Voxel Cuts 25% of Staff in Wake of Arbiter Ruling

Medical device maker Voxel, still reeling from an unfavorable arbitration ruling, said Tuesday it has laid off about 25% of its workers and is accelerating its search for a corporate partnership to generate cash.

The Laguna Hills company said it is also shelving “less essential” marketing and administrative activities to devote its resources to completing the development of its core product, a machine that makes 3-D X-rays.

Earlier this month, the company announced that an arbitration panel ruled it must pay $1.9 million to another company for work that it had done for Voxel.

Voxel’s stock plummeted more than 60% after the award was announced. The company’s stock closed Tuesday at $1.75, down 13 cents a share.

On May 18, the company dismissed 12 of its 44 workers, chief executive Allan Wolfe said Tuesday. Among those who have left the company are Murray Rudin, the chief financial officer, and Robert Littlewood, vice president of sales and marketing, he said.

The company also is scrambling for capital.

Ideally, officials say, they would like to forge a partnership with a medical equipment company that would give Voxel an infusion of cash in exchange for the right to license, manufacture or sell the company’s imaging equipment.

Another option is to raise capital directly through the sale of stock, Wolfe said.

“I would say there’s a full range of options,” said Larry Selwitz, who handles investor relations for the company. “Outside investors have indicated an interest in making an investment in the company. Now it’s a matter of taking a look at which one of the options can come to fruition the soonest and yield the best results financially for the shareholders.”

While the company is focusing on completing the development of its Volcam imaging processor, Voxel will suspend work on related technical developments, Wolfe said.

The arbitration ruling against the company came after 16 months of wrangling between Voxel and General Scanning Inc. over a 1994 development contract.

General Scanning, based in Watertown, Mass., was seeking payment for engineering work it did for Voxel. An American Arbitration Assn. panel decided in favor of General Scanning.

Voxel, which was incorporated in 1989 and went public in 1994, lost almost $6 million last year and recorded no sales.