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North American Technologies Group Inc. (NATK) recently finalized a deal to obtain $5 million in financing from some of the company's major shareholders.

Under the terms of the arrangement, NATK issued $5 million in 7 percent convertible debentures with principal due at the end of one year. The company receives $2 million in gross proceeds immediately with the remainder held in a custodial account.

NATK will use proceeds to maintain production of plastic-composite ties (through subsidiary Tie Tek) at or beyond the designed capacity of existing manufacturing lines, improve production lines at a Marshall, Texas, plant and purchase additional raw material-handling equipment.

The company needs to increase production to manufacture 75,000 ties for Union Pacific Railroad during 2005, according to a prepared statement.