Coates International Ltd (OTCMKTS:COTE) Revving Its Engines Again
Back in June, Coates International Ltd (OTCMKTS:COTE) announced that “the most advanced internal combustion engine in the world” is ready to hit the production line. They also said that they have received tens of millions of dollars worth of purchase orders.
Investors were initially excited and the stock surged from less than $0.002 all the way to more than $0.01 in a matter of just a few short sessions. Unfortunately, it lost momentum just as quickly as it had gained it and soon, it was sliding back down. A couple of weeks later, it found itself under $0.004 and it must be said that not everyone was shocked.
After all, saying that you’re about to start making millions of dollars in revenues is all well and good, but you’ll need to work hard to convince people to take you seriously when your financial statement looks like this:
- cash: $72 thousand
- current assets: $190 thousand
- current liabilities: $7.1 million
- quarterly revenue: $5 thousand
- quarterly net loss: $2.8 million
The 10-Q, as you can see, is pretty appalling and in light of it, the stock’s performance wasn’t too difficult to explain. COTE weren’t done with the announcements, however.
First, they said that they have received a down payment on an electric power generator which should be delivered by the end of the month. They said that they won’t be able to recognize the money as revenue just yet, but they promised that once the testing is completed, all should be good. They also announced (for the second time) yesterday, that they have secured an equity line of financing for up to $20 million. The S-1 registration statement was filed last week and the company is now awaiting approval from the SEC.
This definitely sounds good. It sounds like COTE now have access to the money needed to finally commercialize “the most advanced internal combustion engine in the world”. Investors really believe that this is the case. In a matter of less than a week, they pushed the ticker from less than $0.004 all the way to a little over $0.009 and although it hesitated a bit during yesterday’s session, about twenty minutes after today’s opening bell, the stock is back in the green (albeit only just). It’s currently traded at $0.008 per share.
So, people are excited about the recent developments. So excited, in fact, that they have forgotten about the rather terrible dilution that the ticker underwent over the last few months. In March, for example, there were just over $586 million shares issued and outstanding. By May 8, this number had grown to more than 712 million, and last week, it was sitting at nearly 930 million.
Of course, the dilution, as horrific as it is, won’t cause too much damage if the revenues really are as impressive as Mr. George Coates claims they are. The thing is, as we mentioned in our previous articles, he has been promising things to investors for decades now. In the 1990’s, this led to charges from the SEC. More recently, when he was talking about “confirmed purchase orders”, this led to absolutely nothing for the company and to a lot of losses for investors.
It’s up to you to decide whether the word deja-vu should spring to mind.
