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UNITED STATES SECURITIES EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-QSB
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDING February 28, 2007
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 For the transition period from  to.
 Commission File Number 0-30746
 TBX RESOURCES, INC.
  Texas
    
    75-2592165(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 
   þ o
  o þ
  o þ




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TBX RESOURCES, INC.
 Index
 Pg. #PART I  Financial InformationItem 1. Financial StatementsCondensed Consolidated Balance Sheet as of February 28, 2007 (Unaudited)
    
    
    F-1Condensed Consolidated Statements of Operations for the Three Months Ended February 28, 2007and 2006 (Unaudited)
    
    
    F-2Condensed Consolidated Statements of Cash Flows for the Three Months Ended February 28, 2007and 2006 (Unaudited)
    
    
    F-3Notes to Condensed Consolidated Financial Statements as of February 28, 2007 (Unaudited)
    
    
    F-4Item 2. Managements Discussion and Analysis
    
    
    3Item 3. Controls and Procedures
    
    
    7PART II  Other InformationItem 1. Legal Proceedings
    
    
    8Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    8Item 3. Defaults Upon Senior Securities
    
    
    8Item 4. Submission of Matters to a Vote of Security Holders
    
    
    8Item 5. Other Information
    
    
    8Item 6. Exhibits
    
    
    9SIGNATURES
    
    
    9Certification Pursuant to Section 302Certification Pursuant to Section 906
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PART 1  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 
 TBX RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
FEBRUARY 28, 2007
(Unaudited)
 ASSETSCurrent AssetsCash
    
    $
    25,195Oil and gas revenue receivable
    
    
    40,511Inventory
    
    
    10,929Total current assets
    
    
    76,635Oil and gas properties (successful efforts method), net
    
    
    249,816Other
    
    
    6,211Total Assets
    
    $
    332,662LIABILITIES AND STOCKHOLDERS DEFICITCurrent LiabilitiesAccounts payable and accrued expenses
    
    $
    121,784Advances from affiliate
    
    
    426,018Deferred revenue
    
    
    10,929Total current liabilities
    
    
    558,731Long-term LiabilitiesAsset retirement obligation
    
    
    191,661Non-controlling interest in Consolidated Subsidiary
    
    
    72,000Commitments and Contingencies (Note 8)
    
    
    Stockholders DeficitPreferred stock-$.01 par value; authorized 10,000,000;
no shares outstanding
    
    
    Common stock-$.01 par value; authorized 100,000,000 shares;
3,907,417 shares issued and outstanding at February 28, 2007
    
    
    39,074Additional paid-in capital
    
    
    10,642,390Accumulated deficit
    
    
    (11,171,194
    )Total stockholders deficit
    
    
    (489,730
    )Total Liabilities and Stockholders Deficit
    
    $
    332,662
  F-1




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TBX RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 For the Three Months EndedFeb. 28, 2007
    
    Feb. 28, 2006Revenues:Oil and gas sales
    
    $
    67,357
    
    
    $
    75,230Joint venture contract fees (related party)
    
    
    
    
    
    
    150,000Total revenues
    
    
    67,357
    
    
    
    225,230Expenses:Lease operating and taxes (including $2,400 for 2007 and 2006 to related party)
    
    
    42,876
    
    
    
    44,189General and administrative
    
    
    213,914
    
    
    
    404,819Depreciation, depletion, amortization and accretion
    
    
    17,666
    
    
    
    23,098Total expenses
    
    
    274,456
    
    
    
    472,106Loss Before Provision for Income Taxes
    
    
    (207,099
    )
    
    
    (246,876
    )Provision for income taxes
    
    
    
    
    
    
    Net Loss
    
    $
    (207,099
    )
    
    $
    (246,876
    )Net Loss per Common Share, Basic and Diluted
    
    $
    (0.05
    )
    
    $
    (0.06
    )Weighted Average Common Shares Outstanding: Basic and Diluted
    
    
    3,907,417
    
    
    
    3,803,695
  F-2




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TBX RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 For the Three Months EndedFeb. 28, 2007
    
    
    Feb. 28, 2006Cash Flows From Operating Activities:Net loss
    
    $
    (207,099
    )
    
    $
    (246,876
    )Adjustments to reconcile net loss to net cash provided by
(used for) operating activities:Depreciation, depletion, amortization and accretion
    
    
    17,666
    
    
    
    23,098Stock based compensation
    
    
    72,750
    
    
    
    20,000Changes in operating assets and liabilities:Decrease (increase) in:Oil and gas revenue receivable
    
    
    (26,646
    )
    
    
    15,904Inventory
    
    
    2,371
    
    
    
    Increase (decrease) in:Accounts payable and accrued expenses
    
    
    (10,726
    )
    
    
    58,094Accrued compensation
    
    
    
    
    
    
    235,000Deferred revenue
    
    
    (2,371
    )
    
    
    Net cash provided (used) by operating activities
    
    
    (154,055
    )
    
    
    105,220Cash Flows From Investing Activities:Development of oil and gas properties
    
    
    
    
    
    
    (35,225
    )Cash flows used in investing activities
    
    
    
    
    
    
    (35,225
    )Cash Flows From Financing Activities:Advances from affiliate-net
    
    
    174,000
    
    
    
    20,078Payments to minority interest holders
    
    
    
    
    
    
    (42,000
    )Net cash flows provided by (used in) financing activities
    
    
    174,000
    
    
    
    (21,922
    )Net Increase In Cash
    
    
    19,945
    
    
    
    48,073Cash at beginning of period
    
    
    5,250
    
    
    
    128,452Cash at end of period
    
    $
    25,195
    
    
    $
    176,525Non Cash Investing ActivitiesPayment to minority interest holders by affiliate
    
    $
    
    
    
    $
    20,000
  F-3




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TBX RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
February 28, 2007
(Unaudited)
 1. BASIS OF PRESENTATION:
  2. BUSINESS ACTIVITIES:
    3. GOING CONCERN:
  4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
 Revenue Recognition
  F-4




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Principles of Consolidation
  Concentration of Credit Risk
  Receivables
  Inventory
  Property and Equipment
   Office furniture, equipment, and software
    
    $
    112,768Accumulated depreciation and amortization
    
    
    (112,768
    )$
    -0-
 Oil and Gas Properties
   F-5




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Proved oil and gas properties
    
    $
    1,348,846Accumulated depreciation, depletion and
amortization
    
    
    (1,099,031
    )$
    249,816
 Long-lived Assets
   Asset Retirement Obligations
   ARO at November 30, 2006
    
    $
    186,761Accretion expense
    
    
    4,900Liabilities incurred
    
    
    Liabilities settled
    
    
    Changes in estimates
    
    
    ARO at February 28, 2007
    
    $
    191,661
 Equity Instruments Issued for Goods and Services
   F-6




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Earnings Per Share (EPS)
  Use of Estimates
  5. RECENT ACCOUNTING PRONOUNCEMENTS:
    6. RELATED PARTY TRANSACTIONS:
 a.
    
    The operator of the East Texas oil and gas leases, Gulftex is an affiliate of TBX. Mr.
Burroughs is a 50% stockholder and president of the Company. TBX paid Gulftex $2,400 in
both the three months ended February 28, 2007 and 2006 for activities associated with
operating certain wells.
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b.
    
    The Company had a services arrangement with Gulftex. Under the arrangement, the Company
provided lease and project generation services and administrative assistance to Gulftex for
each joint venture on a venture-by-venture basis for a fee. The services were provided for a
limited duration, typically three months. During the three months ended February 28, 2006
the Company earned $150,000, representing 67% of total revenue. The arrangement with Gulftex
was not generated at arms-length. Fees received under this arrangement could differ
significantly had the arrangement been entered into with an unaffiliated third party. The
services agreement was terminated by mutual agreement on August 31, 2006.c.
    
    Gulftex operates certain oil and gas properties on behalf of the Company. At February 28,
2007 the Company has a liability to Gulftex in the amount of $17,505 related to wells
operated by Gulftex on behalf of the Company.d.
    
    During the three months ended February 28, 2007, the Company received advances from
Gulftex totaling $174,000. The balance due Gulftex as of February 28, 2007 is $426,018.e.
    
    The Company rents a total of 4,105 square feet of office space of which approximately
2,000 square feet is used by Gulftex.
 7. STOCK BASED COMPENSATION:
     F-8




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Weighted-AverageShares
    
    
    Exercise PriceOptionsGranted as of November 30, 2006
    
    
    75,000
    
    
    $
    0.15Granted
    
    
    25,000
    
    
    $
    0.15Exercised
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Outstanding as of February 28, 2007
    
    
    100,000
    
    
    $
    0.15Options exercisable as of February 28,
2007
    
    
    100,000
    
    
    $
    0.15Weighted-average fair value of
options granted during this quarter
    
    $
    72,750
  Average expected life in years
    
    
    1Average interest rate
    
    
    5.00
    %Average volatility
    
    
    76
    %Dividend yield
    
    
    0
    %
  Weighted AverageGrant DateFebruary 28, 2007
    
    Shares
    
    Fair ValueVested
    
    
    100,000
    
    
    $
    3.08Nonvested
    
    
    
    
    
    
    Total
    
    
    100,000
    
    
    $
    3.08
   8. COMMITMENTS AND CONTINGENCIES:
    F-9




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F-10




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS
 CAUTIONARY STATEMENT
     Recent Developments: Going Concern and Liquidity Problems
   LIQUIDITY AND CAPITAL RESOURCES
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RESULTS OF OPERATIONS
 Three Months Ended February 28, 2007 Compared to Three Months Ended February 28, 2006
  Revenues
 %Increase2007
    
    
    2006
    
    
    (Decrease)Revenues:Oil and gas sales
    
    $
    67,357
    
    
    $
    75,230
    
    
    
    -10.47
    %Joint venture contract fees
    
    
    
    
    
    
    150,000
    
    
    
    -100.00
    %Total revenues
    
    $
    67,357
    
    
    $
    225,230
    
    
    
    -70.09
    %
   Expenses
 %Increase2007
    
    
    2006
    
    
    (Decrease)Expenses:Lease operating and taxes
    
    $
    42,876
    
    
    $
    44,189
    
    
    
    -2.97
    %General and administrative
    
    
    213,914
    
    
    
    404,819
    
    
    
    -47.16
    %Depreciation, depl, amort., & accretion
    
    
    17,666
    
    
    
    23,098
    
    
    
    -23.52
    %Total expenses
    
    $
    274,456
    
    
    $
    472,106
    
    
    
    -41.87
    %
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DESCRIPTION OF PROPERTIES
 GENERAL
 PROPERTIES
  Gross
    
    NetProducing
    
    ProducingName of Field
    
    Well Count
    
    Well CountMitchell Creek
    
    
    1
    
    
    
    0.48Talco
    
    
    5
    
    
    
    2.00Quitman
    
    
    3
    
    
    
    2.40Manziel
    
    
    1
    
    
    
    0.80Newark East
    
    
    8
    
    
    
    0.75Bridgeport
    
    
    1
    
    
    
    0.25Carmargo NW
    
    
    2
    
    
    
    0.03Harmon SE Field
    
    
    1
    
    
    
    0.01
 PRODUCTIVE WELLS AND ACREAGE:
  Total
    
    
    
    
    
    
    TotalTotal
    
    
    Net
    
    
    Gross
    
    
    Net
    
    
    Gross
    
    
    Total NetGross Oil
    
    
    Productive
    
    
    Gas
    
    
    Productive
    
    
    Developed
    
    
    DevelopedGeographic Area
    
    Wells
    
    
    Oil Wells
    
    
    Wells
    
    
    Gas Wells
    
    
    Acres
    
    
    AcresEast Texas Region
    
    
    10
    
    
    
    6.04
    
    
    
    
    
    
    
    
    
    
    
    1,172.20
    
    
    
    665.81Wise County
    
    
    2
    
    
    
    0.73
    
    
    
    
    
    
    
    
    
    
    
    224
    
    
    
    81.76Parker and Denton Counties
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    .024
    
    
    
    
    
    
    
    Anadarko Basin
    
    
    4
    
    
    
    0.29
    
    
    
    
    
    
    
    
    
    
    
    480
    
    
    
    34.80
 Notes
 1.
    
    Total Gross Oil Wells was calculated by subtracting 5 wells designated as injection wells and
8 wells which are either shut-in or inactive from the 35 wells TBX Resources, Inc holds a
working or overriding interest in as of February 28, 2007.
 2.
    
    Net Productive Oil Wells were calculated by multiplying the working interest held by TBX
Resources, Inc. in each of the 22 Gross Oil Wells and adding the resulting products.
 3.
    
    Total Gross Developed Acres is equal to the total surface acres of the properties in which
TBX Resources, Inc. holds a working interest.
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4.
    
    Net Developed Acres is equal to the Total Gross Developed Acres multiplied by the percentage
of the total working interest held by TBX Resources, Inc. in the respective properties.
 5.
    
    All acreage in which we hold a working interest as of February 28, 2007 have or had existing
wells located thereon; thus all acreage leased by TBX Resources, Inc. may be accurately
classified as developed.
 6.
    
    Acreage that has existing wells and may be classified as developed may also have additional
development potential based on the number of producible zones beneath the surface acreage. A
more comprehensive study of all properties currently leased by us would be required to
determine precise developmental potential.
 ANADARKO BASIN WESTERN OKLAHOMA
  OIL AND GAS PARTNERSHIP INTERESTS
  CRITICAL ACCOUNTING POLICIES
   Other
 Inflation
 PLAN OF OPERATION FOR THE FUTURE
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1.
    
    Satisfactory conclusion of due diligence.2.
    
    Registration of TBX common shares to be used as merger consideration.3.
    
    Receipt of favorable fairness opinion by TBX that the transaction is fair to the TBX
stockholders.4.
    
    Certain incoming stockholders execute lock up agreements for the TBX
common stock they will receive as merger consideration.5.
    
    Approval by a majority of TBX stockholders.
      
 ITEM 3. CONTROLS AND PROCEDURES
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Limitations on the Effectiveness of Controls.
 
 PART II. OTHER INFORMATION
 
   
   
   
   
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TBX RESOURCES, INC.DATE: July 16, 2007SIGNATURE:
    /s/ Tim BurroughsTIM BURROUGHS, CHIEF EXECUTIVE OFFICER/CHIEF FINANCIAL OFFICER 9