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, 2016June 30, 2017

[   ]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)(I.R.S. Employer 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 [  ]N bAccelerated 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 [  ] No [ X ]

Number of shares outstanding of issuer's Common Stock as of February 10,July 21, 2017: 12,644,452
1
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
PART I - FINANCIAL INFORMATION PART I - FINANCIAL INFORMATION  
      
Item 1. Financial Statements      
      
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES ALTEX INDUSTRIES, INC. AND SUBSIDIARIES  
Consolidated Balance Sheets Consolidated Balance Sheets  
 
 June 30,  September 30, 
 December 31,  September 30,  2017  2016 
 2016  2016  (Unaudited)    
Assets            
Current assets            
Cash and cash equivalents $2,444,000  $2,472,000  $2,379,000  $2,472,000 
Accounts receivable  4,000   3,000   2,000   3,000 
Other  12,000   16,000   22,000   16,000 
Total current assets  2,460,000   2,491,000   2,403,000   2,491,000 
                
Property and equipment, at cost                
Proved oil and gas properties (successful efforts method)  334,000   334,000   334,000   334,000 
Other  17,000   17,000   3,000   17,000 
Total property and equipment, at cost  351,000   351,000   337,000   351,000 
Less accumulated depreciation, depletion, and amortization  (230,000)  (224,000)  (227,000)  (224,000)
Net property and equipment  121,000   127,000   110,000   127,000 
                
Other assets        
        
Total assets  2,581,000   2,618,000  $2,513,000  $2,618,000 
                
Liabilities and Stockholders' Equity                
Current liabilities                
Accounts payable  5,000   7,000  $3,000  $7,000 
Other accrued expenses  1,076,000   1,080,000   1,081,000   1,080,000 
Total current liabilities  1,081,000   1,087,000   1,084,000   1,087,000 
                
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, 12,734,452; outstanding 12,644,452, at December 31, 2016  127,000   127,000 
Common stock, $.01 par value. Authorized 50,000,000 shares; issued, 12,734,452; outstanding 12,644,452 at June 30, 2017 and 12,734,452 at September 30, 2016  127,000   127,000 
Additional paid-in capital  13,837,000   13,837,000   13,837,000   13,837,000 
Accumulated deficit  (12,456,000)  (12,433,000)  (12,527,000)  (12,433,000)
Treasury stock, at cost, 90,000 shares  (8,000)  -   (8,000)  - 
Total stockholders' equity  1,500,000   1,531,000   1,429,000   1,531,000 
                
Total liabilities and stockholders' equity $2,581,000  $2,618,000  $2,513,000  $2,618,000 
        
 
See notes to unaudited consolidated, condensed consolidated financial statements
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ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES            
Consolidated Statements of Operations            
(Unaudited)            
             
  Three Months Ended  NIne Months Ended 
  June 30     June 30    
  2017  2016  2017  2016 
Revenue            
    Oil and gas sales $14,000  $3,000  $51,000  $17,000 
Total revenue  14,000   3,000   51,000   17,000 
                 
Costs and expenses                
    Production taxes  -   -   3,000   1,000 
    General and administrative  39,000   102,000   142,000   296,000 
    Depreciation, depletion, and amortization  5,000   5,000   17,000   16,000 
Total costs and expenses  44,000   107,000   162,000   313,000 
                 
Other income                
    Interest income  5,000   4,000   14,000   13,000 
    Other income  -   -   3,000   - 
Total other income  5,000   4,000   17,000   13,000 
                 
Net loss $(25,000) $(100,000) $(94,000) $(283,000)
                 
Loss per share $(0.00) $(0.01) $(0.01) $(0.02)
                 
Weighted average shares outstanding  12,644,452   12,923,012   12,659,177   12,923,159 
 
       
  Three Months Ended 
  December 31,    
  2016  2015 
Revenue      
    Oil and gas sales $21,000  $5,000 
    Other income  -     
Total revenue  21,000   5,000 
         
Costs and expenses        
    Lease operating  -   - 
    Production taxes  1,000   - 
    General and administrative  42,000   93,000 
    Depreciation, depletion, and amortization  6,000   6,000 
Total costs and expenses  49,000   99,000 
         
Other income (expense)        
    Interest income  5,000   4,000 
         
Net loss $(23,000) $(90,000)
         
Loss per share $(0.00) $(0.01)
         
Weighted average shares outstanding  12,688,148   12,923,232 
         
See notes to unaudited consolidated, condensed consolidated financial statements
3
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES      
Consolidated Statements of Cash Flow      
(Unaudited)      
  
  Nine months ended 
  June 30    
  2017  2016 
Cash flows used in operating activities      
    Net loss $(94,000) $(283,000)
    Adjustments to reconcile net loss to net cash used in operating activities:        
        Depreciation, depletion, and amortization  17,000   16,000 
          Changes in operating assets and liabilities:        
            Decrease in accounts receivable  1,000   6,000 
            Increase in other current assets  (6,000)  (5,000)
            Decrease in accounts payable  (4,000)  (3,000)
            Increase in other accrued expenses  1,000   178,000 
Net cash used in operating activities  (85,000)  (91,000)
         
Cash flows from financing activities        
    Acquisition of treasury stock  (8,000)  (2,000)
Net cash used in financing activities  (8,000)  (2,000)
         
Net decrease in cash and cash equivalents  (93,000)  (93,000)
Cash and cash equivalents at beginning of period  2,472,000   2,605,000 
Cash and cash equivalents at end of period $2,379,000  $2,512,000 
         
Supplmental disclosures        
    Cash paid for interest  -   - 
    Cash paid for income taxes  -   - 
 
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
  Three months ended 
  December 31,    
  2016  2015 
Cash flows used in operating activities      
    Net loss $(23,000) $(90,000)
    Adjustments to reconcile net loss to net cash used in operating activities        
        Depreciation, depletion, and amortization  6,000   6,000 
        (Increase) decrease in accounts receivable  (1,000)  3,000 
        Decrease in other current assets  4,000   5,000 
        Decrease in accounts payable  (2,000)  (6,000)
        Increase (decrease) in other accrued expenses  (4,000)  55,000 
Net cash used in operating activities  (20,000)  (27,000)
         
Cash flows from financing activities        
    Acquisition of treasury stock  (8,000)  - 
Net cash used in financing activities  (8,000)  - 
         
Net decrease in cash and cash equivalents  (28,000)  (27,000)
Cash and cash equivalents at beginning of period  2,472,000   2,605,000 
Cash and cash equivalents at end of period $2,444,000  $2,578,000 
         
See notes to unaudited consolidated, condensed consolidated financial statements
4
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)

Note 1 ‑ Basis of Presentation. The accompanying Condensed Consolidated Balance Sheet as of September 30, 2016, which was derived from audited financial statements, and the unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with U.S. GAAP for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. 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, 2016,June 30, 2017, 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 December 31June 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 2016 Annual Report on Form 10‑K, and it is suggested that these condensed consolidated financial statements be read in conjunction therewith.

Note 2 – Acquisition of Treasury Shares. During the three months ended December 31, 2016, the Company acquired 90,000 shares of its Common Stock for $8,000.

"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 of oil and gas; 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 $28,000$93,000 in the threenine months ended December 31, 2016 ("Q1FY17").June 30, 2017. At December 31, 2016,June 30, 2017, $1,073,000 of other accrued expenses is accrued but unpaid salary (and related accrued payroll tax liability) due to the Company's president 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, the possibility of a change in the interest rates the Company realizes on cash balances, and changes in the price of oil and natural gas, 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 10,July 21, 2017, 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.

5
Results of Operations

Oil and gas sales increased from $5,000$3,000 in the three months ended December 31, 2015,June 30, 2016, ("Q1FY16"Q3FY16") to $21,000$14,000 in Q1FY17. $11,000the three months ended June 30, 2017, ("Q3FY17") and from $17,000 in the nine months ended June 30, 2016, to $51,000 in the nine months ended June 30, 2017. $6,000 of the increase from Q3FY16 to Q3FY17 and $24,000 of the increase from the nine months ended June 30, 2016, to the nine months ended June 30, 2017, resulted from sales from a newly drilled well in which the Company has an interest, and the remaining $5,000 of the increaseinterest. The remainder resulted principally from higher realized oil prices. Sales from the newly drilled well are levelling off, and the Company expects future monthly sales from the newly drilled well to be materially less than those realized in Q1FY17. General and administrative expense decreased from $93,000$102,000 in Q1FY16Q3FY16 to $42,000$39,000 in Q1FY17Q3FY17 and from $296,000 in the nine months ended June 30, 2016, to $142,000 in the nine months ended June 30, 2017, principally because of a reduction in salary expense. The decline in salary expense resulted from a new employment agreement with the Company's president which was effective October 1, 2016, and which reduced salary expense related to the Company's president from $56,000 in Q1FY16 to $1,000 in Q1FY17. 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 and oil and gas prices, 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 $27,000$91,000 and $20,000$85,000 cash in operating activities in Q1FY16the nine months ended June 30, 2016 and Q1FY17,2017, respectively.

Financing Activities. The Company acquired 20,000 shares of its common stock for $2,000 during the nine months ended June 30, 2016 and acquired 90,000 shares of its common stock for $8,000 during Q1FY17.

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.

Changes in Internal Control Over Financial Reporting
During the period covered by this Report there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
6
PART II - OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

Period
(a)
Total number of shares (or units) purchased
(b)
Average price paid per share (or unit)
(c)
Total number of shares (or units) purchased as part of publicly announced plans or programs
(d)
Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
October 1, 2016
through
October 31, 2016
20,000$0.09----
November 1, 2016 through
November 30, 2016
70,000$0.09----
December 1, 2016 through
December 31, 2016
--------
Total90,000$0.09----

The Company has no publicly announced plan or program for the purchase of shares.

Item 6. Exhibits

31.Rule 13a-14(a)/15d-14(a) Certifications
32.*
Section 1350 Certifications
101.xmlXBRL Instance Document
101.xsdXBRL Taxonomy Extension Schema Document
101.calXBRL Taxonomy Extension Calculation Linkbase Document
101.defXBRL Taxonomy Extension Definition Linkbase Document
101.labXBRL Taxonomy Extension Label Linkbase Document
101.preXBRL 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 10,July 21, 2017
By: /s/ STEVEN H. CARDIN
 Steven H. Cardin
 
Chief Executive Officer and
Principal Financial Officer

7