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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 August 31, 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 August 31, 2007 (Unaudited)
    
    
    F-1Condensed Consolidated Statements of Operations for the Three and Nine Months Ended
August 31, 2007and 2006 (Unaudited)
    
    
    F-2Condensed Consolidated Statements of Cash Flows for the Nine Months Ended
August 31, 2007and 2006 (Unaudited)
    
    
    F-3Notes to Condensed Consolidated Financial Statements as of August 31, 2007 (Unaudited)
    
    
    F-4Item 2. Managements Discussion and Analysis
    
    
    3Item 3. Controls and Procedures
    
    
    8PART II  Other InformationItem 1. Legal Proceedings
    
    
    9Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    9Item 3. Defaults Upon Senior Securities
    
    
    9Item 4. Submission of Matters to a Vote of Security Holders
    
    
    9Item 5. Other Information
    
    
    9Item 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
AUGUST 31, 2007
(Unaudited)
 ASSETSCurrent AssetsCash
    
    $
    4,986Oil and gas revenue receivable
    
    
    30,626Inventory
    
    
    26,010Total current assets
    
    
    61,622Oil and gas properties (successful efforts method), net
    
    
    221,741Other
    
    
    6,211Total Assets
    
    $
    289,574LIABILITIES AND STOCKHOLDERS DEFICITCurrent LiabilitiesAccounts payable and accrued expenses
    
    $
    69,026Advances from affiliate
    
    
    724,969Deferred revenue
    
    
    26,010Total current liabilities
    
    
    820,005Long-term LiabilitiesAsset retirement obligation
    
    
    201,461Non-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;
3,977,442 shares issued and outstanding at August 31, 2007
    
    
    39,774Additional paid-in capital
    
    
    10,794,689Accumulated deficit
    
    
    (11,638,355
    )Total stockholders deficit
    
    
    (803,892
    )Total Liabilities and Stockholders Deficit
    
    $
    289,574
  F-1




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##### Table of Contents



TBX RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 For the Three
    
    
    For the NineMonths Ended
    
    
    Months EndedAug 31, 2007
    
    
    Aug 31, 2006
    
    
    Aug 31, 2007
    
    
    Aug 31, 2006Revenues:Oil and gas sales
    
    $
    42,359
    
    
    $
    83,798
    
    
    $
    185,524
    
    
    $
    228,705Joint venture contract fees (related party)
    
    
    
    
    
    
    133,615
    
    
    
    
    
    
    
    605,615Total revenues
    
    
    42,359
    
    
    
    217,413
    
    
    
    185,524
    
    
    
    834,320Expenses:Lease operating and taxes (including
$2,400 for the
three months and $7,200 for the nine
months of
2007 and 2006 to related party)
    
    
    58,743
    
    
    
    64,647
    
    
    
    180,995
    
    
    
    262,537General and administrative
    
    
    145,075
    
    
    
    291,769
    
    
    
    629,499
    
    
    
    1,069,570Depreciation, depletion, amortization and
accretion
    
    
    18,587
    
    
    
    25,523
    
    
    
    55,541
    
    
    
    72,988Total expenses
    
    
    222,405
    
    
    
    381,939
    
    
    
    866,035
    
    
    
    1,405,095Operating Loss
    
    
    (180,046
    )
    
    
    (164,526
    )
    
    
    (680,511
    )
    
    
    (570,775
    )Other Income (Expense):Gain on sale of oil and gas property
    
    
    
    
    
    
    
    
    
    
    6,250
    
    
    
    Loss Before Provision for Income Taxes
    
    
    (180,046
    )
    
    
    (164,526
    )
    
    
    (674,261
    )
    
    
    (570,775
    )Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net Loss
    
    $
    (180,046
    )
    
    $
    (164,526
    )
    
    $
    (674,261
    )
    
    $
    (570,775
    )Net Loss per Common Share, Basic and Diluted
    
    $
    (0.05
    )
    
    $
    (0.04
    )
    
    $
    (0.17
    )
    
    $
    (0.15
    )Weighted Average Common Shares Outstanding:Basic and Diluted
    
    
    3,932,417
    
    
    
    3,807,417
    
    
    
    3,921,468
    
    
    
    3,806,540
  F-2




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TBX RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 For the Nine Months EndedAug 31, 2007
    
    
    Aug 31, 2006Cash Flows From Operating Activities:Net Loss
    
    $
    (674,261
    )
    
    $
    (570,775
    )Adjustments to reconcile net loss to net cash provided by
(used for) operating activities:Gain on sale of oil and gas property
    
    
    (6,250
    )
    
    
    Depreciation, depletion, amortization and accretion
    
    
    55,541
    
    
    
    72,988Stock based compensation
    
    
    218,250
    
    
    
    Changes in operating assets and liabilities:Decrease (increase) in:Oil and gas revenue receivable
    
    
    (16,761
    )
    
    
    62,600Inventory
    
    
    12,710
    
    
    
    Increase (decrease) in:Accounts payable and accrued expenses
    
    
    (63,484
    )
    
    
    153,546Accrued compensation
    
    
    
    
    
    
    365,000Deferred revenue and other
    
    
    (12,710
    )
    
    
    (7,404
    )Net cash provided (used) by operating activities
    
    
    (486,965
    )
    
    
    75,955Cash Flows From Investing Activities:Proceeds from sale of oil and gas property
    
    
    6,250
    
    
    
    Development of oil and gas properties
    
    
    
    
    
    
    (99,150
    )Cash flows provided by (used in) investing activities
    
    
    6,250
    
    
    
    (99,150
    )Cash Flows From Financing Activities:Advances from affiliate-net
    
    
    472,951
    
    
    
    (15,000
    )Exercise of 50,000 common stock options
    
    
    7,500
    
    
    
    Payments to minority interest holders
    
    
    
    
    
    
    (22,000
    )Issuance of common stock for services
    
    
    
    
    
    
    20,000Net cash flows provided by (used in) financing activities
    
    
    480,451
    
    
    
    (17,000
    )Net Decrease In Cash
    
    
    (264
    )
    
    
    (40,195
    )Cash at beginning of period
    
    
    5,250
    
    
    
    128,452Cash at end of period
    
    $
    4,986
    
    
    $
    88,257Non 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
August 31, 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
    
    $
    1,299,699Accumulated depreciation, depletion and
amortization
    
    
    (1,077,958
    )$
    221,741
 Long-lived Assets
   Asset Retirement Obligations
   ARO at November 30, 2006
    
    $
    186,761Accretion expense
    
    
    14,700Liabilities incurred
    
    
    Liabilities settled
    
    
    Changes in estimates
    
    
    ARO at August 31, 2007
    
    $
    201,461
 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 $7,200 in
both the nine months ended August 31, 2007 and 2006 for activities associated with operating
certain wells.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 nine months ended August 31, 2006 the
Company earned $605,615, representing 73% of total revenue. Fees received under this
arrangement could differ 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 August 31,
2007 the Company has a liability to Gulftex in the amount of $9,929 related to wells
operated by Gulftex on behalf of the Company.d.
    
    During the nine months ended August 31, 2007, the Company received advances from Gulftex
totaling $497,000. The balance due Gulftex as of August 31, 2007 is $724,969 (see note
6.e.).e.
    
    Effective June 1, 2007, the Company is charging Gulftex rent for a portion of the
Companys office space plus administrative expenses paid by the Company that relate to
Gulftexs operations. The
 F-7




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Company charged Gulftex $24,049 in the current quarter that was used to offset advances from
Gulftex with a corresponding credit to general and administrative expense.
 7. STOCK BASED COMPENSATION:
     F-8




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Weighted-AverageShares
    
    
    Exercise PriceOptionsGranted at November 30, 2006
    
    
    75,000
    
    
    $
    0.15Granted
    
    
    75,000
    
    
    $
    0.15Exercised
    
    
    (50,000
    )
    
    $
    0.15Forfeited
    
    
    
    
    
    
    Outstanding at August 31, 2007
    
    
    100,000
    
    
    $
    0.15Options exercisable at August 31, 2007
    
    
    100,000
    
    
    $
    0.15Weighted-average fair value of
options granted during this quarter
    
    $
    64,000Weighted-average fair value of
options granted in the year to date
    
    $
    218,250
  Average expected life in years
    
    
    1Average interest rate
    
    
    5.25
    %Average volatility
    
    
    81
    %Dividend yield
    
    
    0
    %
  Weighted AverageGrant DateAugust 31, 2007
    
    Shares
    
    Fair ValueVested
    
    
    100,000
    
    
    $
    2.82Nonvested
    
    
    
    
    
    
    Total
    
    
    100,000
    
    
    $
    2.82
  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
  3




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RESULTS OF OPERATIONS
  Revenues-
 %
    
    
    
    
    
    
    
    
    
    
    %Three Months Ended
    
    
    Increase
    
    
    Nine Months Ended
    
    
    IncreaseAug 31, 2007
    
    
    Aug 31, 2006
    
    
    (Decrease)
    
    
    Aug 31, 2007
    
    
    Aug 31, 2006
    
    
    (Decrease)Revenues:Oil and gas sales
    
    $
    42,359
    
    
    $
    83,798
    
    
    
    -49.45
    %
    
    $
    185,524
    
    
    $
    228,705
    
    
    
    -18.88
    %Joint venture contract fees
    
    
    
    
    
    
    133,615
    
    
    
    -100.00
    %
    
    
    
    
    
    
    605,615
    
    
    
    -100.00
    %Total revenues
    
    $
    42,359
    
    
    $
    217,413
    
    
    
    -80.52
    %
    
    $
    185,524
    
    
    $
    834,320
    
    
    
    -77.76
    %
   Expenses-
 %
    
    
    
    
    
    
    
    
    
    
    %Three Months Ended
    
    
    Increase
    
    
    Nine Months Ended
    
    
    Increase2007
    
    
    2006
    
    
    (Decrease)
    
    
    2007
    
    
    2006
    
    
    (Decrease)Expenses:Lease operating and taxes
    
    $
    58,743
    
    
    $
    64,647
    
    
    
    -9.13
    %
    
    $
    180,995
    
    
    $
    262,537
    
    
    
    -31.06
    %General and administrative
    
    
    145,075
    
    
    
    291,769
    
    
    
    -50.28
    %
    
    
    629,499
    
    
    
    1,069,570
    
    
    
    -41.14
    %Depreciation, depl, amort.,
& accretion
    
    
    18,587
    
    
    
    25,523
    
    
    
    -27.18
    %
    
    
    55,541
    
    
    
    72,988
    
    
    
    -23.90
    %Total expenses
    
    $
    222,405
    
    
    $
    381,939
    
    
    
    -41.77
    %
    
    $
    866,035
    
    
    $
    1,405,095
    
    
    
    -38.36
    %
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DESCRIPTION OF PROPERTIES
 GENERAL
 PROPERTIES
  Gross Producing
    
    Net ProducingName of Field or Well
    
    Well Count
    
    Well CountMitchell Creek
    
    
    1
    
    
    
    0.48Talco Field
    
    
    5
    
    
    
    2.00Quitman Field
    
    
    3
    
    
    
    2.40Manziel Field
    
    
    1
    
    
    
    0.80Newark East
    
    
    8
    
    
    
    0.75Camargo NW Field
    
    
    2
    
    
    
    0.03Harmon SE Field
    
    
    1
    
    
    
    0.01
 PRODUCTIVE WELLS AND ACREAGE:
  5




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Total Gross
    
    
    Net Productive
    
    
    Total Gross
    
    
    Net Productive
    
    
    Total Gross
    
    
    Total NetGeographic Area
    
    Oil Wells
    
    
    Oil Wells
    
    
    Gas Wells
    
    
    Gas Wells
    
    
    Developed Acres
    
    
    Developed AcresEast Texas Region
    
    
    10
    
    
    
    5.68
    
    
    
    
    
    
    
    
    
    
    
    1,172.20
    
    
    
    665.81Wise County
    
    
    2
    
    
    
    0.73
    
    
    
    
    
    
    
    
    
    
    
    224
    
    
    
    81.76Parker County
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    .024
    
    
    
    
    
    
    
    Anadarko Basin
    
    
    3
    
    
    
    .04
    
    
    
    
    
    
    
    
    
    
    
    480
    
    
    
    19.20
 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 34 wells TBX Resources, Inc holds a
working or overriding interest in as of August 31, 2007.2.
    
    Net Productive Oil Wells were calculated by multiplying the working interest held by TBX
Resources, Inc. in each of the 21 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.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 August 31, 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
   6




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OVERVIEW
   PLAN OF OPERATION FOR THE FUTURE
    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.
   7




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ITEM 3. CONTROLS AND PROCEDURES
     Limitations on the Effectiveness of Controls.
 8




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PART II. OTHER INFORMATION
 
   
   
   
   
   
       
   TBX RESOURCES, INC.DATE: October 18, 2007SIGNATURE:
    
    /s/ Tim Burroughs

TIM BURROUGHS, PRESIDENT/CHIEF
FINANCIAL OFFICER
 9