UNITED STATES

SECURITIES AND EXCHANGE COMMISSION



Washington, D.C. 20549



FORM 10-Q



[X]	QUARTERLY REPORT UNDER SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended February 28,
2012



[   ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934



For the transition period from _______ to
______



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)                               | 27-0686507
        (I.R.S. Employer Identification No.)
|------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------
|                                                                                                                   
|715 13th Street NE, Wenatchee,
        WA 98802
        (Address of principal executive offices) (Zip
        Code)
|                                                                                                                   
|(509) 884-2218
        (Registrant's telephone number, including area
        code)                                
|                                                                                                                   
|10757 South River Front Parkway, Suite 125, South Jordan, UT 84095                                                 
|(801) 816-2520
        (Former Address if Changed Since Last Report)                                               
|                                                                                                                   

Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
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 past 90 days.	Yes [X] No [  ]



Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files). Yes [  ] No [X]



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” and “smaller reporting company” in Rule 12b-2
of the Exchange Act.



|Large accelerated filer [ ]                                             | Accelerated filer [ ]        
|----------------------------------------------------------------------- | -----------------------------
|Non-accelerated filer [ ] (Do not check if a smaller reporting company) | 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]



As of April 18, 2012 there were 4,891,756,208 shares of our common
stock issued and outstanding.




Table of Contents










TABLE OF CONTENTS





|                                                                     |  | Page No.
|-------------------------------------------------------------------- |  | --------
|PART I – FINANCIAL INFORMATION                                       |  |         
|Item 1.  Financial Statements                                        |  | 1       
|Item 2.  Management's Discussion and Analysis                        |  | 10      
|Item 3. Quantitative and Qualitative Disclosures About Market Risk   |  | 15      
|Item 4T.  Controls and Procedures                                    |  | 15      
|PART II – OTHER INFORMATION                                          |  |         
|Item 1.  Legal Proceedings                                           |  | 16      
|Item 1A.  Risk Factors                                               |  | 16      
|Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds |  | 19      
|Item 3.  Defaults Upon Senior Securities                             |  | 19      
|Item 4.  Submission of Matters to a Vote of Security Holders         |  | 19      
|Item 5.  Other Information                                           |  | 20      
|Item 6.  Exhibits                                                    |  | 20      












Table of Contents


PART I – FINANCIAL
INFORMATION



Item 1.  Financial Statements.



The Consolidated Financial Statements of the Company are prepared
as of February 29, 2012.





|CONTENTS                             
|-------------------------------------
|Consolidated Balance Sheets          
|Consolidated Statements of Operations
|Consolidated Statements of Cash Flows
|Notes to the Financial Statements    



1


Table of Contents






|ALTO
    GROUP HOLDINGS INC.                                                  
|------------------------------------------------------------------------------
|(an exploration
    stage company)                                            
|CONSOLIDATED
    BALANCE SHEETS                                               
|(Unaudited)                                                                   
|                                                                              
|ASSETS                                                                        
|                                                                              
|                                                                              
|                                                                              
|CURRENT
    ASSETS                                                            
|                                                                              
|Cash
    and cash equivalents                                                 
|Loans
    receivable                                                          
|                                                                              
|Total
    Current Assets                                                      
|                                                                              
|PROPERTY
    AND EQUIPMENT, net of accumulated                                
|depreciation
    of $44,521 and $33,341, respectively                         
|                                                                              
|OTHER
    ASSETS                                                              
|                                                                              
|Mining
    assets                                                             
|Other
    assets                                                              
|                                                                              
|Total
    Other Assets                                                        
|                                                                              
|TOTAL
    ASSETS                                                              
|                                                                              
|LIABILITIES
    AND STOCKHOLDERS' DEFICIT                                     
|                                                                              
|CURRENT
    LIABILITIES                                                       
|                                                                              
|Accounts
    payable and accrued liabilities                                  
|Due
    to related parties                                                    
|Notes
    and loans payable                                                   
|Proceeds
    from investors pursuant to Stock Purchase                        
|Agreements
    to be effective upon completion of                             
|reverse
    stock split                                                       
|                                                                              
|Total
    Current Liabilities                                                 
|                                                                              
|TOTAL
    LIABILITIES                                                         
|                                                                              
|STOCKHOLDERS'
    DEFICIT                                                     
|                                                                              
|Preferred stock, $0.00001
    par value; 100,000,000 shares authorized:       
|Series
    A Preferred Stock, 20,000,000 shares designated,                   
|14,000,000
    and 14,000,000 shares issued and outstanding,                  
|respectively                                                                  
|Series
    B Preferred Stock, 100,000 and 100,000 shares                      
|issued
    and outstanding, respectively                                      
|Common stock, $0.00001
    par value; 7,000,000,000 shares                    
|authorized,
    4,906,756,205 and 619,613,332 shares issued                   
|and
    outstanding, respectively                                             
|Additional
    paid-in capital                                                
|Deficit
    accumulated during the exploration stage                          
|                                                                              
|Total
    Stockholders' Deficit                                               
|                                                                              
|TOTAL
    LIABILITIES AND STOCKHOLDERS' DEFICIT                               
|                                                                              
|The
    accompanying notes are an integral part of these financial statements.



2


Table of Contents








|ALTO
    GROUP HOLDINGS INC.                                                  
|------------------------------------------------------------------------------
|(an exploration
    stage company)                                            
|CONSOLIDATED
    STATEMENTS OF OPERATIONS                                     
|(Unaudited)                                                                   
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|NET
    REVENUES                                                              
|                                                                              
|OPERATING
    EXPENSES                                                        
|                                                                              
|Exploration
    and carrying costs (including                                 
|stock-based
    costs of $-0-, $-0-,                                          
|and
    $123,000, respectively                                                
|Officers'
    and directors' compensation (including                          
|stock-based
    compensation of $-0-, $-0-,                                   
|and
    $860,000, respectively)                                               
|Consulting
    fees (including stock-based compensation                       
|of
    $-0-,  $-0-, and $2,606,600, respectively)                             
|Professional
    fees (including stock-based compensation                     
|of
    $-0-, $2,372,017 and $4,303,492, respectively)                         
|General
    and administrative                                                
|Donated
    services                                                          
|Impairment
    of mineral property                                            
|acquisition
    costs                                                         
|                                                                              
|Total
    Operating Expenses                                                  
|                                                                              
|LOSS
    FROM OPERATIONS                                                      
|                                                                              
|OTHER
    INCOME (EXPENSES)                                                   
|                                                                              
|Gain
    from forgiveness of amounts due to                                   
|former
    related parties                                                    
|Write
    off of goodwill                                                     
|Interest
    expense (including amortization of debt                          
|discount
    of $-0-, $-0-, and $350,391, respectively)                       
|Loss
    on conversion of notes payable                                       
|to
    investors to common stock                                              
|                                                                              
|Total
    Other Income (Expenses)                                             
|                                                                              
|LOSS
    BEFORE INCOME TAXES                                                  
|                                                                              
|INCOME
    TAX EXPENSE                                                        
|                                                                              
|NET
    LOSS                                                                  
|                                                                              
|BASIC
    AND FULLY DILUTED:                                                  
|Net
    loss per common share                                                 
|                                                                              
|Weighted
    average shares outstanding                                       
|                                                                              
|The
    accompanying notes are an integral part of these financial statements.
|                                                                              





3


Table of Contents




|ALTO GROUP HOLDINGS INC.                                                  
|--------------------------------------------------------------------------
|(an exploration stage company)                                            
|CONSOLIDATED STATEMENTS OF CASH FLOWS                                     
|(Unaudited)                                                               
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|CASH FLOWS FROM OPERATING ACTIVITIES:                                     
|Net loss                                                                  
|Adjustments to reconcile net loss to net                                  
|cash used by operating activities:                                        
|Depreciation                                                              
|Write off of goodwill                                                     
|Stock issued for services, including $-0-, $2,372,017, and                
|$4,303,824, respectively, of excess of fair value of common stock         
|issued over amount of debt and accrued interest settled (charged          
|to professional fees in the statements of operations)                     
|Amortization of debt discount                                             
|Gain from forgiveness of amounts due to related parties                   
|Loss on conversion of notes payable to investors to common stock          
|Donated services and expenses                                             
|Impairment of mineral property acquisition costs                          
|Changes in operating assets and liabilities:                              
|Other assets                                                              
|Accounts payable and accrued liabilities                                  
|Accrued consulting fees due to  related parties                           
|Net Cash Used by Operating Activities                                     
|                                                                          
|CASH FLOWS FROM INVESTING ACTIVITIES:                                     
|Cash received in connection with acquisition of  Liberty American, LLC    
|Purchases of property and equipment                                       
|Mineral property acquisition costs                                        
|Net Cash Used by Investing Activities                                     
|                                                                          
|CASH FLOWS FROM FINANCING ACTIVITIES:                                     
|Increase in due to related party                                          
|Proceeds from notes payable                                               
|Repayment of note payable                                                 
|Repayment of loan payable of Liberty American, LLC to the                 
|Company's corporate counsel                                               
|Proceeds from sale of common stock                                        
|Proceeds from investors pursuant to Stock Purchase Agreements             
|to be effective upon completion of reverse stock split                    
|Net Cash Provided by Financing Activities                                 
|                                                                          
|NET INCREASE IN CASH AND CASH EQUIVALENTS                                 
|                                                                          
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                            
|                                                                          
|CASH AND CASH EQUIVALENTS, END OF PERIOD                                  
|                                                                          
|SUPPLEMENTAL CASH FLOW INFORMATION:                                       
|Cash Payments For:                                                        
|Interest                                                                  
|Income taxes                                                              
|Non-cash investing and financing activities:                              
|Forgiveness of due to related party by then majority                      
|stockholder on September 15, 2009                                         
|Stock issued for services                                                 
|                                                                          
|Conversion of notes payable and accrued interest                          
|into common stock:                                                        
|Notes payable ($1,270,705, $30,000, and $1,386,205, respectively)         
|and accrued interest ($105,500, $1,356, and $112,506,                     
|respectively) settled                                                     
|Excess of fair value of common stock issued                               
|over amount of debt and accrued interest settled                          
|Fair value of common stock issued                                         
|Settlement of accrued consulting fees due to related parties              
|in exchange for common stock on June 20, 2011                             
|Conversion of common stock to Series A                                    
|preferred stock on March 3, 2010                                          
|Common stock issued for acquisition of mining                             
|assets on March 12, 2010                                                  
|Common stock issued for acquisition of Liberty                            
|American, LLC on January 24, 2011                                         
|                                                                          
|The accompanying notes are an integral part of these financial statements.









4


Table of Contents




ALTO GROUP HOLDINGS, INC.

(an exploration stage company)

NOTES TO FINANCIAL STATEMENTS

February 29, 2012

(Unaudited)





NOTE 1 -	ORGANIZATION AND DESCRIPTION OF
BUSINESS



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 Financial
Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 915, Development Stage
Entities. 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.

These financial statements have been prepared on a going
concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course
of business. The Company has never generated revenues since inception and has never paid any dividends and is unlikely to pay dividends
or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon
the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue
operations, and the attainment of profitable operations. As at February 28, 2012, the Company has a total stockholders’ deficit
of $2,361,997 and has accumulated losses of $13,174,394 since inception. These factors raise substantial doubt regarding the Company’s
ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification
of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as
a going concern.



NOTE 2 -	BASIS OF FINANCIAL STATEMENT PRESENTATION



The accompanying unaudited consolidated financial statements
have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting
principles have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim
consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of
management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and
information presented are adequate to make the information not misleading, it is suggested that these interim consolidated financial
statements be read in conjunction with the Company’s unaudited financial statements and notes thereto included in its Form
10-K filed on March 14, 2012. Operating results for the three months ended February 28, 2012 are not necessarily indicative of
the results to be expected for the year ending November 30, 2012.



NOTE 3 -	COMMON STOCK



On December 14, 2011, the Company approved the conversion
into common stock certain notes (the “Notes”) issued by the Company between February 1, 2011 and June 1, 2011. Subject
to the terms and conditions contained therein, the Notes were converted into an aggregate of 4,287,142,876 shares of common stock
of the Company.



On February 9, 2012, the Company issued an aggregate
of 300,000 shares of Series C Preferred Stock (hereafter, the “Preferred Stock”) in equal amounts to Robert Howie,
Chene Gardner, and Douglas McFarland, each of whom were, at the time of issuance, members of the Board of Directors. The Preferred
Stock contains no economic rights whatsoever,

5


Table of Contents




ALTO GROUP HOLDINGS, INC.

(an exploration stage company)

NOTES TO FINANCIAL STATEMENTS

February 29, 2012

(Unaudited)





NOTE 3 -	COMMON STOCK (Continued)



including no rights to participate in dividends, distributions,
or the net assets of the Company upon liquidation, as well as no right to convert such shares into common stock or other securities
of the Company. Each share of Preferred Stock does, however, possess 100,000 votes per share and is entitled to vote together with
holders of the company’s common stock on all matters upon which common stockholders may vote.



NOTE 4 -	SUBSEQUENT EVENTS



The Company has evaluated subsequent events for the period
of February 29, 2012 through the dare the financial statements were issued, and concluded there were no other events or transactions
occurring during this period that required recognition or disclosure in its financial statements.















6


Table of Contents


Item 2.  Management's Discussion and Analysis of Financial
Condition and Plan of Operation.



Forward-Looking Statements



This report contains forward-looking statements
that involve risks and uncertainties. We use words such as anticipate, believe, plan, expect, future, intend and similar expressions
to identify such forward-looking statements. You should not place too much reliance on these forward-looking statements. Our actual
results are likely to differ materially from those anticipated in these forward-looking statements for many reasons.



Plan of Operation



We were incorporated in the State of Nevada
on September 21, 2007. We are an exploration stage corporation. An exploration stage corporation is one engaged in the search of
mineral deposits or reserves which are not in either the development or production stage. We maintain our statutory registered
agent's office at National Registered Agents, Inc. of NV, 1000 East William Street, Suite 204, Carson City, Nevada 89701 and our
business office and mailing address is 715 13th Street NE, Wenatchee, WA 98802. Our telephone number is (509) 884-2218.



If we are able to successfully develop the interests
we acquire, we may engage in (or contract with third parties for the) extraction and production of the minerals involved, may sell
these interests, or pursue a combination of the foregoing. Although we believe that rights to the mineral interests we acquire
may contain valuable deposits that would inure to the benefit of the Company and its shareholders, we cannot assure you that commercially
viable deposits exist on any of these properties until further exploration and development has been undertaken and a thorough economic
feasibility analysis has been prepared. We are actively seeking to raise working capital sufficient to begin exploration and development
of these concessions, as well as for other development opportunities.



We have not generated any revenues since the
inception of the Company and we have been issued a “going concern” opinion from our auditors. We have no plans to change
our business activities from the exploration and development of mining interests with the objective of including extraction and
production operations as a core component of the business of the Company.



Liquidity and Capital Resources



As of February 29, 2012, our working capital
deficit of $2,596,659 was comprised of total current assets of $8,425 consisting of cash and cash equivalents, and total current
liabilities of $2,605,084. While we continued to consume working capital in the pursuit of our business plan, the consumption was
more than offset by the sale of equity securities and the conversion of certain indebtedness into equity.



We do not believe that the Company’s
current capital resources will be sufficient to fund its operating activity and other capital resource demands during the next
fiscal year. Our ability to continue as a going concern is contingent upon our ability to obtain capital through the sale of equity
or issuance of debt, joint venture or sale of assets, and ultimately attaining profitable operations. We cannot provide that we
will be able to successfully complete any one of these activities.

7


Table of Contents




We are presently seeking additional debt and
equity financing to provide sufficient funds for payment of obligations incurred and to fund our ongoing business plan.



Although we are actively seeking to acquire
and develop mineral interests throughout the world, we have not yet generated any revenue from our operations. We have historically
relied on equity and debt financings to fund our capital resource requirements. We have experienced net losses since inception.
We will be dependent on additional debt and equity financing to develop our new business.



All of our investment in research and development
activities has been expensed, and does not appear as an asset on our balance sheet.



Our ability to pay accounts payable and accrued
expenses and repay borrowings is dependent upon receipt of new funding from related parties, private placements or debt financing.
Certain related parties have periodically advanced funds to us to meet our working capital needs. The related parties are under
no obligation to continue these advances.



Net cash used in operating activities was
$7070 during the quarter ended February 29, 2012, compared to $561,513 during the quarter ended February 28, 2011. During the quarter
ended February 29, 2012, we incurred a net loss of $87,635. Accounts payable and accrued expenses increased by $53,796 during the
quarter ended February 29, 2012. By comparison, during the quarter ended February 28, 2011, we incurred a net loss of $3,520,242
and reported an increase in accounts payable and accrued expenses of $124,203. During the quarter ended February 28, 2011, the
Company issued stock for services valued at $2,372,017 based on the market value of the stock at the time of stock issuance. Historically,
we have reported significant fluctuations in cash usage, as the timing of our cash payments is typically dependent upon cash provided
by financing activities.



During the quarters ended February 29, 2012
and February 28, 2011, the Company used $-0- and $97,787, in investing activities. During the quarter ended February 28, 2011,
the Company purchased property and equipment in the amount of $97,852.



Net cash provided by
financing activities during the quarter ended February 29, 2012 was $-0- compared to $685,581 during the quarter ended February
28, 2011 which consisted of proceeds of $747,000 in the form of loans from accredited investors. The Company also used $61,419
to repay loans of Liberty American LLC to Corporate Counsel.



Our Excelsior Mining Interests



On April 21, 2011, we formed Alto Cascade Resources,
LLC (“Alto Cascade”), as a joint venture with Douglas McFarland, our Chief Executive Officer. Alto Cascade, 51% of
which is owned by the Company, holds 60 lode mining claims in respect of the Great Excelsior Mine located in Whatcom County in
the Mount Baker quadrangle in western Washington State.



The Great Excelsior Mine was a former gold and
silver producer which was forced to close in 1918 due to falling metal prices and a shortage of supplies. This mining property
has

8


Table of Contents




been explored by numerous mining companies over the years, including
ASARCO, Silver Standard, Ltd., Quintana Resources, Inc., US Borax, Steelhead Resources, Inc, FMC Gold Corp., Stanford Metals, Ltd,
and Arizuma Silver, Inc.



If we were able to commence production at Great
Excelsior, we would likely not construct milling facilities but would transport extracted material to a nearby mill operated by
other larger gold and silver producers. Extensive metallurgical testing had been done on the ore by Hazen Research, Inc. of Golden,
Colorado. Recovery of 96.8 percent of the silver and 95.6 percent of the gold could also, in our opinion, be accomplished by flotation
accompanied by a nitric acid leach of the concentrates and CIL recovery.



Property Interests and Mining Claims in General



Mining claims are subject to the same risk of
defective title that is common to all real property interests. Additionally, mining claims are self-initiated and self-maintained
and therefore, possess some unique vulnerabilities not associated with other types of property interests. It is impossible to ascertain
the validity of unpatented mining claims solely from an examination of public real estate records and, therefore, it can be difficult
or impossible to confirm that all of the requisite steps have been followed for location and maintenance of a claim. Furthermore,
as these interests are derived from mining claims in foreign jurisdictions, the risk of a defective claim or other problems with
ownership and development of the claim (including but not limited to the right of eminent domain) is compounded further. If the
validity of a patented mining claim or mineral interest is challenged by an applicable governmental body on the grounds that mineralization
has not been demonstrated, the claimant has the burden of proving the present economic feasibility of mining minerals located thereon.
Such a challenge might be raised at any stage of development or at the commencement of production, or simply when the government
seeks to include the land in an area to be dedicated to another use.



Reserve Estimates



Our reserve and resource figures are estimates,
and we cannot assure you that the indicated level of recovery will be realized or that we will have the resources to do so. Because
mining development is inherently capital intensive, we would expect that the Company would partner with a larger mining company
or other strategic source of capital and knowledge in respect of any significant development or operational activity. Prolonged
declines in the market price of gold may render reserves containing relatively lower grades of gold mineralization uneconomic to
exploit and could materially reduce our reserves. Should such reductions occur, discontinuation of exploration and development
(including the production of a NI 43-101 compliant report) could be discontinued. There are numerous uncertainties inherent in
estimating quantities of proven and probable gold reserves. The estimates in this document are based on various assumptions relating
to gold prices during the expected life of production and the results of additional planned development work, either by us or in
partnership with a larger mining company or other third party with more sufficient capitalization. Actual future production rates,
sales prices, and amounts, revenues, taxes, operating expenses, environmental and regulatory compliance expenditures, development
expenditures and recovery rates may vary substantially from those assumed in any estimates we have given. Any significant change
in these assumptions, including changes that result from variances between projected and actual results, could result in a material
downward or upward revision of current estimates.



9


Table of Contents




Joint Ventures



Our mining interests are held in joint ventures
or are subject to joint venture agreements between the Company and a third party. These joint venture agreements typically obligate
the Company to contribute substantial capital, property, or other expertise to develop these interests.



Any failure, by us or our joint venture partners
in respect of the obligations in our joint venture agreements, could have a material adverse effect on the mining interests held
through the joint venture, and could therefore have a material adverse effect on the Company as a whole. In the two years prior
to the date of this Memorandum, we have had several joint venture agreements terminated or substantially amended because of our
inability to comply with our contractual obligations under these agreements.



Reclamation



In most jurisdictions where we have or are seeking
to develop mineral interests, we generally are required to mitigate long-term environmental impacts by stabilizing, contouring,
re-sloping and re-vegetating various portions of a site after mining and mineral processing operations are completed. These reclamation
efforts will be conducted in accordance with detailed plans, which must be reviewed and approved by the appropriate regulatory
agencies.



Government Regulation



Mining operations and exploration activities
are subject to various national, state/provincial, and local laws and regulations, which govern prospecting, development, mining,
production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous
substances and other matters. Our objective is to obtain the licenses, permits or other authorizations currently required to conduct
our exploration program. We believe that we are in compliance in all material respects with applicable mining, health, safety and
environmental statutes and the regulations applicable to the mineral interests we now hold in the United States.



Mining claims involving federally owned land
in the United States are principally regulated by the Department of the Interior – Bureau of Land Management (“BLM”).
The BLM administers over 258 million acres of public lands and 700 million acres of subsurface minerals in 19 mostly western U.S.
states. The Federal Land Policy and Management Act of 1976 provides that public lands remain under the stewardship of the BLM and
that their resources be managed under a multiple-use concept, which uses include certain mining and exploration activities. The
General Mining Law of 1872 remains the major federal law governing locatable minerals and allows individuals and entities the opportunity
to explore for, discover, and purchase certain valuable mineral deposits on those federal lands that are open for mining claim
location and patent (open to mineral entry). These mineral deposits include most metallic mineral deposits and certain nonmetallic
and industrial minerals. The law sets general standards and guidelines for claiming the possessory right to a valuable mineral
deposit discovered during exploration. The General Mining Law also allows for the enactment of state laws governing location and
recording of mining claims and sites that are consistent with federal law.



Environmental Regulations



Our activities are subject to various national
and local laws and regulations governing protection of the environment. These laws are continually changing and, in general, are
becoming

10


Table of Contents




more restrictive. In the United States, for example, any mining
activity which disturbs the surface of the earth is required to be reclaimed, even if the claim or site is abandoned or forfeited,
and a plan of operation must be submitted and approved by the BLM prior to activity. In addition, any such reclamation activities
are subject to individual state law requirements which also regulate air, water pollution, and use of hazardous materials.



Changes to current state or federal laws and
regulations in the United States, or other countries where we hold mineral interests could, in the future, require additional capital
expenditures and increased operating and/or reclamation costs. Although we are unable to predict what additional legislation, if
any, might be proposed or enacted, additional regulatory requirements could impact the economics of our projects.



During 2010 and 2011, we had no material environmental
incidents or non-compliance with any applicable environmental regulations.



Significant Events During the Quarter



Issuance of Super-Voting Shares. On February
9, 2012, the Company issued an aggregate of 300,000 shares of Series C Preferred Stock (hereafter, the “Preferred Stock”)
in equal amounts to Robert Howie, Chene Gardner, and Douglas McFarland, each members of the Board of Directors. The Preferred Stock
contains no economic rights whatsoever, including no rights to participate in dividends, distributions, or the net assets of the
Company upon liquidation, as well as no right to convert such shares into common stock or other securities of the Company. Each
share of Preferred Stock does, however, possess 100,000 votes per share and is entitled to vote together with holders of the company’s
common stock on all matters upon which common stockholders may vote.



Changes in Management and Directors.
On February 9, 2012, the Board of Directors and holders of a majority of the Company’s voting shares dismissed Mark Klok
from the Company as an officer and director, respectively. Also on February 9, 2012, the Company appointed Douglas McFarland and
Chene Gardner to its Board of Directors and appointed Mr. Gardner as Chairman, Chief Financial Officer, and Secretary. Mr. McFarland
was subsequently appointed as Chief Executive Officer on February 15, 2012. Also on February 15, 2012, Paul Donaldson was appointed
to the Board of Directors. On February 23, 2012, W. Glen Zinn was appointed to the Board of Directors. On March 20, 2012, Robert
Howie was dismissed from the Board of Directors.



Restatement of Bylaws. On February 9,
2012, the Board of Directors amended and restated the Company’s Bylaws in their entirety. The principal purpose of the restatement
was to remove the requirement that all actions taken by the Board at a duly called meeting be made by unanimous vote and, instead,
require that such vote be a majority of directors then present at the meeting.



Off-Balance Sheet Arrangements



We do not have any off-balance sheet arrangements.



Critical Accounting Policies



We believe the following more critical accounting
policies are used in the preparation of our financial statements:

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Use of Estimates. The preparation of
financial statements in conformity with accounting principles generally accepted in the United States of America requires management
to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results
could differ from those estimates. On a periodic basis, management reviews those estimates, including those related to valuation
allowances, loss contingencies, income taxes, and projection of future cash flows.



Mineral Property Costs. The Company has
been in the exploration stage since its formation on April 25, 2007 and has not yet realized any revenues from its planned operations.
It is primarily engaged in the acquisition, exploration and development of mineral properties. Mineral property acquisition costs
are capitalized when management has determined that probable future benefits consisting of a contribution to future cash inflows
have been identified and adequate financial resources are available or are expected to be available as required to meet the terms
of property acquisition and budgeted exploration and development expenditures. Mineral property acquisition costs are expensed
as incurred if the criteria for capitalization are not met. In the event that a mineral property is acquired through the issuance
of the Company’s shares, the mineral property will be recorded at the fair value of the respective property or the fair value
of common shares, whichever is more readily determinable.



When mineral properties are acquired under option
agreements with future acquisition payments to be made at the sole discretion of the Company, those future payments, whether in
cash or shares, are recorded only when the Company has made or is obliged to make the payment or issue the shares. When it has
been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves
and pre feasibility, the costs incurred to develop such property will be capitalized.



Recent Accounting Pronouncements



We have reviewed accounting pronouncements issued
during the past two years and have adopted any that are applicable to the Company. We have determined that none had a material
impact on our financial position, results of operations, or cash flows for the quarters ended February 29, 2012 and February 28,
2011.



Forward-Looking Statements



This report contains or incorporates by reference
forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 concerning
our future business plans and strategies, the receipt of working capital, future revenues and other statements that are not historical
in nature. In this report, forward-looking statements are often identified by the words “anticipate,” “plan,”
“believe,” “expect,” “estimate,” and the like. These forward-looking statements reflect our
current beliefs, expectations and opinions with respect to future events, and involve future risks and uncertainties which could
cause actual results to differ materially from those expressed or implied.



Other uncertainties that could affect the accuracy
of forward-looking statements include:



|• |  | the worldwide economic situation;
|- |  | ---------------------------------

|• |  | any changes in interest rates or inflation;
|- |  | -------------------------------------------

|• |  | the willingness and ability of third parties to honor their contractual commitments;
|- |  | ------------------------------------------------------------------------------------

|• |  | our ability to raise additional capital, as it may be affected by current conditions
in the stock market and competition for risk capital;
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------

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|• |  | our capital expenditures, as they may be affected by delays or cost overruns;
|- |  | -----------------------------------------------------------------------------

|• |  | environmental and other regulations, as the same presently exist or may later be amended;
|- |  | -----------------------------------------------------------------------------------------

|• |  | our ability to identify, finance and integrate any future acquisitions; and
|- |  | ---------------------------------------------------------------------------

|• |  | the volatility of our common stock price.
|- |  | -----------------------------------------



This list is not exhaustive of the factors that
may affect any of our forward-looking statements. You should read this report completely and with the understanding that our actual
future results may be materially different from what we expect. These forward-looking statements represent our beliefs, expectations
and opinions only as of the date of this report. We do not intend to update these forward looking statements except as required
by law. We qualify all of our forward-looking statements by these cautionary statements.



Item 3. Quantitative and Qualitative Disclosures About Market
Risk.



Not Applicable.



Item 4.  Controls and Procedures.



(a)We maintain a system of controls and procedures designed to ensure that information required
to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed,
summarized and reported within time periods specified in the SEC’s rules and forms and to ensure that information required
to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is accumulated
and communicated to our management, including our Chief Executive Officer and Principal Financial Officer, or persons performing
similar functions, as appropriate to allow timely decisions regarding required disclosure. As of February 28, 2012, under the supervision
and with the participation of our Chief Executive Officer and Chief Financial Officer, management has evaluated the effectiveness
of the design and operation of our disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and
the Chief Financial Officer concluded that our disclosure controls and procedures were effective.



As permitted by applicable SEC rules, this report
does not include an attestation report of our independent registered public accounting firm regarding internal control over financial
reporting. Management’s report, which is included in Item 8 above, was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual
report.



(b)There were no changes in our internal control over financial reporting during the quarter
ended February 29, 2012 that materially affected, or is reasonably likely to materially affect, our internal controls over financial
reporting.

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PART II – OTHER INFORMATION



Item 1.	Legal Proceedings



None.



Item 1A. Risk Factors



Because we are a smaller reporting company,
we are not required to provide the information required by this item.



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds



On December 14, 2011, the Company approved the
conversion into common stock certain notes (the “Notes”) issued by the Company between February 1, 2011 and June 1,
2011. Subject to the terms and conditions contained therein, the Notes were converted into an aggregate of 4,287,142,876 shares
of common stock of the Company. The Company believes that these transactions were exempt from registration with the Securities
and Exchange Commission pursuant to Section 4(2) of the Securities Act of 1933.



On February 9, 2012, the Company issued an aggregate
of 300,000 shares of Series C Preferred Stock (hereafter, the “Preferred Stock”) in equal amounts to Robert Howie,
Chene Gardner, and Douglas McFarland, each members of the Board of Directors. The Preferred Stock contains no economic rights whatsoever,
including no rights to participate in dividends, distributions, or the net assets of the Company upon liquidation, as well as no
right to convert such shares into common stock or other securities of the Company. Each share of Preferred Stock does, however,
possess 100,000 votes per share and is entitled to vote together with holders of the company’s common stock on all matters
upon which common stockholders may vote. The Company believes that the issuance of the Series C Preferred Stock was a transaction
not involving a public offering and was exempt from registration with the Securities and Exchange Commission pursuant to Rule 4(2)
of the Securities Act of 1933.



Item 3. Defaults Upon Senior Securities



None.



Item 4. Mine Safety Disclosures.



Not Applicable.



Item 5. Other Information.



None.



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Item 6. Exhibits.



The following exhibits are filed with or incorporated
by referenced in this report:



|Item No. | Description                                                                                                                              
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------
|3.1      | Amended and Restated Articles of Incorporation (incorporated by reference from our Current Report on Form 8-K filed on December 5, 2011).
|3.3      | Amended and Restated Bylaws (incorporated by reference from our Current Report on Form 8-K filed on February 14, 2012).                  
|31.1*    | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Douglas McFarland.                                           
|31.2*    | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Chene Gardner.                                               
|32.1*    | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Douglas McFarland.                                           
|32.2*    | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Chene Gardner.                                               



* filed herewith



In accordance with Section 13 or 15(d) of the
Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                      |                                                | ALTO GROUP HOLDINGS, INC.
|--------------------- | ---------------------------------------------- | -------------------------
|                      |                                                |                          
|                      |                                                |                          
|                      | /s/ Douglas McFarland                         
|Dated: April 19, 2012 | By: Douglas McFarland, Chief Executive Officer
|                      |                                                |                          
|                      |                                                |                          





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