Holography firm Voxel finds buyer to pull company out of Chapter 7

Holographic Dimensions signs letter of intent

Beleaguered holographic developer Voxel of Laguna Hills, CA, may have found a buyer. Miami-based Holographic Dimensions this month filed a letter of intent with a California bankruptcy court to purchase Voxel for $5 million. In a related deal, HDI agreed to fund Voxel’s existing operations with a cash infusion of approximately $250,000 distributed over the next four months. The loan will be applied to the purchase price if HDI successfully acquires Voxel.

Voxel’s tenuous financial status arose this year out of a dispute with former manufacturing partner General Scanning of Watertown, MA. After an arbitration panel awarded GSI $1.9 million, Voxel was forced to apply for Chapter 11 bankruptcy protection. Despite drastic personnel cuts, the company proved unable to raise new financial backing. In August a judge in the U.S. Bankruptcy Court for the Central District of California converted Voxel’s Chapter 11 bankruptcy filing to Chapter 7 and referred the case to a bankruptcy court trustee (SCAN 8/19/98).

Voxel’s outstanding debt is roughly $5 million, an amount that includes the GSI award and other debt. In addition to Holographic Dimensions’ letter of intent, the court has received another, lesser offer for the company, according to Raymond Schultz, Voxel’s director of marketing.

Voxel holds six U.S. patents and three 510(k) clearances for its technology, which produces holograms from CT and MRI scans. Called Voxgrams, Voxel’s anatomical holograms are three-dimensional and transparent, and allow the elements within a volume of CT or MRI data to be viewed simultaneously.

Holographic Dimensions manufactures security holograms used for such products as credit cards, negotiable documents, and transit passes. The purchase of Voxel would give the firm access to the medical imaging holography market. HDI president and CEO Kevin Brown estimates that more than 6000 U.S. sites use CT and MRI scanners to perform about 32 million tests per year. With 10% penetration of the market, Voxel’s technology could produce annual revenue of $320 million in the U.S., according to Brown.

Bankruptcy trustee Thomas Casey expects the court to call a sale hearing in mid-November, at which he will ask the court to approve the sale of Voxel to Holographic Dimensions, provided HDI can produce $5 million in cash by the time of the hearing. If the judge agrees that the deal can progress, the sale will be subject to bids from other interested parties. Offers will be presented at the hearing and the court will award Voxel to the highest bidder, Casey said.