Local wearable tech company Wisewear is liquidating its assets and intellectual property after filing for bankruptcy last week in the United States Bankruptcy Court, Western District of Texas.
Court hearings were held Thursday and heard by Judge Ronald B. King.
In legal documents filed in connection with the bankruptcy case, the company claims an Apple Watch update rendered one of its products unusable. Because of that, a recent Series A funding round in which Wisewear needed to obtain $2 million in capital was unsuccessful, according to a motion filed in the case.
Wisewear, founded in part by CEO Jerry Wilmink, filed for Chapter 11 bankruptcy, sometimes referred to as reorganization bankruptcy. In Chapter 11 proceedings, a company outlines a plan for reorganizing the business to keep it afloat and pay off creditors over time.
Wilmink and the lead attorney in the case, Ron Smeberg, did not respond to the Rivard Report‘s multiple requests for comment.
In addition to liquidating its assets, the company is suspending payment of salaries after filing the petition.
Wisewear’s products combine functions one might find in products like the Apple Watch or Fitbit into fashion-forward bracelets, dubbed “smart jewelry.” Such functions include a panic button, fitness tracker, and mobile notifications.
The company sells its wearable tech for around $300 a piece at retailers such as Saks Fifth Avenue, Macy’s, and Nordstrom.
Wisewear recently acquired and merged with Reserve Strap, which has patented technology that straps to an Apple Watch and serves as an external battery for the device. In a recent operating system update, Apple disabled the service port through which the Reserve Strap battery charged – rendering the product unusable.
Reserve Strap had received more than $174,000 for pre-orders of its Apple Watch battery band from more than 500 customers, according to court documents.
Wisewear has a list of 822 creditors. The highest 20 claims total more than $3 million in debt, records show.
Its motion to begin bankruptcy proceedings will be heard in court March 22.