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, 2018June 30, 2019

[   ]
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 [  ]Accelerated filer [  ]
Non-accelerated filer [  ]Smaller reporting company [ X ]
 Emerging growth company [  ]

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 8,August 9, 2019: 12,351,731

12,262,376
PART I - FINANCIAL INFORMATION
 
  
Item 1. Financial Statements 
  
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES 
Condensed Consolidated Balance Sheets 
(Unaudited) 
  December 31,  September 30, 
  2018  2018 
Assets      
Current assets      
    Cash and cash equivalents $2,266,000  $2,274,000 
    Accounts receivable  3,000   - 
    Other  14,000   18,000 
Total current assets  2,283,000   2,292,000 
         
Property and equipment, at cost        
    Proved oil and gas properties (successful efforts method)  333,000   333,000 
    Less accumulated depreciation, depletion, and amortization  (239,000)  (236,000)
Net property and equipment  94,000   97,000 
         
Total assets  2,377,000   2,389,000 
         
Liabilities and Stockholders’ Equity        
Current liabilities        
    Accounts payable  6,000   11,000 
    Other accrued expenses  1,075,000   1,080,000 
Total current liabilities  1,081,000   1,091,000 
         
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; 12,351,731 shares issued and outstanding  124,000   124,000 
    Additional paid-in capital  13,809,000   13,809,000 
    Accumulated deficit  (12,637,000)  (12,635,000)
Total stockholders' equity  1,296,000   1,298,000 
         
Total liabilities and stockholders' equity $2,377,000  $2,389,000 
         
See notes to unaudited condensed consolidated financial statements 
PART I - FINANCIAL INFORMATION
 
  
Item 1. Financial Statements 
  
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES 
Condensed Consolidated Balance Sheets 
(Unaudited) 
  June 30  September 30 
  2019  2018 
Assets      
Current assets      
    Cash and cash equivalents $2,280,000  $2,274,000 
    Accounts receivable  2,000   - 
    Other  24,000   18,000 
Total current assets  2,306,000   2,292,000 
         
Property and equipment, at cost        
    Proved oil and gas properties (successful efforts method)  333,000   333,000 
    Less accumulated depreciation, depletion, and amortization  (245,000)  (236,000)
Net property and equipment  88,000   97,000 
         
Total assets  2,394,000   2,389,000 
         
Liabilities and Stockholders’ Equity        
Current liabilities        
    Accounts payable  4,000   11,000 
    Other accrued expenses  1,080,000   1,080,000 
Total current liabilities  1,084,000   1,091,000 
         
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; 12,351,731 shares issued; 12,262,376 and 12,351,731 shares outstanding in June and September, respectively  124,000   124,000 
    Additional paid-in capital  13,809,000   13,809,000 
    Accumulated deficit  (12,616,000)  (12,635,000)
    Treasury stock, at cost, 89,355 shares  (7,000)  - 
Total stockholders' equity  1,310,000   1,298,000 
         
Total liabilities and stockholders' equity $2,394,000  $2,389,000 


See notes to unaudited condensed consolidated financial statements
1
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES 
Condensed Consolidated Statements of Operations 
(Unaudited) 
       
  Three Months Ended 
  December 31, 
  2018  2017 
Revenue      
    Oil and gas sales $22,000  $12,000 
Total revenue  22,000   12,000 
         
Costs and expenses        
    Production taxes  2,000   - 
    General and administrative  32,000   38,000 
    Depreciation, depletion, and amortization  3,000   5,000 
Total costs and expenses  37,000   43,000 
         
Loss from operations  (15,000)  (31,000)
         
Other income        
    Interest income  13,000   4,000 
Total other income  13,000   4,000 
         
Net loss $(2,000) $(27,000)
         
Loss per share $(0.00) $(0.00)
         
Weighted average shares outstanding  12,351,731   12,573,229 
         
See notes to unaudited condensed consolidated financial statements 
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES 
Condensed Consolidated Statements of Operations 
(Unaudited) 
             
  Three Months Ended  Nine Months Ended 
  June 30  June 30 
  2019  2018  2019  2018 
Revenue            
    Oil and gas sales $12,000  $14,000  $43,000  $53,000 
Total revenue  12,000   14,000   43,000   53,000 
                 
Costs and expenses                
    Production taxes  -   1,000   3,000   4,000 
    General and administrative  35,000   35,000   115,000   118,000 
    Depreciation, depletion, and amortization  3,000   4,000   9,000   13,000 
Total costs and expenses  38,000   40,000   127,000   135,000 
                 
Loss from operations  (26,000)  (26,000)  (84,000)  (82,000)
                 
Other income                
    Interest income  12,000   10,000   38,000   19,000 
    Other income  41,000   1,000   65,000   6,000 
Total other income  53,000   11,000   103,000   25,000 
                 
Net gain (loss) $27,000  $(15,000) $19,000  $(57,000)
                 
Gain (loss) per share $0.00  $(0.00) $0.00  $(0.00)
                 
Weighted average shares outstanding  12,262,596   12,555,131   12,318,973   12,561,230 


See notes to unaudited condensed consolidated financial statements
2
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES 
Condensed Consolidated Statements of Cash Flows 
(Unaudited) 
  Three months ended 
  December 31, 
  2018  2017 
Cash flows used in operating activities      
    Net loss $(2,000) $(27,000)
    Adjustments to reconcile net loss to net cash used in operating activities        
        Depreciation, depletion, and amortization  3,000   5,000 
        Increase in accounts receivable  (3,000)  (1,000)
        Decrease in other current assets  4,000   5,000 
        Increase (decrease) in accounts payable  (5,000)  4,000 
        Decrease in other accrued expenses  (5,000)  (4,000)
Net cash used in operating activities  (8,000)  (18,000)
         
Cash flows from financing activities        
    Acquisition of treasury stock  -   (4,000)
Net cash used in financing activities  -   (4,000)
         
Net decrease in cash and cash equivalents  (8,000)  (22,000)
Cash and cash equivalents at beginning of period  2,274,000   2,349,000 
Cash and cash equivalents at end of period $2,266,000  $2,327,000 
         
Noncash investing and financing activities        
    Retirement of property plant and equipment $-  $3,000 
         
Supplemental disclosures        
    Cash paid for interest $-  $- 
    Cash paid for income taxes $-  $- 
         
See notes to unaudited condensed consolidated financial statements 
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES 
Condensed Consolidated Statements of Cash Flows 
(Unaudited) 
  Nine months ended 
  June 30 
  2019  2018 
Cash flows used in operating activities      
    Net gain (loss) $19,000  $(57,000)
    Adjustments to reconcile net loss to net cash used in operating activities        
        Depreciation, depletion, and amortization  9,000   13,000 
        Increase in accounts receivable  (2,000)  (5,000)
        Increase in other current assets  (6,000)  (6,000)
        Decrease in accounts payable  (7,000)  (1,000)
        Decrease in other accrued expenses  -   (2,000)
Net cash provided by (used in) operating activities  13,000   (58,000)
         
Cash flows from financing activities        
    Acquisition of treasury stock  (7,000)  (4,000)
Net cash used in financing activities  (7,000)  (4,000)
         
Net increase (decrease) in cash and cash equivalents  6,000   (62,000)
Cash and cash equivalents at beginning of period  2,274,000   2,349,000 
Cash and cash equivalents at end of period $2,280,000  $2,287,000 
         
Noncash investing and financing activities        
    Retirement of property plant and equipment $-  $3,000 
         
Supplemental disclosures        
    Cash paid for interest $-  $- 
    Cash paid for income taxes $-  $- 


See notes to unaudited condensed consolidated financial statements
3
ALTEX INDUSTRIES, INC.
Condensed Consolidated Statements of Stockholders' Equity
(Unaudited)

For the nine months ended
June 30, 2019
Preferred Stock Common Stock  
Additional
paid-in
  Accumulated  Treasury  
Total
stockholders'
 

AmountShares
 Shares  Amount   capital   deficit   stock   equity 
                           
Balance at September 30, 2018    12,351,731  $124,000  $13,809,000  $(12,635,000) $-  $1,298,000 
Net gain                19,000       19,000 
Dividends declared                          
    Preferred stock, none                          
    Common stock, none                          
Acquisition of treasury stock, 89,355 shares at $0.08 per share    (89,355)              (7,000)  (7,000)
Balance at June 30, 2019    12,262,376  $124,000  $13,809,000  $(12,616,000) $(7,000) $1,310,000 
                           
                           
For the three months ended
June 30, 2019
Preferred Stock Common Stock  
Additional
paid-in
  Accumulated  Treasury  
Total
stockholders'
 

AmountShares
 Shares  Amount   capital
   deficit
   stock
   equity
 
                           
Balance at March 31, 2019    12,282,376  $124,000  $13,809,000  $(12,643,000) $(5,000) $1,285,000 
Net gain                27,000       27,000 
Dividends declared                          
    Preferred stock, none                          
    Common stock, none                          
Acquisition of treasury stock, 20,000 shares at $0.10 per share    (20,000)              (2,000)  (2,000)
Balance at June 30, 2019    12,262,376  $124,000  $13,809,000  $(12,616,000) $(7,000) $1,310,000 

See notes to unaudited 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, 2018, 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, 2018,June 30, 2019, 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 2018 Annual Report on Form 10‑K, and it is suggested that these condensed consolidated 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 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

The Company used $18,000Operating activities in the nine months ended June 30, 2019, provided $13,000 cash, inand operating activities in the threenine months ended December 31, 2017, and $8,000 cash in operating activities in the three months ended December 31, 2018.June 30, 2018, used $58,000 cash. The Company used $4,000 cash to acquire 42,500 shares of its Common Stock in the threenine months ended December 31, 2017.June 30, 2018, and $7,000 cash to acquire 89,355 shares of its Common Stock in the nine months ended June 30, 2019. Consequently, cash decreased $22,000$62,000 in the threenine months ended December 31, 2017,June 30, 2018, and cash decreased $8,000increased $6,000 in the threenine months ended December 31, 2018.June 30, 2019. At September 30, 2018, and at December 31, 2018,June 30, 2019, $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 8,August 9, 2019, 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.

45
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 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.

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.
PART II - OTHER INFORMATION

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

Issuer Purchases of Equity Securities

   (a)   (b)   (c)   (d) 
Period 
Total
number of
shares
 (or units)
purchased
  
Average
price paid
per share
(or unit)
  
Total number
of shares
(or units)
purchased as
part of
publicly
announced
plans or
programs
  
Maximum
number (or approximate
dollar value)
of shares
(or units) that
may yet be
purchased
under the
plans or
programs
 
April
2019
  20,000  $0.10   --   -- 
May
2019
  --   --   --   -- 
June
2019
  --   --   --   -- 
Total  20,000  $0.10   --   -- 

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

6
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 8,August 9, 2019
By: /s//s/ STEVEN H. CARDIN
 Steven H. Cardin
 
Chief Executive Officer and
Principal Financial Officer


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