Hoana Medical Inc., a Honolulu-based medical device firm, filed for Chapter 11 bankruptcy reorganization this week after financial setbacks stemming from the market crash of 2008.

The company found success as the maker of a system that tracks vital signs without connecting anything to a patient. The firm lists assets of between $100,001 and $500,000 and debts of $1,000,001 to $10 million.

“We have taken this difficult, but necessary step to provide adequate time to complete ongoing discussions and processes with our lenders to restructure our balance sheet and create a strong financial foundation for the future,” said Edward Chen, Hoana Medical’s president and chief operating officer. “We continue to push forward technology improvements and manage operations without interruption.”

An investment group that was supposed to give the company a $30 million cash infusion “pulled out at the very last minute,” he said. “When it got pulled, we basically had to re-evaluate our plan to move forward.”

In the meantime Hoana Medical borrowed funds to keep the lights on and made improvements to its signature technology, called the LifeBed Patient Vigilance System, which uses sensors embedded under a mattress coverlet to monitor heart and respiratory rates through bed linens and clothing. The system alerts hospital workers via a call system if a patient’s heart or respiratory rate goes outside normal limits.

“Our goal was to really make a better version of our original system,” Chen said. “We’ve actually brought down the cost of manufacturing and added increased connectivity capabilities. Originally we were focused on the medical environment. As wearables and (health) data has become everywhere, really, new interest has occurred recently.”

Hoana Medical, a privately held company established in 2001, said its systems have been used by more than 100,000 acute-care hospital patients in facilities across the United States and is responsible for nearly 4,000 interventions.

After emerging from bankruptcy, the company hopes to expand its technology to new markets and is developing a lower-cost home version.

“We have technology you can put on basically anything,” Chen said. “We can start to monitor a person’s vital information through a piece of furniture now.”

The firm has fewer than 50 unsecured creditors, but it estimates there will be no funds available to fully repay its financial obligations.

“The company is committed to protecting the value of its assets in the short run and maximizing long-term asset value on behalf of all stakeholders,” Chen said. “If we didn’t think we had a future, we wouldn’t be fighting to keep the company going. We do have a lot of prospects. Obviously, we can’t pay everyone off to the full capacity. But we’re figuring out how we can make everyone as whole as possible through the process.”