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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:February 29, 2008
 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
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company þ o þ




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##### 



TBX RESOURCES, INC.
 Index
 Pg. No.PART I  Financial InformationItem 1. Financial StatementsCondensed Consolidated Balance Sheet as of November 30, 2007
and February 29, 2008 (Unaudited)
    
    
    F-1Condensed Consolidated Statements of Operations for the Three Months Ended
February 29, 2008 and February 28, 2007 (Unaudited)
    
    
    F-2Condensed Consolidated Statements of Cash Flows for the Three Months Ended
February 29, 2008 and February 28, 2007 (Unaudited)
    
    
    F-3Notes to Condensed Consolidated Financial Statements as of February 29, 2008 (Unaudited)
    
    
    F-4Item 2. Managements Discussion and Analysis
    
    
    3Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    7Item 4. 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
    
    
    8SIGNATURES
    
    
    9EX-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
 February 29, 2008(Unaudited)
    
    
    November 30, 2007ASSETSCurrent AssetsCash
    
    $
    36,801
    
    
    $
    23,821Oil and gas revenue receivable
    
    
    24,100
    
    
    
    63,379Inventory
    
    
    22,957
    
    
    
    2,584Total current assets
    
    
    83,858
    
    
    
    89,784Oil and gas properties (successful efforts method), net
    
    
    240,462
    
    
    
    223,638Other
    
    
    6,211
    
    
    
    6,211Total Assets
    
    $
    330,531
    
    
    $
    319,633LIABILITIES AND STOCKHOLDERS DEFICITCurrent LiabilitiesTrade accounts payable and accrued expenses
    
    $
    146,932
    
    
    $
    64,543Accounts payable to and advances from affiliate
    
    
    937,282
    
    
    
    869,192Asset retirement obligations  current portion
    
    
    29,964
    
    
    
    29,964Deferred revenue
    
    
    22,957
    
    
    
    2,584Total current liabilities
    
    
    1,137,135
    
    
    
    966,283Long-term LiabilitiesAsset retirement obligations
    
    
    155,793
    
    
    
    153,370Non-controlling Interest in Consolidated Subsidiary
    
    
    72,000
    
    
    
    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;4,027,442 shares issued and outstanding at February 29, 2008,4,002,442 shares issued and outstanding at November 30, 2007
    
    
    40,274
    
    
    
    40,024Additional paid-in capital
    
    
    10,877,440
    
    
    
    10,827,440Accumulated deficit
    
    
    (11,952,111
    )
    
    
    (11,739,484
    )Total stockholders deficit
    
    
    (1,034,397
    )
    
    
    (872,020
    )Total Liabilities and Stockholders Deficit
    
    $
    330,531
    
    
    $
    319,633
  F-1




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TBX RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 For the Three Months EndedFeb. 29, 2008
    
    Feb. 28, 2007Revenues:Oil and gas sales
    
    $
    90,977
    
    
    $
    67,357Total revenues
    
    
    90,977
    
    
    
    67,357Expenses:Lease operating and taxes (including $2,400
for 2008 and 2007 to related party)
    
    
    155,235
    
    
    
    42,876General and administrative
    
    
    134,309
    
    
    
    213,914Depreciation, depletion, amortization and accretion
    
    
    14,060
    
    
    
    17,666Total expenses
    
    
    303,604
    
    
    
    274,456Loss Before Provision for Income Taxes
    
    
    (212,627
    )
    
    
    (207,099
    )Provision for income taxes
    
    
    
    
    
    
    Net Loss
    
    $
    (212,627
    )
    
    $
    (207,099
    )Net Loss per Common Share, Basic and Diluted
    
    $
    (0.05
    )
    
    $
    (0.05
    )Weighted average common shares used in calculations:Basic and Diluted
    
    
    4,008,486
    
    
    
    3,907,417
  F-2




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TBX RESOURCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 For the Three Months EndedFeb. 29, 2008
    
    
    Feb. 28, 2007Cash Flows From Operating Activities:Net loss
    
    $
    (212,627
    )
    
    $
    (207,099
    )Adjustments to reconcile net loss to net cash provided by (used for)
operating activities:Depreciation, depletion, amortization and accretion
    
    
    14,060
    
    
    
    17,666Stock based compensation
    
    
    46,500
    
    
    
    72,750Changes in operating assets and liabilities other than
advances from affiliate:Decrease (increase) in:Oil and gas revenue receivable
    
    
    39,279
    
    
    
    (26,646
    )Inventory
    
    
    (20,373
    )
    
    
    2,371Increase (decrease) in:Trade accounts payable and accrued expenses
    
    
    82,390
    
    
    
    (10,726
    )Accounts payable to affiliate
    
    
    58,854
    
    
    
    Deferred revenue
    
    
    20,373
    
    
    
    (2,371
    )Net cash provided by (used for) operating activities
    
    
    28,456
    
    
    
    (154,055
    )Cash Flows From Investing Activities:Development of oil and gas properties
    
    
    (28,461
    )
    
    
    Net cash used in investing activities
    
    
    (28,461
    )
    
    
    Cash Flows From Financing Activities:Advances from affiliate
    
    
    9,235
    
    
    
    174,000Exercise of common stock options
    
    
    3,750
    
    
    
    Net cash provided by financing activities
    
    
    12,985
    
    
    
    174,000Net Increase In Cash
    
    
    12,980
    
    
    
    19,945Cash at beginning of period
    
    
    23,821
    
    
    
    5,250Cash at end of period
    
    $
    36,801
    
    
    $
    25,195
  F-3




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TBX RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
February 29, 2008
(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
  Receivables
  Inventory
  Property and Equipment
  Oil and Gas Properties
    Proved oil and gas properties
    
    $
    1,341,811Accumulated depreciation, depletion and
amortization
    
    
    (1,101,349
    )$
    240,462
 Long-lived Assets
  F-5




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Asset Retirement Obligations
   ARO at November 30, 2007
    
    $
    183,334Accretion expense
    
    
    2,423Liabilities incurred
    
    
    Liabilities settled
    
    
    Changes in estimates
    
    
    ARO at February 29, 2008
    
    $
    185,757
 Equity Instruments Issued for Goods and Services
  Earnings Per Share (EPS)
  Use of Estimates
  F-6




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5. RECENT ACCOUNTING PRONOUNCEMENTS:
 Noncontrolling Interests in Consolidated Financial
Statements
  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 29, 2008 and February 28, 2007 for activities associated with
operating certain wells.b.
    
    Gulftex operates certain oil and gas properties on behalf of the Company. At February 29,
2008 the Company has a liability to Gulftex in the amount of $169,028 related to wells
operated by Gulftex on behalf of the Company.c.
    
    During the three months ended February 29, 2008, the Company received advances from Gulftex
totaling $9,235. The balance due Gulftex as of February 29, 2008 is $768,253.d.
    
    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 relates to Gulftexs
operations. The Company billed and was paid $24,049 for the three months ended February 29,
2008.e.
    
    See Note 9, Subsequent Event.
 7. STOCK BASED COMPENSATION:
  F-7




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Weighted-AverageShares
    
    
    Exercise PriceOutstanding December 1, 2007
    
    
    100,000
    
    
    $
    0.15Granted
    
    
    25,000
    
    
    $
    0.15Exercised
    
    
    (25,000
    )
    
    $
    0.15Forfeited
    
    
    
    
    
    
    Outstanding February 29,2008
    
    
    100,000
    
    
    $
    0.15Options exercisable at February 29, 2008
    
    
    100,000
    
    
    $
    0.15Weighted-average fair value of
options granted during this quarter
    
    $
    46,500
   Average expected life in years
    
    
    1Average interest rate
    
    
    4.50
    %Average volatility
    
    
    66
    %Dividend yield
    
    
    0
    %
  F-8




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Weighted Average
    
    
    Weighted AverageGrant Date
    
    
    Grant DateShares
    
    
    Fair Value per Share
    
    
    Fair ValueVested
    
    
    100,000
    
    
    $
    2.21
    
    
    $
    221,000Nonvested
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    100,000
    
    
    $
    2.21
    
    
    $
    221,000
  8. COMMITMENTS AND CONTINGENCIES:
   9. SUBSEQUENT EVENT:
   F-9




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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS
 CAUTIONARY STATEMENT
  DESCRIPTION OF PROPERTIES
 GENERAL
  PROPERTIES
  Gross
    
    NetProducing
    
    ProducingName of Field or Well
    
    Well Count
    
    Well CountTalco Field
    
    
    5
    
    
    
    0.68Quitman Field
    
    
    3
    
    
    
    2.93Manziel Field
    
    
    1
    
    
    
    0.98Newark East, Working Interest
    
    
    2
    
    
    
    0.65Newark East, Override Interest
    
    
    8
    
    
    
    0.03Camargo NW Field
    
    
    2
    
    
    
    0.03Harmon SE Field
    
    
    1
    
    
    
    0.01
 PRODUCTIVE WELLS AND ACREAGE:
  Net
    
    
    
    
    
    
    Net
    
    
    Total Gross
    
    
    Total NetTotal Gross
    
    
    Productivity
    
    
    Total Gross
    
    
    Productive
    
    
    Developed
    
    
    DevelopedGeographic Area
    
    Oil Wells
    
    
    Oil Wells
    
    
    Gas Wells
    
    
    Gas Wells
    
    
    Acres
    
    
    AcresEast Texas Region
    
    
    9
    
    
    
    4.58
    
    
    
    
    
    
    
    
    
    
    
    1,172.20
    
    
    
    596.85Wise County
    
    
    2
    
    
    
    .65
    
    
    
    
    
    
    
    
    
    
    
    224
    
    
    
    73.18Denton County
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    .02
    
    
    
    566
    
    
    
    2.49Anadarko Basin
    
    
    3
    
    
    
    .05
    
    
    
    
    
    
    
    
    
    
    
    480
    
    
    
    7.70
 Notes
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1.
    
    Total Gross Oil Wells was calculated by subtracting wells
which are either shut-in or inactive from the 22 wells TBX Resources, Inc holds a
working or overriding interest in as of February 29, 2008.2.
    
    Net Productive Oil Wells were calculated by multiplying the working interest held by TBX
Resources, Inc. in each of the 20 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 February 29, 2008 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
   4




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OVERVIEW
 Going Concern and Liquidity Problems
     RESULTS OF OPERATIONS
  Revenue
  Gas
    
    
    MBTU
    
    
    Price/
    
    
    Oil
    
    
    Bbls
    
    
    Price/Sales
    
    
    Sold
    
    
    MBTU
    
    
    Sales
    
    
    Sold
    
    
    BblFebruary 29, 2008
    
    $
    46,734
    
    
    
    5,980
    
    
    $
    7.82
    
    
    $
    46,087
    
    
    
    601
    
    
    $
    76.66February 28, 2007
    
    $
    25,599
    
    
    
    4,982
    
    
    $
    5.14
    
    
    $
    46,674
    
    
    
    1,065
    
    
    $
    43.813 Month Change2008 vs 2007Amount
    
    $
    21,135
    
    
    
    998
    
    
    $
    2.68
    
    
    $
    (587
    )
    
    
    (464
    )
    
    $
    32.85Percentage
    
    
    82.56
    %
    
    
    20.03
    %
    
    
    52.14
    %
    
    
    -1.26
    %
    
    
    -43.57
    %
    
    
    74.98
    %
 5




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Expenses
 %Increase2008
    
    
    2007
    
    
    (Decrease)Lease operating and taxes
    
    
    155,235
    
    
    
    42,876
    
    
    
    262.06
    %General and administrative
    
    
    134,309
    
    
    
    213,914
    
    
    
    -37.21
    %Depreciation, depl, amort., & accretion
    
    
    14,060
    
    
    
    17,666
    
    
    
    -20.41
    %Total expenses
    
    $
    303,604
    
    
    $
    274,456
    
    
    
    10.62
    %
     LIQUIDITY AND CAPITAL RESOURCES
  PLAN OF OPERATION FOR THE FUTURE
   6




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ITEM 3. QUANTITATIVE AND QUALATIVE DISCLOSURES ABOUT MARKET RISK.
  
 ITEM 4. CONTROLS AND PROCEDURES
     Limitations on the Effectiveness of Controls.
 7




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PART II. OTHER INFORMATION
 
   
   
   
   
   
       8




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SIGNATURE:
    /s/ Tim BurroughsTIM BURROUGHS, PRESIDENT/CHIEF FINANCIAL OFFICER 9