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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 May 31, 2006
 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
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 
   þ o
  o þ
  o þ




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TBX RESOURCES, INC.
 Index
 Page #PART I  Financial InformationItem 1. Financial StatementsCondensed Consolidated Balance Sheet
    
    
    F-1May 31, 2006 (Unaudited)Condensed Consolidated Statements of Operations
    
    
    F-2Three and Six Months Ended May 31, 2006 (Unaudited)
and 2005 (Restated)Condensed Consolidated Statements of Cash Flows
    
    
    F-3Three and Six Months Ended May 31, 2006 (Unaudited)
and 2005 (Restated)Notes to Condensed Consolidated Financial Statements
    
    
    F-4May 31, 2006 (Unaudited)Item 2. Managements Discussion and Analysis
    
    
    3Item 3. Controls and Procedures
    
    
    7PART II  Other Information
    
    
    8Item 1. Legal ProceedingsItem 2. Unregistered Sales of Equity Securities and Use of ProceedsItem 3. Defaults Upon Senior SecuritiesItem 4. Submission of Matters to a Vote of Security HoldersItem 5. Other InformationItem 6. ExhibitsSIGNATURES
    
    
    8Employment AgreementCertification of CEO and CFO Pursuant to Section 302Certification of CEO and CFO Pursuant to Section 906
  2




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PART 1  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 TBX RESOURCES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEET
May 31, 2006 (Unaudited)
 ASSETSCurrent AssetsCash
    
    $
    180,221Oil and gas revenue receivable
    
    
    27,932Total current assets
    
    
    208,153Property and equipment, net
    
    
    1,097Oil and gas properties (successful efforts method), net
    
    
    447,020Other
    
    
    6,211Total Assets
    
    $
    662,481LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesAccounts payable and accrued expenses
    
    $
    77,250Accrued compensation
    
    
    460,000Advances from affiliates
    
    
    84,759Accounts payable to affiliate
    
    
    30,548Asset retirement liabilitycurrent portion
    
    
    106,273Total current liabilities
    
    
    758,830Long-term LiabilitiesAsset retirement obligation
    
    
    63,285Minority interest
    
    
    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;
3,807,417 shares issued and outstanding
    
    
    38,075Additional paid-in capital
    
    
    9,926,139Accumulated deficit
    
    
    (10,195,848
    )Total stockholders deficit
    
    
    (231,634
    )Total Liabilities and Stockholders Deficit
    
    $
    662,481
  F-1




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TBX RESOURCES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 For Three Months Ended
    
    
    For Six Months EndedMay 31, 2006
    
    
    May 31, 2005
    
    
    May 31, 2006
    
    
    May 31, 2005(Restated)
    
    
    
    
    
    
    (Restated)Revenues:Oil and gas sales
    
    $
    23,296
    
    
    $
    22,403
    
    
    $
    98,526
    
    
    $
    47,266Joint venture contract fees (related party)
    
    
    322,000
    
    
    
    217,243
    
    
    
    472,000
    
    
    
    481,330Total revenues
    
    
    345,296
    
    
    
    239,646
    
    
    
    570,526
    
    
    
    528,596Expenses:Lease operating expense and production taxes
    
    
    61,687
    
    
    
    22,010
    
    
    
    105,876
    
    
    
    52,103General and administrative
    
    
    372,982
    
    
    
    153,632
    
    
    
    777,801
    
    
    
    327,092Depreciation, depletion, and amortization
    
    
    19,467
    
    
    
    15,709
    
    
    
    37,665
    
    
    
    36,777Accretion of asset retirement obligation
    
    
    4,900
    
    
    
    
    
    
    
    9,800
    
    
    
    Total expenses
    
    
    459,036
    
    
    
    191,351
    
    
    
    931,142
    
    
    
    415,972Operating Income (Loss)
    
    
    (113,740
    )
    
    
    48,295
    
    
    
    (360,616
    )
    
    
    112,624Other Income (Expense)Interest and other -
    
    
    
    
    
    
    (1,777
    )
    
    
    
    
    
    
    (3,598
    )Net Income (Loss)
    
    $
    (113,740
    )
    
    $
    46,518
    
    
    
    (360,616
    )
    
    $
    109,026Net Income (Loss) per common Share, Basic and Diluted
    
    $
    (0.03
    )
    
    $
    0.01
    
    
    $
    (0.09
    )
    
    $
    0.03Weighted average common shares used in calculations:Basic and diluted
    
    
    3,807,417
    
    
    
    3,327,254
    
    
    
    3,806,097
    
    
    
    3,327,254
  F-2




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TBX RESOURCES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 For the Six Months EndedMay 31, 2006
    
    
    May 31, 2005(Restated)Cash Flows From Operating Activities:Net income (loss)
    
    $
    (360,616
    )
    
    
    109,026Adjustments to reconcile net income (loss) to net
cash flow from operating activities:Depreciation, depletion and amortization
    
    
    37,665
    
    
    
    27,052Accretion of asset retirement obligation
    
    
    9,800
    
    
    
    9,724Changes in operating assets and liabilities:Decrease (increase) in:Trade/affiliate receivables
    
    
    73,664
    
    
    
    (59,332
    )Increase (decrease) in:Accounts payable and accrued expenses
    
    
    (7,370
    )
    
    
    103,384Accounts payable to affiliates
    
    
    3,332
    
    
    
    25,439Accrued compensation
    
    
    335,000
    
    
    
    Other
    
    
    (5,674
    )
    
    
    20,200Net cash provided by (used in) operating activities
    
    
    85,801
    
    
    
    28,725Cash Flows From Investing Activities:Purchase of oil and gas properties
    
    
    (37,031
    )
    
    
    Net cash used in investing activities
    
    
    (37,031
    )
    
    
    Cash Flows From Financing Activities:Payments to minority interest holders
    
    
    (42,000
    )
    
    
    (40,000
    )Advance from affiliate
    
    
    24,999
    
    
    
    3,799Issuance of Common Stock for Services
    
    
    20,000
    
    
    
    Net cash provided by (used in) financing activities
    
    
    (2,999
    )
    
    
    (36,201
    )Net Increase In Cash
    
    
    51,769
    
    
    
    (7,476
    )Cash at beginning of period
    
    
    128,452
    
    
    
    8,843Cash at end of period
    
    $
    180,221
    
    
    $
    1,367
  F-3




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TBX RESOURCES, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 MAY 31, 2006
(Unaudited)
 1.
    
    BASIS OF PRESENTATION:
  Principles of Consolidation
  2.
    
    RESTATEMENT OF PRIOR FINANCIAL STATEMENTS:
   As of May 31, 2005Condensed Consolidated Balance Sheet
    
    As Originally Presented
    
    As RestatedTotal current assets
    
    $
    178,278
    
    
    $
    71,092Total assets
    
    $
    637,217
    
    
    $
    275,181Total current liabilities
    
    $
    332,220
    
    
    $
    243,749Total liabilities
    
    $
    332,220
    
    
    $
    596,887Accumulated deficit
    
    $
    8,686,625
    
    
    $
    9,313,328Total stockholders equity (deficit)
    
    $
    304,997
    
    
    $
    321,706
 F-4




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For Three Months Ended
    
    For Six Months EndedMay 31, 2005
    
    May 31, 2005As Originally
    
    
    
    
    
    As OriginallyPresented
    
    As Restated
    
    Presented
    
    As RestatedCondensed Consolidated Statement of OperationsTotal revenue
    
$
224,399


$
239,646


    $
    498,102
    
    
    $
    528,596Total expenses
    
$
197,490


$
191,351


    $
    433,324
    
    
    $
    415,972Operating income
    
$
26,909


$
48,295


    $
    64,778
    
    
    $
    112,624Net income
    
$
25,132


$
46,518


    $
    61,180
    
    
    $
    109,026Net income per common shareBasic and Diluted
    
$
0.01


$
0.01


    $
    0.02
    
    
    $
    0.03Condensed Consolidated Statement of Cash FlowsNet cash provided by operating activities
    








    $
    61,180
    
    
    $
    28,725Net cash used by investing activities
    








    
    
    
    
    
    Net cash used by financing activities
    








    $
    (5,615
    )
    
    $
    (36,201
    )
 Reclassifications
  3.
    
    BUSINESS ACTIVITIES:
     4.
    
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:Revenue Recognition
 Joint Venture Contract Fees
 F-5




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Oil & Gas Sales
 Asset Retirement Obligation
   Balance, November 30, 2005
    
    $
    167,161Accretion Expense
    
    
    9,800Liabilities incurred
    
    
    Liabilities settled
    
    
    Changes in estimates
    
    
    (7,403
    )Balance, May 31, 2006
    
    $
    169,558
 Use of Estimates
  Recent Accounting Pronouncements
  5.
    
    RELATED PARTY TRANSACTIONS:
  F-6




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6.
    
    ACCRUED COMPENSATION:
   7.
    
    STOCKHOLDERS EQUITY:
  8.
    
    COMMITMENTS AND CONTINGENCIES:
   F-7




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS
 CAUTIONARY STATEMENT
  DESCRIPTION OF PROPERTIES
 GENERAL
 PROPERTIES:
 Name of Field
    
    Gross Producing Well Count
    
    Net Producing Well CountMitchell Creek
    
    
    1
    
    
    
    .48Talco
    
    
    5
    
    
    
    2.0Quitman
    
    
    3
    
    
    
    2.4Manziel
    
    
    1
    
    
    
    .8Newark East
    
    
    2
    
    
    
    .7Bridgeport
    
    
    1
    
    
    
    .25Carmargo NW
    
    
    2
    
    
    
    .03Harmon SE
    
    
    1
    
    
    
    .01
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PROVED
    
    PROVEDPROVED
    
    PROVED
    
    DEVELOPED
    
    DEVELOPEDRESERVES:
    
    RESERVES:
    
    RESERVES:
    
    RESERVES:OIL
    
    GAS
    
    OIL
    
    GASNAME OF FIELD
    
    (bbls)
    
    (mcf)
    
    (bbls)
    
    (mcf)Mitchell Creek
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Talco
    
    
    .332
    
    
    
    0
    
    
    
    .332
    
    
    
    0Quitman
    
    
    9.946
    
    
    
    0
    
    
    
    9.946
    
    
    
    0Manziel
    
    
    11.120
    
    
    
    0
    
    
    
    11.120
    
    
    
    0Newark East
    
    
    5.330
    
    
    
    30.347
    
    
    
    5.330
    
    
    
    30.347Bridgeport
    
    
    627
    
    
    
    2,363
    
    
    
    627
    
    
    
    2,363Carmargo NW
    
    
    1.658
    
    
    
    0
    
    
    
    1.658
    
    
    
    0Harmon SE
    
    
    .047
    
    
    
    1.292
    
    
    
    .047
    
    
    
    1.292
 PRODUCTIVE WELLS AND ACREAGE
 Net
    
    
    
    
    
    
    
    
    
    Total Gross
    
    NetTotal Gross
    
    Productive
    
    Total Gross
    
    Net Productive
    
    Developed
    
    DevelopedGeographic Area
    
    Oil Wells
    
    Oil Wells
    
    Gas Wells
    
    Gas Wells
    
    Acres
    
    AcresEast Texas Region
    
    
    10
    
    
    
    6.04
    
    
    
    0
    
    
    
    0
    
    
    
    1,172.2
    
    
    
    887.54Wise County
    
    
    2
    
    
    
    .37
    
    
    
    2
    
    
    
    .35
    
    
    
    224
    
    
    
    83Anadarko Basin
    
    
    4
    
    
    
    .29
    
    
    
    0
    
    
    
    0
    
    
    
    480
    
    
    
    14
 Notes
      4




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ANADARKO BASIN- WESTERN OKLAHOMA
  OIL AND GAS PARTNERSHIP INTERESTS
  CRITICAL ACCOUNTING POLICIES
   RESULTS OF OPERATIONS
   Three months ended
    
    % increase
    
    Six months ended
    
    % increaseMay 31, 2006
    
    May 31, 2005
    
    (decrease)
    
    May 31, 2006
    
    May 31, 2005
    
    (decrease)(restated)
    
    
    
    
    
    
    
    
    
    
    
    (restated)Oil & Gas Sales
    
    $
    23,296
    
    
    $
    22,403
    
    
    
    3.99
    %
    
    $
    98,526
    
    
    $
    47,266
    
    
    
    108.45
    %Joint Venture Contract Revenue
    
    
    322,000
    
    
    
    217,243
    
    
    
    48.22
    %
    
    
    472,000
    
    
    
    481,330
    
    
    
    -1.94
    %$
    345,296
    
    
    $
    239,646
    
    
    
    44.09
    %
    
    $
    570,526
    
    
    $
    528,596
    
    
    
    7.93
    %
  5




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Expenses
 %
    
    
    
    
    
    
    
    
    
    %Three months ended
    
    Increase
    
    Six months ended
    
    IncreaseMay 31, 2006
    
    May 31, 2005
    
    (Decrease)
    
    May 31, 2006
    
    May 31, 2005
    
    (Decrease)RESTATED
    
    
    
    
    
    RESTATEDLease operating & taxes
    
    $
    61,687
    
    
    $
    22,010
    
    
    
    180.27
    %
    
    $
    105,876
    
    
    $
    52,103
    
    
    
    103.21
    %General & administrative
    
    
    372,982
    
    
    
    153,632
    
    
    
    142.78
    %
    
    
    777,801
    
    
    
    327,092
    
    
    
    137.79
    %D D & A
    
    
    19,467
    
    
    
    15,709
    
    
    
    23.93
    %
    
    
    37,665
    
    
    
    37,667
    
    
    
    (0.01
    )%Accretion
    
    
    4,900
    
    
    
    0
    
    
    
    100.00
    %
    
    
    9,800
    
    
    
    
    
    
    
    100.00
    %$
    459,036
    
    
    $
    191,351
    
    
    
    139.89
    %
    
    $
    931,142
    
    
    $
    416,862
    
    
    
    123.37
    %
   LIQUIDITY AND CAPITAL RESOURCES
   6




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PLAN OF OPERATION FOR THE FUTURE
    
 ITEM 3. CONTROLS AND PROCEDURES
    7




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PART II. OTHER INFORMATION
 
   
   
   
   
   
        
     /s/ Tim Burroughs
 8