OK, I called Tag yesterday and here is what you need to do....
1. Hard reset your watch, to factory settings
2. Delete the Bluetooth profile from your Bluetooth menu on your phone. (forget the device)
3. Upgrade the iOS in your iPhone to the newest version.
4. Delete the android wear watch app from your iphone, then redownload it again.
5. Start the pairing process FRESH, like the first time when you bought the watch.
You have to erase all the of Bluetooth pairing from both the phone and the watch. Once you do that, redownload, repair and then it will work. Took me just a couple of minutes to do it all.