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UNITED STATES
SECURITIES EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-QSB

(Mark One)

|ý | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------

FOR THE QUARTERLY PERIOD ENDING August 31, 2002.

|o | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|- | ---------------------------------------------------------------

For the transition period from  to

Commission File Number 0-30746

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TBX RESOURCES, INC.(Exact name of small business issuer as specified in its charter)

Texas(State or other jurisdiction of
incorporation or organization)

75-2592165(I.R.S. Employer
Identification No.)


12300 Ford Road
Suite 194
Dallas, TX 75234(Address of principal executive offices)

Issuer's
telephone number(972) 243-2610

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State
the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 26,492,373.

Transitional
Small Business Disclosure Format (check
one) Yes o    No ý

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TBX RESOURCES, INC.  BALANCE SHEET  August 31, 2002  (Unaudited)

|ASSETS                                         |                                                                                                             
|---------------------------------------------- | ------------------------------------------------------------------------------------------------------------
|Current Assets                                 |                                                                                                             
|                                               | Cash                                                                                                        
|                                               | Trade accounts receivable                                                                                   
|                                               | Accounts receivable other                                                                                   
|                                               | Prepaid consulting fees and other                                                                           
|                                               |                                                                                                             
|                                               |                                                                                                             
|                                               |                                                                                                             
|Equipment and Property                         |                                                                                                             
|                                               | Office furniture, fixtures and equipment                                                                    
|                                               | Oil and gas properties, using successful efforts accounting                                                 
|                                               |                                                                                                             
|                                               |                                                                                                             
|                                               |                                                                                                             
|                                               | Less accumulated depreciation, depletion and amortization                                                   
|                                               |                                                                                                             
|                                               |                                                                                                             
|                                               |                                                                                                             
|Investment in Southern Oil & Gas Company, Inc. |                                                                                                             
|                                               |                                                                                                             
|Other Assets                                   |                                                                                                             
|                                               |                                                                                                             
|                                               |                                                                                                             
|                                               |                                                                                                             
|LIABILITIES AND STOCKHOLDERS' EQUITY           |                                                                                                             
|Current Liabilities                            |                                                                                                             
|                                               | Trade accounts payable                                                                                      
|                                               | Taxes payable                                                                                               
|                                               | Loans from affiliates                                                                                       
|                                               | Accrued expenses and other                                                                                  
|                                               |                                                                                                             
|                                               |                                                                                                             
|                                               |                                                                                                             
|Commitments and Contingencies                  |                                                                                                             
|Stockholders' Equity                           |                                                                                                             
|                                               | Preferred stock$.01 par value; authorized 10,000,000 shares; no shares outstanding                         
|                                               | Common stock$.01 par value; authorized 100,000,000 shares; 26,492,373 shares outstanding at August 31, 2002
|                                               | Additional paid-in capital                                                                                  
|                                               | Accumulated deficit                                                                                         
|                                               |                                                                                                             
|                                               |                                                                                                             
|                                               |                                                                                                             
|                                               |                                                                                                             
|                                               |                                                                                                             

The
accompanying notes are an integral part of these financial statements.

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TBX RESOURCES, INC.  STATEMENTS OF OPERATIONS  (Unaudited)

|                                                     |                                          | For The Three
Months Ended
August 31, 2002 |          | August 31, 2001 |         | For The Nine
Months Ended
August 31, 2002 |            | August 31, 2001 |         
|---------------------------------------------------- | ---------------------------------------- | ------------------------------------------ | -------- | --------------- | ------- | ----------------------------------------- | ---------- | --------------- | --------
|Revenues:                                            |                                          |                                            |          |                 |         |                                           |            |                 |         
|                                                     | Oil and gas sales                        |                                            | $        | 26,656          |         | $                                         | 45,655     |                 | $       
|                                                     | Gain on sale of oil & gas properties     |                                            |          |                |         |                                           | 25,600     |                 |         
|                                                     |                                          |                                            |          |                 |         |                                           |            |                 |         
|                                                     |                                          | Total revenues                             |          |                 | 26,656  |                                           |            | 71,255          |         
|                                                     |                                          |                                            |          |                 |         |                                           |            |                 |         
|Expenses:                                            |                                          |                                            |          |                 |         |                                           |            |                 |         
|                                                     | Lease operating and taxes                |                                            |          | 19,113          |         |                                           | 34,598     |                 |         
|                                                     | Exploration and drilling                 |                                            |          |                |         |                                           | 150,000    |                 |         
|                                                     | General and administrative               |                                            |          | 224,291         |         |                                           | 145,916    |                 |         
|                                                     | Depreciation, depletion and amortization |                                            |          | 50,837          |         |                                           | 100,000    |                 |         
|                                                     |                                          |                                            |          |                 |         |                                           |            |                 |         
|                                                     |                                          | Total expenses                             |          |                 | 294,241 |                                           |            | 430,514         |         
|                                                     |                                          |                                            |          |                 |         |                                           |            |                 |         
|Operating Loss                                       |                                          |                                            | (267,585 | )               |         | (359,259                                  | )          |                 | (727,879
|Other Income (Expense):                              |                                          |                                            |          |                 |         |                                           |            |                 |         
|                                                     | Interest and other                       |                                            |          | 2,964           |         |                                           | 2,646      |                 |         
|                                                     |                                          |                                            |          |                 |         |                                           |            |                 |         
|Net Loss Before Provision for Income Taxes           |                                          |                                            | (264,621 | )               |         | (356,613                                  | )          |                 | (727,208
|                                                     | Provision for income taxes               |                                            |          |                |         |                                           |           |                 |         
|                                                     |                                          |                                            |          |                 |         |                                           |            |                 |         
|Net Loss                                             |                                          | $                                          | (264,621 | )               | $       | (356,613                                  | )          | $               | (727,208
|                                                     |                                          |                                            |          |                 |         |                                           |            |                 |         
|Net Loss Per Common Share, Basic and Diluted         |                                          | $                                          | (0.01    | )               | $       | (0.02                                     | )          | $               | (0.03   
|                                                     |                                          |                                            |          |                 |         |                                           |            |                 |         
|Weighted average common shares used in calculations: |                                          |                                            |          |                 |         |                                           |            |                 |         
|                                                     | Basic and diluted                        |                                            |          | 24,300,037      |         |                                           | 17,135,487 |                 |         
|                                                     |                                          |                                            |          |                 |         |                                           |            |                 |         

The
accompanying notes are an integral part of these financial statements.

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TBX RESOURCES, INC.  STATEMENTS OF CASH FLOWS  (Unaudited)

|                                                                    |                                                                               | For The Nine
Months Ended
August 31, 2002    |                         | August 31, 2001            |        
|------------------------------------------------------------------- | ----------------------------------------------------------------------------- | -------------------------------------------- | ----------------------- | -------------------------- | -------
|Cash Flows From Operating Activities:                               |                                                                               |                                              |                         |                            |        
|                                                                    | Net loss                                                                      |                                              | $                       | (727,208                   | )      
|                                                                    | Adjustments to reconcile net loss to net cash flow from operating activities: |                                              |                         |                            |        
|                                                                    |                                                                               | Gain on the sale of oil and gas interests    |                         |                            | (46,071
|                                                                    |                                                                               | Depreciation, depletion and amortization     |                         |                            | 115,827
|                                                                    |                                                                               | Common stock issued for services             |                         |                            | 234,680
|                                                                    |                                                                               | Changes in operating assets and liabilities: |                         |                            |        
|                                                                    |                                                                               |                                              | Decrease (increase) in: |                            |        
|                                                                    |                                                                               |                                              |                         | Trade receivables          |        
|                                                                    |                                                                               |                                              |                         | Affiliate receivables      |        
|                                                                    |                                                                               |                                              |                         | Other receivables          |        
|                                                                    |                                                                               |                                              |                         | Other current assets       |        
|                                                                    |                                                                               |                                              | Increase (decrease) in: |                            |        
|                                                                    |                                                                               |                                              |                         | Accounts payable           |        
|                                                                    |                                                                               |                                              |                         | Affiliate payable          |        
|                                                                    |                                                                               |                                              |                         | Taxes payable              |        
|                                                                    |                                                                               |                                              |                         | Accrued expenses and other |        
|                                                                    |                                                                               |                                              |                         |                            |        
|Net cash provided by (used) for operating activities                |                                                                               |                                              | (280,828                | )                          |        
|                                                                    |                                                                               |                                              |                         |                            |        
|Cash Flows From Investing Activities:                               |                                                                               |                                              |                         |                            |        
|                                                                    | Cash used in the development of oil and gas properties                        |                                              |                         | (269,169                   | )      
|                                                                    | Cash provided by the sale of oil and gas properties                           |                                              |                         | 255,530                    |        
|                                                                    |                                                                               |                                              |                         |                            |        
|                                                                    |                                                                               |                                              | (13,639                 | )                          |        
|                                                                    |                                                                               |                                              |                         |                            |        
|Cash Flows From Financing Activities:                               |                                                                               |                                              |                         |                            |        
|                                                                    | Cash provided (used) by change in other assets                                |                                              |                         |                           |        
|                                                                    | Cash provided by the issuance of common stock                                 |                                              |                         | 192,938                    |        
|                                                                    |                                                                               |                                              |                         |                            |        
|                                                                    |                                                                               |                                              | 192,938                 |                            |        
|                                                                    |                                                                               |                                              |                         |                            |        
|Net Increase (Decrease) In Cash                                     |                                                                               |                                              | (101,529                | )                          |        
|Cash at beginning of period                                         |                                                                               |                                              | 111,451                 |                            |        
|                                                                    |                                                                               |                                              |                         |                            |        
|Cash at end of period                                               |                                                                               | $                                            | 9,922                   |                            | $      
|                                                                    |                                                                               |                                              |                         |                            |        
|SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES |                                                                               |                                              |                         |                            |        
|Fair value of consulting services acquired                          |                                                                               | $                                            | (500,000                | )                          | $      
|Issuance of common stock for services                               |                                                                               |                                              | 500,000                 |                            |        
|                                                                    |                                                                               |                                              |                         |                            |        
|                                                                    |                                                                               | $                                            |                        |                            | $      
|                                                                    |                                                                               |                                              |                         |                            |        

The
accompanying notes are an integral part of these financial statements.

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TBX RESOURCES, INC.  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY  (Unaudited)

|                                      |  | Common Stock |  |   |         |  |   |           | 
|------------------------------------- |  | ------------ |  | - | ------- |  | - | --------- | 
|
|
|Balance November 30, 2001             |  | 19,874,389   |  | $ | 198,744 |  | $ | 7,736,945 | 
|Issuance of common stock for cash     |  | 640,639      |  |   | 6,406   |  |   | 131,888   | 
|Issuance of common stock for services |  | 5,977,345    |  |   | 59,773  |  |   | 635,566   | 
|Net loss for period                   |  |             |  |   |        |  |   |          | 
|                                      |  |              |  |   |         |  |   |           | 
|Balance August 31, 2002               |  | 26,492,373   |  | $ | 264,924 |  | $ | 8,504,399 | 
|                                      |  |              |  |   |         |  |   |           | 

The
accompanying notes are an integral part of these financial statements.

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TBX RESOURCES, INC.  NOTES TO UNAUDITED FINANCIAL STATEMENTS  AUGUST 31, 2002

1.    BUSINESS ACTIVITIES:

TBX Resources, Inc., a Texas Corporation, was organized on March 24, 1995. The Company's principal business activity is acquiring and developing oil
and gas properties. The Company owns 53 wells and operates another 7 wells located in East Texas. Of the 53 wells located in East Texas, 8 wells have been designated as injection wells and 3 wells
have been designated as water supply wells. In addition, 8 wells are currently producing oil. The remaining 34 wells are either currently shut-in, scheduled to be brought back into
production or are designated as injection wells. Also, the Company has an interest in 6 producing wells in Oklahoma and one additional well that is currently being drilled in Oklahoma. In addition,
TBX Resources has an opportunity to drill and exploit 76,800 acres that is 120 sections of prime increased density development leases in the Anadarko Basin in Oklahoma. The Company's philosophy is to
acquire properties with the purpose of reworking existing wells and/or drilling development wells to make a profit. In addition, the Company has sponsored joint venture development partnerships for
the purpose of developing oil and gas properties for profit.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of PresentationThe accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles in the United States for interim financial information and with instructions to Form 10-QSB of Regulation S-B. They
do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, the Company believes that the disclosures are adequate to make
the information presented not misleading. The Company's quarterly financial statements should be read in conjunction with the financial statements of the Company for the year ended November 30,
2001 (including the notes thereto) set forth in Form 10-KSB.

In
the opinion of Management, all adjustments (which include normal recurring adjustments except as disclosed herein) necessary to present a fair statement of financial position as of
August 31, 2002, results of operations, cash flows and stockholders' equity for the nine months ended August 31, 2002 and 2001 have been made. Operating results for the nine months ended
August 31, 2002 are not necessarily indicative of the operating results for the full fiscal year or any future period.

Net Loss Per Common ShareStock options are excluded from the calculation of net loss per common share because they are
antidilutive.

Recent Accounting PronouncementOn August 15, 2001, the FASB issued Statement No. 143, Accounting for Asset
Retirement Obligations. Initiated in 1994 as a project to account for the costs of nuclear decommissioning, the FASB expanded the scope to include similar closure or removal-type costs in
other industries that are incurred at any time during the life of an asset. That standard requires entities to record the fair value of a liability for an asset retirement obligation in the period in
which it is incurred. When the liability is initially recorded, the entity capitalizes a cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is
accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, an entity either settles the obligation
for its recorded amount or incurs a gain or loss upon settlement. The standard is effective for fiscal years beginning after June 15, 2002, with earlier application encouraged. Accordingly, TBX
Resources will adopt this standard on December 1, 2002. TBX Resources has not completed the process of determining the impact of adopting the standard.

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3.    SIGNIFICANT TRANSACTIONS:



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During
the current quarter, Mr. Burroughs was issued 600,000 shares of common stock in lieu of receiving $60,000 in compensation owed him from the previous fiscal year. The
$60,000 was charged to accrued liabilities with an offsetting credit to capital.



Management's Discussion and Analysis of Financial Condition and Results of Operations

TBX RSOURCES, INC.
RESULTS OF OPERATIONS

The Company incurred an operating loss of $727,879 for the nine months ended August 31, 2002 as compared to an operating loss of $766,115 for the nine
months ended August 31, 2001. The decrease in the operating loss of $38,236, 5.0%, is discussed below.

RevenuesRevenues generated from oil and gas sales and the disposal of oil and gas properties decreased $25,257, 14.6%, from
$173,108 for the nine months ended August 31, 2001 to $147,851 for the nine months ended August 31, 2002.

During
the nine months ended August 31, 2002, the Company sold its interest in three producing Oklahoma properties for approximately $255,000 in cash. The Company wrote off the
costs of the wells and related depreciation, depletion and amortization and reported a net gain of approximately $46,000 on the transactions. During the nine months ended August 31, 2001, the
Company sold a minor interest in a property for $25,600 in cash. The Company wrote off the cost and reported a net gain of approximately $31,098 on the transactions.

During
the nine months ended August 31, 2001, the Company generated approximately $142,010 in revenue from oil and gas sales as compared to $101,780 for the nine months ended
August 31, 2002. The $40,230, 28.3%, decrease was primarily due to the sale of the Company's interest in three producing properties in Oklahoma. During the past nine months, oil sales on the
Texas properties were

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approximately $32,760 that is comparable to the same period last fiscal year. The majority of the Texas wells remain shut-in awaiting re-work or the designation as injection
wells.

ExpensesTotal expenses decreased $63,493, 6.8%, from $939,222 for the nine months ended August 31, 2001 to $875,730
for the nine months ended August 31, 2002.

Lease
operating and taxes decreased $56,005, 39.7%, from $140,991 for the nine months ended August 31, 2001 to $84,986 for the nine months ended August 31, 2002. The
decrease is primarily the result of decreased expenses associated with several of the Company's Texas wells and to a lesser extent the gas wells in Oklahoma which were sold earlier this year.

Exploration
and drilling expenses were $150,000 for the nine months ended August 31, 2001 as compared to $0 for the same period this year. In accordance with successful efforts
accounting, costs and expenses on non-productive properties are charged to operations.

General
and administrative expenses increased approximately $143,582, 27.0%, from $531,335 for the nine months ended August 31, 2001 to $674,917 for the nine months ended
August 31, 2002. The increase is primarily due to higher consulting and professional fees offset somewhat by lower compensation and employee related costs, and general expenses.

Depreciation,
depletion and amortization increased $279, from $115,548 for the nine months ended August 31, 2001 to $115,827 for the nine months ended August 31, 2002.
There was no change in estimate.

Other Income (Expense)Other income decreased from $5,331 for the nine months ended August 31, 2001 to $671 for the
nine months ended August 31, 2002. The $4,660 decrease is attributable a reduction in the Company's money market cash account.

Provision for Income TaxesThere are no recorded tax benefits for the nine months ended August 31, 2002 and for the
same period last fiscal year.

Net lossThe Company's net loss decreased approximately $33,576, 4.4%, from $760,784 for the nine months ended
August 31, 2001 to $727,208 for the same period this year. The decrease in the loss is primarily attributable to decreases in lease operations and exploration and drilling costs offset by the
increase in general and administrative expenses.

TBX RSOURCES, INC.
LIQUIDITY AND CAPITAL RESOURCES

As of August 31, 2002, the Company has total assets of approximately $4.0 million of which net oil and gas properties amount to approximately
$3.0 million or 75.0% of our total assets. The cumulative losses through August 31, 2002, total approximately $5.1 million. The ratio of current assets to current liabilities is
0.6:1; the Company has no long-term debt. As of August 31, 2002, the Company's shareholders equity is positive by approximately $3.6 million.

The
Company has funded its operations through cash generated from the sale of its common stock and to a lesser extent through loans from affiliates. The Company's cash used for operating
activities decreased $271,104 from $551,932 for the nine months ended August 31 2001 to $280,828 for the nine months ended August 31, 2002. The Company's capital investments totaled
$269,169 and $245,701 for the nine months ended August 31 2002 and August 31, 2001, respectively. Cash provided from the sale of oil and gas properties totaled $255,530 during the nine
months ended August 31, 2002 as compared to $25,600 for the nine months ended August 31, 2001. Cash provided from the sale of common stock

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totaled $192,938 during the nine months ended August 31, 2002 as compared to $554,232 for the nine months ended August 31, 2001.

The
Company expects that the principal source of funds in the near future will be from the sale of its common stock. On February 6, 2001 the Company entered into a
Regulation S Stock Purchase agreement with Citizen Asia Pacific Limited (CAPL), a Hong Kong company. The shares are being offered and sold on reliance of an exemption from registration
requirements of the United States federal and state securities laws under Regulation S promulgated under the Securities Act. The agreement stipulates that CAPL will use its best efforts to
purchase from the Company up to 800,000 restricted shares of common stock at a per share price which shall be 30% of the moving ten day average closing prices of the Company's shares of common stock
as quoted on the OTC Bulletin Board
or other public trading market. The Company has the right to accept or reject subscriptions for the shares, in whole or in part. The agreement runs from February 7, 2001 to September 30,
2001.The Company expects that the principal use of funds in the foreseeable future will be for developing existing oil and gas properties and/or the acquisition of new properties. In September of this
year, the Company formed and is acting as the general partner for The Grasslands I, Texas Limited Partnership. The purpose of the partnership is to acquire 2,800 acres of oil and gas leases in the
Barnett Shale play in the Fort Worth Basin for developmental drilling.

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PART II. OTHER INFORMATION

Item 1.    LEGAL PROCEEDINGS

None.

Item 2.    CHANGES IN SECURITIES

During the three months ended February 28, 2002, the Company used the services of consultants who received 325,000 share of common stock. The Company
recorded the transactions as a $48,750 charge to expense with an offsetting credit to capital.

On
March 7, 2002 the Company executed a professional services agreement with Mr. S. Warren, President of both Warren Drilling, Inc. and Drill Pipe
Industries, Inc. Under the terms of the agreement, which is to run for five years, the Company is to receive assistance in developing new business opportunities and strategies, expanding
existing operations, and facilitating any other normal business transactions requested by the Company. The Company is compensating Mr. Warren by issuing him 4,271,089 shares of Rule 144
restricted common stock valued for the purpose of this transaction at $500,000 that is to be amortized over the next five years.

Item 3.    DEFAULTS UPON SENIOR SECURITIES

None.

Item 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

None.

Item 5.    OTHER INFORMATION



No
reports on Form 8-K were filed during the period covered by this Form 10-QSB.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed by the undersigned, hereunto duly authorized.

|TBX RESOURCES, INC.                                |  |                     
|-------------------------------------------------- |  | --------------------
|DATE:  October 15, 2002                            |  |                     
|SIGNATURE:                                         |  | /s/ Tim P. Burroughs
|TIM P. BURROUGHS,PRESIDENT CHIEF FINANCIAL OFFICER

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