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EX-31 - RULE 13A-14(A)/15D-14(A) CERTIFICATIONS - ALTEX INDUSTRIES INCaltexindust10qexh31.htm
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EX-32 - SECTION 1350 CERTIFICATIONS - ALTEX INDUSTRIES INCaltexindust10qexh32.htm


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 March 31, 2012

[   ]
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 May 11, 2012: 13,619,606

 

 
 

 
 
PART I - FINANCIAL INFORMATION
 
   
Item 1. Financial Statements
 
   
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
 
Consolidated Balance Sheet
 
             
             
   
March 31
   
September 30
 
   
2012
   
2011
 
   
(Unaudited)
   
(Audited)
 
Assets
           
Current assets
           
    Cash and cash equivalents
  $ 2,938,000       2,584,000  
    Accounts receivable
    17,000       14,000  
    Other
    3,000       504,000  
Total current assets
    2,958,000       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
    (134,000 )     (122,000 )
Net property and equipment
    233,000       245,000  
                 
Other assets
    4,000       4,000  
                 
Total assets
    3,195,000       3,351,000  
                 
Liabilities and Stockholders’ Equity
               
Current liabilities
               
    Accounts payable
    20,000       26,000  
    Other accrued expenses
    117,000       106,000  
Total current liabilities
    137,000       132,000  
                 
Commitments and Contingencies
    -       -  
                 
Stockholders’ equity
               
    Preferred stock, $.01 par value. Authorized 5,000,000 shares, none issued
    -       -  
    Common stock, $.01 par value. Authorized 50,000,000 shares; issued and outstanding, 13,619,606
    136,000       136,000  
    Additional paid-in capital
    13,928,000       13,928,000  
    Accumulated deficit
    (11,006,000 )     (10,845,000 )
Total stockholders' equity
    3,058,000       3,219,000  
                 
Total stockholders' equity and liabilities
  $ 3,195,000       3,351,000  
                 
See accompanying notes to consolidated, condensed financial statements.
 

 
 
Page 1 of  7

 

 
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
 
Consolidated Statement of Operations
 
(Unaudited)
 
                         
   
Three Months Ended
   
Six Months Ended
 
   
March 31
   
March 31
 
   
2012
   
2011
   
2012
   
2011
 
Revenue
                       
    Oil and gas sales
  $ 35,000     $ 33,000       58,000       62,000  
    Interest income
    6,000       8,000       11,000       17,000  
    Other
    -       1,000       -       2,000  
Total revenue
    41,000       42,000       69,000       81,000  
                                 
Costs and expenses
                               
    Lease operating
    3,000       1,000       4,000       3,000  
    Production taxes
    4,000       3,000       6,000       6,000  
    General and administrative
    83,000       106,000       208,000       217,000  
    Depreciation, depletion, and amortization
    6,000       7,000       12,000       12,000  
Total costs and expenses
    96,000       117,000       230,000       238,000  
                                 
Net loss
  $ (55,000 )   $ (75,000 )     (161,000 )     (157,000 )
                                 
Loss per share
  $ (0.004 )   $ (0.006 )     (0.012 )     (0.012 )
                                 
Weighted average shares outstanding
    13,619,606       13,619,606       13,619,606       13,619,606  
                                 
See accompanying notes to consolidated, condensed financial statements.
 

 
 
Page 2 of  7

 
 
ALTEX INDUSTRIES, INC. AND SUBSIDIARIES
 
Consolidated Statement of Cash Flow
 
(Unaudited)
 
   
Six months ended
 
   
March 31
 
   
2012
   
2011
 
Cash flows used in operating activities
           
    Net loss
  $ (161,000 )   $ (157,000 )
    Adjustments to reconcile net loss to net cash used in operating activities
               
        Depreciation, depletion, and amortization
    12,000       12,000  
        Increase in accounts receivable
    (3,000 )     (3,000 )
        Decrease in other current assets
    1,000       1,000  
        Increase (decrease) in accounts payable
    (6,000 )     8,000  
        Increase (decrease) in other accrued expenses
    11,000       (4,000 )
Net cash used in operating activities
    (146,000 )     (143,000 )
                 
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
    354,000       (143,000 )
Cash and cash equivalents at beginning of year
    2,584,000       3,327,000  
Cash and cash equivalents at end of year
  $ 2,938,000     $ 3,184,000  
                 
See accompanying notes to consolidated, condensed financial statements.
 

 
 
Page 3 of  7

 

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 March 31, 2012, and the cash flows and results of operations for the three and six months then ended. Such adjustments consisted only of normal recurring items. The results of operations for the three and six months ended March 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 $354,000 in the six months ended March 31, 2012, 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 $146,000 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 May 11, 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.

 
Page 4 of  7

 
 
Results of Operations

General and administrative expense decreased from $106,000 in the three months ended March 31, 2011, to $83,000 in the three months ended March 31, 2012, principally because of a $24,000 decrease in salary expense. At the current level of cash balances and at current interest rates, the Company’s revenue is unlikely to exceed its expenses. Unless and until the Company invests a substantial portion of its cash balances in interests in producing oil and gas wells or in one or more other ventures that produce revenue and net income, the Company is likely to experience net losses. With the exception of unanticipated RR&D, unanticipated environmental expense, and possible changes in interest rates, the Company is not aware of any other known trends or uncertainties that have had or that the Company reasonably expects will have a material favorable or unfavorable impact on net sales or revenues or income from continuing operations.

Liquidity and Capital Resources

Investing Activities. Net cash provided by investing activities in the six months ended March 31, 2012, consisted of a refund to the Company of a $500,000 cash deposit made in connection with a potential investment that was terminated.

Item 4. Controls and Procedures.

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Principal Executive Officer and Principal Financial Officer as appropriate, to allow timely decisions regarding required disclosure. Management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures which, by their nature, can provide only reasonable assurance regarding management’s control objectives.

As of the end of the period covered by the report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon the foregoing, the Company’s Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its consolidated subsidiary) required to be included in the Company’s Exchange Act reports. There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date the Company carried out its evaluation.

 
Page 5 of  7

 

PART II - OTHER INFORMATION

Item 6. Exhibits

31.
Rule 13a-14(a)/15d-14(a) Certifications
32.*
Section 1350 Certifications
101.xml*
XBRL Instance Document
101.xsd*
XBRL Taxonomy Extension Schema Document
101.cal*
XBRL Taxonomy Extension Calculation Linkbase Document
101.def*
XBRL Taxonomy Extension Definition Linkbase Document
101.lab*
XBRL Taxonomy Extension Label Linkbase Document
101.pre*
XBRL Taxonomy Extension Presentation Linkbase Document
___________________________
* Furnished. Not Filed. Not incorporated by reference. Not subject to liability.



 
Page 6 of  7

 

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:  May 11, 2012
 
By: /s/ STEVEN H. CARDIN
   
Steven H. Cardin
   
Chief Executive Officer and Principal Financial Officer

 
 
 
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