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Yesterday, North American Technologies Group Inc. (NATK) announced Chief Executive Officer Kevin Maddox and Avalanche Resources Ltd. — who together own about 49 percent of outstanding common stock — have agreed to sell their interest in the company to a group of investors comprising many current preferred stockholders. The investors would pay $10.8 million cash to acquire more than 34 million common shares and warrants to purchase 3.7 million more shares.

Per a sale condition, NATK reached an agreement with Sponsor Investments L.L.C. under which Sponsor will exchange its option to acquire 49.9 percent of NATK subsidiary TieTek L.L.C. — which produces plastic-composite ties — for shares of a new class of Series CC convertible preferred stock and a warrant to purchase additional shares of the Series CC stock at an exercise price of $1 per share. Sponsor then would own about 33 percent of NATK's common stock.

The sale also is contingent on NATK replacing its current directors and officers with representatives from the investor group and Sponsor. The investor group has nominated Robert Hoyt, Kenneth Scott and TieTek President Henry Sullivan as directors, and elected Sullivan NATK president and CEO.

NATK plans to mail a notice to stockholders seeking approval of the officer/director changes, and issuance of preferred stock and purchase warrants.