Rialto Markets, a broker-dealer active in the securities crowdfunding sector, has filed a Form-C with the Securities and Exchange Commission (SEC) indicating its intent to raise money utilizing the Reg CF securities exemption. The document indicates that Rialto will list its security offering on Netcapital, a regulated Funding Portal.
An issuer using Reg CF may raise up to $5 million in an online sale of securities available to both accredited and nonaccredited investors.
Rialto Markets provides a portfolio of services to private firms, including investment crowdfunding under Reg CF, Reg D 506c and Reg A+. Rialto can also provide compliance services along with secondary trading under its ATS (Alternative Trading System).
According to the offering document, Rialto aims to raise up to $522,480 in Series A-2 Preferred Units with a Target Offering Amount of $10,000.
A concurrent Reg D offering is also being pursued for accredited investors only. This is a typical strategy for issuers looking to broaden its reach of investors. The offering document indicates the Reg D offering will be made at the same price per share as the Reg CF offering.
In 2021, Rialto raised just over $3 million in a Reg D offering. In 2022, Rialto raised about $164,000 in a Reg CF offering, along with a Reg D offering that raised about $2.5 million.
Rialto reports that its net revenues for the year ended June 30, 2022, were $741,235, a 339% increase from $168,810 in 2021.
As with many early-stage firms, Rialto is losing money. The company reports that its net income for fiscal 2022 was $8,539,957, and a net loss of $3,854,320 in fiscal 2021.
The offering does not appear to be live as of today, but since the filing with the SEC is a notice document, it should be available on Netcapital soon.
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