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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended: August 31, 2010
 Or
 o
    
    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: 0-30746
 TBX RESOURCES, INC.
  Texas
    
    75-2592165(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification Number)3030 LBJ Freeway, Suite 1320
    
    75234(Address of principal executive offices)
    
    (Zip Code)
 (972) 234-2610
 N/A
 o þ
 o o
  o Large Accelerated Filer
o Accelerated Filer
o Non-Accelerated Filer (Do not check if smaller reporting company)
þ Smaller Reporting Company o þ




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##### 



TBX RESOURCES, INC.
 Index
 Pg. No.PART I  Financial InformationItem 1. Financial StatementsCondensed Consolidated Balance Sheets as of August 31, 2010 (Unaudited) and
November 30, 2009
    
    
    F-1Condensed Consolidated Statements of Operations for the Three
and Nine months Ended August 31, 2010 and 2009 (Unaudited)
    
    
    F-2Condensed Consolidated Statements of Cash Flows for the
Nine months Ended August 31, 2010 and 2009 (Unaudited)
    
    
    F-3Notes to Condensed Consolidated Financial Statements as of August 31, 2010 (Unaudited)
    
    
    F-4Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    F-10Item 3. Quantitative and Qualitative Disclosures about Market Risk.
    
    
    F-14Item 4. Controls and Procedures
    
    
    F-14PART II  Other InformationItem 1. Legal Proceedings
    
    
    F-15Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    F-15Item 3. Defaults Upon Senior Securities
    
    
    F-15Item 5. Other Information
    
    
    F-15Item 6. Exhibits
    
    
    F-15SIGNATURESEX-31.1EX-32.1
  2




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PART 1  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 
 TBX RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 August 31,2010
    
    
    November 30,(Unaudited)
    
    
    2009ASSETSCurrent AssetsCash
    
    $
    7,431
    
    
    $
    5,327Oil and gas revenue receivable
    
    
    16,314
    
    
    
    112,122Inventory
    
    
    4,200
    
    
    
    4,494Total current assets
    
    
    27,945
    
    
    
    121,943Oil and gas properties (successful efforts method), net
    
    
    39,919
    
    
    
    49,591Other
    
    
    6,211
    
    
    
    6,211Total Assets
    
    $
    74,075
    
    
    $
    177,745LIABILITIES AND STOCKHOLDERS DEFICITCurrent LiabilitiesTrade accounts payable and accrued expenses
    
    $
    33,365
    
    
    $
    62,693Advances from affiliate
    
    
    415,993
    
    
    
    496,602Deferred revenue
    
    
    4,200
    
    
    
    4,494Total current liabilities
    
    
    453,558
    
    
    
    563,789Long-term LiabilitiesAsset retirement obligations
    
    
    21,787
    
    
    
    21,021Commitments 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;
4,027,442 shares issued and outstanding at August 31, 2010,
4,027,442 shares issued and outstanding at November 30, 2009
    
    
    40,274
    
    
    
    40,274Additional paid-in capital
    
    
    10,929,940
    
    
    
    10,929,940Accumulated deficit
    
    
    (11,371,484
    )
    
    
    (11,377,279
    )Total stockholders deficit
    
    
    (401,270
    )
    
    
    (407,065
    )Total Liabilities and Stockholders Deficit
    
    $
    74,075
    
    
    $
    177,745
  F-1




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TBX RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 For the Three Months Ended
    
    
    For the Nine Months EndedAug. 31, 2010
    
    
    Aug. 31, 2009
    
    
    Aug. 31, 2010
    
    
    Aug. 31, 2009Revenues:Oil and gas sales
    
    $
    22,557
    
    
    $
    15,114
    
    
    $
    58,666
    
    
    $
    39,959Total revenues
    
    
    22,557
    
    
    
    15,114
    
    
    
    58,666
    
    
    
    39,959Expenses:Lease operating and taxes
    
    
    8,064
    
    
    
    8,268
    
    
    
    27,641
    
    
    
    28,932General and administrative
    
    
    32,841
    
    
    
    73,860
    
    
    
    113,918
    
    
    
    293,461Depreciation, depletion, amortization and accretion
    
    
    4,908
    
    
    
    2,430
    
    
    
    10,438
    
    
    
    7,092Gain on sale of oil and gas properties
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,687
    )Total expenses
    
    
    45,813
    
    
    
    84,558
    
    
    
    151,997
    
    
    
    327,798Operating Loss
    
    
    (23,256
    )
    
    
    (69,444
    )
    
    
    (93,331
    )
    
    
    (287,839
    )Other Income:Partial loss recovery (Note 10)
    
    
    5,062
    
    
    
    
    
    
    
    99,126
    
    
    
    Income (Loss) Before Provision for Income Taxes
    
    
    (18,194
    )
    
    
    (69,444
    )
    
    
    5,795
    
    
    
    (287,839
    )Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net Income (Loss)
    
    $
    (18,194
    )
    
    $
    (69,444
    )
    
    $
    5,795
    
    
    $
    (287,839
    )Net Income (Loss) per Common Share:Basic and Diluted
    
    $
    (0.00
    )
    
    $
    (0.02
    )
    
    $
    0.00
    
    
    $
    (0.07
    )Weighted Average Common Shares Outstanding:Basic and Diluted
    
    
    4,027,442
    
    
    
    4,027,442
    
    
    
    4,027,442
    
    
    
    4,027,442
  F-2




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TBX RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 For the Nine Months EndedAug. 31, 2010
    
    
    Aug. 31, 2009Cash Flows From Operating Activities:Net income (loss)
    
    $
    5,795
    
    
    $
    (287,839
    )Adjustments to reconcile net income (loss) to net cash provided by
(used for) operating activities:Depreciation, depletion, amortization and accretion
    
    
    10,438
    
    
    
    7,092Gain on sale of oil and gas properties
    
    
    
    
    
    
    (1,687
    )Stock based compensation
    
    
    
    
    
    
    500Changes in operating assets and liabilities other than
advances from affiliate:Decrease (increase) in:Oil and gas revenue receivable
    
    
    95,808
    
    
    
    (39,878
    )Inventory
    
    
    294
    
    
    
    (6,226
    )Accounts receivable from affiliate
    
    
    
    
    
    
    21,824Increase (decrease) in:Trade accounts payable and accrued expenses
    
    
    (29,328
    )
    
    
    43,405Deferred revenue
    
    
    (294
    )
    
    
    6,226Net cash provided by (used for) operating activities
    
    
    82,713
    
    
    
    (256,583
    )Cash Flows From Investing Activities:Proceeds from sale of oil and gas properties
    
    
    
    
    
    
    1,687Net cash provided by investing activities
    
    
    
    
    
    
    1,687Cash Flows From Financing Activities:Advances from affiliate
    
    
    135,580
    
    
    
    258,314Payments to affiliate
    
    
    (216,189
    )
    
    
    Net cash provided by (used for) financing activities
    
    
    (80,609
    )
    
    
    258,314Net Increase in Cash
    
    
    2,104
    
    
    
    3,418Cash at beginning of period
    
    
    5,327
    
    
    
    2,506Cash at end of period
    
    $
    7,431
    
    
    $
    5,924Supplemental Non-Cash Activity:Write-off of fully depreciated property and equipment
    
    $
    
    
    
    $
    229,074
  F-3




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TBX RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2010
(Unaudited)
 1. BASIS OF PRESENTATION:
  2. BUSINESS ACTIVITIES:
    3. GOING CONCERN:
  4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
 Revenue Recognition
  Principles of Consolidation
  F-4




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Concentration of Credit Risk
  Oil and Gas Revenue Receivable
  Inventory
  Property and Equipment
  Oil and Gas Properties
    Proved oil and gas properties
    
    $
    518,538Accumulated depreciation, depletion and
amortization
    
    
    (478,619
    )$
    39,919
 Long-lived Assets
   Asset Retirement Obligations
  F-5




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ARO at November 30, 2009
    
    $
    21,021Accretion expense
    
    
    766Liabilities incurred
    
    
    Liabilities settled
    
    
    Changes in estimates
    
    
    ARO at August 31, 2010
    
    $
    21,787
 Income Taxes
  Earnings Per Share (EPS)
  Use of Estimates
  Fair Value Measurements
   F-6




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Level 1
    
    Inputs to the valuation methodology are unadjusted quoted prices for identical assets or
liabilities in active markets that the Plan has the ability to access.Level 2
    
    Inputs to the valuation methodology include:   we quoted prices for similar assets or liabilities in active markets;   quoted prices for identical or similar assets or liabilities in inactive markets;   inputs other than quoted prices that are observable for the asset or liability;   inputs that are derived principally from or corroborated by observable market data by
correlation or other means.If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for
substantially the full term of the asset or liability.Level 3
    
    Inputs to the valuation methodology are unobservable and significant to the fair value
measurement.
  Subsequent Events
  5. RECENT ACCOUNTING PRONOUNCEMENTS:
  6. RELATED PARTY TRANSACTIONS:
  a.
    
    During the nine months ended August 31, 2010 the Company had a net reduction in advances
from Gulftex totaling $80,609. During the nine months ended August 31, 2009, the Company
received advances from Gulftex totaling $258,314. The balance due Gulftex as of August 31,
2010 is $415,993.b.
    
    The Company is charging Gulftex rent for a portion of the Companys office space plus
administrative expenses paid by the Company that relates to Gulftexs operations. The Company
billed Gulftex $50,138 for the nine months ended August 31, 2010 and $63,412 for the nine
months ended August 31, 2009.
 7. STOCK BASED COMPENSATION:
  F-7




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Weighted-AverageShares
    
    
    Exercise PriceOutstanding December 1, 2009
    
    
    25,000
    
    
    $
    0.15Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (25,000
    )
    
    $
    0.15Outstanding August 31, 2010
    
    
    
    
    
    
    Options exercisable at August 31, 2010
    
    
    
    
    
    
    
 8. COMMITMENTS AND CONTINGENCIES:
   9. LAW SUIT SETTLEMENT:
 th
 F-8




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10. COURT ORDERED RESTITUTION:
  11. SALE OF OIL AND GAS PROPERTIES:
  12. INCOME TAXES:
  F-9




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 CAUTIONARY STATEMENT
  DESCRIPTION OF PROPERTIES
 GENERAL
 PROPERTIES
  Gross
    
    NetProducing
    
    ProducingName of Field or Well
    
    Well Count
    
    Well CountNewark East, Working Interest
    
    
    2
    
    
    
    0.74Newark East, Override Interest
    
    
    9
    
    
    
    0.04
 PRODUCTIVE WELLS AND ACREAGE:
  Proved
    
    
    ProvedProved
    
    
    Proved
    
    
    Developed
    
    
    DevelopedReserves:
    
    
    Reserves:
    
    
    Reserves:
    
    
    Reserves:Name of
    
    Oil
    
    
    Gas
    
    
    Oil
    
    
    GasField or Well
    
    (bbls)
    
    
    (mcf)
    
    
    (bbls)
    
    
    (mcf)Newark East
    
    
    1,861
    
    
    
    78,121
    
    
    
    1,861
    
    
    
    78,121
 Notes
 1.
    
    Total Gross Wells are those wells in which the Company holds a working or overriding interest
in as of August 31, 2010.2.
    
    Net Productive Wells was calculated by multiplying the working or overriding interest held by
the Company in each of the 11 Gross Wells and adding the resulting products.3.
    
    Total Gross Developed Acres is equal to the total surface acres of the properties in which
the Company holds a working interest.4.
    
    Net Developed Acres is equal to the Total Gross Developed Acres multiplied by the percentage
of the total working interest held by the Company in the respective properties.5.
    
    All acreage in which we hold a working interest as of August 31, 2010 have or had existing
wells located thereon; thus all acreage leased by the Company 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
 F-10




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comprehensive study of all properties currently leased by us would be required to
determine precise developmental potential.
 OIL AND GAS PARTNERSHIP INTERESTS
  CRITICAL ACCOUNTING POLICIES
   OVERVIEW
 Going Concern and Liquidity Problems
   Sale of Assets
  RESULTS OF OPERATIONS
  Revenues-
  F-11




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Gas
    
    
    MBTU
    
    
    Price/
    
    
    Oil
    
    
    Bbls
    
    
    Price/Sales
    
    
    Sold
    
    
    MBTU
    
    
    Sales
    
    
    Sold
    
    
    BblAugust 31, 2010
    
    $
    16,507
    
    
    
    2,684
    
    
    $
    6.15
    
    
    $
    6,050
    
    
    
    86
    
    
    $
    70.35August 31, 2009
    
    $
    12,233
    
    
    
    3,151
    
    
    $
    3.88
    
    
    $
    2,800
    
    
    
    43
    
    
    $
    65.123 Month Change2010 vs 2009Amount
    
    $
    4,274
    
    
    
    (467
    )
    
    $
    2.27
    
    
    $
    3,250
    
    
    
    43
    
    
    $
    5.23Percentage
    
    
    34.94
    %
    
    
    -14.82
    %
    
    
    58.51
    %
    
    
    116.07
    %
    
    
    100.00
    %
    
    
    8.04
    %
    Gas
    
    
    MBTU
    
    
    Price/
    
    
    Oil
    
    
    Bbls
    
    
    Price/Sales
    
    
    Sold
    
    
    MBTU
    
    
    Sales
    
    
    Sold
    
    
    BblAugust 31, 2010
    
    $
    42,049
    
    
    
    7,151
    
    
    $
    5.88
    
    
    $
    16,617
    
    
    
    230
    
    
    $
    72.25August 31, 2009
    
    $
    33,648
    
    
    
    8,628
    
    
    $
    3.90
    
    
    $
    6,231
    
    
    
    132
    
    
    $
    47.209 Month Change2010 vs 2009Amount
    
    $
    8,401
    
    
    
    (1,477
    )
    
    $
    1.98
    
    
    $
    10,386
    
    
    
    98
    
    
    $
    25.05Percentage
    
    
    24.97
    %
    
    
    -17.12
    %
    
    
    50.77
    %
    
    
    166.68
    %
    
    
    74.24
    %
    
    
    53.07
    %
  Expenses-
 F-12




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%
    
    
    
    
    
    
    
    
    
    
    %Three Months Ended
    
    
    Increase
    
    
    Nine Months Ended
    
    
    IncreaseAug. 31, 2010
    
    
    Aug. 31, 2009
    
    
    (Decrease)
    
    
    Aug. 31, 2010
    
    
    Aug. 31, 2009
    
    
    (Decrease)Expenses :Lease operating and taxes
    
    $
    8,064
    
    
    $
    8,268
    
    
    
    -2.47
    %
    
    $
    27,641
    
    
    $
    28,932
    
    
    
    -4.46
    %General and administrative
    
    
    32,841
    
    
    
    73,860
    
    
    
    -55.54
    %
    
    
    113,918
    
    
    
    293,461
    
    
    
    -61.18
    %Depreciation, depl, amort., & accretion
    
    
    4,908
    
    
    
    2,430
    
    
    
    101.98
    %
    
    
    10,438
    
    
    
    7,092
    
    
    
    47.18
    %Gain on sale of prop
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,687
    )
    
    
    -100.00
    %Total expenses
    
    $
    45,813
    
    
    $
    84,558
    
    
    
    -45.82
    %
    
    $
    151,997
    
    
    $
    327,798
    
    
    
    53.63
    %
       LIQUIDITY AND CAPITAL RESOURCES
    F-13




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PLAN OF OPERATION FOR THE FUTURE
     
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
  
 ITEM 4. CONTROLS AND PROCEDURES
     F-14




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Limitations on the Effectiveness of Controls.
 
 PART II. OTHER INFORMATION
 
   
   
   
   
         /s/ Tim Burroughs
 F-15