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 June 30, 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 ]

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 August 3, 2012: 13,619,6069, 2013: 13,288,343

 
Page 1 of 8
 

PART I - FINANCIAL INFORMATION 
  
Item 1. Financial Statements 
  
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES 
Consolidated Balance Sheet 
  
  June 30  September 30 
  2013  2012 
  (Unaudited)  (Audited) 
Assets      
Current assets      
    Cash and cash equivalents $2,796,000   2,852,000 
    Accounts receivable  11,000   13,000 
    Other  18,000   15,000 
Total current assets  2,825,000   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  (182,000)  (155,000)
Net property and equipment  182,000   209,000 
         
Other assets  3,000   3,000 
         
Total assets  3,010,000   3,092,000 
         
Liabilities and Stockholders’ Equity        
Current liabilities        
    Accounts payable  1,000   12,000 
    Other accrued expenses  348,000   195,000 
Total current liabilities  349,000   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  (11,359,000)  (11,135,000)
Total stockholders' equity  2,661,000   2,885,000 
         
Total stockholders' equity and liabilities $3,010,000   3,092,000 
 
PART I - FINANCIAL INFORMATIONSee accompanying notes to consolidated, condensed financial statements.
 
Item 1. Financial Statements1
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES 
Consolidated Statement of Operations 
(Unaudited) 
             
  Three Months Ended  Nine Months Ended 
  June 30  June 30 
  2013  2012  2013  2012 
Revenue            
    Oil and gas sales $23,000   25,000   66,000   83,000 
    Interest income  5,000   4,000   14,000   15,000 
    Other  4,000   26,000   4,000   26,000 
Total revenue  32,000   55,000   84,000   124,000 
                 
Costs and expenses                
    Lease operating  1,000   1,000   4,000   5,000 
    Production taxes  3,000   2,000   7,000   8,000 
    General and administrative  87,000   88,000   270,000   296,000 
    Depreciation, depletion, and amortization  9,000   6,000   27,000   18,000 
Total costs and expenses  100,000   97,000   308,000   327,000 
                 
Net loss $(68,000)  (42,000)  (224,000)  (203,000)
                 
Loss per share $(0.01)  (0.00)  (0.02)  (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.
 
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheet
       
       
  June 30  September 30 
  2012  2011 
  (Unaudited)  (Audited) 
Assets      
Current assets      
    Cash and cash equivalents $2,909,000   2,584,000 
    Accounts receivable  16,000   14,000 
    Other  19,000   504,000 
Total current assets  2,944,000   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  (140,000)  (122,000)
Net property and equipment  227,000   245,000 
         
Other assets  4,000   4,000 
         
Total assets  3,175,000   3,351,000 
         
Liabilities and Stockholders’ Equity        
Current liabilities        
    Accounts payable  13,000   26,000 
    Other accrued expenses  146,000   106,000 
Total current liabilities  159,000   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  (11,048,000)  (10,845,000)
Total stockholders' equity  3,016,000   3,219,000 
         
Total stockholders' equity and liabilities $3,175,000   3,351,000 
2
 
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES 
Consolidated Statement of Cash Flow 
(Unaudited) 
  
  Nine months ended 
  June 30 
  2013  2012 
Cash flows used in operating activities      
    Net loss $(224,000)  (203,000)
    Adjustments to reconcile net loss to net cash used in operating activities        
        Depreciation, depletion, and amortization  27,000   18,000 
        Decrease (increase) in accounts receivable  2,000   (2,000)
        Increase in other current assets  (3,000)  (15,000)
        Decrease in accounts payable  (11,000)  (13,000)
        Increase in other accrued expenses  153,000   40,000 
Net cash used in operating activities  (56,000)  (175,000)
         
Cash flows provided by investing activities        
  Return of deposit on potential investment subsequently terminated  -   500,000 
Total cash flows provided by investing activities  -   500,000 
         
Net increase (decrease) in cash and cash equivalents  (56,000)  325,000 
Cash and cash equivalents at beginning of year  2,852,000   2,584,000 
Cash and cash equivalents at end of year $2,796,000   2,909,000 

See accompanying notes to consolidated, condensed financial statements.

 
Page 2 of 83
 
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statement of Operations
(Unaudited)
             
  Three Months Ended  Nine Months Ended 
  June 30  June 30 
  2012  2011  2012  2011 
Revenue            
    Oil and gas sales $25,000   26,000   83,000   88,000 
    Interest income  4,000   7,000   15,000   24,000 
    Other  26,000   3,000   26,000   5,000 
Total revenue  55,000   36,000   124,000   117,000 
                 
Costs and expenses                
    Lease operating  1,000   -   5,000   3,000 
    Production taxes  2,000   2,000   8,000   8,000 
    General and administrative  88,000   112,000   296,000   329,000 
    Depreciation, depletion, and amortization  6,000   6,000   18,000   18,000 
Total costs and expenses  97,000   120,000   327,000   358,000 
                 
Net loss $(42,000)  (84,000)  (203,000)  (241,000)
                 
Loss per share $(0.003)  (0.006)  (0.015)  (0.018)
                 
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 3 of 8
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statement of Cash Flow
(Unaudited)
  Nine months ended 
  June 30 
  2012  2011 
Cash flows used in operating activities      
    Net loss $(203,000) $(241,000)
    Adjustments to reconcile net loss to net cash used in operating activities        
        Depreciation, depletion, and amortization  18,000   18,000 
        Decrease (increase) in accounts receivable  (2,000)  1,000 
        Decrease (increase) in other current assets  (15,000)  1,000 
        Decrease in accounts payable  (13,000)  (9,000)
        Increase in other accrued expenses  40,000   - 
Net cash used in operating activities  (175,000)  (230,000)
         
Cash flows provided by investing activities        
  Return of deposit on potential investment subsequently terminated  500,000   - 
Total cash flows provided by investing activities  500,000   - 
         
Net increase (decrease) in cash and cash equivalents  325,000   (230,000)
Cash and cash equivalents at beginning of year  2,584,000   3,327,000 
Cash and cash equivalents at end of year $2,909,000  $3,097,000 
See accompanying notes to consolidated, condensed financial statements.
Page 4 of 8
 
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 June 30, 2012,2013, and the cash flows and results of operations for the three and nine months then ended. Such adjustments consisted only of normal recurring items. The results of operations for the three and nine months ended June 30 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 $325,000decreased $56,000 in the nine months ended June 30, 2012, primarily2013, because of a refund to the Company of a $500,000used $56,000 cash deposit made in connection with a potential investment that was terminated. This was offset by $175,000 in cash used in operating activities. At June 30, 2012, $138,0002013, $340,000 of other accrued expenses is accrued but unpaid salary due the Company’s president pursuant to his employment agreement.agreement, and related accrued but unpaid payroll tax. 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.

4
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 August 3, 2012,9, 2013, the Company had no material commitments for capital expenditures.

Page 5 of 8

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.

Results of Operations

DuringIn the quarter ended June 30, 2012, the Company recognized $26,000 of other income that had previously been recorded as a liability. GeneralOil and administrative expensegas sales decreased from $112,000 in the quarter ended June 30, 2011, to $88,000 in the quarter ended June 30, 2012, and from $329,000$83,000 in the nine months ended June 30, 2011,2012, to $66,000 in the nine months ended June 30, 2013, because of a decrease in barrels of oil sold. General and administrative expense decreased from $296,000 in the nine months ended June 30, 2012, to $270,000 in the nine months ended June 30, 2013, because of reduced salaryacquisition 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

Investing Activities. Net cash provided by investing activities in the nine months ended June 30, 2012, consisted of a refund to the Company of a $500,000 cash deposit made in connection with a potential investment that was 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.

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 6 of 85
 

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 7 of 86
 

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.

Date:  August 3, 20129, 2013By: /s/ STEVEN H. CARDIN
 Steven H. Cardin
 Chief Executive Officer and Principal Financial Officer

 
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