Wearable Camera Maker iON Worldwide Files for Bankruptcy
June 27 2016 - 3:20PM
Dow Jones News
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)
Copyright (c) 2016 Dow Jones & Company, Inc.
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