Apple suggests you try to [https://support.apple.com/en-us/HT204776|force restart it] again, if that doesn't work, they want you to contact Apple Support. Some users have found it's connected to two factor authentication. You can read more on this [http://forums.macrumors.com/threads/apple-watch-red-exclamation-point-apple-watch-dead.1873459/|macrumors forum thread]. Unfortunately, there's not too much info on the subject yet, and you may have to get a replacement =C