Coates International, Ltd. has received an irrevocable, non-recourse unconditional letter of credit for $30,000,000 USD which it intends to use as collateral for a new loan facility. This loan would provide the necessary working capital to enable the Company to ramp up production in the United States. The Company intends to manufacture its CSRV industrial, natural gas, electric power engine generators for the oil and gas industry. The letter of credit must be accepted by a bank or funding institution as collateral for a loan facility. There can be no assurances that it will be accepted.
Management believes that, if accepted, the prospective loan facility combined with the Dutchess Opportunity Fund, LP equity line of credit for $20,000,000 USD that the Company secured in June 2011, may provide sufficient working capital to fulfill the Company's current business plans.
The Company is continuing discussions with a number of states to identify the overall optimal package of incentives and location for establishing its manufacturing and assembly plant.
The Company has received projections from its licensed distributor in Alberta, Canada estimating its requirements to be more than 11,000 CSRV natural gas industrial systems.
The Company's distributor in Alberta, Canada has advised that once the CSRV natural gas engine generators start shipping in larger numbers it will be in a position to pay off the remaining balances for the Escrow Release Payment of $5,847,000 andthe United States license of $49,000,000.
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