amendment,
         McLean, England and Associates shall take delivery of the no. 1 diesel
         855 engine incorporating the Coates CSRV System from the Company and,
         at licensee's own expense, undertake further required modifications.

                                       7
<PAGE>

         Due to lack of funding, we have been unable to finalize the last phase
         of the design, testing of components and their composition,
         functionality as well as any continuing emissions/durability testing of
         the McLean truck engine as well as the third prototype model of the
         natural gas fueled, Coates Generator Engine under the WWE license
         agreement. We anticipate a need for approximately $500,000 of capital
         in order to fund the completion of these two projects.

         Results of Operations for the Three and Nine Month Periods Ended
         September 30, 2004 and 2003

         CIL's currently anticipated sources of revenues are the payments due to
         CIL from WWE under the R&D Agreement and the License Agreement, and the
         payments made and to be made under the agreements with McLean. Further
         payments from these sources are not scheduled until the completion of
         the testing and delivery to WWE of the third prototype, production
         model Coates Generator Engine. We have been unable to finalize our
         third prototype production model Coates Generator Engine due to lack of
         funds to test the functionality, design and components through what we
         believe to be our final evaluation protocol. Due to lack of funding, we
         have been unable to finalize the last phase of the design, testing of
         components and their composition, functionality as well as any
         continuing emissions/durability testing of the McLean truck engine.

         Total operating expenses for the quarter and the nine month period
         ended September 30, 2004, were $324,659 and $1,000,701, respectively,
         as compared to $593,060 and $1,347,750 for the corresponding three
         month and nine month periods of 2003. Research and development costs
         were $43,321and $173,057 for the quarters ended September 30, 2004 and
         2003, respectively, and $139,987 and $285,115 for the corresponding
         nine months periods. This approximate quarterly 68% decrease in
         research and development expense is attributable to the fact that the
         Company did not have available funds to finalize testing for the
         functionality, design and components through the final phases of the
         two projects for WWE and McLean. Approximately $23,991 for the three
         month period, and approximately $69,823 for the nine month period ended
         September 30, 2004 represent labor charges. Although labor charges
         remained consistent during the corresponding quarters for 2004 and
         2003, they decreased by approximately 26% over the corresponding nine
         month periods. Again, due to lack of capital, the Company was unable
         this fiscal year to devote funding to its research and development
         efforts on the two subject projects.

         No revenues were generated during the quarter. General and
         administrative expenses were $265,522 for the quarter as compared to
         $400,945 for the quarter ended September 30, 2003. The Company had a
         loss from operations for the quarter of $324,659, but $165,136 in net
         income, or $.001 per share, due primarily to a settlement of a legal
         case which resulted in a payment of $485,336 to the Company this
         quarter. This, in comparison to the third quarter of 2003, represents
         an approximate 130% increase in income from the $566,729 loss suffered
         last year. However, for the nine month period ended September 30, 2004,
         even with this legal settlement, losses have accrued to $510,618 as
         compared to the $1,361,671 loss, or (.005) per share, for the same nine
         month period of 2003.

         Dependent upon the Company's ability to obtain new capital to fund
         completion of the prototype engines under the WWE and McLean license
         agreements, and depending upon their successful completion, management
         expects the license agreements described above to contribute an
         increasing stream of revenues during the upcoming periods. There can be
         no assurance, however, that completion and testing of the various
         prototype engines can be completed in a satisfactory manner and within
         the anticipated time frames, and that other contributing factors will
         not prohibit or delay finalization and consummation of the agreements,
         in which case revenues in the short run would be limited to certain
         non-refundable deposit payments.

                                       8
<PAGE>

         Liquidity and Capital Resources

         The Company had a cash position of $102,365 at September 30, 2004, an
         approximate 80% decrease from the $695,094 cash position for the
         corresponding quarter last year and a decrease of 22% from the $130,839
         position at June 30, 2004. The Company's cash position of $102,365 at
         September 30, 2004, is principally the result of the receipt of a
         payment of $485,336 from a settled legal action as well as a result of
         the Company's receipt of $250,000 in subscription proceeds in July this
         year from an investor in the Company's private placement. CIL's working
         capital deficit of $676,949 at September 30, 2004 represents an
         approximate $430,492, or 39% decrease in the $1,107,441 working capital
         deficit position at June 30, 2004. CIL's current liabilities of
         $1,428,597 at September 30, 2004 have decreased since June 30, 2004
         ($1,812,812) and remained relatively constant with the corresponding
         nine month period ended September 30, 2003 during which an aggregate
         $895,015 in private placement subscriptions were received as compared
         to $815,000 received during the corresponding nine month period this
         year.

                   CIL has completed the basic construction of the last of the
         three prototype Coates Generator Engines for WWE, the production model,
         which is currently undergoing testing in connection with CIL's R&D
         Agreement and License Agreement with Well to Wire Energy, Inc. Upon
         completion of testing and delivery of this third prototype engine, CIL
         expects to receive the balance of $3,800,000 from Well to Wire Energy,
         Inc under the R&D Agreement. Under this License Agreement, the balance
         due CIL of $4,700,00 is payable in equal quarterly payments over a four
         year period, commencing 180 days following delivery to WWE of the third
         prototype. As well, CIL is scheduled to receive the license fee
         payments due under the McLean license when the two truck engines, one
         being completed by McLean pursuant to the April, 2004 license
         amendment, and the other truck engine, the Company is completing, are
         delivered and fully tested. The Company has been unable to finalize the
         third prototype production model Coates Generator Engine under the WWE
         license agreement nor the truck engine, under the McLean license
         agreement, due to a lack of capital necessary to test the
         functionality, design and components through what we believe to be the
         final evaluation protocols for these two projects. There can be no
         assurance, however, that these agreements, as well as those presently
         in negotiations with the other licensees, will be consummated in
         accordance with the Company's expectations nor that payments will be
         received as called for in the agreements.

         During the second quarter of 2003, the Company organized a subsidiary,
         Coates Motorcycle Company, Ltd., to research and develop a heavy
         cruiser motorcycle equipped with the Coates SRV engine. In connection
         with this project, on April 30, 2003, CIL executed and delivered an
         exclusive Sublicense Agreement to Coates Motorcycle Company, Ltd.
         ("Coates Motorcycle") in exchange for a 50+% equity ownership interest
         and anti-dilution right to maintain this majority ownership position.
         In consideration for its receipt of this exclusive Sublicense
         Agreement, Coates Motorcycle issued 2,550,000 of its common shares to
         CIL and became its subsidiary. Conjunctively, George J. Coates, Gregory
         G. Coates and the Coates Trust granted a non-exclusive license at the
         same time to Coates Motorcycle for a minority equity interest without
         any anti-dilution rights.

                                       9
<PAGE>

         On March 5, 2004 this Sublicense Agreement was amended and the
         anti-dilution rights were terminated and the Company received an
         additional 1,000,000 shares of Coates Motorcycle.

ITEM 3. CONTROLS AND PROCEDURES

      (a) Evaluation of Disclosure Controls and Procedures.

            Within the 90 days prior to the filing date of this Quarterly Report
on Form 10-QSB, our Chief Executive Officer and our Principal Financial Officer
evaluated the effectiveness of our disclosure controls and procedures as defined
in Rule 13a-14(c) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Based upon that evaluation, the Chief Executive Officer and the
Principal Financial Officer, have concluded that our current disclosure controls
and procedures are adequate and effective to ensure that information required to
be disclosed in the reports we file under the Exchange Act is recorded,
processed, summarized and reported on a timely basis.

      (b) Changes in Internal Controls.

            There have been no significant changes in our internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of their evaluation by the Chief Executive Officer and the Principal
Financial Officer.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

         The Company, its officers and directors and other related and unrelated
parties have been named as defendants in a lawsuit brought in the Superior Court
of New Jersey, Law Division, Ocean County, by a local New Jersey attorney, as a
pro se plaintiff and captioned H. Alton Neff v. George Coates, Coates
International, Ltd. et al, based upon that plaintiff's contention that he is the
assignee of 1107 N.W. Central Avenue, Inc. 1107 and the Company entered into a
Preliminary Agreement in relation to the potential grant, by the Company of a
license to 1107. The Preliminary Agreement provided that the $500,000 deposit of
1107 would convert to the stock of the Company if 1107 did not make the next
payment required by the Preliminary Agreement. 1107 did not make the next
payment; therefore, the deposit converted into shares of the Company's
restricted common stock. Company management deems this lawsuit without merit and
intends to vigorously defend this action and to seek from the plaintiff payment
of its legal fees and costs.

Item 2 CHANGES IN SECURITIES

              None

c) sales of unregistered securities during the quarter ended September 30, 2004:

         During the quarter ended September 30, 2004, the Company placed 50,000
restricted common shares with 1 accredited investor and received gross
subscription proceeds of $250,000 pursuant to its private placement. The Company
conducted its private placement pursuant to the exemption from the registration
requirements of the Securities Act of 1933 and applicable state registration
requirements provided by Rule 506 of Regulation D. The accredited investor who
tendered the subscription proceeds to the Company had a pre-existing
relationship with the Company and the certificates representing the securities
subscribed for bore the appropriate restrictive legend.

                                       10
<PAGE>

Item 3 DEFAULTS ON SENIOR SECURITIES

             None

Item 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    NONE

Item 5 OTHER INFORMATION

         On July 27, 2004, the Company had executed an agreement of sale to
purchase an industrial complex comprised of approximately 8 buildings,
representing an aggregate 355,482 square feet of industrial and office space,
situated on approximately 113.60 acres of land located in the Township of
Howell, Monmouth County, State of New Jersey for the purchase price of
$10,000,000. The agreement was subject to a number of contingencies, including a
120 day due diligence period to investigate, among other things, the property's
compliance with applicable environmental laws, rules and regulations. On
November 16, 2004, the Company exercised its right to terminate this contract in
writing.

Item 6 EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits:

                  31.1 and 31.2 Certification of the Chief Executive Officer and
   Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
   of 2002.

                     32.1 and 32.2 Certification of Chief Executive Officer and
   Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act
   of 2002, 18 U.S.C. Section 1350.

          (b) Reports on Form 8-K: None.


                                       11
<PAGE>

                                                             SIGNATURES

 Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Form 10-QSB for the quarter ended September 30,
2004 to be signed on its behalf by the undersigned, thereunto duly authorized.



Date: November  22, 2004                    COATES INTERNATIONAL, LTD.


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


                                       12