GPRO GoPro Inc

ION Worldwide Inc., a maker of wearable digital recorders that competes with industry leader GoPro Inc., has filed for bankruptcy after seeing its revenue drop significantly last year.

The New Jersey company has already reached a restructuring support agreement with one of its lenders, which would cut more than $15 million in debt from its balance sheet and allow iON to stay in business.

ION Chief Financial Officer Chris Oatway said in court papers filed last week that the cash-starved company has been mired with problems, including disputes with one of its licensed brands and an intellectual-property lawsuit with GoPro.

ION makes a line of wearable cameras in a variety of sizes, home-security products and dash cams, among other products, under the iON and Contour brands.

ION saw its revenue drop to $12.4 million in 2015 from more than $25 million in 2014, Mr. Oatway said in court papers. The company sought to cut costs, and it laid off employees, but that wasn't enough to stave off bankruptcy.

Litigation involving the company has also cut into iON's bottom line. The company filed a patent lawsuit against GoPro late last year. And though the lawsuit is "likely years from producing any result," the company will be incurring high legal costs, Mr. Oatway said in court papers.

Contour LLC also sued iON earlier this year in a bid to get out of its licensing agreement. The two companies have since reached an agreement that allows iON to continue selling Contour products, according to court papers.

ION expects to keep its business going and said in court papers that it will launch a new 4K camera by the end of the summer, which the company says will be priced to compete with GoPro.

ION's debt load includes roughly $5.4 million in secured debt owed to supplier and manufacturer Skylight Holdings Ltd., which has agreed to provide a $1.5 million bankruptcy loan to the company.

In addition, iON's debt includes a $4.6 million secured convertible promissory note and about $12.6 million in trade and other unsecured debt. ION also owes approximately $7.8 million to affiliate World Wide Licenses Ltd., which owns the trademarks and intellectual property related to iON's camera designs. World Wide isn't under bankruptcy protection.

ION will seek permission to use its bankruptcy loan and pay employee wages at a hearing Tuesday in the U.S. Bankruptcy Court in Wilmington, Del.

Write to Lillian Rizzo at Lillian.Rizzo@wsj.com

(END) Dow Jones Newswires

June 27, 2016 15:05 ET (19:05 GMT)

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