UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 20122013

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

For the transition period from                      to                   .

Commission file number 1-9030


ALTEX INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)


Delaware 84-0989164
(State or other jurisdiction ofincorporation or organization)
 
(I.R.S. Employer
incorporation or organization)Identification No.)

PO Box 1057  Breckenridge CO  80424-1057
(Address of principal executive offices) (Zip Code)
 
(303) 265-9312
(Registrant's telephone number, including area code)

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 [ X ] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company.

Large accelerated filer [  ]Accelerated filer [  ]
Non-accelerated filer [  ]Smaller reporting company [X][ X ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [  ]

Number of shares outstanding of issuer's Common Stock as of May 11, 2012: 13,619,606

10, 2013: 13,288,343

 
1

PART I - FINANCIAL INFORMATION 
  
Item 1. Financial Statements 
  
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES 
Consolidated Balance Sheet 
  March 30  September 30 
  2013  2012 
  (Unaudited)  (Audited) 
Assets      
Current assets      
    Cash and cash equivalents $2,824,000   2,852,000 
    Accounts receivable  10,000   13,000 
    Other  4,000   15,000 
Total current assets  2,838,000   2,880,000 
         
Property and equipment, at cost        
    Proved oil and gas properties (successful efforts method)  347,000   347,000 
    Other  17,000   17,000 
Total property and equipment, at cost  364,000   364,000 
    Less accumulated depreciation, depletion, and amortization  (173,000)  (155,000)
Net property and equipment  191,000   209,000 
         
Other assets  3,000   3,000 
         
Total assets  3,032,000   3,092,000 
         
Liabilities and Stockholders’ Equity        
Current liabilities        
    Accounts payable  13,000   12,000 
    Other accrued expenses  290,000   195,000 
Total current liabilities  303,000   207,000 
         
Commitments and Contingencies  -   - 
         
Stockholders’ equity        
    Preferred stock, $.01 par value. Authorized 5,000,000 shares, none issued  -   - 
    Common stock, $.01 par value. Authorized 50,000,000 shares; issued and outstanding, 13,288,343  133,000   133,000 
    Additional paid-in capital  13,887,000   13,887,000 
    Accumulated deficit  (11,291,000)  (11,135,000)
Total stockholders' equity  2,729,000   2,885,000 
         
Total liabilities and stockholders' equity $3,032,000   3,092,000 

See accompanying notes to consolidated, condensed financial statements.

2
 
 
PART I - FINANCIAL INFORMATION 
  
Item 1. Financial Statements 
  
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES 
Consolidated Balance Sheet 
       
       
  March 31  September 30 
  2012  2011 
  (Unaudited)  (Audited) 
Assets      
Current assets      
    Cash and cash equivalents $2,938,000   2,584,000 
    Accounts receivable  17,000   14,000 
    Other  3,000   504,000 
Total current assets  2,958,000   3,102,000 
         
Property and equipment, at cost        
    Proved oil and gas properties (successful efforts method)  350,000   350,000 
    Other  17,000   17,000 
Total property and equipment, at cost  367,000   367,000 
    Less accumulated depreciation, depletion, and amortization  (134,000)  (122,000)
Net property and equipment  233,000   245,000 
         
Other assets  4,000   4,000 
         
Total assets  3,195,000   3,351,000 
         
Liabilities and Stockholders’ Equity        
Current liabilities        
    Accounts payable  20,000   26,000 
    Other accrued expenses  117,000   106,000 
Total current liabilities  137,000   132,000 
         
Commitments and Contingencies  -   - 
         
Stockholders’ equity        
    Preferred stock, $.01 par value. Authorized 5,000,000 shares, none issued  -   - 
    Common stock, $.01 par value. Authorized 50,000,000 shares; issued and outstanding, 13,619,606  136,000   136,000 
    Additional paid-in capital  13,928,000   13,928,000 
    Accumulated deficit  (11,006,000)  (10,845,000)
Total stockholders' equity  3,058,000   3,219,000 
         
Total stockholders' equity and liabilities $3,195,000   3,351,000 
         
See accompanying notes to consolidated, condensed financial statements. 
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES 
Consolidated Statement of Operations 
(Unaudited) 
             
  Three Months Ended  Six Months Ended 
  March 31  March 31 
  2013  2012  2013  2012 
Revenue            
    Oil and gas sales $15,000   35,000   43,000   58,000 
    Interest income  4,000   6,000   9,000   11,000 
Total revenue  19,000   41,000   52,000   69,000 
                 
Costs and expenses                
    Lease operating  1,000   3,000   3,000   4,000 
    Production taxes  1,000   4,000   4,000   6,000��
    General and administrative  94,000   83,000   183,000   208,000 
    Depreciation, depletion, and amortization  9,000   6,000   18,000   12,000 
Total costs and expenses  105,000   96,000   208,000   230,000 
                 
Net loss $(86,000)  (55,000)  (156,000)  (161,000)
                 
Loss per share $(0.01)  (0.00)  (0.01)  (0.01)
                 
Weighted average shares outstanding  13,288,343   13,619,606   13,288,343   13,619,606 

See accompanying notes to consolidated, condensed financial statements.

 
Page 1 of  7

ALTEX INDUSTRIES, INC. AND SUBSIDIARIES 
Consolidated Statement of Operations 
(Unaudited) 
             
  Three Months Ended  Six Months Ended 
  March 31  March 31 
  2012  2011  2012  2011 
Revenue            
    Oil and gas sales $35,000  $33,000   58,000   62,000 
    Interest income  6,000   8,000   11,000   17,000 
    Other  -   1,000   -   2,000 
Total revenue  41,000   42,000   69,000   81,000 
                 
Costs and expenses                
    Lease operating  3,000   1,000   4,000   3,000 
    Production taxes  4,000   3,000   6,000   6,000 
    General and administrative  83,000   106,000   208,000   217,000 
    Depreciation, depletion, and amortization  6,000   7,000   12,000   12,000 
Total costs and expenses  96,000   117,000   230,000   238,000 
                 
Net loss $(55,000) $(75,000)  (161,000)  (157,000)
                 
Loss per share $(0.004) $(0.006)  (0.012)  (0.012)
                 
Weighted average shares outstanding  13,619,606   13,619,606   13,619,606   13,619,606 
                 
See accompanying notes to consolidated, condensed financial statements. 

Page 2 of  73
 
 
ALTEX INDUSTRIES, INC. AND SUBSIDIARIESALTEX INDUSTRIES, INC. AND SUBSIDIARIES ALTEX INDUSTRIES, INC. AND SUBSIDIARIES 
Consolidated Statement of Cash FlowConsolidated Statement of Cash Flow Consolidated Statement of Cash Flow 
(Unaudited)(Unaudited) (Unaudited) 
 Six months ended  Six months ended 
 March 31  March 
 2012  2011  2013  2012 
Cash flows used in operating activities            
Net loss $(161,000) $(157,000) $(156,000)  (161,000)
Adjustments to reconcile net loss to net cash used in operating activities                
Depreciation, depletion, and amortization  12,000   12,000   18,000   12,000 
Increase in accounts receivable  (3,000)  (3,000)
Increase (decrease) in accounts receivable  3,000   (3,000)
Decrease in other current assets  1,000   1,000   11,000   1,000 
Increase (decrease) in accounts payable  (6,000)  8,000 
Increase (decrease) in other accrued expenses  11,000   (4,000)
Decrease in accounts payable  1,000   (6,000)
Increase in other accrued expenses  95,000   11,000 
Net cash used in operating activities  (146,000)  (143,000)  (28,000)  (146,000)
                
Cash flows provided by investing activities                
Deposit on potential investment subsequently terminated  500,000   -   -   500,000 
Total cash flows provided by investing activities  500,000   -   -   500,000 
                
Net increase (decrease) in cash and cash equivalents  354,000   (143,000)
Cash and cash equivalents at beginning of year  2,584,000   3,327,000 
Cash and cash equivalents at end of year $2,938,000  $3,184,000 
        
See accompanying notes to consolidated, condensed financial statements. 
Net increase (decrease ) in cash and cash equivalents  (28,000)  354,000 
Cash and cash equivalents at beginning of period  2,852,000   2,584,000 
Cash and cash equivalents at end of period $2,824,000   2,938,000 

See accompanying notes to consolidated, condensed financial statements.

 
Page 3 of  74
 

ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Consolidated, Condensed Financial Statements
(Unaudited)
 

Note 1 - Financial Statements. In the opinion of management, the accompanying unaudited, consolidated, condensed financial statements contain all adjustments necessary to present fairly the financial position of the Company as of March 31, 2012,2013, and the cash flows and results of operations for the three and six months then ended. Such adjustments consisted only of normal recurring items. The results of operations for the three and six months ended March 31 are not necessarily indicative of the results for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The accounting policies followed by the Company are set forth in Note 1 to the Company's consolidated financial statements contained in the Company's 20112012 Annual Report on Form 10-K, and it is suggested that these consolidated, condensed financial statements be read in conjunction therewith.

“SAFE HARBOR” STATEMENT UNDER THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Statements that are not historical facts contained in this Form 10-Q are forward-looking statements that involve risks and uncertainties that could cause actual results to differ from projected results. Factors that could cause actual results to differ materially include, among others: general economic conditions; movements in interest rates; the market price of oil and natural gas; the risks associated with exploration and production in the Rocky Mountain region; the Company's ability, or the ability of its operating subsidiary, Altex Oil Corporation ("AOC"), to find, acquire, market, develop, and produce new properties; operating hazards attendant to the oil and natural gas business; uncertainties in the estimation of proved reserves and in the projection of future rates of production and timing of development expenditures; the strength and financial resources of the Company's competitors; the Company's ability and AOC's ability to find and retain skilled personnel; climatic conditions; availability and cost of material and equipment; delays in anticipated start-up dates; environmental risks; the results of financing efforts; and other uncertainties detailed elsewhere herein and in the Company’s filings with the Securities and Exchange Commission.

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

 
Financial Condition

Cash balances increased $354,000decreased $28,000 in the six months ended March 31, 2013, because the Company used $28,000 cash in operating activities in the six months ended March 31, 2013. In the six months ended March 31, 2012, the Company received back a deposit of $500,000 cash it had previously made in connection with a proposed investment that was subsequently terminated. Consequently, in the six months ended March 31, 2012, primarilycash balances increased $354,000. Excluding receipt of the deposit, cash balances declined $146,000 in the six months ended March 31, 2012, because of a refund to the Company of a $500,000used $146,000 cash deposit made in connection with a potential investment that was terminated. This was offset by $146,000 in cash used in operating activities. activities in the six months ended March 31, 2012. At March 31, 2013, $285,000 of other accrued expenses is accrued salary (and associated accrued payroll taxes) due the Company’s president pursuant to his employment agreement, which the Company’s president has elected to defer.

The Company is likely to experience negative cash flow from operations unless and until the Company invests in interests in producing oil and gas wells or in another venture that produces cash flow from operations. With the exception of capital expenditures related to production acquisitions or drilling or recompletion activities or an investment in another venture that produces cash flow from operations, none of which are currently planned, the cash flows that could result from such acquisitions, activities, or investments, and the possibility of a change in the interest rates the Company realizes on cash balances, the Company knows of no other trends or any known demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in the Company's liquidity increasing or decreasing in any material way.

5
Except for cash generated by the operation of the Company's producing oil and gas properties, asset sales, and interest income, the Company has no internal or external sources of liquidity other than its working capital. At May 11, 2012,10 2013, the Company had no material commitments for capital expenditures.

The Company regularly assesses its exposure to both environmental liability and reclamation, restoration, and dismantlement expense (“RR&D”). The Company does not believe that it currently has any material exposure to environmental liability or to RR&D, net of salvage value, although this cannot be assured.

Page 4 of  7
Results of Operations

GeneralOil and administrative expensegas sales decreased from $106,000 in the three months ended March 31, 2011, to $83,000$35,000 in the three months ended March 31, 2012 (“Q2FY12”), to $15,000 in the three months ended March 31, 2013 (“Q2FY13”), and from $58,000 in the six months ended March 31, 2012, to $43,000 in the six months ended March 31, 2013, because of lower quantities sold and lower prices received. General and administrative expense increased from $83,000 in Q2FY12 to $94,000 in Q2FY13 principally because of a $24,000 decreaseincreased insurance, office, and franchise tax expense. In the six months ended March 31, 2012, the Company recognized $43,000 in expense incurred in connection with unconsummated acquisitions. Excluding this expense, general and administrative expense increased from $165,000 in the six months ended March 31, 2012, to $183,000 in the six months ended March 31, 2013, principally because of increased salary, insurance, office, SEC filing, and franchise tax expense.

At the current level of cash balances and at current interest rates, the Company’s revenue is unlikely to exceed its expenses. Unless and until the Company invests a substantial portion of its cash balances in interests in producing oil and gas wells or in one or more other ventures that produce revenue and net income, the Company is likely to experience net losses. With the exception of unanticipated RR&D, unanticipated environmental expense, and possible changes in interest rates, the Company is not aware of any other known trends or uncertainties that have had or that the Company reasonably expects will have a material favorable or unfavorable impact on net sales or revenues or income from continuing operations.

Liquidity and Capital Resources

Operating Activities. The Company used $146,000 and $28,000 cash in operating activities in the six months ended March 31, 2012 and 2013, respectively.
Investing Activities. Net cash provided by investing activities in the six months ended March 31, 2012 consisted of a refund to the Company of a $500,000 cash deposit made in connection with a potential investment that was subsequently terminated.

Item 4. Controls and Procedures.

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Principal Executive Officer and Principal Financial Officer as appropriate, to allow timely decisions regarding required disclosure. Management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures which, by their nature, can provide only reasonable assurance regarding management’s control objectives.

6
As of the end of the period covered by the report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon the foregoing, the Company’s Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiary) required to be included in the Company’s Exchange Act reports. There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date the Company carried out its evaluation.

Page 5 of  7

PART II - OTHER INFORMATION

Item 6. Exhibits

31.Rule 13a-14(a)/15d-14(a) Certifications
32.*
Section 1350 Certifications
101.xml*
XBRL Instance Document
101.xsd*
XBRL Taxonomy Extension Schema Document
101.cal*
XBRL Taxonomy Extension Calculation Linkbase Document
101.def*
XBRL Taxonomy Extension Definition Linkbase Document
101.lab*
XBRL Taxonomy Extension Label Linkbase Document
101.pre*
XBRL Taxonomy Extension Presentation Linkbase Document
___________________________
* Furnished. Not Filed. Not incorporated by reference. Not subject to liability.



Page 6 of  7

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ALTEX INDUSTRIES, INC.

ALTEX INDUSTRIES, INC.
Date:  May 11, 201210, 2013 
By: /s//s/ STEVEN H. CARDIN
  Steven H. Cardin
  Chief Executive Officer and Principal Financial Officer

 
Page 7 of 7