Eagle Votes to Issue 11 Million More Shares

Eagle Computer Inc. stockholders voted overwhelmingly Tuesday to authorize the issuance of 11 million new shares of common and preferred stock to finance the product on which the company is pinning its hopes for the future.

The vote allows Eagle to sell an additional 10 million shares of common stock and a new class of 1 million preferred shares. Until the vote, the company’s charter set the limit on the common shares at 25 million and there was no class of preferred stock. Currently, Eagle has 21.1 million common shares outstanding.

Gary Kappenman, Eagle’s chairman and chief executive, said the company has no immediate plans to sell the stock,largely because its common shares are currently trading at 40 cents each. As recently as 1983, Eagle shares sold for $24 each.

Kappenman told an audience of about 50 shareholders who attended the special meeting in Garden Grove that the company would attempt eventually to sell the shares to a private investor rather than at a public offering.

Kappenman said proceeds from the sale would be used to bankroll the new computer the company expects to unveil in mid-November. Kappenman said the company needs an infusion of about $6.6 million in cash to finance its expanding operations, including production of the new computer system.

Code-named “SST,” the new computer represents Eagle’s bid to return to its high-flying ways after nearly 18 months of penny pinching and fancy financial footwork to avoid bankruptcy.

“With this machine we can be profitable,” Kappenman said of the company that has lost money every quarter since December, 1983. Kappenman told shareholders that if the machine sells as the company expects, Eagle could turn a profit in the quarter ending next March 31.

The machine, which will sell in the range of $20,000 to $25,000, is aimed at the small- and medium-sized business, not the single user as were its earlier desk-top models.