North American Technologies' investors sell $10.8 million in shares to investment group

By Sheri Kasprzak

Atlanta, Nov. 15 - North American Technologies Inc. entered into an agreement with two investors to sell shares and warrants to an investment group for $10.8 million.

The company on Nov. 8 entered into an agreement with Avalanche Resources and Kevin C. Maddox, two investors, to sell 34,338,246 shares owned by the two entities to an investment group. The group consists of Big Bend XI Investments Ltd., Crestview Capital Master LLC, Midsummer Investment Ltd., HLTFFT LLC, Richard Kiphart, Islandia LP and Crestview Warrant Fund LP.

The shares and warrants were priced ranging from $0.25 to $0.40 per share for an average price of $0.31. The average price for the seller warrants was $350,000.

The deal, which closed on Nov. 12, resulted in a change of control for North American.

Avalanche, Maddox and North American entered into an exchange agreement with Sponsor Investments LLC, in which Sponsor agreed to exchange its option to buy a 49.9% ownership interest in TieTek LLC, North American's subsidiary, for the issuance of 43,114 shares of series CC preferred stock. The series CC stock is convertible into about 39,920,190 shares of common stock, and the preferred stock purchasable under the Sponsor warrant is convertible into about 8,479,594 shares of common stock.

After the transaction, Sponsor owns about 33% of the outstanding shares of common stock and a warrant to buy half of the shares now subject to outstanding warrants.

North American is a Houston-based railroad technology company. Its stock closed down $0.14 at $0.61 Monday.

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