On December 14, 2010, Alto Group Holdings, Inc. (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.
Item 3.02 Unregistered Sales of Equity Securities
As described in Item 1.01 above, on December 14, 2011, the Company issued 4,287,142,876 shares of common stock to various Noteholders. 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.
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I remember making a post back in August saying that at the current share price on the date of my post in August - $.0022/share - it would take 3,876,650,551 shares to satisfy the $135,246 debt they had on their books at that time owed to their "corporate counsel" alone.
Obviously the price dropped and the number of shares having to be issued towards the debt Notes has gone up.
The sickest part is that the debt Note holder is getting millions of dollars worth of shares for thousands of dollars worth of debt.
According to the last 10Q for the period ending August 31, 2011, $3,700,000 worth of shares were issued for $60,331 worth of debt.
It is one thing to operate through loans because you are a company with no cash and no revenues ever, but it is another thing to use those debt Notes to make insiders rich while diluting the share price of the stock down to worthless. The way Mark Klok is using this shell for insider enrichment is a crime in my opinion.
Not only are the conversion rates on the debt Notes criminally low (98% below the market price), but the life of the Notes are ridiculously short. Converting Notes that are only a few months old into super discounted shares is just sickening. It is obvious that the whole debt Note set up is an intentional scheme for insider enrichment led by Mark Klok.
4,287,142,876 would equal more than 10% ownership so I'll be watching for the beneficial ownership form to be filed. I believe there is a time limit for that filing. Even if those shares were split up among "various" noteholders as stated in the 8K, there would probably be between 5,000,000,000 and 5,500,000,000 outstanding shares after the conversion meaning that 500,000,000 - 550,000,000 shares would constitute 10% ownership. Do we really believe that more than 10 different noteholders got less than 500,000,000 shares each?
I think it is very possible that a Noteholder had more than 500,000,000 shares split up among more than one entity all controlled by the same person to
#1) illegally avoid having to claim ownership #2) illegally allow the shares to be free trading
I suggest that some of the people who have reported this company to the SEC in the past report the debt Note conversion and missing beneficial ownership form. It wouldn't surprise me if the 4,287,142,876 shares issued towards debt as disclosed in the last 8K are being illegally spread out among various entities/people all controlled by the same Noteholder to avoid registration of those shares and to make those shares free trading.
The chart shows that ALTO has been nothing but a dilution machine since the beginning of December of 2010 (from $.04/share to $.0004/share in one year):
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