UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2009
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission file number 000-53592
ALTO GROUP HOLDINGS INC.
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
620 Newport Ctr Drive, Suite 570
Newport Beach, California 92660
(Address of principal executive offices, including zip code)
949-644-1433
(Registrant's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the last 90 days. YES [X] NO [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer, "accelerated filer,"
"non-accelerated filer," and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). YES [ ] NO [X]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 9,960,000 as of October 20, 2009.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Alto Group Holdings Inc.
(An Exploration Stage Company)
August 31, 2009
Index
-----
FINANCIAL STATEMENTS
Balance Sheets 3
Statements of Operations 4
Statements of Stockholders' Equity (Deficit) 5
Statements of Cash Flows 6
Notes to the Financial Statements 7
2
Alto Group Holdings Inc.
(An Exploration Stage Company)
Balance Sheets
(Expressed in US Dollars)
--------------------------------------------------------------------------------
August 31, November 30,
2009 2008
-------- --------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 674 $ 1,110
-------- --------
TOTAL CURRENT ASSETS 674 1,110
Mineral property acquisition costs, less reserve
for impairment of $6,500 -- --
-------- --------
TOTAL ASSETS $ 674 $ 1,110
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 5,286 $ 3,085
Due to related party 28,007 10,886
-------- --------
TOTAL CURRENT LIABILITIES 33,293 13,971
-------- --------
STOCKHOLDERS' DEFICIT
Preferred Stock, $0.00001 par value;
authorized 100,000,000 shares, none issued and outstanding -- --
Common Stock, $0.00001 par value;
authorized 100,000,000 shares, issued and outstanding 9,960,000 shares 100 100
Additional paid-in capital 64,700 57,500
Deficit accumulated during the exploration stage (97,419) (70,461)
-------- --------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (32,619) (12,861)
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 674 $ 1,110
======== ========
3
Alto Group Holdings Inc.
(An Exploration Stage Company)
Statements of Operations
(Expressed in US Dollars)
(Unaudited)
--------------------------------------------------------------------------------
Accumulated from
For the three For the three For the nine For the nine September 21, 2007
months ended months ended months ended months ended (Date of Inception) to
August 31, August 31, August 31, August 31, August 31,
2009 2008 2009 2008 2009
---------- ---------- ---------- ---------- ----------
REVENUE $ -- $ -- $ -- $ -- $ --
---------- ---------- ---------- ---------- ----------
COSTS AND EXPENSES
Exploration and carrying costs -- 125 -- 2,625 2,625
General and administrative 4,811 4,610 19,758 39,522 69,094
Donated services 2,400 2,400 7,200 7,200 19,200
Impairment of mineral property
acquisition costs -- -- -- 6,500 6,500
---------- ---------- ---------- ---------- ----------
Total costs and expenses 7,211 7,135 26,958 55,847 97,419
---------- ---------- ---------- ---------- ----------
NET LOSS $ (7,211) $ (7,135) $ (26,958) $ (55,847) $ (97,419)
========== ========== ========== ========== ==========
NET LOSS PER SHARE
Basic and diluted $ (0.00) $ (0.00) $ (0.00) $ (0.01)
========== ========== ========== ==========
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic and Diluted 9,960,000 9,960,000 9,960,000 9,960,000
========== ========== ========== ==========
4
Alto Group Holdings Inc.
(An Exploration Stage Company)
Statements of Stockholders' Equity (Deficit)
For the Period September 21, 2007 (Inception) to August 31, 2009
(Expressed in US Dollars)
--------------------------------------------------------------------------------
Deficit
Common Stock, $0.00001 Accumulated
par value Additional During the
---------------------- Paid-in Subscriptions Exploration
Shares Amount Capital Receivable Stage Total
------ ------ ------- ---------- ----- -----
Common shares sold for cash at
$0.001 per share 6,000,000 $ 60 $ 5,940 $ -- $ -- $ 6,000
Common shares sold for cash at
$0.01 per share 3,960,000 40 39,560 (4,500) -- 35,100
Donated services and expenses -- -- 2,400 -- -- 2,400
Net Loss -- -- -- -- (5,772) (5,772)
--------- ------ -------- ------- -------- --------
Balance - November 30, 2007 9,960,000 $ 100 $ 47,900 $(4,500) $ (5,772) $ 37,728
Common stock subscriptions collected -- -- -- 4,500 -- 4,500
Donated services and expenses -- -- 9,600 -- -- 9,600
Net Loss -- -- -- -- (64,689) (64,689)
--------- ------ -------- ------- -------- --------
Balance - November 30, 2008 9,960,000 $ 100 $ 57,500 $ -- $(70,461) $(12,861)
Unaudited:
Donated services and expenses -- -- 7,200 -- -- 7,200
Net Loss -- -- -- -- (26,958) (26,958)
--------- ------ -------- ------- -------- --------
Balance - August 31, 2009 9,960,000 $ 100 $ 64,700 $ -- $(97,419) $(32,619)
========= ====== ======== ======= ======== ========
5
Alto Group Holdings Inc.
(An Exploration Stage Company)
Statements of Cash Flows
(Expressed in US Dollars)
(Unaudited)
--------------------------------------------------------------------------------
Accumulated from
For the nine For the nine September 21, 2007
months ended months ended (Date of Inception) to
August 31, August 31, August 31,
2009 2008 2009
-------- -------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(26,958) $(55,847) $(97,419)
Adjustments to reconcile net loss to net cash
provided by (used for) operating activities
Donated services and expenses 7,200 7,200 19,200
Impairment of mineral property acquisition costs -- 6,500 6,500
Change in operating assets and liabilities:
Negative bank account balance -- 440 --
Accounts payable and accrued liabilities 2,201 812 5,286
-------- -------- --------
NET CASH USED FOR OPERATING ACTIVITIES (17,557) (40,895) (66,433)
-------- -------- --------
INVESTING ACTIVITIES
Mineral property acquisition costs -- (6,500) (6,500)
-------- -------- --------
NET CASH USED FOR INVESTING ACTIVITIES -- (6,500) (6,500)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in due to related party 17,121 2,870 28,007
Proceeds from sale of common stock -- 4,500 45,600
-------- -------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 17,121 7,370 73,607
-------- -------- --------
(DECREASE) INCREASE IN CASH (436) (40,025) 674
CASH - BEGINNING OF PERIOD 1,110 40,025 --
-------- -------- --------
CASH - END OF PERIOD $ 674 $ -- $ 674
======== ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid $ -- $ -- $ --
-------- -------- --------
Income taxes paid $ -- $ -- $ --
-------- -------- --------
6
Alto Group Holdings Inc.
NOTES TO FINANCIAL STATEMENTS
(An Exploration Stage Company)
August 31, 2009
--------------------------------------------------------------------------------
1. Nature of Operations
Alto Group Holdings Inc. (the "Company") was incorporated in the State of Nevada
on September 21, 2007. The Company is an Exploration Stage Company, as defined
by Statement of Financial Accounting Standards ("SFAS") No.7 "ACCOUNTING AND
REPORTING FOR DEVELOPMENT STAGE ENTERPRISES". The Company's principal business
is the acquisition and exploration of mineral resources. The Company has not
presently determined whether its properties contain mineral reserves that are
economically recoverable.
On March 21, 2008, the Company filed a Registration Statement on Form S-1 with
the United States Securities and Exchange Commission ("SEC") to register
3,960,000 shares of common stock for resale by existing stockholders of the
Company at $0.01 per share until the shares are quoted on the OTC Bulletin
Board, and thereafter at prevailing market prices. On April 9, 2008, the
Registration Statement was declared effective by the SEC. The Company will not
receive any proceeds from the resale of shares of common stock by the
shareholders.
2. Summary of Significant Accounting Policies
a) Interim Financial Information
The unaudited financial statements as of August 31, 2009 and for the three and
nine months then ended and for the period September 21, 2007 (inception) to
August 31, 2009 have been prepared in accordance with accounting principles
generally accepted in the United States for interim financial information and
with instructions to Form 10-Q. In the opinion of management, the unaudited
financial statements have been prepared on the same basis as the annual
financial statements and reflect all adjustments, which include only normal
recurring adjustments, necessary to present fairly the financial position as of
August 31, 2009 and the results of operations and cash flows for the periods
then ended. The financial data and other information disclosed in these notes to
the interim financial statements related to these periods are unaudited. The
results for the nine month period ended August 31, 2009 is not necessarily
indicative of the results to be expected for any subsequent quarter or the
entire year ending November 30, 2009. The balance sheet at November 30, 2008 has
been derived from the audited financial statements at that date.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States have been condensed or omitted pursuant to the Securities
and Exchange Commission's rules and regulations. These unaudited financial
statements should be read in conjunction with our audited financial statements
and notes thereto for the year ended November 30, 2008 as included in our Form
10-K filed with the Securities and Exchange Commission on March 2, 2009.
7
2. Summary of Significant Accounting Policies (continued)
b) Financial Instruments
SFAS No. 157 "FAIR VALUE MEASUREMENTS" requires an entity to maximize the use of
observable inputs and minimize the use of unobservable inputs when measuring
fair value. SFAS No. 157 establishes a fair value hierarchy based on the level
of independent, objective evidence surrounding the inputs used to measure fair
value. A financial instrument's categorization within the fair value hierarchy
is based upon the lowest level of input that is significant to the fair value
measurement. SFAS No. 157 prioritizes the inputs into three levels that may be
used to measure fair value:
LEVEL 1
Level 1 applies to assets or liabilities for which there are quoted prices in
active markets for identical assets or liabilities.
LEVEL 2
Level 2 applies to assets or liabilities for which there are inputs other than
quoted prices that are observable for the asset or liability such as quoted
prices for similar assets or liabilities in active markets; quoted prices for
identical assets or liabilities in markets with insufficient volume or
infrequent transactions (less active markets); or model-derived valuations in
which significant inputs are observable or can be derived principally from, or
corroborated by, observable market data.
LEVEL 3
Level 3 applies to assets or liabilities for which there are unobservable inputs
to the valuation methodology that are significant to the measurement of the fair
value of the assets or liabilities.
The Company's financial instruments consist principally of cash, accounts
payable, and amounts due to a related party. Pursuant to SFAS No. 157, fair
value of assets and liabilities measured on a recurring basis include cash
equivalents determined based on "Level 1" inputs, which consist of quoted prices
in active markets for identical assets. The Company believes that the recorded
values of all of the other financial instruments approximate their current fair
values because of their nature and respective maturity dates or durations.
8
2. Summary of Significant Accounting Policies (continued)
c) Recently Issued Accounting Pronouncements
In June 2009, the Financial Accounting Standards Board ("FASB") issued SFAS No.
168, "THE FASB ACCOUNTING STANDARDS CODIFICATION AND THE HIERARCHY OF GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES - A REPLACEMENT OF FASB STATEMENT NO. 162". The
FASB Accounting Standards Codification ("Codification") will become the source
of authoritative U.S. generally accepted accounting principles ("GAAP")
recognized by FASB to be applied by non-governmental entities. Rules and
interpretive releases of the Securities and Exchange Commission "SEC" under
authority of federal securities laws are also sources of authoritative GAAP for
SEC registrants. On the effective date of this statement, the Codification will
supersede all then-existing non-SEC accounting and reporting standards. All
other non-grandfathered non-SEC accounting literature not included in the
Codification will become non-authoritative. This statement is effective for
financial statements issued for interim and annual periods ending after
September 30, 2009. The adoption of this statement is not expected to have a
material effect on the Company's financial statements.
In June 2009, the FASB issued SFAS No. 167, "AMENDMENTS TO FASB INTERPRETATION
NO. 46(R)". The objective of this statement is to improve financial reporting by
enterprises involved with variable interest entities. This statement addresses
(1) the effects on certain provisions of FASB Interpretation No. 46 (revised
December 2003), "CONSOLIDATION OF VARIABLE INTEREST ENTITIES", as a result of
the elimination of the qualifying special-purpose entity concept in SFAS No.
166, "ACCOUNTING FOR TRANSFERS OF FINANCIAL ASSETS", and (2) concern about the
application of certain key provisions of FASB Interpretation No. 46(R),
including those in which the accounting and disclosures under the Interpretation
do not always provide timely and useful information about an enterprise's
involvement in a variable interest entity. This statement is effective as of the
beginning of each reporting entity's first annual reporting period that begins
after November 15, 2009, for interim periods within that first annual reporting
period, and for interim and annual reporting periods thereafter. Earlier
application is prohibited. The adoption of this statement is not expected to
have a material effect on the Company's financial statements.
In June 2009, the FASB issued SFAS No. 166, "ACCOUNTING FOR TRANSFERS OF
FINANCIAL ASSETS - AN AMENDMENT OF FASB NO. 140". The object of this statement
is to improve the relevance, representational faithfulness, and comparability of
the information that a reporting entity provides in its financial statements
about a transfer of financial assets; the effects of a transfer on its financial
position, financial performance, and cash flows; and a transferor's continuing
involvement, if any, in transferred financial assets. This statement addresses
(1) practices that have developed since the issuance of SFAS No. 140,
"ACCOUNTING FOR TRANSFERS AND SERVICING OF FINANCIAL ASSETS AND EXTINGUISHMENTS
OF LIABILITIES", that are not consistent with the original intent and key
requirements of that statement and (2) concerns of financial statement users
that many of the financial assets (and related obligations) that have been
de-recognized should continue to be reported in the financial statements of
transferors. SFAS No. 166 must be applied as of the beginning of each reporting
entity's first annual reporting period that begins after November 15, 2009, for
interim periods within that first annual reporting period and for interim and
annual reporting periods thereafter. Earlier application is prohibited. This
statement must be applied to transfers occurring on or after the effective date.
Additionally, on and after the effective date, the concept of a qualifying
special-purpose entity is no longer relevant for accounting purposes. The
disclosure provisions of this statement should be applied to transfers that
occurred both before and after the effective date of this statement. The
adoption of this statement is not expected to have a material effect on the
Company's financial statements.
9
2. Summary of Significant Accounting Policies (continued)
c) Recently Issued Accounting Pronouncements (continued)
On April 13, 2009, the SEC Office of the Chief Accountant and Division of
Corporation Finance issued SEC Staff Accounting Bulletin 111 ("SAB 111"). SAB
111 amends and replaces SAB Topic 5M, "MISCELLANEOUS ACCOUNTING--OTHER THAN
TEMPORARY IMPAIRMENT OF CERTAIN INVESTMENTS IN EQUITY SECURITIES" to reflect FSP
FAS 115-2 and FAS 124-2. This FSP provides guidance for assessing whether an
impairment of a debt security is other than temporary, as well as how such
impairments are presented and disclosed in the financial statements. The amended
SAB Topic 5M maintains the prior staff views related to equity securities but
has been amended to exclude debt securities from its scope. SAB 111 is effective
upon the adoption of FSP FAS 115-2 and FAS 124-2. The Company is currently
evaluating the impact, if any, that the adoption of SAB 111 will have on the
financial statements of the Company.
In April 2009 the FASB issued FSP No. 141R-1 "ACCOUNTING FOR ASSETS ACQUIRED AND
LIABILITIES ASSUMED IN A BUSINESS COMBINATION THAT ARISE FROM CONTINGENCIES", or
FSP 141R-1. FSP 141R-1 amends the provisions in Statement 141R for the initial
recognition and measurement, subsequent measurement and accounting, and
disclosures for assets and liabilities arising from contingencies in business
combinations. The FSP eliminates the distinction between contractual and
non-contractual contingencies, including the initial recognition and measurement
criteria in Statement 141R and instead carries forward most of the provisions in
SFAS 141 for acquired contingencies. FSP 141R-1 is effective for contingent
assets and contingent liabilities acquired in business combinations for which
the acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. We expect FSP 141R-1 will have
an impact on our financial statements, but the nature and magnitude of the
specific effects will depend upon the nature, term and size of the acquired
contingencies. The effect of adopting FSP 141R-1 will depend upon the nature,
terms and size of any acquired contingencies consummated after the effective
date of December 1, 2009.
On April 9, 2009, the FASB issued three FSPs intended to provide additional
application guidance and enhanced disclosures regarding fair value measurements
and other-than-temporary impairments of securities.
FSP FAS 157-4, "DETERMINING FAIR VALUE WHEN THE VOLUME AND LEVEL OF ACTIVITY FOR
THE ASSET OR LIABILITY HAVE SIGNIFICANTLY DECREASED AND IDENTIFYING TRANSACTIONS
THAT ARE NOT ORDERLY," provides guidelines for making fair value measurements
more consistent with the principles presented in FASB Statement No. 157, "FAIR
VALUE MEASUREMENTS." FSP FAS 157-4 must be applied prospectively and
retrospective application is not permitted. FSP FAS 157-4 is effective for
interim and annual periods ending after June 15, 2009, with early adoption
permitted for periods ending after March 15, 2009. An entity early adopting FSP
FAS 157-4 must also early adopt FSP FAS 115-2 and FAS 124-2.
10
2. Summary of Significant Accounting Policies (continued)
c) Recently Issued Accounting Pronouncements (continued)
FSP FAS 115-2 and FAS 124-2, "RECOGNITION AND PRESENTATION OF
OTHER-THAN-TEMPORARY IMPAIRMENTS," provides additional guidance designed to
create greater clarity and consistency in accounting for and presenting
impairment losses on debt securities. FSP FAS 115-2 and FAS 124-2 are effective
for interim and annual periods ending after June 15, 2009, with early adoption
permitted for periods ending after March 15, 2009. An entity may early adopt
this FSP only if it also elects to early adopt FSP FAS 157-4.
FSP FAS 107-1 and APB 28-1, "INTERIM DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL
INSTRUMENTS," enhance consistency in financial reporting by increasing the
frequency of fair value disclosures. FSP 107-1 and APB 28-1 are effective for
interim periods ending after June 15, 2009, with early adoption permitted for
periods ending after March 15, 2009. However, an entity may early adopt these
interim fair value disclosure requirements only if it also elects to early adopt
FSP FAS 157-4 and FSP FAS 115-2 and FAS 124-2.
The Company is currently evaluating the impact, if any, that the adoption of
these FSPs will have on its financial statements.
In June 2008, the FASB issued FASB Staff Position EITF 03-6-1, "DETERMINING
WHETHER INSTRUMENTS GRANTED IN SHARE-BASED PAYMENT TRANSACTIONS ARE
PARTICIPATING SECURITIES". FSP EITF 03-6-1 addresses whether instruments granted
in share-based payment transactions are participating securities prior to
vesting, and therefore need to be included in the computation of earnings per
share under the two-class method as described in FASB SFA No. 128, "EARNINGS PER
SHARE." FSP EITF 03-6-1 is effective for financial statements issued for fiscal
years beginning on or after December 15, 2008 and earlier adoption is
prohibited. The adoption of this statement is not expected to have a material
effect on the Company's financial statements.
3. Related Party Balances/Transactions
a) During the nine-month period ended August 31, 2009, the Company recognized
a total of $7,200 (August 31, 2008 - $7,200) for donated management
services at $800 per month provided by a former Director of the Company.
b) At August 31, 2009, the Company is indebted to a former director of the
Company for $28,007 (November 30, 2008 - $10,886) representing advances and
expenditures paid on behalf of the Company. This amount is unsecured,
non-interest bearing, due on demand and has no specific terms of repayment.
4. Mineral Property
On December 14, 2007, the Company paid $6,500 for a 100% interest in a mineral
claim located in Clark County, Nevada and $2,500 for a geological report
conducted on the respective mining claim. In August 2008, an annual fee of $125
was paid for the claim. The cost of the mineral property was initially
capitalized. At February 28, 2008, the Company recognized an impairment loss of
$6,500, as it had not yet been determined whether there are proven or probable
reserves on the property.
11
5. Common Stock
a) On September 21, 2007, the Company issued 6,000,000 shares of common stock
at $0.001 per share to the former sole Director of the Company for cash
proceeds of $6,000.
b) During the period ended November 30, 2007, the Company accepted stock
subscriptions for 3,960,000 shares of common stock at $0.01 per share or
$39,600 total. $35,100 was collected by November 30, 2007 and $4,500 was
collected in December 2007.
6. Income Taxes
A reconciliation of the expected income tax recovery computed by applying the
statutory United States federal income tax rate of 34% to income (loss) before
taxes follows:
For the nine For the nine September 21, 2007
months ended months ended (Date of Inception) to
August 31, August 31, August 31,
2009 2008 2009
-------- -------- --------
Income tax recovery at statutory rate $ 9,166 $ 19,546 $ 33,122
Non-deductible donated services (2,448) (2,520) (6,528)
Valuation allowance change (6,718) (17,026) (26,594)
-------- -------- --------
Provision for income taxes $ -- $ -- $ --
======== ======== ========
The components of the net deferred tax asset at August 31, 2009 and November 30,
2008 consist of:
August 31, November 30,
2009 2008
-------- --------
Net operating loss carry-forward $ 26,594 $ 19,877
Valuation allowance (26,594) (19,877)
-------- --------
Net deferred income tax asset $ -- $ --
======== ========
12
6. Income Tax (continued)
Potential benefits of income taxes are not recognized in the accounts until
realization is more likely than not. At August 31, 2009, the Company has a net
operating loss carry-forward of $78,219 which expires $3,372 in 2027, $55,089 in
2028 and $19,758 in 2029. Pursuant to SFAS No. 109 the Company is required to
compute tax asset benefits for net operating losses carried forward. Potential
benefit of net operating losses have not been recognized in these financial
statements because the Company cannot be assured it is more likely than not it
will utilize the net operating losses carried forward in future years.
Current United States income tax laws limit the amount of loss available to be
offset against future taxable income when a substantial change in ownership
occurs. Therefore, the amount available to offset future taxable income may be
limited.
7. Subsequent Events
a) On September 15, 2009, DSC, Inc., an affiliate of Mr. Dale Paisley, agreed
to advance $50,000 to Mateo Mining, Inc. ("Mateo") and $10,000 to an
attorney on behalf of the Company. In exchange, the Company issued DSC,
Inc. a $60,000 8% Secured Convertible Debenture (the "Debenture"). The
Debenture is due on or before September 14, 2011 and is convertible in
whole or in part into shares of common stock at a conversion price of $4.50
per share.
b) Also on September 15, 2009, the former sole director of the Company forgave
the $28,007 balance due him.
c) On September 29, 2009, the Company entered into a Letter of Intent ("LOI")
with Mateo. Pursuant to the LOI, the Company is to acquire all the rights
and assets of Mateo. The Final Definitive Agreement is to be drafted by the
parties but has not been completed yet.
d) Effective as of October 9, 2009, Mr. Dale Paisley was appointed as a Board
of Director of the Company and Mr. Lee Rice was appointed as President and
CEO of the Company.
e) The Company has evaluated subsequent events through the filing date of this
Form 10-Q and has determined that there were no additional subsequent
events to recognize or disclose in these financial statements.
13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
This section of this report includes a number of forward-looking statements
that reflect our current views with respect to future events and financial
performance. Forward-looking statements are often identified by words like:
believe, expect, estimate, anticipate, intend, project and similar expressions,
or words which, by their nature, refer to future events. You should not place
undue certainty on these forward-looking statements, which apply only as of the
date of this report. These forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical results or our predictions.
PLAN OF OPERATION
We are a start-up, exploration stage corporation and have not yet generated
or realized any revenues from our business activities.
Our auditors have issued a going concern opinion. This means that there is
substantial doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay our bills. This is
because we have not generated any revenues and no revenues are anticipated until
we begin removing and selling minerals. Our success or failure will be
determined by the success of exploration activities and commercial viability of
extraction and sales of minerals.
To meet our need for cash we must raise money in order to operate. If we
find mineralized material and it is economically feasible to remove the
mineralized material, we will have to raise additional money through a
subsequent private placement, public offering or through loans. We do not
presently have enough money to conduct exploration activities. Currently we have
to find alternative sources of capital, like a second public offering, a private
placement of securities, or loans from our directors, officers or others.
Our officers and directors may be unwilling to make any commitment to loan
us any money except to cover expenses relating to reclamation if commercially
viable minerals are not found in our claim areas. At the present time, we have
not made any arrangements to raise additional cash, though management is
negotiating with potential investors. If we can't raise additional money, we
will cease activities entirely.
We have the right to conduct exploration activities on two properties. Even
if we complete our current exploration program and it is successful in
identifying a mineral deposit, we will have to spend substantial funds on
further drilling and engineering studies before we will know if we have a
commercially viable mineral deposit - a `reserve'.
We will be conducting research in the form of exploration of the property
subject to receipt of additional capital. Our exploration program is explained
in as much detail as possible in the business section of this report. We will
not buy any equipment until have located a reserve and we have determined it is
economical to extract the minerals from the land.
14
We do not intend to interest other companies in the property if we find
mineralized materials. We intend to try to develop the reserves ourselves.
We do not intend to hire additional employees at this time. All of the work
on the property will be conducted by unaffiliated independent contractors that
we will hire. The independent contractors will be responsible for surveying,
geology, engineering, exploration, and excavation. The geologists will evaluate
the information derived from the exploration and excavation and the engineers
will advise us on the economic feasibility of removing the mineralized material.
We intend to seek alternative opportunities in order to potentially enhance
shareholder value. Management intends to review other potential assets for
acquisition.
SUBSEQUENT ACTIONS AND RECENT EVENTS:
On July 31, 2009, the Board of Directors elected Natalie Bannister to the
Board of Directors, and appointed her Chairman of the Board of Directors. On the
same date, the Board accepted the resignation of Tareq Hinawy from the Board of
Directors, and the Board accepted Mr. Hinawy's resignation from all offices
formerly held with the corporation. The Board of Directors then elected Natalie
Bannister as Chief Executive Officer, Chief Financial Officer, and Secretary of
the Corporation. With this action, Ms Bannister became the sole officer and sole
director of the Company. The Board of Directors then acted to move the principle
corporate office of the Company to 620 Newport Ctr Drive Suite 570 located in
Newport Beach, California 92660. The new telephone number is 949-644-1433.
On September 15, 2009, a credit-line debt instrument in the amount of
$60,000 was granted to Alto Group Holdings, Inc. by DSC Inc., a Nevada
Corporation, owned and operated by Dale Paisley, a Los Angeles, California
resident. The interest rate is 8% per year; the loan is due in 2 years and is
convertible at $4.50 per share.
On September 29, 2009, Alto Group Holdings entered into an agreement with
Mateo Mining, Inc. (a Delaware Corporation) in which Alto Group Holdings shall
acquire all the rights and assets of Mateo Mining, Inc. for a price of
$5,000,000. An amount of $115,000.00 is to be paid as a deposit, of which Mateo
was paid $25,000 on October 7, 2009 and $25,000 on October, 21, 2009 and $65,000
is planned for October 29, 2009. These funds were paid directly to Mateo from a
company owned by Mr. Dale Paisley (Board Member), and is classified as a loan
from that Company to ALTO.
On October 7, 2009, The Company also filed a Form 14A for the purpose of
forward splitting the common stock of the Company on an 8:1 basis. These filings
and the disclosure items thereon are incorporated herein by reference.
On October 9, 2009, the Board of Directors of Alto Group Holdings elected
Mr. Dale Paisley to the Board of Directors and also elected Mr. Lee Rice as
President and CEO. These are more fully described in a Form 8K filed on October
13, 2009.
RESULTS OF OPERATIONS
We conducted no operations and have been actively seeking other mineral
properties to conduct exploration on.
MILESTONES
The milestones are as follows:
1. Raise additional capital.
2. Retain our consultant to manage the exploration of the Ghana property
at a maximum cost of $25,000.
We have no money at the present time and cannot operate until we raise
additional capital.
15
LIMITED OPERATING HISTORY; NEED FOR ADDITIONAL CAPITAL
There is no historical financial information about us upon which to base an
evaluation of our performance. We are an exploration stage corporation and have
not generated any revenues from activities. We cannot guarantee we will be
successful in our business activities. Our business is subject to risks inherent
in the establishment of a new business enterprise, including limited capital
resources, possible delays in the exploration of our properties, and possible
cost overruns due to price and cost increases in services.
To become profitable and competitive, we have to conduct research and
exploration of the property before we start production of any minerals we may
find. We are seeking additional equity financing to provide for the capital
required to implement our research and exploration phases.
We have no assurance that future financing will be available to us on
acceptable terms. If financing is not available on satisfactory terms, we may be
unable to continue, develop or expand our operations. Equity financing could
result in additional dilution to existing shareholders.
LIQUIDITY AND CAPITAL RESOURCES
Since inception, we have issued 9,960,000 shares of our common stock and
received $45,600.
As of the date of this report, we appear to be insolvent and it appears we
do not have capital to operate, but our officers and directors will be injecting
more funds into the Company to keep it operational.
In September 2007, we issued 6,000,000 shares of common stock to our former
sole officer and director, Tareq Hinawy, pursuant to the exemption from
registration contained in Regulation S of the Securities Act of 1933. The
purchase price of the shares was $6,000. This was accounted for as an
acquisition of shares. The company was relieved of any monies owed to Mr. Hinawy
at his resignation on July 31, 2009.
In December 2007, we issued 3,960,000 shares of common stock to 44
individuals in consideration of $39,600. As of August 30, 2009, our total assets
were $674 and our total liabilities were $33,293,.
RECENT ACCOUNTING PRONOUNCEMENTS
In December 2007, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements -
An amendment of ARB No. 51".SFAS 160 requires companies with noncontrolling
interests to disclose such interests clearly as a portion of equity but separate
from the parent's equity. The noncontrolling interest's portion of net income
must also be clearly presented on the Income Statement. SFAS 160 is effective
for financial statements issued for fiscal years beginning after December 15,
2008. The adoption of this statement is not expected to have a material effect
on the Company's future financial position or results of operations.
16
In December 2007, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 141,(revised 2007), "Business Combinations". SFAS 141 (R) applies the
acquisition method of accounting for business combinations established in SFAS
141 to all acquisitions where the acquirer gains a controlling interest,
regardless of whether consideration was exchanged. Consistent with SFAS 141,
SFAS 141 (R) requires the acquirer to fair value the assets and liabilities of
the acquiree and record goodwill on bargain purchases, with main difference the
application to all acquisitions where control is achieved. SFAS 141 (R) is
effective for financial statements issued for fiscal years beginning after
December 15, 2008. The adoption of this statement is not expected to have a
material effect on the Company's future financial position or results of
operations.
In August 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities". SFAS No. 159 permits entities to
choose to measure many financial instruments and certain other items at fair
value that are not currently required to be measured at fair value. The
objective is to improve financial reporting by providing entities with the
opportunity to mitigate volatility in reported earnings caused by measuring
related assets and liabilities differently without having to apply complex hedge
accounting provisions. SFAS No. 159 also establishes presentation and disclosure
requirements designed to facilitate comparisons between entities that choose
different measurement attributes for similar types of assets and liabilities.
SFAS No. 159 is effective for fiscal years beginning after November 15, 2007.
The Company has not yet determined whether it will elect the fair value option
for any of its financial instruments.
In March 2008, the FASB issued FASB Statement No. 161 ("SFAS 161 "),
"Disclosures about Derivative Instruments and Hedging Activities". SFAS 161
requires companies with derivative instruments to disclose information that
should enable financial-statement users to understand how and why a company uses
derivative instruments, how derivative instruments and related hedged items are
accounted for under FASB Statement No. 133 "Accounting for Derivative
Instruments and Hedging Activities" and how derivative instruments and related
hedged items affect a company's financial position, financial performance and
cash flows. SFAS 161 is effective for financial statements issued for fiscal
years and interim periods beginning after November 15, 2008. The adoption of
this statement is not expected to have a material effect on the Company's future
financial position or results of operations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company as defined by Rule 12b-2 of the
Securities Exchange Act of 1934 and are not required to provide the information
under this item.
17
ITEM 4. CONTROLS AND PROCEDURES.
Under the supervision and with the participation of our management,
including the Principal Executive Officer and Principal Financial Officer, we
have evaluated the effectiveness of our disclosure controls and procedures as
required by Exchange Act Rule 13a-15(b) as of the end of the period covered by
this report. Based on that evaluation, the Principal Executive Officer and
Principal Financial Officer have concluded that these disclosure controls and
procedures are effective. There were no changes in our internal control over
financial reporting during the quarter ended August 30, 2009 that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS.
The following documents are included herein:
Exhibit No. Document Description
----------- --------------------
10.1 Letter Of Intent between Mateo Mining, Inc. and Alto Group
Holdings, Inc. dated September 29, 2009.
10.2 Promissory Note from DSC, Inc. to Alto Group Holdings, Inc.
31.1 Certification of Principal Executive Officer and Principal
Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
32.1 Certification of Chief Executive Officer and Chief Financial
Officer pursuant to section 906 of the SarbanesOxley Act of
2002.
18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following person on behalf of the Registrant
and in the capacities on this 22nd day of October, 2009.
ALTO GROUP HOLDINGS INC.
By: /s/ Natalie Bannister
----------------------------------------
Natalie Bannister, Secretary, Treasurer,
Chief Financial Officer, Principal
Accounting Officer and a member of the
Board of Directors.
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EXHIBIT INDEX
Exhibit No. Document Description
----------- --------------------
10.1 Letter Of Intent between Mateo Mining, Inc. and Alto Group
Holdings, Inc. dated September 29, 2009.
10.2 Promissory Note from DSC, Inc. to Alto Group Holdings, Inc.
31.1 Certification of Principal Executive Officer and Principal
Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
32.1 Certification of Chief Executive Officer and Chief Financial
Officer pursuant to section 906 of the SarbanesOxley Act of
2002.