Rialto Markets, a broker-dealer specializing in securities crowdfunding, has submitted a Form-C to the Securities and Exchange Commission (SEC), signaling its intention to raise funds through the Reg CF securities exemption. This move comes as Rialto plans to list its security offering on Netcapital, a regulated Funding Portal.
Under the Reg CF framework, Rialto can raise up to $5 million in an online sale of securities, which will be accessible to both accredited and non-accredited investors.
Rialto Markets offers a range of services to private firms, including investment crowdfunding under Reg CF, Reg D 506c, and Reg A+. Additionally, the company provides compliance services and enables secondary trading through its Alternative Trading System (ATS).
According to the offering document, Rialto aims to raise up to $522,480 through Series A-2 Preferred Units, with a Target Offering Amount set at $10,000.
In addition to the Reg CF offering, Rialto is also pursuing a concurrent Reg D offering exclusively for accredited investors. This strategy is commonly employed to expand the pool of potential investors. The offering document states that the Reg D offering will be made at the same price per share as the Reg CF offering.
In previous fundraising rounds, Rialto successfully raised over $3 million in a Reg D offering in 2021. In 2022, the company raised approximately $164,000 through a Reg CF offering, along with a Reg D offering that generated around $2.5 million.
Rialto has reported a significant increase in net revenues for the year ending June 30, 2022, with figures reaching $741,235. This marks a notable 339% surge from the $168,810 reported in 2021.
However, like many early-stage firms, Rialto is currently operating at a loss. The company disclosed a net income of $8,539,957 for fiscal 2022, alongside a net loss of $3,854,320 in fiscal 2021.
While the offering does not appear to be live at this time, the SEC filing serves as a notice document, which suggests that it will become available on Netcapital in the near future.
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