Coates International, Ltd. Executes Letter of Intent With a U.S. Company to Supply 5,000 CSRV Natural Gas Electric Power Generators for Distribution Throughout the Countries of M.E.N.A. -- Estimated to Be Valued at $90,000,000 USD -- Stockholders' Update
WALL TOWNSHIP, NJ--(Marketwired - Sep 25, 2015) - Coates International, Ltd. (OTC PINK: COTE) (the "Company") is pleased to announce that it has executed a Letter of Intent to manufacture and supply 5,000 CSRV natural gas electric power generators for distribution throughout the countries that comprise the Middle East and North Africa ("M.E.N.A."). Meetings with business executives from the Middle East are scheduled for Monday, September 28, 2015, at the Coates headquarters facility in New Jersey.
The following is an update for our stockholders:
- A Cummins 250 KW natural gas electric power generator set will be delivered on November 7, 2015. This gen set is a stand-by emergency unit. It will be tested under full load:
-- For power output;
-- Fuel consumption; and
Thereafter, it will be dismantled, inspected and completely rebuilt and retrofitted with the Coates CSRV system, which eliminates 2,700 parts of the generator engine, including the engine oil from the head of the engine. The Coates CSRV system utilizes only two rotating CSRV assembly shafts and 12 floating seals in place of all of the removed parts.
- The retrofitted CSRV gen set will be retested under the same test conditions; this is known as an A and B comparison, which is recommended by the E.P.A. Mr. George J. Coates is an official inspector licensed by the Motor Vehicle Commission of New Jersey.
- Parts and components are being manufactured; a minimum of 100 pieces at a time. This results in longer delivery lead times to the Company.
- Factory shut-downs, which are common over the summer, created delays as certain suppliers closed down for up to two weeks.
- The Company continues to move closer towards start-up of the licensing arrangements in China. The Company has already shipped one 150 KW CSRV electric power natural gas generator to China and as soon as the final documents and agreements are executed for the manufacturing license, shipments will commence.
Company President and CEO, Mr. George J. Coates, comments: "We have more orders in place than we can handle, which has created a desirable backlog to address upon commencement of production in large numbers. Stops and starts are unavoidable in the beginning. As the time to fulfill these orders stretches out, certain orders can become stale. For this reason we continue to press on to achieve our goal of manufacturing products in larger quantities. The Company has engaged many parts and components manufacturers in the USA to supply these items. These custom parts require a lot of time to be produced to our specifications. Our costs of procurement will be higher than we would expect to incur until we can place our orders in economic quantities. We expect that we will be able to reduce these costs and generate acceptable gross margins. We will be required to sell our products at competitive prices even though our CSRV systems are the most advanced in the world. Our competitor's gen sets are only suitable as stand-by emergency units and have a relatively short life span when operating on natural gas. The Coates CSRV units will operate efficiently under continuous operation and deliver longer product life cycles, while requiring substantially less servicing."
There can be no assurance that the Company will be successful in any of its endeavors.
Safe Harbor Statement:
This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please see our filings with the Securities and Exchange Commission. Our public filings with the SEC may be viewed and printed on the website maintained by the SEC at http://www.sec.gov.
(September 25, 2015 - 7:00 AM EDT)
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