OTC:ALTX
ALTEX INDUSTRIES INC
A financially distressed micro-cap OTC stock with minimal operating revenue but positive interest income and significant cash reserves relative to liabilities.
Key Metrics
Investment Thesis
Bull Case
An investor might buy ALTX due to its strong liquidity buffer of $2.5M in cash against modest liabilities, providing a safety margin during market volatility. The absence of cost of revenue and low operational burn suggests the company could pivot to a profitable model if it successfully monetizes its idle assets or acquires distressed operations. Current share repurchases indicate management may believe the stock is undervalued relative to its net asset value.
Bear Case
The stock is risky because the company has recorded three consecutive years of negligible revenue and recent losses, indicating a broken or non-existent core business model. The massive $12.5M retained earnings deficit highlights chronic underperformance that has not been addressed through profitable operations. With operating cash flow negative and no growth in sales, the enterprise value is entirely speculative based on liquidation potential rather than future earnings.
About ALTEX INDUSTRIES INC
ALTEX INDUSTRIES INC (ALTX) is a micro-cap entity trading on the OTC market with minimal operational revenue but significant cash reserves. The company reports negligible cost of revenue and gross profit, suggesting a potential holding company structure or non-operating status focused on financial assets. Investors should note the substantial retained earnings deficit and recent negative net income while analyzing its liquidity position.
Analysis
Management Discussion
The company's latest annual data reveals a challenging operational environment where non-operating interest income barely covers massive administrative costs, resulting in a net loss of $192,000. While the balance sheet remains technically solvent with current assets significantly exceeding current liabilities, the inability to generate core revenue is a critical concern. The management team has utilized financing cash flows for share repurchases despite negative operating performance, which may signal confidence or capital preservation strategies.
Industry Overview
ALTX operates within the broader financial services or industrial micro-cap sector where small market capitalization firms often struggle with high administrative overheads relative to revenue. The industry landscape for such entities typically involves balancing cash reserves against the need for consistent operational income to avoid delisting. Many OTC stocks in this space face headwinds from regulatory scrutiny and the difficulty of scaling without significant capital expenditure.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $32.0K | $23.0K | $18.0K |
| Cost of Revenue | $0 | $0 | $0 |
| Gross Profit | $32.0K | $23.0K | $18.0K |
| Operating Expenses | $163.0K | $-414.0K | $210.0K |
| Operating Income | $-131.0K | $437.0K | $-192.0K |
| G&A | $263.0K | $233.0K | $320.0K |
| D&A | $6.0K | $4.0K | $3.0K |
| Other OpEx | $-100.0K | $-647.0K | $-110.0K |
| Non-Operating Income | $0 | $0 | $0 |
| Interest Income | $101.0K | $128.0K | $115.0K |
| Pre-Tax Income | $-131.0K | $437.0K | $-192.0K |
| Income Tax | $0 | $0 | $0 |
| Continuing Ops | $-131.0K | $437.0K | $-192.0K |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $-131.0K | $437.0K | $-192.0K |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $-131.0K | $437.0K | $-192.0K |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $2.3M | $2.7M | $2.6M |
| Cash & Equivalents | $2.2M | $2.7M | $2.5M |
| Other Current Assets | $26.0K | $24.0K | $23.0K |
| Long-Term Assets | $76.0K | $46.0K | $177.0K |
| PP&E (Net) | $29.0K | $26.0K | $23.0K |
| Operating Leases | $47.0K | $20.0K | $154.0K |
| Other LT Assets | $0 | $0 | $0 |
| Total Assets | $2.3M | $2.7M | $2.7M |
| Current Liabilities | $1.2M | $1.2M | $1.3M |
| Accounts Payable | $4.0K | $5.0K | $7.0K |
| Current Leases | $27.0K | $21.0K | $26.0K |
| Other Current Liab | $11.0K | $13.0K | $8.0K |
| Long-Term Liabilities | $20.0K | $0 | $127.0K |
| LT Operating Leases | $20.0K | $0 | $127.0K |
| Other LT Liab | $0 | $0 | $0 |
| Total Liabilities | $1.2M | $1.2M | $1.4M |
| Shareholders' Equity | $1.1M | $1.5M | $1.3M |
| Paid-In Capital | $13.7M | $13.7M | $13.7M |
| Retained Earnings | $-12.7M | $-12.3M | $-12.5M |
| Total L&E | $2.3M | $2.7M | $2.7M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $-131.0K | $437.0K | $-192.0K |
| Non-Cash Adjustments | $7.0K | $-580.0K | $22.0K |
| Working Capital Changes | $66.0K | $65.0K | $71.0K |
| Cash from Operations | $-58.0K | $-78.0K | $-99.0K |
| Cash from Investing | $0 | $525.0K | $0 |
| Share Buybacks | $68.0K | $23.0K | $12.0K |
| Cash from Financing | $-68.0K | $-23.0K | $-12.0K |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $-126.0K | $424.0K | $-111.0K |
| Beginning Cash | $2.4M | $2.2M | $2.7M |
| Ending Cash | $2.2M | $2.7M | $2.5M |
Frequently Asked Questions
How does ALTEX INDUSTRIES INC make money?
1) Financial Asset Management (generating $115,000 in interest income on $2.5M cash); 2) Non-Operating Income/Loss; 3) General and Administrative Operations (costing $320,000 annually).
What are the main risks for ALTX?
1) Persistent net losses and a retained earnings deficit of $12.5M eroding shareholder value over time; 2) Operating cash flow burn of $99,000 not offset by sufficient operational revenue generation; 3) Lack of meaningful revenue growth in recent years raises questions about business model viability; 4) High general and administrative expenses relative to gross profit margins.
What is ALTX's competitive advantage?
1) Strong liquidity position with $2.5M in cash and equivalents against only $1.4M in total liabilities; 2) Zero cost of revenue indicating no direct product sales or supply chain exposure; 3) Minimal long-term debt obligations providing flexibility for potential restructuring.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.