Raleigh startup WaiOut, which has developed an automated cell phone contract breaking application (see Cellbreaker.com) has raised $125,000 in debt financing according to a regulatory filing.

The company’s cell breaker Web site promises to get users out of their cell phone contracts and switch them to a new carrier in seven days. The product launched officially in June, although the brand launched in July 2013.

CEO Jon Colgan wrote on the site that WaiOut, the parent firm, wants to raise $500,000. The company won a $46,000 NC IDEA grant in May 2014.

“It shouldn’t cost hundreds of dollars and dozens of man-hours to end a contract. We make it easy to get out of your cell phone contract,” Colgan wrote.

Next year, Colgan added, WaiOut intends to launch new brands specific to TV, internet, and gym contracts, and these will integrate with one another through WaiOut’s free automated contract-analysis service.

Colgan, who appeared on ABC World News Sept. 14, 2014 as a contract-breaking expert, said on the show that a family could save up to $2,000 in the first year.

How it works

Colgan explained the cell breaker process this way:

“Let’s say somebody wants to get out of a cell phone contract and a cable contract. Instead of users having to sign up to break each different type of contract with each different Breaker brand, uploading their information each time, WaiOut will automatically pull all of the user’s account information from each of these services, once per month. Then WaiOut runs a monthly analysis on each contract, and email users the results, highlighting any potential breaches by the service provider.”

According to the filing with the U.S. Securities and Exchange Commission, $15,300 is slated for management compensation.

WRAL has contacted Colgan for an interview. Look for an update later today.

SEC filing: http://www.sec.gov/Archives/edgar/data/1647264/000164726415000001/xslFormDX01/primary_doc.xml