10-Q

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 December 31, 2011

[   ] 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 of	(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 [  ] 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 February 9, 2012: 13,619,606

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheet
	December 31			September 30
	2011			2011
	(Unaudited)			(Audited)
Assets
Current assets
Cash and cash equivalents	$	2,943,000			2,584,000
Accounts receivable		13,000			14,000
Other		4,000			504,000
Total current assets		2,960,000			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		(128,000	)		(122,000	)
Net property and equipment		239,000			245,000
Other assets		4,000			4,000
Total assets		3,203,000			3,351,000
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable		18,000			26,000
Other accrued expenses		72,000			106,000
Total current liabilities		90,000			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		(10,951,000	)		(10,845,000	)
Total stockholders' equity		3,113,000			3,219,000
Total stockholders' equity and liabilities	$	3,203,000			3,351,000

See accompanying notes to consolidated, condensed financial statements.

ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statement of Operations
(Unaudited)
	Three Months Ended
	December 31
	2011			2010
Revenue
Oil and gas sales	$	23,000			29,000
Interest income		5,000			9,000
Other		-			1,000
Total revenue		28,000			39,000
Costs and expenses
Lease operating		1,000			2,000
Production taxes		2,000			3,000
General and administrative		125,000			111,000
Depreciation, depletion, and amortization		6,000			5,000
Total costs and expenses		134,000			121,000
Net loss	$	(106,000	)		(82,000	)
Loss per share	$	(0.008	)		(0.006	)
Weighted average shares outstanding		13,619,606			13,619,606

See accompanying notes to consolidated, condensed financial statements.

ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statement of Cash Flow
(Unaudited)
	Three months ended
	December 31
	2011			2010
Cash flows used in operating activities
Net loss	$	(106,000	)		(82,000	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation, depletion, and amortization		6,000			5,000
Decrease in accounts receivable		1,000			-
Increase (decrease) in accounts payable		(8,000	)		4,000
Increase (decrease) in other accrued expenses		(34,000	)		1,000
Net cash used in operating activities		(141,000	)		(72,000	)
Cash flows provided by investing activities
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		359,000			(72,000	)
Cash and cash equivalents at beginning of period		2,584,000			3,327,000
Cash and cash equivalents at end of period	$	2,943,000			3,255,000

See accompanying notes to consolidated, condensed financial statements.

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 December 31, 2011, and the cash flows and results of operations for the three months then ended. Such adjustments consisted only of normal recurring items. The results of operations for the three months ended December 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 2011 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 $359,000 in the three months ended December 31, 2011, primarily because of a refund to the Company of a $500,000 cash deposit made in connection with a potential investment that was terminated. This was offset by $141,000 in cash used in operating activities. 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.

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 February 9, 2012, 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.

Results of Operations

General and administrative expense increased from $111,000 in the three months ended December 31, 2010, to $125,000 in the three months ended December 31, 2011, principally because a $24,000 decrease in salary expense was more than offset by a $43,000 increase in acquisition 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. Net cash used in operating activities in the nine months ended December 31, 2011 and 2010, was $141,000 and $72,000, respectively.

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.

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.

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:  February 9, 2012	By: /s/ STEVEN H. CARDIN
	Steven H. Cardin
	Chief Executive Officer and Principal Financial Officer

EX-31

EXHIBIT 31

Rule 13a-14(a)/15d-14(a) Certifications

I, Steven H. Cardin, certify that:

1. I have reviewed this Form 10-Q of Altex Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ STEVEN H. CARDIN	February 9, 2012
Steven H. Cardin	Date
Principal Executive Officer and Principal Financial Officer

EX-32

EXHIBIT 32

Certification pursuant to 18 U.S.C. Section 1350,

as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Altex Industries, Inc. (the "Company") on Form 10-Q for the period ending December 31, 2011, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Steven H. Cardin, Chief Executive Officer and Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: February 9, 2012	/s/ STEVEN H. CARDIN
	By:	Steven H. Cardin
		Chief Executive Officer and Principal Financial Officer

XML

Consolidated Balance Sheet (USD $)	Dec. 31, 2011	Sep. 30, 2011
Cash and cash equivalents	$ 2,943,000	$ 2,584,000
Accounts receivable	13,000	14,000
Other	4,000	504,000
Total current assets	2,960,000	3,102,000
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	(128,000)	(122,000)
Net property and equipment	239,000	245,000
Other assets	4,000	4,000
Total assets	3,203,000	3,351,000
Accounts payable	18,000	26,000
Other accrued expenses	72,000	106,000
Total current liabilities	90,000	132,000
Commitments and Contingencies
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	(10,951,000)	(10,845,000)
Total stockholders' equity	3,113,000	3,219,000
Total stockholders' equity and liabilities	$ 3,203,000	$ 3,351,000

XML

Financial Statements

3 Months Ended

Dec. 31, 2011

Accounting Policies

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

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 December 31, 2011, and the cash flows and results of operations for the three months then ended. Such adjustments consisted only of normal recurring items. The results of operations for the three months ended December 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 2011 Annual Report on Form 10-K, and it is suggested that these consolidated, condensed financial statements be read in conjunction therewith.

XML

Consolidated Balance Sheet Parenthetical (USD $)	Dec. 31, 2011	Sep. 30, 2011
Preferred stock par value	$ 0.01	$ 0.01
Preferred stock shares authorized	5,000,000	5,000,000
Preferred stock shares issued
Common stock par value	$ 0.01	$ 0.01
Common stock shares authorized	50,000,000	50,000,000
Common stock shares issued	13,619,606	13,619,606
Common stock shares outstanding	13,619,606	13,619,606

XML

Document and Entity Information	3 Months Ended
	Dec. 31, 2011	Feb. 09, 2012
Document and Entity Information
Entity Registrant Name	ALTEX INDUSTRIES INC
Document Type	10-Q
Document Period End Date	Dec. 31, 2011
Amendment Flag	false
Entity Central Index Key	0000775057
Current Fiscal Year End Date	--09-30
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Entity Common Stock, Shares Outstanding		13,619,606

XML

Consolidated Statement of Operations (USD $)	3 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Oil and gas sales	$ 23,000	$ 29,000
Interest income	5,000	9,000
Other		1,000
Total revenue	28,000	39,000
Lease operating	1,000	2,000
Production taxes	2,000	3,000
General and administrative	125,000	111,000
Depreciation, depletion, and amortization	6,000	5,000
Total costs and expenses	134,000	121,000
Net loss	$ (106,000)	$ (82,000)
Loss per share	$ (0.008)	$ (0.006)
Weighted average shares outstanding - basic	13,619,606	13,619,606
Weighted average shares outstanding - diluted	13,619,606	13,619,606

XML

Consolidated Statements of Cash Flows (USD $)	3 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Net loss	$ (106,000)	$ (82,000)
Depreciation, depletion, and amortization	6,000	5,000
Decrease in accounts receivable	1,000
Increase (decrease) in accounts payable	(8,000)	4,000
Increase (decrease) in other accrued expenses	(34,000)	1,000
Net cash used in operating activities	(141,000)	(72,000)
Deposit on potential investment subsequently terminated	500,000
Total cash flows used in investing activities	500,000
Net increase (decrease) in cash and cash equivalents	359,000	(72,000)
Cash and cash equivalents at beginning of period	2,584,000	3,327,000
Cash and cash equivalents at end of period	$ 2,943,000	$ 3,255,000