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, 2013

[   ] 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 [ 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 February 7, 2014: 13,229,888

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheet
	December 31			September 30
	2013			2013
	(Unaudited)			(Audited)
Assets
Current assets
Cash and cash equivalents	$	2,781,000			2,785,000
Accounts receivable		13,000			13,000
Other		9,000			15,000
Total current assets		2,803,000			2,813,000
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		(181,000	)		(176,000	)
Net property and equipment		183,000			188,000
Other assets		2,000			2,000
Total assets		2,988,000			3,003,000
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable		3,000			2,000
Other accrued expenses		453,000			399,000
Total current liabilities		456,000			401,000
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, 13,229,888		132,000			132,000
Additional paid-in capital		13,881,000			13,881,000
Accumulated deficit		(11,481,000	)		(11,411,000	)
Total stockholders' equity		2,532,000			2,602,000
Total stockholders' equity and liabilities	$	2,988,000			3,003,000
See accompanying notes to consolidated, condensed financial statements.

ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statement of Operations
(Unaudited)
	Three Months Ended
	December 31
	2013			2012
Revenue
Oil and gas sales	$	20,000			28,000
Interest income		3,000			5,000
Other income		7,000			-
Total revenue		30,000			33,000
Costs and expenses
Lease operating		-			2,000
Production taxes		2,000			3,000
General and administrative		93,000			89,000
Depreciation, depletion, and amortization		5,000			9,000
Total costs and expenses		100,000			103,000
Net loss	$	(70,000	)		(70,000	)
Loss per share	$	(0.01	)		(0.01	)
Weighted average shares outstanding		13,229,888			13,288,343
See accompanying notes to consolidated, condensed financial statements.

ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statement of Cash Flow
(Unaudited)
	Three months ended
	December 31
	2013			2012
Cash flows used in operating activities
Net loss	$	(70,000	)		(70,000	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation, depletion, and amortization		5,000			9,000
Increase in accounts receivable		-			(2,000	)
Decrease in other current assets		6,000			5,000
Increase (decrease) in accounts payable		1,000			(5,000	)
Increase in other accrued expenses		54,000			46,000
Net cash used in operating activities		(4,000	)		(17,000	)
Cash flows provided by investing activities		-			-
Net decrease in cash and cash equivalents		(4,000	)		(17,000	)
Cash and cash equivalents at beginning of period		2,785,000			2,852,000
Cash and cash equivalents at end of period	$	2,781,000			2,835,000
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, 2013, 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 2013 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 decreased $4,000 in the three months ended December 31, 2013 (“Q1FY14”). At December 31, 2013, $447,000 of other accrued expenses is accrued but unpaid salary (and related accrued payroll tax liability) due the Company’s president pursuant to his employment agreement that 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.

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 7, 2014, the Company had no material commitments for capital expenditures.

The Company regularly assesses its exposure to 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

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 $4,000 and $17,000 cash in operating activities in Q1FY14 and Q1FY13, 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

10.	Amended and Restated Employment Agreement between the Company and Steven H. Cardin
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 7, 2014	By: /s/ STEVEN H. CARDIN
	Steven H. Cardin
	Chief Executive Officer and Principal Financial Officer

EX-10

EXHIBIT 10

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Agreement is made December 3, 2013, effective as of October 1, 2011, between Altex Industries, Inc. (the "Company") and Steven H. Cardin ("Cardin").

Whereas, the Company and Cardin entered into an employment agreement effective October 1, 1989 (the “89 Agreement”), and

Whereas, the 89 Agreement has been amended from time to time by action of the Board of Directors of the Company as documented in the minutes of the Board of Directors, and

Whereas, the Company and Cardin wish to reflect the amendments to the 89 Agreement by executing this amended and restated employment agreement,

Now, therefore, in consideration of the mutual promises and agreements contained herein, it is agreed that:

1.Nature of Employment; Term of Employment. The Company shall employ Cardin, and Cardin shall serve the Company and its subsidiary corporations (collectively referred to herein as the "Business") as an employee, upon the terms and conditions contained herein, for a term commencing as of the effective date of this Agreement and continuing until October 1, 2016, which term shall thereafter automatically be renewed for successive 12-month periods unless either Cardin or the Company shall give the other notice (a "Nonrenewal Notice") to the contrary at least six months prior to the commencement of any such 12-month period. Cardin agrees to devote such working time, energy, and efforts to the business of the Company as shall be reasonably necessary for the performance of his duties hereunder during the term of his employment with the Company, provided, however, that his primary endeavor shall be that of President and Chief Executive Officer of the Company. Notwithstanding anything to the contrary contained herein, Cardin shall not be prevented from investing and managing his assets and from undertaking civic or charitable endeavors in such form or manner as will not unreasonably interfere with the services to be rendered by him hereunder.

2.Duties and Powers as Employee; Location. Cardin shall be the President and Chief Executive Officer of the Company and shall have the duties, powers, and responsibilities attendant to the office of President and Chief Executive Officer of the Company. The Company acknowledges that Cardin divides his time among Denver, Colorado, Breckenridge, Colorado, and Prince Edward Island, Canada. Cardin shall be permitted to perform his duties at any time in any location, in his sole and absolute subjective discretion, provided, however, that at no time shall he perform his duties in a location that materially impairs his effectiveness or causes the Business to incur material unnecessary expense.

3.Compensation.

a.As compensation for the services to be rendered by Cardin during the term of his employment with the Company, the Company shall pay or cause to be paid to Cardin a minimum annual base salary of $200,000.00, payable in 24 equal bimonthly installments. Cardin’s annual base salary shall increase effective October 1 of each year by 3% of Cardin's annual base salary in effect immediately preceding such October 1.

b.In addition to the foregoing annual base salary, the Company shall pay or cause to be paid to Cardin an annual bonus of no less than 20% of the Company's earnings before tax, payable within 120 days after the end of each of the Company's fiscal years beginning during the term of Cardin's employment hereunder, regardless of whether such payment date falls outside of the term of this Agreement, in either cash or common stock of the Company at then fair market value, in whichever form Cardin may elect.

4.Expenses. Cardin shall be promptly reimbursed for all expenditures he makes on behalf of the Company for which he supplies reasonable documentation.

5.Fringe Benefits. Cardin shall receive benefits, in addition to the compensation provided for herein, during his term of employment with the Company not less than those substantially equivalent to those granted to other executives or employees of the Business, provided, however, that such benefits shall at all times be at least equal to those benefits Cardin is receiving as of the date hereof. Such benefits, including, but not limited to, medical and long-term care insurance, shall be provided to Cardin without charge to him and shall be increased in accordance with increases in such benefits granted to other executives or employees of the Business.

6.Office Facilities. The Company shall provide Cardin with an office, furniture, computer equipment, office supplies, telecommunications equipment, internet connections and devices, and clerical assistance appropriate to the President and Chief Executive Officer.

7.Termination.

a.The Company shall have the right to terminate Cardin's employment pursuant to this Agreement only for (i) Permanent Disability, as hereinafter defined, pursuant to Subparagraph 7.b. hereof or for (ii) Cause, as hereinafter defined, pursuant to Subparagraph 7.c. hereof. Cardin shall have the right to terminate his employment pursuant to this Agreement upon 30 days written notice to the Company in the event that (a) the Company shall fail to make any payment due to Cardin under this Agreement, (b) the Company shall fail to perform any other covenant or agreement to be performed by it hereunder, or (c) the Company shall take any action prohibited by this Agreement, provided, however, that the Company shall have the right to cure such breach of this Agreement within 10 days of receipt of notice of Cardin's intent to terminate his employment pursuant to this Agreement.

b.The Company shall have the right to terminate Cardin's employment pursuant to this Agreement for Permanent Disability, as hereinafter defined, only in accordance with the provisions of this Subparagraph 7.b. In the event of Cardin's Permanent Disability, as hereinafter defined, the Company shall have the right to terminate Cardin's employment pursuant to this Agreement by giving not less than 30 days written notice to Cardin. As used herein, the term "Permanent Disability" shall mean, and be limited to, any illness, injury, or other physical or mental disability that prevents Cardin from performing his duties on behalf of the Company, as provided for herein, for a continuous period in excess of 180 days. Such termination shall require a good faith determination by at least a two-thirds majority of the Company's Board of Directors that the termination of this Agreement is necessary for Permanent Disability. In the event of termination for such Permanent Disability, the Company agrees (i) to pay or cause to be paid to Cardin a total sum, payable in 24 equal monthly installments, equal to 50% of the base salary to which he would have been entitled had he performed his duties for the Company for a period of two years after his termination, less the amount of any disability insurance benefits he received under policies maintained by the Company for his benefit, and (ii) to continue to provide Cardin with all fringe benefits being provided to him pursuant to Paragraph 5. hereof at the time of Cardin's Permanent Disability for a period of two years following such Permanent Disability.

c.The Company shall have the right to terminate Cardin's employment pursuant to this Agreement for Cause, as hereinafter defined, only in accordance with the provisions of this Subparagraph 7.c. Such termination shall require a good faith determination by at least a two-thirds majority of the Company's Board of Directors that the termination of this Agreement is necessary for Cause. As used in this Agreement, the term "Cause" shall mean and be limited to: (i) the conviction of Cardin for a felony under state or federal law, or the equivalent under foreign law, which, in the opinion of at least a two­ thirds majority of the Board of Directors of the Company, has a material adverse effect on the Company or on the ability of Cardin to perform his duties hereunder, unless Cardin performed the acts underlying such felony in good faith and in a manner Cardin reasonably believed to be in or not opposed to the best interests of the Company; or (ii) the material breach by Cardin of the provisions of this Agreement; provided, however, that the Company shall have given Cardin written notice (a) that at least a two-thirds majority of the Board of Directors has made a good faith determination that there has been a material breach by Cardin of the provisions of this Agreement, (b) specifying such breach, and (c) permitting Cardin to cure such breach within a period of 30 days after receipt of such notice.

8.Special Severance Payment.

a.If, subsequent to a Change in Control, as hereinafter defined, Cardin's Circumstances of Employment, as hereinafter defined, shall have changed, Cardin shall have the right to terminate his employment pursuant to this Agreement by written notice to the Company specifying the event relied on for such termination.

b.In the event Cardin terminates his employment pursuant to Subparagraph 7.a. or 8.a. of this Agreement, or if the Company shall terminate Cardin's employment in breach of this Agreement, then the Company shall pay to Cardin, within 15 days of such termination, in cash, the Special Severance Payment, as hereinafter defined.

c.A "Change in Control" shall be deemed to occur upon (i) the election of one or more individuals to the Board of Directors of the Company which election results in one-third of the Directors of the Company consisting of individuals who have not been Directors of the Company for at least two years, unless such individuals have been elected as Directors or nominated for election as Directors by four-fifths of the Directors of the Company who have been Directors of the Company for at least two years, (ii) the sale by the Company of all or substantially all of its assets to any individual, partnership, firm, trust, corporation, or other similar entity ("Person"), the consolidation of the Company with any Person, the merger of the Company with any Person as a result of which merger the Company is not the surviving entity as a publicly-held corporation, (iii) the sale or transfer of shares of the Company by the Company and/or any one or more of its shareholders, in one or more transactions, related or unrelated, to one or more Persons under circumstances whereby any Person, other than Cardin, and any Person that directly or indirectly controls, or is controlled by, or is under common control with any other Person, other than Cardin, shall own, after such sales and transfers, at least twenty percent (20%) but less than one-half, of the shares of the Company having voting power for the election of Directors, unless such sale or transfer has been approved in advance or within sixty days thereafter by four-fifths of the Directors of the Company who have been Directors of the Company for at least two years, (iv) the sale or transfer of shares of the Company by the Company and/or any one or more of its shareholders, in one or more transactions, related or unrelated, to one or more Persons under circumstances whereby any Person and any Person that directly controls, or is controlled by, or is under common control with any other Person, other than Cardin, shall own, after such sales and transfers, at least one-half of the shares of the Company having voting power for the election of Directors, or (v) any other transaction or series of transactions, related or unrelated, with one or more Persons, under circumstances whereby any Person and its Affiliates, other than Cardin, shall own, after such transaction or series of transactions, at least one-half of the shares of the Company having voting power for the election of Directors.

d.Cardin's "Circumstances of Employment” shall have changed if, in Cardin's sole and absolute subjective discretion, there shall have occurred any of the following events: (i) a material reduction or change in Cardin's duties or responsibilities, or a removal from or failure to be elected to a previously held position; (ii) a breach by the Company of any provision of this Agreement; (iii) a reduction in the fringe benefits made available by the Company to Cardin; (iv) a material diminution in Cardin's status, working conditions, or economic benefits; (v) any action which materially and adversely affects Cardin's ability to maximize his annual bonus payable pursuant to Subparagraph 3.b. hereof, including without limitation, the diversion of business from the Company or the failure of the Company to be adequately capitalized; or (vi) any action which substantially impairs the prestige or esteem of Cardin in relation to any other employee of the Business.

e.The "Special Severance Payment" shall mean a lump sum payment equal to the sum of (i) the product of two and the total base salary paid to or accrued with respect to Cardin by the Company pursuant to Subparagraph 3.a. hereof during the 12-month period immediately preceding the termination of Cardin's employment, (ii) the greater of (a) the product of two and the annual bonus paid to or accrued with respect to Cardin by the Company pursuant to Subparagraph 3.b. hereof with respect to the fiscal year of the Company immediately preceding the fiscal year in which Cardin's employment shall have been terminated and (b) the product of three and the total base salary paid to or accrued with respect to Cardin by the Company pursuant to Subparagraph 3.a. hereof during the 12-month period immediately preceding the termination of Cardin's employment, and (iii) any other compensation owed to Cardin pursuant to this Agreement at the time of such termination.

f.In the event that, as a result of any of the payments or other consideration provided for or contemplated by this Agreement or otherwise, a tax (an "Excise Tax") shall be imposed upon Cardin or threatened to be imposed upon Cardin by virtue of the application of Section 4999(a) of the Internal Revenue Code of 1986 (the "Code") as now in effect or as the same may from time to time be amended, or any similar provisions of state or local tax law, the Company shall indemnify and hold Cardin harmless from and against all such taxes (including additions to tax, penalties, and interest and additional Excise Taxes, whether applicable to payments pursuant to this Paragraph 8. or payments pursuant to other provisions of this Agreement) incurred by, or imposed upon, Cardin and all expenses arising therefrom. Each indemnity payment to be made by the Company hereunder shall be increased by the amount of all Federal. state, and local tax liabilities (including additions to tax, penalties and interest, and Excise Tax) incurred by, or imposed upon, Cardin so that the effect of receiving all such payments will be such that Cardin shall be held harmless on an after-tax basis from the amount of all Excise Taxes imposed upon payments made to Cardin by the Company pursuant to this Agreement and otherwise other than pursuant to this Subparagraph 8.f. and all taxes, penalties and interest, and Excise Taxes with respect to payments pursuant to this Subparagraph 8.f. under the laws of all Federal, state, and local taxing authorities and so that Cardin shall not incur any out-of-pocket costs or expenses of any kind or nature on account of the Excise Tax and the receipt of the indemnity payments to be made by the Company pursuant hereto.

g.Each indemnity payment to be made to Cardin pursuant to Subparagraph 8.f. shall be paid within fifteen business days of delivery of a written request (a "Request”) for such payment to the Company (which request may be made prior to the time Cardin is required to file a tax return showing a liability for an Excise Tax or other tax). A Request shall set forth the amount of the indemnity payment due to Cardin and the manner in which such amount was calculated, and Cardin shall thereafter submit such other evidence of the indemnity to which Cardin is entitled as the Company shall reasonably request.

h.Cardin agrees to notify the Company (i) within fifteen business days of being informed by a representative of the Internal Revenue Service (the "Service") or any state or local taxing authority that the Service or such authority intends to assert that an Excise Tax is or may be payable, (ii) within fifteen business days of Cardin's receipt of a revenue agent's report (or similar document) notifying Cardin that an Excise Tax may be imposed, and (iii) within fifteen business days of Cardin's receipt of a Notice of Deficiency under Section 6212 of the Code or similar provision under state or local law which is based in whole or in part upon an Excise Tax and/or a payment made to Cardin pursuant to Subparagraph 8.f.

i.After receiving any of the aforementioned notices, and subject to Cardin's right to control any and all administrative and judicial proceedings with respect to, or arising out of, the examination of Cardin's tax returns, except as such proceedings relate to an Excise Tax, the Company shall have the right (i) to examine all pertinent records, files, and other information and documentation in Cardin's possession or under Cardin's control, (ii) to be present and to participate in all administrative and judicial proceedings with respect to an Excise Tax, including the right to appear and act for Cardin at such proceedings in resisting any contentions made by the Service or a state or local taxing authority with respect to an Excise Tax and to file any and all written responses in connection therewith, (iii) to forego any and all administrative appeals, proceedings, hearings, and conferences with the Service or a state or local taxing authority with respect to an Excise Tax on Cardin's behalf, and (iv) to pay any tax increase on Cardin's behalf and to control all administrative and judicial proceedings with respect to a claim for refund from the Service or state or local taxing authority with respect to such tax increase.

j.The Company shall be solely responsible for all legal, accounting, or other expenses (whether of Cardin's representatives or the representative of the Company) incurred in connection with any such administrative or judicial proceedings insofar as they relate to an Excise Tax or other tax increases resulting therefrom, and Cardin agrees to execute and file, or cause to be executed and filed, such instruments and documents, including, without limitation, waivers, consents, and Powers of Attorneys, as the Company shall reasonably deem necessary or desirable in order to enable it to exercise the rights granted to It pursuant to Subparagraph 8.i. hereof.

k.The liability of the Company shall not be affected by Cardin's failure to give any notice provided for in Subparagraph 8.h. hereof unless such failure materially prejudices its ability to defend itself as provided for. Cardin may not compromise or settle a claim which he is indemnified against hereunder without the consent of the Company, unless Cardin can establish by a preponderance of the evidence that the decision of the Company was not made in the good faith belief that a materially more favorable result could be obtained by continuing to defend against the claim (or prosecute a claim for refund).

9.Indemnification. The Company shall take such steps as Cardin shall reasonably deem necessary, including, but not limited, to obtaining liability insurance, to indemnify Cardin, to the fullest extent possible, under the provisions of the laws of any state in which the Company or, as applicable, any of its subsidiaries is incorporated or is qualified to do business for any act or failure to act in the course of his duties.

10.Prior agreements; entire agreement. This Agreement sets forth the entire agreement and understanding between the Company and Cardin, and any and all prior written or oral agreements or understandings between the Company and Cardin are hereby superseded.

11.Severability. If any provision of this Agreement or the application thereof to any Person or circumstance shall to any extent be held in any proceeding to be invalid or unenforceable, the remainder of this Agreement, or the application of such provision to Persons or circumstances other than those to which it was held to be invalid or unenforceable, shall not be affected thereby, and each remaining provision shall be valid and be enforced to the fullest extent permitted by law.

12.No Waiver. Except as otherwise specifically provided herein, no delay on the part of any party hereto in exercising any right, power, or privilege hereunder shall operate as a waiver thereof; nor shall any waiver on the part of any party hereto of any right, power, or privilege hereunder operate as a waiver of any other right, power, or privilege hereunder; nor shall any single or partial exercise of any right, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power, or privilege hereunder.

13.Headings and Other Matters. The headings of the paragraphs of this Agreement are inserted for convenience of reference only and shall not be considered a part hereof. Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context requires.

14.Successors and Assigns. This Agreement is binding on the Company and its successors, executors, and assigns, regardless of any change in the business structure of the Company, be it through spinoff, merger, sale of stock, sale of assets, or any other transaction.

15.Governing Law. This Agreement shall be construed under and governed by the laws of the State of Colorado without regard to conflict of laws principles.

16.Jurisdiction; Service of Process. Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement may be brought against any of the parties in the courts of the State of Colorado, County of Denver, or, if it has or can acquire jurisdiction, in the United States District Court for the District of Colorado, and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid in those courts. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere.

17.Amendments. This Agreement may be amended or modified only by an agreement in writing between the Company and Cardin.

18.Costs and expenses in event of breach. In the event that either party breaches any of the terms of this Agreement, the non-defaulting party shall be reimbursed by such defaulting party for all reasonable costs and expenses, including, but not limited to, reasonable attorneys' fees incurred by the non-defaulting party enforcing the terms of this Agreement and/or recovering damages as a result of any such breach.

19.Counterparts and digital signatures. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original, and all of which, when taken together, will be deemed to constitute one and the same agreement. A facsimile, photocopy or a copy in PDF or other digitized image format shall be deemed an original document for all purposes.

20.Notices. Any notices, requests, instructions, or other documents to be given hereunder by Cardin to the Company or by the Company to Cardin shall be in writing and shall be sent by nationally recognized overnight courier as set forth below or at such other address as Cardin or the Company may designate by prior written notice to the other: If to the Company then to: Altex Industries, Inc., c/o Corporation Service Company, 1560 Broadway Ste 2090, Denver CO 80202. If to Cardin, then to: Steven H. Cardin, 700 Colorado Blvd. #273, Denver CO 80206. Notices will be deemed effective upon receipt.

ALTEX INDUSTRIES, INC.

By: /s/ STEVEN H. CARDIN          

      Steven H. Cardin, President

STEVEN H. CARDIN

/s/ STEVEN H. CARDIN              

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 7, 2014
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, 2013, 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 7, 2014	/s/ STEVEN H. CARDIN
	By:	Steven H. Cardin
		Chief Executive Officer and Principal Financial Officer

XML

Consolidated Balance Sheet (USD $)	Dec. 31, 2013	Sep. 30, 2013
Consolidated Balance Sheet
Cash and cash equivalents	$ 2,781,000	$ 2,785,000
Accounts receivable	13,000	13,000
Other	9,000	15,000
Total current assets	2,803,000	2,813,000
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	(181,000)	(176,000)
Net property and equipment	183,000	188,000
Other assets	2,000	2,000
Total assets	2,988,000	3,003,000
Accounts payable	3,000	2,000
Other accrued expenses	453,000	399,000
Total current liabilities	456,000	401,000
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, 13,229,888	132,000	132,000
Additional paid-in capital	13,881,000	13,881,000
Accumulated deficit	(11,481,000)	(11,411,000)
Total stockholders' equity	2,532,000	2,602,000
Total stockholders' equity and liabilities	$ 2,988,000	$ 3,003,000

XML

Note 1 - Financial Statements

3 Months Ended

Dec. 31, 2013

Notes

Note 1 - Financial Statements

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, 2013, 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 2013 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, 2013	Sep. 30, 2013
Consolidated Balance Sheet Parenthetical
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	13,229,888	13,229,888
Common stock shares outstanding	13,229,888	13,229,888

XML

Document and Entity Information	3 Months Ended
	Dec. 31, 2013	Feb. 07, 2014
Document and Entity Information
Entity Registrant Name	ALTEX INDUSTRIES INC
Document Type	10-Q
Document Period End Date	Dec. 31, 2013
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	2014
Document Fiscal Period Focus	Q1
Entity Common Stock, Shares Outstanding		13,229,888

XML

Consolidated Statement of Operations (USD $)	3 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Consolidated Statement of Operations
Oil and gas sales	$ 20,000	$ 28,000
Interest income	3,000	5,000
Other income	7,000
Total revenue	30,000	33,000
Lease operating		2,000
Production taxes	2,000	3,000
General and administrative	93,000	89,000
Depreciation, depletion, and amortization	5,000	9,000
Total costs and expenses	100,000	103,000
Net loss	$ (70,000)	$ (70,000)
Loss per share	$ (0.01)	$ (0.01)
Weighted average shares outstanding	13,229,888	13,288,343

XML

Consolidated Statements of Cash Flows (USD $)	3 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Consolidated Statements of Cash Flows
Net loss	$ (70,000)	$ (70,000)
Depreciation, depletion, and amortization	5,000	9,000
Increase in accounts receivable		(2,000)
Decrease in other current assets	6,000	5,000
Increase (decrease) in accounts payable	1,000	(5,000)
Increase in other accrued expenses	54,000	46,000
Net cash used in operating activities	(4,000)	(17,000)
Cash flows provided by investing activities
Net decrease in cash and cash equivalents	(4,000)	(17,000)
Cash and cash equivalents at beginning of period	2,785,000	2,852,000
Cash and cash equivalents at end of period	$ 2,781,000	$ 2,835,000