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, 2000

                                       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
requirement s for the past 90 days.

                                   Yes [X] No

On May 19, 2000 The Board of Directors and Majority Stock holders of CIL
unanimously agreed to convert all Preferred shares of stock to Common shares, at
a 10 Common for each Preferred shares. Par Valve $ .0001. The number of shares
of Registrant's Common Stock, $ 0.001 par value, outstanding as of September 30,
2000 was 66,072,910 shares.

From its inception in 1988 CIL has primarily devoted its attention to the
Research and Development of Technology associated with the CSRV combustion
engine. 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.

On September 29, 1999, the Company entered into a License Agreement with Well to
Wire Energy, Inc. (WTW), a Canadian oil and gas corporation, whereby the Company
granted to WTW a use

<PAGE>

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 percent of the gross profits which WTW derives from all
sources. The Company (CIL), which retains the exclusive right to manufacture the
engine for WTW, received in October 1999, a $41,000,000 order comprising both
co-generation systems and engines. The consummation of the License agreement
with WTW and finalization of WTWs orders for the generator engines is contingent
upon the successful validation of the prototype generator engine incorporating
the Coates System.

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 offset the
general and administrative expenses for the twelve months ending March 31, 2001
which are estimated at $100,000 per month or $1,200,000. 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.

On July 2, 2000, the first 855 cubic inch natural gas prototype built for Well
to Wire Energy, Inc. was completed. This engine was fired up on July 4, 2000.
The engine ran successfully, and was dismantled a number of times over a period
of ten days. After full assessment of this engine, a number of recommendations
were made for the first production field engines. The engine was delivered to
Well to Wire Energy, Inc. on July 22, 2000. CIL is now in the process of
manufacturing the first field engines for Well to Wire Energy, Inc. of Canada.
The cost of the prototype was $5,000,000. Well to Wire Energy, Inc. has paid CIL
a total of $1,270,000, of which $250,000 is a license deposit, and $1,020,000 is
a prototype deposit.

All other arrangements and pending arrangements other than WTW Energy licensing
agreements, have been put on hold because management believes that the
co-generator opportunity in Canada is the most significant. WTW has paid to date
$1,270,000 in deposits and signed a $5,000,000 license. CIL management expects
to start production of its co-generator engine for the oil and gas companies on
a significantly large scale. Both WTW, CIL and another oil and gas company are
in high level talks regarding a joint venture.

It is the intention of CIL to fund its business plan by 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 combination or in what amounts.

LIQUIDITY AND CAPITAL RESOURCES

The Company's balance sheet and financial condition did not change materially
during the quarter.

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, 1999.

Item 2 -  CHANGES IN SECURITIES AND USES OF PROCEEDS - None

Item 3 -  DEFAULTS UPON SENIOR SECURITIES - None

<PAGE>

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 March 31, 2000.

Item 7 - All Preferred Stock was converted to Common Shares at 10 Common for
each Preferred.

<PAGE>

                           Coates International, Ltd.
                             Condensed Balance Sheet
                               September 30, 2000
                                   (Unaudited)

<TABLE>
<S>                                                                                                        <C>
      Assets
Current Assets
   Cash                                                                                                    $    281,999
   Restricted cash                                                                                              112,000
   Prepaid insurance                                                                                              3,196
   Deferred tax asset                                                                                           251,000
                                                                                                                648,195
      Total Current Assets
                                                                                                              1,634,209
Property, Plant and Equipment - Net of accumulated depreciation of $431,811

Other Assets
   Mortgage loan costs, net of accumulated amortization of $56,489                                               45,402
   Deposits                                                                                                       2,500
                                                                                                              2,330,306
      Total Assets

      Liabilities and Stockholders' Equity

Current Liabilities                                                                                              77,000
   Note payable                                                                                                   7,211
   Current portion of mortgage payable                                                                          730,251
   Accounts payable and accrued expenses                                                                        118,468
   Accrued interest payable                                                                                       6,000
   Due to stockholders                                                                                           17,196
   Due to related parties

        Total Current Liabilities                                                                               956,126

   Mortgage payable, net of current portion                                                                     883,697

Stockholders' Equity
   Preferred stock, Series A, $.001 par value voting non-cumulative convertible,
   14,000,000 shares authorized no shares issued and outstanding
   Common stock, $.0001 par value, 200,000,000 shares authorized, 66,085,410 shares issued and                    6,606
   outstanding
   Additional paid-in capital                                                                                11,061,789
Retained earnings (Deficit)                                                                                 (10,577,912)

        Total Stockholders' Equity                                                                              490,483
        Total Liabilities and Stockholders' Equity                                                         $  2,330,306
                                                                                                           ============
</TABLE>

See notes to the condensed financial statements.

<PAGE>

                           Coates International, Ltd.
                       Condensed Statements of Operations

<TABLE>
<CAPTION>
                                                                        Three Months Ended                  Nine Months Ended
                                                                           September 30,                      September 30,
                                                                       2000             1999              2000              1999
                                                                   (Unaudited)      (Unaudited)       (Unaudited)       (Unaudited)
<S>                                                              <C>               <C>               <C>               <C>
Revenue                                                          $    320,000      $         --      $    720,000      $         --

Operating Expenses:

   Research and development costs                                     126,981            16,035           252,427            72,609

   Research and development costs - related party                      50,986                --           139,361            48,189

   General and administrative expenses                                 36,288           196,338           214,485           308,297

   Depreciation and amortization expense                               15,259             9,263            34,682            46,790


      Total Operating Expenses                                        229,514           221,636           640,955           475,885


   Income (Loss) From Operations                                       90,486          (221,636)           79,045          (475,885)


Other Income (Expense):

   Interest income                                                        184               173             1,882               869

   Interest expense                                                   (36,586)          (48,211)         (108,044)          (98,883)

   Miscellaneous income                                                15,000                --            15,000                --


      Total Other Income (Expense)                                    (21,402)          (48,038)          (91,162)          (98,014)


Net Income (Loss) Before Benefit From Income Taxes                     69,084          (269,674)          (12,117)         (573,899)

Net Income (Loss)                                                $     69,084      $   (269,674)     $    (12,117)     $   (573,899)


Income (Loss) Per Share                                          $       0.00      $       0.00      $       0.00      $      (0.01)


Weighted Average Number of Common                                  66,085,410        65,724,240        66,085,410        65,724,240
Shares                                                                      0                 0                 0                 0
  Outstanding
                                                                 ============      ============      ============      ============
</TABLE>

See notes to the condensed financial statements.

<PAGE>

                           Coates International, Ltd.
                       Condensed Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                            Nine Months Ended
                                                                               September 30,
                                                                           2000             1999
                                                                       (Unaudited)       (Unaudited)
<S>                                                                    <C>                <C>
Cash Flows From Operating Activities                                   $(132,505)         $(428,120)


Cash Flows From Investing Activities                                     (74,000)           (19,564)


Cash Flows From Financing Activities

    Proceeds from note payable                                            77,000                 --

    Proceeds from mortgage payable                                            --            900,000

    Repayment of mortgage payable                                         (4,659)          (501,496)

    Proceeds of additional paid-in capital                                69,965            171,742

    Proceeds from issuance of stock                                           35                 --

    Payment for treasury stock                                                --                 --

    (Repayment of) Proceeds from stockholder loans                       (10,000)             9,338

    Payment for mortgage loan costs                                           --            (65,343)

    Net Cash Provided by Financing Activities                            132,341            514,241


    Net (Decrease) Increase in Cash                                      (74,164)            66,557

    Cash - Beginning of Periods                                          356,163             14,575

    Cash - End of Periods                                              $ 281,999          $  81,132
                                                                       =========          =========
</TABLE>

See notes to the condensed financial statements.

<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 nine months
     ended  September  30, 2000 and 1999 are not  necessarily  indicative of the
     results  that may be  expected  for the years ended  December  31, 2000 and
     1999.  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, 1999.

RELATED PARTY TRANSACTION

     Subcontract Labor - The Company  subcontracts its project expense (payroll,
     insurance  and  supplies)  from an entity in which  George  J.  Coates  (an
     officer and  director of the Company) is the sole  stockholder.  During the
     nine months  ended  September  30,  2000 and 1999,  $139,361  and  $48,189,
     respectively, were paid for these services.

CAPITAL STOCK

     During the nine months ended September 30, 2000, the Company  converted all
     shares of its Series A preferred  stock into common stock,  on the basis of
     10 shares of common stock for each share of Series A preferred  stock.  The
     Company  also  increased  its  authorized   shares  of  common  stock  from
     20,000,000 to  200,000,000  shares and changed the par value from $0.001 to
     $0.0001.

     Prior period earnings per share  calculations have been restated to reflect
     the above.

NOTE PAYABLE

     Note  payable  to bank with  interest  at  13.64%  due in  equally  monthly
     installments of $6,907 including  interest through September 2001.  Secured
     by equipment with a net book value of $66,660.