SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10-KSB/A

            |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

                   For the fiscal year ended December 31, 1998

                                       OR

          |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

           For the Transition period from____________to______________

                         Commission File Number 33-94884

                            COATES INTERNATIONAL LTD.
        (Exact name of small business issuer 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)

          Issuer's telephone number, including area code (732) 449-7717

                    Securities registered pursuant to Section
                               12(b) of the Act:

                                 Title of Class
                                      None

                    Securities registered pursuant to Section
                               12(g) of the Act:

                                 Title of Class
                                      None

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-B is not contained  herein,  and will not be contained,  to the
best of the issuer's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-KSB or in any amendment to
this Form 10-KSB. [ ]

Issuer did not generate any revenues for the year ended December 31, 1998.

During the year ended December 31, 1998, there was no established public trading
market for the issuer's Series A Preferred  Stock.  On December 31, 1998,  there
were  6,572,424  shares of Series A  Preferred  Stock of the  Issuer  issued and
outstanding.



<PAGE>



Item 10. Executive Compensation

         None of CIL's executive  officers has an employment  contract with CIL.
With respect to each of calendar years 1996, 1997 and 1998, no executive officer
had compensation  paid or accrued in excess of $100,000 for any such year except
for George J. Coates,  CIL's chief executive officer,  whose compensation was as
follows:

                           SUMMARY COMPENSATION TABLE
                               Annual Compensation
                               Year Ended
         Name                  December 31                Salary

George J. Coates,                 1998                    $186,947
Chief Executive Officer           1997                    $183,550
                                  1996                    $184,908

* CIL had  agreed  to pay a  $5,500,000  license  fee to  George  J.  Coates  in
consideration  for  his  grant  to CIL of a  non-exclusive  license.  See  "Item
1-Business-Patents and Licenses." The fee was payable at management's discretion
but  in no  event  later  than  February  17,  1998.  In  September  1998,  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 Preferred Stock
to Mr.  Coates as the  license  fee.  The shares  were  issued to Mr.  Coates in
November 1998.

         To date, no employee stock options have been granted by CIL.

Item 11. Security Ownership of Certain Beneficial Owners and Management

         The following table sets forth as of December 31, 1998 the ownership of
CIL  Series  A  Preferred  Stock  by  (i)  each  person  known  by CIL to be the
beneficial  owner of more than 5% of the outstanding  Series A Preferred  Stock,
(ii) each director and executive officer of CIL who owned shares,  and (iii) all
directors and executive officers as a group.


                                       Shares of Series A
Name of                             Stock Beneficially Owned
Beneficial Owner                      Number        Percent

George J. Coates*                5,189,324 shs        76%
Gregory Coates*                    318,150 shs         5%
Richard W. Evans                    16,500 shs         .003%
Michael J. Suchar                    6,000 shs         .001%

All directors and executive
officers as a Group (four persons)   5,334,650 shs        81%

        * c/o CIL, Highway 34 & Ridgewood Road, Wall Township, New Jersey 07719.



                                       14

<PAGE>



                                   Signatures

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
and  Exchange  Act of 1934,  the  Registrant  has duly  caused this Amendment
No.1 for Form 10KSB for December 31, 1998 to be signed on its behalf by the
undersigned, thereunto duly authorized.



Date:                                   COATES INTERNATIONAL LTD.

July 14, 1999                         By: /s/George J. Coates
                                          George J. Coates, President
                                          Chief Executive Officer and
                                          Chief Financial Officer

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  Amendment No. 1 to Form 10-KSB for December 31, 1999 has been  signed
below by the  following  persons on behalf of the Registrant and in the
capacities and on the date indicated.

Signature                         Title                                Date

/s/George J. Coates
George J. Coates         Director (Principal Executive           July 14, 1999
                         Principal Financial Officer, Principal
                         Accounting Officer

/s/Richard W. Evans
Richard W. Evans         Director                                July 14, 1999



Michael J. Suchar        Director                                July 14, 1999





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