##### Table of Contents



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: May 31, 2009
 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 a smaller reporting company)
    
    þ Smaller Reporting Company
 o þ




---



##### 



TBX RESOURCES, INC.
 Index
 Pg. No.PART I  Financial InformationItem 1. Financial StatementsCondensed Consolidated Balance Sheets as of November 30, 2008
and May 31, 2009 (Unaudited)
    
    
    F-1Condensed Consolidated Statements of Operations for the Three
and Six months Ended May 31, 2009 and 2008 (Unaudited)
    
    
    F-2Condensed Consolidated Statements of Cash Flows for the
Six months Ended May 31, 2009 and 2008 (Unaudited)
    
    
    F-3Notes to Condensed Consolidated Financial Statements as of May 31, 2009 (Unaudited)
    
    
    F-4Item 2. Managements
Discussion and Analysis and Results of Operations
    
    
    3Item 3. Quantitative and Qualitative Disclosures about Market Risk.
    
    
    8Item 4T. 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
    
    
    9EX-31.1EX-32.1
  2




---



##### Table of Contents



PART 1  FINANCIAL INFORMATION
 
 ITEM 1.
    
    FINANCIAL STATEMENTS
 TBX RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
 May 31, 2009
    
    
    November 30,(Unaudited)
    
    
    2008ASSETSCurrent AssetsCash
    
    $
    2,823
    
    
    $
    2,506Oil and gas revenue receivable
    
    
    200,656
    
    
    
    175,812Accounts receivable from affiliate
    
    
    
    
    
    
    21,824Prepaid expense
    
    
    10,000
    
    
    
    10,000Inventory
    
    
    5,300
    
    
    
    Total current assets
    
    
    218,779
    
    
    
    210,142Oil and gas properties (successful efforts method), net
    
    
    53,468
    
    
    
    57,619Other
    
    
    6,211
    
    
    
    6,211Total Assets
    
    $
    278,458
    
    
    $
    273,972LIABILITIES AND STOCKHOLDERS DEFICITCurrent LiabilitiesTrade accounts payable and accrued expenses
    
    $
    129,958
    
    
    $
    90,789Accounts payable to and advances from affiliate
    
    
    351,188
    
    
    
    173,786Deferred revenue
    
    
    5,300
    
    
    
    Total current liabilities
    
    
    486,446
    
    
    
    264,575Long-term LiabilitiesAsset retirement obligations
    
    
    21,492
    
    
    
    20,981Non-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 May 31, 2009,
4,027,442 shares issued and outstanding at November 30,
2008
    
    
    40,274
    
    
    
    40,274Additional paid-in capital
    
    
    10,929,940
    
    
    
    10,929,440Accumulated deficit
    
    
    (11,271,694
    )
    
    
    (11,053,298
    )Total stockholders deficit
    
    
    (301,480
    )
    
    
    (83,584
    )Total Liabilities and Stockholders Deficit
    
    $
    278,458
    
    
    $
    273,972
  F-1




---



##### Table of Contents



TBX RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 For the Three Months Ended
    
    
    For the Six Months EndedMay 31, 2009
    
    
    May 31, 2008
    
    
    May 31, 2009
    
    
    May 31, 2008Revenues:Oil and gas sales
    
    $
    10,320
    
    
    $
    66,304
    
    
    $
    24,845
    
    
    $
    157,281Total revenues
    
    
    10,320
    
    
    
    66,304
    
    
    
    24,845
    
    
    
    157,281Expenses:Lease operating and taxes
    
    
    8,905
    
    
    
    45,935
    
    
    
    20,665
    
    
    
    201,170General and administrative
    
    
    91,271
    
    
    
    87,797
    
    
    
    219,601
    
    
    
    222,107Depreciation, depletion, amortization
and accretion
    
    
    2,268
    
    
    
    7,620
    
    
    
    4,662
    
    
    
    21,680Total expenses
    
    
    102,444
    
    
    
    141,352
    
    
    
    244,928
    
    
    
    444,957Operating Loss
    
    
    (92,124
    )
    
    
    (75,048
    )
    
    
    (220,083
    )
    
    
    (287,676
    )Other Income (Expense):Gain on sale of oil and gas properties
    
    
    1,687
    
    
    
    1,092,040
    
    
    
    1,687
    
    
    
    1,092,040Income (Loss) Before Provision for Income Taxes
    
    
    (90,437
    )
    
    
    1,016,992
    
    
    
    (218,396
    )
    
    
    804,364Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net Income (Loss)
    
    $
    (90,437
    )
    
    $
    1,016,992
    
    
    $
    (218,396
    )
    
    $
    804,364Net Income (Loss) per Common Share, Basic
    
    $
    (0.02
    )
    
    $
    0.25
    
    
    $
    (0.05
    )
    
    $
    0.20Net Income (Loss) per Common Share, Diluted
    
    $
    0.02
    
    
    $
    0.25
    
    
    $
    (0.05
    )
    
    $
    0.20Weighted Average Common Shares Outstanding:Basic
    
    
    4,027,442
    
    
    
    4,027,442
    
    
    
    4,027,442
    
    
    
    4,018,016Diluted
    
    
    4,027,442
    
    
    
    4,118,746
    
    
    
    4,027,442
    
    
    
    4,123,070
  F-2




---



##### Table of Contents



TBX RESOURCES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 For the Six Months EndedMay 31, 2009
    
    
    May 31, 2008Cash Flows From Operating Activities:Net income (loss)
    
    $
    (218,396
    )
    
    $
    804,364Adjustments to reconcile net income (loss) to net cash used for
operating activities:Gain on sale of oil and gas properties
    
    
    (1,687
    )
    
    
    (1,092,040
    )Lease operating and taxes
    
    
    
    
    
    
    174,120Depreciation, depletion, amortization and accretion
    
    
    4,662
    
    
    
    21,680Stock based compensation
    
    
    500
    
    
    
    80,500Changes in operating assets and liabilities other than
accounts payable to and advances from affiliate:Decrease (increase) in:Accounts receivable from affiliate
    
    
    21,824
    
    
    
    Oil and gas revenue receivable
    
    
    (24,844
    )
    
    
    8,884Inventory
    
    
    (5,300
    )
    
    
    (4,165
    )Increase (decrease) in:Trade accounts payable and accrued expenses
    
    
    39,169
    
    
    
    (7,759
    )Asset retirement obligations  current portion
    
    
    
    
    
    
    (29,964
    )Deferred revenue
    
    
    5,300
    
    
    
    4,165Net cash used for operating activities
    
    
    (178,772
    )
    
    
    (40,215
    )Cash Flows From Investing Activities:Development of oil and gas properties
    
    
    
    
    
    
    (28,461
    )Proceeds from sale of oil and gas properties
    
    
    1,687
    
    
    
    Net cash provided by (used in) investing activities
    
    
    1,687
    
    
    
    (28,461
    )Cash Flows From Financing Activities:Advances from affiliate  net
    
    
    177,402
    
    
    
    42,027Exercise of common stock options
    
    
    
    
    
    
    3,750Net cash provided by financing activities
    
    
    177,402
    
    
    
    45,777Net Increase (Decrease) in Cash
    
    
    317
    
    
    
    (22,899
    )Cash at beginning of period
    
    
    2,506
    
    
    
    23,821Cash at end of period
    
    $
    2,823
    
    
    $
    922Supplemental Non-Cash Activity:Sale of oil and gas properties
    
    $
    
    
    
    $
    106,430Payables to and advances from affiliate
    
    $
    
    
    
    $
    (1,052,547
    )Asset retirement obligations settled
    
    $
    
    
    
    $
    (145,923
    )Write-off of fully depreciated property and equipment in May 2009.
    
    $
    229,074
    
    
    $
    
  F-3




---



##### Table of Contents



TBX RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
May 31, 2009
(Unaudited)
 1. BASIS OF PRESENTATION:
  2. BUSINESS ACTIVITIES:
    3. GOING CONCERN:
  4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
 Revenue Recognition
  Principles of Consolidation
  F-4




---



##### Table of Contents



Concentration of Credit Risk
  Receivables
  Inventory
  Property and Equipment
  Oil and Gas Properties
    Proved oil and gas properties
    
    $
    518,538Accumulated depreciation, depletion and
amortization
    
    
    (465,070
    )$
    53,468
 Long-lived Assets
   F-5




---



##### Table of Contents



Asset Retirement Obligations
   ARO at November 30, 2008
    
    $
    20,981Accretion expense
    
    
    511Liabilities incurred
    
    
    Liabilities settled
    
    
    Changes in estimates
    
    
    ARO at May 31, 2009
    
    $
    21,492
 Income Taxes
  Earnings Per Share (EPS)
  Use of Estimates
    F-6




---



##### Table of Contents



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:
 
    
    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.
 5. RECENT ACCOUNTING PRONOUNCEMENTS:
  6. RELATED PARTY TRANSACTIONS:
  a.
    
    The former 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 sold its interest in
East Texas properties to Gulftex on April 1, 2008; accordingly, there are no fees associated
with operating these wells for the six months ended May 31, 2009. Fees paid Gulftex for
operating these wells for the six months ended May 31, 2008 are $3,200.b.
    
    During the six months ended May 31, 2009, the Company received net advances from Gulftex
totaling $177,402. The balance due Gulftex as of May 31, 2009 is $351,188.c.
    
    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 Gulftex $48,607 for the six months ended May 31, 2009.d.
    
    On June 4, 2008, the Company executed a sales agreement (effective April 1, 2008) with
Gulftex. Under the agreement, the Company transferred all of its East Texas oil and gas
properties with a net book value of $106,430 to Gulftex. In consideration for the transfer of
the properties, Gulftex forgave the Companys trade payables and advances totaling
$1,052,547. In addition, Gulftex is assumed the Companys asset retirement obligations with a
book value of $145,923. The Company recorded a gain of $1,092,040 on the sale. Gulftex did
not charge interest for its advances to the Company. The amount of interest that could have
been charged is immaterial.
 F-7




---



##### Table of Contents



7. STOCK BASED COMPENSATION:
    Weighted-AverageShares
    
    
    Exercise PriceOutstanding December 1, 2008
    
    
    100,000
    
    
    $
    0.15Granted
    
    
    50,000
    
    
    $
    0.15Exercised
    
    
    
    
    
    $
    0.15Forfeited
    
    
    (50,000
    )
    
    $
    0.15Outstanding May 31, 2009
    
    
    100,000
    
    
    $
    0.15Options exercisable at May 31, 2009
    
    
    100,000
    
    
    $
    0.15Weighted-average fair value of
options granted during this quarter
    
    $
    250Weighted-average fair value of
options granted during this year to date
    
    $
    500
  Average expected life in years
    
    
    1Average interest rate
    
    
    4.00
    %Average volatility
    
    
    169.86
    %Dividend yield
    
    
    0
    %
  F-8




---



##### Table of Contents



Weighted Average
    
    
    Weighted AverageGrant Date
    
    
    Grant DateShares
    
    
    Fair Value per Share
    
    
    Fair ValueVested
    
    
    100,000
    
    
    $
    .2250
    
    
    $
    22,500Nonvested
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    100,000
    
    
    $
    .2250
    
    
    $
    22,500
  8. COMMITMENTS AND CONTINGENCIES:
  th Loss Contingencies
  9. SALE OF OIL AND GAS PROPERTIES:
   10. INCOME TAXES:
  F-9




---



##### Table of Contents



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 CountNewark East, Working Interest
    
    
    2
    
    
    
    0.73Newark East, Override Interest
    
    
    8
    
    
    
    0.03
 PRODUCTIVE WELLS AND ACREAGE:
  TotalNet
    
    
    
    
    
    Net
    
    Gross
    
    Total NetTotal Gross
    
    Productive
    
    Total Gross
    
    Productive
    
    Developed
    
    DevelopedGeographic Area
    
    Oil Wells
    
    Oil Wells
    
    Gas Wells
    
    Gas Wells
    
    Acres
    
    AcresWise County
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    .74
    
    
    
    224
    
    
    
    83.14Denton County
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    .03
    
    
    
    566
    
    
    
    18.11
 Notes
 1.
    
    Total Gross Wells are those wells in which the Company holds a working or overriding interest
in as of May 31, 2009.2.
    
    Net Productive Wells was calculated by multiplying the working or overriding interest held by
the Company in each of the 10 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 May 31, 2009 have or had existing wells
located thereon; thus all acreage leased by the Company may be accurately classified as
developed.
 3




---



##### Table of Contents



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
   OVERVIEW
 Going Concern and Liquidity Problems
   4




---



##### Table of Contents



Sale of Assets
   RESULTS OF OPERATIONS
  Revenues
    Gas
    
    
    MBTU
    
    
    Price/
    
    
    Oil
    
    
    Bbls
    
    
    Price/Sales
    
    
    Sold
    
    
    MBTU
    
    
    Sales
    
    
    Sold
    
    
    BblMay 31, 2009
    
    $
    8,487
    
    
    
    2,629
    
    
    $
    3.23
    
    
    $
    1,833
    
    
    
    43
    
    
    $
    42.63May 31, 2008
    
    $
    42,199
    
    
    
    5,345
    
    
    $
    7.90
    
    
    $
    24,105
    
    
    
    304
    
    
    $
    79.293 Month Change2009 vs 2008Amount
    
    $
    (33,712
    )
    
    
    (2,716
    )
    
    $
    (4.67
    )
    
    $
    (22,272
    )
    
    
    (261
    )
    
    $
    (36.66
    )Percentage
    
    
    -79.89
    %
    
    
    -50.81
    %
    
    
    -59.11
    %
    
    
    -92.40
    %
    
    
    -85.86
    %
    
    
    -46.24
    %
    5




---



##### Table of Contents



Gas
    
    
    MBTU
    
    
    Price/
    
    
    Oil
    
    
    Bbls
    
    
    Price/Sales
    
    
    Sold
    
    
    MBTU
    
    
    Sales
    
    
    Sold
    
    
    BblMay 31, 2009
    
    $
    21,415
    
    
    
    5,477
    
    
    $
    3.91
    
    
    $
    3,430
    
    
    
    89
    
    
    $
    38.54May 31, 2008
    
    $
    88,934
    
    
    
    11,325
    
    
    $
    7.85
    
    
    $
    70,192
    
    
    
    905
    
    
    $
    77.556 Month Change2009 vs 2008Amount
    
    $
    (67,519
    )
    
    
    (5,848
    )
    
    $
    (3.94
    )
    
    $
    (66,762
    )
    
    
    (816
    )
    
    $
    (39.01
    )Percentage
    
    
    -75.92
    %
    
    
    -51.64
    %
    
    
    -50.19
    %
    
    
    -95.11
    %
    
    
    -90.17
    %
    
    
    -50.30
    %
   Expenses 
 %
    
    
    
    
    
    
    
    
    
    
    %Three Months Ended
    
    
    Increase
    
    
    Six Months Ended
    
    
    IncreaseMay 31, 2009
    
    
    May 31, 2008
    
    
    (Decrease)
    
    
    May 31, 2009
    
    
    May 31, 2008
    
    
    (Decrease)Expenses:Lease operating and taxes
    
    $
    8,905
    
    
    $
    45,935
    
    
    
    -80.61
    %
    
    $
    20,665
    
    
    $
    201,170
    
    
    
    -89.73
    %General and administrative
    
    
    91,271
    
    
    
    87,797
    
    
    
    3.96
    %
    
    
    219,601
    
    
    
    222,107
    
    
    
    -1.13
    %Depreciation, depl, amort., & accretion
    
    
    2,268
    
    
    
    7,620
    
    
    
    -70.24
    %
    
    
    4,662
    
    
    
    21,680
    
    
    
    -78.50
    %Total expenses
    
    $
    102,444
    
    
    $
    141,352
    
    
    
    -27.53
    %
    
    $
    244,928
    
    
    $
    444,957
    
    
    
    -44.95
    %
    6




---



##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
    PLAN OF OPERATION FOR THE FUTURE
   7




---



##### Table of Contents



ITEM 3.
    
    QUANTITATIVE AND QUALATIVE DISCLOSURES ABOUT MARKET RISK.
  
 ITEM 4T.
    
    CONTROLS AND PROCEDURES
     Limitations on the Effectiveness of Controls.
 8




---



##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1.
    
    LEGAL PROCEEDINGS
 th
 
 Item 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 Item 3.
    
    DEFAULTS UPON SENIOR SECURITIES
  
 Item 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS:
  
 Item 5.
    
    OTHER INFORMATION
   
 Item 6.
    
    EXHIBITS
 (a)
    
    EXHIBITS:
   (b)
    
    REPORTS ON FORM 8-K SIGNATURES
    SIGNATURE:
    
    /s/ Tim BurroughsTIM BURROUGHS, PRESIDENT/ CHIEF FINANCIAL OFFICER
 9