[1]	During the year ended December 31, 2017, the Company issued 3,351 shares of Series A Preferred Stock with an estimated fair value of $17,000 to George J. Coates representing anti-dilution shares to restore Mr. Coates' percentage of eligible votes to 85.7%.
[2]	For the years ended December 31, 2017 and 2016, George J. Coates earned additional base compensation of $240,000 and $250,000, respectively, payment of which is being deferred until the Company has sufficient working capital. At December 31, 2017 and 2016, the total amount of deferred compensation was $1,221,000 and $981,000, respectively. These amounts are included in deferred compensation in the accompanying balance sheets at December 31, 2017 and 2016.
[3]	During the year ended December 31, 2017 and 2016, George J. Coates was awarded 136,599 and 59,694 shares of Series B Convertible Preferred Stock, respectively, with an estimated fair value of $5,204,000 and $6,386,000, respectively, for anti-dilution. Each share of Series B Convertible Preferred Stock becomes convertible into 1,000 shares of common stock at any time after the second anniversary of the date of issuance.
[4]	During the years ended December 31, 2017 and 2016, Gregory G. Coates was awarded 10,646 and 4,360 shares of Series B Convertible Preferred Stock with an estimated fair value of $423,000 and $455,000, respectively, for anti-dilution. Each share of Series B Convertible Preferred Stock becomes convertible into 1,000 shares of common stock at any time after the second anniversary of the date of issuance.
[5]	For the years ended December 31, 2017 and 2016, Gregory G. Coates earned additional base compensation of $110,000 and $33,000, respectively, payment of which is being deferred until the Company has sufficient working capital. At December 31, 2017 and 2016, the total amount of deferred compensation was $143,000 and $33,000, respectively. These amounts are included in deferred compensation in the accompanying balance sheets at December 31, 2017 and 2016.
[6]	For the year ended December 31, 2016, Bernadette Coates, who retired at the end of third quarter of 2016, earned additional base compensation of $50,000, respectively, payment of which is being deferred until the Company has sufficient working capital. At December 31, 2017 and 2016, the total amount of deferred compensation was $242,000. These amounts are included in deferred compensation in the accompanying balance sheets at December 31, 2017 and 2016.

COATES INTERNATIONAL LTD \DE\ 10-K