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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal Year Ended November 30, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File No. 0-30746
 TBX RESOURCES, INC.
  Texas
    
    75-2592165(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)3030 LBJ Freeway, Suite 1320
Dallas, Texas 75234
    
    75234(Address of Principal Executive Offices)
    
    Zip Code
    o
 o
 þ o
 o 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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##### 



TABLE OF CONTENTS
 TBX RESOURCES, INC.
INDEX
 Part IItem 1.
    
    Business
    
    
    1Item 1A.
    
    Risk Factors
    
    
    4Item 1B.
    
    Unresolved Staff Comments
    
    
    9Item 2.
    
    Properties
    
    
    10Item 3.
    
    Legal Proceedings
    
    
    11Part IIItem 5.
    
    Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities
    
    
    11Item 6.
    
    Selected Financial Data
    
    
    12Item 7.
    
    Management's Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12Item 7A.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    15Item 8.
    
    Financial Statements and Supplemental Data
    
    
    16Report of independent registered public accounting firm
    
    
    F-1Consolidated Balance Sheets
    
    
    F-2Consolidated Statements of Operations
    
    
    F-3Consolidated Statements of Cash Flows
    
    
    F-4Consolidated Statements of Changes in Stockholders' Deficit
    
    
    F-5Notes
to Consolidated Financial Statements
    
    
    F-6Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    17Item 9A(T).
    
    Controls and Procedures
    
    
    17Item 9B.
    
    Other Information
    
    
    18Part IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    18Item 11.
    
    Executive Compensation
    
    
    19Item 12.
    
    Security Ownership and Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    22Item 13.
    
    Certain Relationships and Related Transactions and Director Independence
    
    
    22Item 14.
    
    Principal Accounting Fees and Services
    
    
    22Part IVItem 15.
    
    Exhibits, Financial Statement Schedules
    
    
    23Signatures
    
    
    
    
    24EX-31.1EX-32.1




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PART I
 Forward Looking Statements
    
 Item 1. Business
 Recent Developments: Going Concern and Liquidity Problems
    1




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The Company and Its Business
     Wells Held By the Company
  Development and Operating Activities
  2




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General Regulations
  Federal Regulatory Controls
     State Regulatory Controls
  3




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Environmental Regulations
   Employees
  Offices
  
 Item 1A. Business Risks
 We may not be able to continue as a going concern or fund our existing capital needs.
 See
 We are currently operating without a Board of Directors and currently there is no oversight of our
operations and the activities of our officers.
  4




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Our future success depends upon our ability to adapt to changes in the oil industry and
successfully implement our new business strategy.
  Our future success depends upon our ability to find, develop and acquire additional oil and gas
reserves that are economically recoverable
  Oil and gas drilling is a high-risk activity
  
    
    unexpected drilling conditions;
    
    pressure or irregularities in formations;
    
    equipment failures or accidents;
    
    adverse weather conditions;
    
    inability to comply with governmental requirements; and
    
    shortage or delays in the availability of drilling rigs and the delivery of equipment.
  Factors beyond our control affect our ability to market oil and gas.
  
    
    the level of domestic production and imports of oil and gas;
    
    the proximity of gas production to gas pipelines;
    
    the availability of pipeline capacity;
    
    the demand for oil and gas by utilities and other end users;
    
    the availability of alternate fuel sources;
    
    the effect of weather;
    
    state and federal regulation of oil and gas marketing; and
    
    federal regulation of gas sold or transported in interstate commerce.
  The marketability of our production may be dependent upon transportation facilities over which we
have no control.
  5




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Oil and natural gas prices are volatile. A substantial decrease in oil and natural gas prices
could adversely affect our financial results.
  
    
    the level of consumer demand for oil and natural gas;
    
    the domestic and foreign supply of oil and natural gas;
    
    the ability of the members of the Organization of Petroleum Exporting
Countries to agree to and maintain oil price and production controls;
    
    the price of foreign oil and natural gas;
    
    domestic governmental regulations and taxes;
    
    the price and availability of alternative fuel sources;
    
    weather conditions, including hurricanes and tropical storms in and around
the Gulf of Mexico;
    
    market uncertainty;
    
    political conditions in oil and natural gas producing regions, including the
Middle East; and world wide economic conditions.
    We may not be able to replace our reserves or generate cash flows if we are unable to raise
capital.
  6




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We face strong competition from other energy companies that may negatively affect our ability to
carry on operations.
  
    
    the availability of funds and information relating to a property;
    
    the standards established by us for the minimum projected return on investment;
    
    the availability of alternate fuel sources; and
    
    the intermediate transportation of gas.
  The inability to control other associated entities could adversely affect our business.
  There are substantial risks in acquiring producing properties.
   Operating hazards may adversely affect our ability to conduct business
  
    
    blowouts;
    
    cratering;
    
    explosions;
    
    uncontrollable flows of oil, gas or well fluids;
    
    fires;
    
    pollution; and
    
    other environmental risks.
  Losses and liabilities from uninsured or underinsured drilling and operating activities could have
a material adverse effect on our financial condition and operations.
  Compliance with environmental and other government regulations could be costly and could negatively
impact production.
  
    
    require the acquisition of a permit before drilling commences;
    
    restrict the types, quantities and concentration of various substances that
can be released into the environment from drilling and production activities;
    
    limit or prohibit drilling activities on certain lands lying within
wilderness, wetlands, and other protected areas;
 7




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
    
    require remedial measures to mitigate pollution from former operations, such
as plugging abandoned wells; and
    
    impose substantial liabilities for pollution resulting from our operations.
   You should not place undue reliance on reserve information because reserve information represents
estimates
  
    
    the available data;
    
    assumptions regarding future oil and gas prices;
    
    expenditures for future development and exploitation activities; and
    
    engineering and geological interpretation and judgment.
   Loss of executive officers or other key employees could adversely affect our business.
  8




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Acquisition of entire businesses may be a component of our growth strategy; our failure to complete
future acquisitions successfully could reduce the earnings and slow our growth.
  Risks Related to Our Common Stock
 We may issue additional shares of Common Stock.
  There may be future dilution of our Common Stock.
  Our management controls a significant percentage of our outstanding common stock and their
interests may conflict with those of our stockholders
  Sales of substantial amounts of our common stock may adversely affect our stock price and make
future offerings to raise more capital difficult.
  
 Item 1B. Unresolved Staff Comments.
  9




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Item 2. Description of Properties.
 General
 Reserves Reported To Other Agencies
 Properties
 Oil
    
    
    Gas(BBL)
    
    
    (MCF)Proved Reserves November 30, 2008
    
    
    1,037
    
    
    
    62,117Revisions to previous estimates
    
    
    (60
    )
    
    
    (1,031
    )Purchases
    
    
    
    
    
    
    Production
    
    
    (21
    )
    
    
    (9,656
    )Sales, transfers and retirements
    
    
    
    
    
    
    Proved Reserves November 30, 2009
    
    
    956
    
    
    
    51,430Revisions to previous estimates
    
    
    
    
    
    
    Purchases
    
    
    
    
    
    
    Production
    
    
    (197
    )
    
    
    (9,150
    )Sales, transfers and retirements
    
    
    
    
    
    
    Proved Reserves November 30, 2010
    
    
    759
    
    
    
    42,280
  Gross
    
    NetProducing
    
    ProducingWell
    
    WellName of Field or Well
    
    Count
    
    CountNewark East, Working Interest
    
    
    2
    
    
    
    0.74Newark East, Override Interest
    
    
    9
    
    
    
    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
    
    
    
    0.7424
    
    
    
    224
    
    
    
    83.14Denton County
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    0.0360
    
    
    
    566
    
    
    
    20.38
  1.
    
    Total Gross Wells are those wells in which the Company holds a working or overriding interest
in as of November 30, 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.
 10




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3.
    
    Total Gross Developed Acres is equal to the total surface acres of the properties in which
the Company holds a working or overriding interest.
 4.
    
    Net Developed Acres is equal to the Total Gross Developed Acres multiplied by the percentage
of the total working or overriding interest held by the Company in the respective properties.
 5.
    
    All acreage in which we hold a working interest as of November 30, 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 comprehensive study of all properties currently leased by us would be required to
determine precise developmental potential.
 Oil and Gas Partnership Interests
  
 Item 3. Legal Proceedings
  
 PART II
 
 Item 5. Market For Registrants Common Equity and Related Stockholder Matters and Issuer Purchases
of Equity Securities.
  QUARTER
    
    LOW BID
    
    HIGH BIDQuarter ending February 28, 2010
    
    $
    0.01
    
    
    $
    0.19Quarter ending May 31, 2010
    
    $
    0.03
    
    
    $
    0.19Quarter ending August 31, 2010
    
    $
    0.03
    
    
    $
    0.05Quarter ending November 30, 2010
    
    $
    0.02
    
    
    $
    0.06
 QUARTER
    
    LOW BID
    
    HIGH BIDQuarter ending February 28, 2009
    
    $
    0.05
    
    
    $
    0.24Quarter ending May 31, 2009
    
    $
    0.03
    
    
    $
    0.24Quarter ending August 31, 2009
    
    $
    0.12
    
    
    $
    0.12Quarter ending November 30, 2009
    
    $
    0.02
    
    
    $
    0.51
  11




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Item 6. Selected Financial Data
  
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  Cautionary Statement
  Recent Developments
   th
  Going Concern and Liquidity Problems
   12




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Asset Sales
  Employment Agreements
   Other
   13




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Results Of Operations
  Revenue
   Gas
    
    
    MBTU
    
    
    Price/
    
    
    Oil
    
    
    Bbls
    
    
    Price/Sales
    
    
    Sold
    
    
    MBTU
    
    
    Sales
    
    
    Sold
    
    
    BblNovember 30, 2010
    
    $
    47,321
    
    
    
    9,972.26
    
    
    $
    4.75
    
    
    $
    17,392
    
    
    
    231.84
    
    
    $
    75.02November 30, 2009
    
    $
    45,495
    
    
    
    11,101.85
    
    
    $
    4.10
    
    
    $
    6,231
    
    
    
    131.69
    
    
    $
    47.3212 Month Change2010 vs 2009Amount
    
    $
    1,826
    
    
    
    (1,129.59
    )
    
    $
    0.65
    
    
    $
    11,161
    
    
    
    100.15
    
    
    $
    27.70Percentage
    
    
    4.01
    %
    
    
    -10.17
    %
    
    
    15.85
    %
    
    
    179.12
    %
    
    
    76.05
    %
    
    
    58.54
    %
  Expenses
    Gain on Sale of Properties
 Other Income
 Provision For Income Taxes
 14




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Liquidity and Capital Resources
       
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
  15




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Item 8. FINANCIAL STATEMENTS.
 
 PAGEReport of Independent Registered Public Accounting Firm
    
    F-1Consolidated Balance Sheets  November 30, 2010 and 2009
    
    F-2Consolidated Statements of Operations-
For The Years Ended November 30, 2010 and 2009
    
    F-3Consolidated Statements of Cash Flows-
For The Years Ended November 30, 2010 and 2009
    
    F-4Consolidated Statements of Changes In Stockholders Deficit-
For The Years Ended November 30, 2010 and 2009
    
    F-5Notes to Consolidated Financial Statements
    
    F-6
 16




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      
 F-1




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TBX RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 November 30,2010
    
    
    2009ASSETSCurrent AssetsCash
    
    $
    665
    
    
    $
    5,327Oil and gas revenue receivable
    
    
    8,271
    
    
    
    112,122Inventory
    
    
    8,300
    
    
    
    4,494Total current assets
    
    
    17,236
    
    
    
    121,943Oil and gas properties (successful efforts)Proved properties (acreage costs)
    
    
    116,514
    
    
    
    116,514Lease and well equipment
    
    
    402,025
    
    
    
    402,025518,539
    
    
    
    518,539Less: depreciation, depletion and amortization
    
    
    (480,972
    )
    
    
    (468,948
    )Oil and gas properties, net
    
    
    37,567
    
    
    
    49,591Other
    
    
    6,211
    
    
    
    6,211Total Assets
    
    $
    61,014
    
    
    $
    177,745LIABILITIES AND STOCKHOLDERS DEFICITCurrent LiabilitiesTrade accounts payable
    
    $
    28,339
    
    
    $
    30,761Accrued expenses
    
    
    5,270
    
    
    
    31,932Advances from affiliate
    
    
    
    
    
    
    496,602Deferred revenue
    
    
    8,300
    
    
    
    4,494Total current liabilities
    
    
    41,909
    
    
    
    563,789Long-term LiabilitiesAsset retirement obligations
    
    
    21,347
    
    
    
    21,021Commitments and Contingencies (Note 6)Stockholders DeficitPreferred stock- $.01 par value; authorized 10,000,000 shares;
no shares outstanding
    
    
    
    
    
    
    Common
stock- $.01 par value; authorized 100,000,000 shares; 4,027,442 shares issued and outstanding at November 30, 2010,
4,027,442 shares issued and outstanding at November 30, 2009
    
    
    40,274
    
    
    
    40,274Additional paid-in capital
    
    
    11,363,172
    
    
    
    10,929,940Accumulated deficit
    
    
    (11,405,688
    )
    
    
    (11,377,279
    )Total stockholders deficit
    
    
    (2,242
    )
    
    
    (407,065
    )Total Liabilities and Stockholders Deficit
    
    $
    61,014
    
    
    $
    177,745
  F-2




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TBX RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 For The Years Ended November 30,2010
    
    
    2009Revenues:Oil and gas sales
    
    $
    64,713
    
    
    $
    51,726Total revenues
    
    
    64,713
    
    
    
    51,726Expenses:Lease operating and taxes
    
    
    40,817
    
    
    
    67,672General and administrative
    
    
    139,081
    
    
    
    373,653Depreciation, depletion, amortization and accretion
    
    
    12,350
    
    
    
    8,068Gain on sale of oil and gas properties
    
    
    
    
    
    
    (1,686
    )Total expenses
    
    
    192,248
    
    
    
    447,707Operating Loss
    
    
    (127,535
    )
    
    
    (395,981
    )Other Income:Partial loss recovery (Note 10)
    
    
    99,126
    
    
    
    Minority interest debt forgiveness (Note 9 )
    
    
    
    
    
    
    72,000Total other income
    
    
    99,126
    
    
    
    72,000Income (Loss) Before Provision for Income Taxes
    
    
    (28,409
    )
    
    
    (323,981
    )Provision for income taxes
    
    
    
    
    
    
    Net Income (Loss)
    
    $
    (28,409
    )
    
    $
    (323,981
    )Net Income (Loss) per Common Share
    
    $
    (0.01
    )
    
    $
    (0.08
    )Weighted Average Common Shares Outstanding
    
    
    4,027,442
    
    
    
    4,027,442
  F-3




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TBX RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 For The Years Ended November 30,2010
    
    
    2009Cash Flows From Operating Activities:Net income (loss)
    
    $
    (28,409
    )
    
    $
    (323,981
    )Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:Depreciation, depletion and amortization
    
    
    12,024
    
    
    
    8,028Accretion of asset retirement obligations
    
    
    326
    
    
    
    40Stock based compensation
    
    
    
    
    
    
    500Gain on sale of oil and gas properties
    
    
    
    
    
    
    (1,686
    )Allocated expenses to affiliate
    
    
    
    
    
    
    (61,099
    )Minority interest debt forgiveness
    
    
    
    
    
    
    (72,000
    )Changes in operating assets and liabilities other than advances
from affiliate:Decrease (increase) in:Oil and gas revenue receivable
    
    
    103,851
    
    
    
    63,690Accounts receivable from affiliates
    
    
    
    
    
    
    21,824Inventory
    
    
    (3,806
    )
    
    
    (4,494
    )Prepaid expense
    
    
    
    
    
    
    10,000Increase (decrease) in:Trade accounts payable
    
    
    (2,422
    )
    
    
    10,873Deferred revenue
    
    
    3,806
    
    
    
    4,494Accrued expenses
    
    
    (26,662
    )
    
    
    (38,969
    )Net cash provided by (used in) operating activities
    
    
    58,708
    
    
    
    (382,780
    )Cash Flows From Investing Activities:Proceeds from sale of oil and gas property
    
    
    
    
    
    
    1,686Net cash provided by investing activities
    
    
    
    
    
    
    1,686Cash Flows From Financing Activities:Advances from affiliate
    
    
    166,171
    
    
    
    383,915Payments to affiliate
    
    
    (229,541
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    (63,370
    )
    
    
    383,915Net Increase (Decrease) In Cash
    
    
    (4,662
    )
    
    
    2,821Cash at beginning of year
    
    
    5,327
    
    
    
    2,506Cash at end of year
    
    $
    665
    
    
    $
    5,327Supplemental Schedule of Non-Cash Investing and Financing Activities:Forgiveness of Debt by Affiliate
    
    $
    433,232
    
    
    $
    Write-off of fully depreciated property and equipment
    
    $
    
    
    
    $
    229,038
  F-4




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TBX RESOURCES, INC. AND SUBSIDIARIES  CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS DEFICIT
 Additional
    
    
    Accum-
    
    
    TotalCommon Stock
    
    
    Paid-In
    
    
    ulated
    
    
    StockholdersShares
    
    
    Par Value
    
    
    Capital
    
    
    Deficit
    
    
    DeficitBalance November 30, 2008
    
    
    4,027,442
    
    
    $
    40,274
    
    
    $
    10,929,440
    
    
    $
    (11,053,298
    )
    
    $
    (83,584
    )Issuance of common stock options for services
    
    
    
    
    
    
    
    
    
    
    500
    
    
    
    
    
    
    
    500Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (323,981
    )
    
    
    (323,981
    )Balance November 30, 2009
    
    
    4,027,442
    
    
    
    40,274
    
    
    
    10,929,940
    
    
    
    (11,377,279
    )
    
    
    (407,065
    )Affiliate debt forgiveness
    
    
    
    
    
    
    
    
    
    
    433,232
    
    
    
    
    
    
    
    433,232Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,409
    )
    
    
    (28,409
    )Balance November 30, 2010
    
    
    4,027,442
    
    
    $
    40,274
    
    
    $
    11,363,172
    
    
    $
    (11,405,688
    )
    
    $
    (2,242
    )
  F-5




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TBX RESOURCES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. BUSINESS ACTIVITIES:
   2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
 Revenue Recognition
  Principles of Consolidation
  Concentration of Credit Risk
  Cash and Cash Flows
   Oil and Gas Revenue Receivable
  Inventory
  F-6




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Property and Equipment
  Oil and Gas Properties
     November 30,2010
    
    
    2009Proved oil and gas properties
    
    $
    518,539
    
    
    $
    518,539Accumulated depreciation, depletion and amortization
    
    
    (480,972
    )
    
    
    (468,948
    )$
    37,567
    
    
    $
    49,591
  November 30,2010
    
    
    2009Office furniture, equipment, and software
    
    $
    112,768
    
    
    $
    112,768Accumulated depreciation and amortization
    
    
    (112,768
    )
    
    
    (112,768
    )$
    
    
    
    $
    
  Long-lived Assets
  Asset Retirement Obligations
  F-7




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ARO at November 30, 2008
    
    $
    20,981Accretion expense
    
    
    1,023Liabilities settled
    
    
    Changes in estimates
    
    
    (983
    )ARO at November 30, 2009
    
    
    21,021Accretion expense
    
    
    1,022Liabilities settled
    
    
    Changes in estimates
    
    
    (695
    )Adjustment to opening balance
    
    
    (1
    )ARO at November 30, 2010
    
    $
    21,347
 Income Taxes
  Equity Instruments Issued for Services
  Earnings Per Share (EPS)
  Use of Estimates
  Reclassifications
  F-8




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Fair Value Measurements
   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.
  3. RECENT ACCOUNTING PRONOUNCEMENTS:
  4. GOING CONCERN:
  F-9




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##### Table of Contents



5. RELATED PARTY TRANSACTIONS:
  a.
    
    The Company received cash advances of $161,171 and paid $229,541 against the balance
due Gulftex in the current fiscal year. Effective November 30, 2010 Gulftex forgave the
balance due from the Company totaling $433,232. The Company received cash advances of
$383,915 from Gulftex in the previous fiscal year. The balance due Gulftex at November 30,
2009 was $496,602.b.
    
    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 Company charged Gulftex $63,490 in the current fiscal year and
$89,647 in the previous fiscal year that is recorded as an offset to general and
administrative expenses.
 6. COMMITMENTS AND CONTINGENCIES:
 a.
    
    The Company is obligated for $18,986 under an operating lease agreement for rent of its
office space in Dallas, Texas. The term of the lease is from February 1, 2004 through
February 28, 2011. The average monthly base lease payment over the remaining term of the
lease is approximately $6,329. The base lease payment for the current fiscal year is
$64,189. Following is a schedule of base lease payments by year:
 Year
    
    Amount2011
    
    $
    18,986
  b.
    
    Trio Consulting & Management and Merrit Operating are the bonded operators for TBX
Resources and are responsible for compliance with the laws and regulations relating to the
protection of the environment. While it is not possible to quantify with certainty the
potential impact of actions regarding environmental matters, particularly any future
remediation and other compliance efforts, in the opinion of management, compliance with the
present environmental protection laws will not have a material adverse affect on the
financial condition, competitive position or capital expenditures of TBX Resources.
However, the Companys cost to comply with increasingly stringent environmental regulations
may have an adverse effect on the Companys future earnings.
 7. STOCK BASED COMPENSATION:
   F-10




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##### Table of Contents



Weighted-AverageShares
    
    
    Exercise PriceOutstanding December 1, 2008
    
    
    100,000
    
    
    $
    0.15Granted
    
    
    25,000
    
    
    $
    0.15Exercised
    
    
    
    
    
    $
    0.15Forfeited
    
    
    (100,000
    )
    
    $
    0.15Outstanding December 1, 2009
    
    
    25,000
    
    
    $
    0.15Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (25,000
    )
    
    $
    0.15Outstanding November 30, 2010
    
    
    
    
    
    
    
   Average expected life in years
    
    
    1Average interest rate
    
    
    4.00
    %Average volatility
    
    
    147
    %Dividend yield
    
    
    0
    %
 F-11




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##### Table of Contents



Weighted AverageGrant DateShares
    
    Fair Value per ShareNonvested at December 1, 2008
    
    
    
    
    
    
    Granted
    
    
    25,000
    
    
    $
    0.05Vested
    
    
    (25,000
    )
    
    $
    0.05Forfeited
    
    
    Nonvested at November 30, 2009
    
    
    Granted
    
    
    Vested
    
    
    Forfeited
    
    
    Nonvested at November 30, 2010
    
    
    
  8. OIL AND GAS PROPERTIES IMPAIRMENT LOSSES:
  9. NON-CONTROLLING INTEREST IN CONSOLIDATED SUBSIDIARY
  10. COURT ORDERED RESTITUTION:
  11. SALE OF OIL AND GAS PROPERTIES:
  12. INCOME TAXES:
  F-12




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##### Table of Contents



,
  November 30,2010
    
    2009Statutory rate
    
    
    35
    %
    
    
    35
    %Change in valuation allowance
    
    
    -35
    %
    
    
    -35
    %Tax provision
    
    
    0
    %
    
    
    0
    %
 Deferred Income Taxes
  November 30,2010
    
    
    2009Deferred tax assets:Net operating loss carryforward
    
    $
    3,245,000
    
    
    $
    3,393,000Oil and gas properties
    
    
    26,000
    
    
    
    49,000Cash/accrual method differences
    
    
    15,000
    
    
    
    61,000Total deferred tax assets
    
    
    3,286,000
    
    
    
    3,503,000Valuation allowance
    
    
    (3,286,000
    )
    
    
    (3,503,000
    )Total net deferred tax assets
    
    $
    
    
    
    $
    
  13. LAW SUIT SETTLEMENT:
 th
 F-13




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##### Table of Contents



14. SUPPLEMENTARY DISCLOSURE AND OIL AND GAS INFORMATION -UNAUDITED:
 Results of operations for oil and gas producing activities are as follows
 For The Year Ended Nov. 30,2010
    
    
    2009Oil and gas sales
    
    $
    64,713
    
    
    $
    51,726Production costs
    
    
    (40,817
    )
    
    
    (67,672
    )Depreciation, depletion, amortization and accretion
    
    
    (12,351
    )
    
    
    (8,068
    )Impairment of oil and gas properties
    
    
    
    
    
    
    11,545
    
    
    
    (24,014
    )Income tax benefit
    
    
    
    
    
    
    Results of Operations Excluding Selling, General and
Administrative and Joint Venture Activities
    
    $
    11,545
    
    
    $
    (24,014
    )
 Capitalized
costs relating to oil and gas producing activities are as follows:
 November 30,2010
    
    
    2009Property (acreage costs)- Proved
    
    $
    116,514
    
    
    $
    116,514Producing assets
    
    
    402,025
    
    
    
    402,025518,539
    
    
    
    518,539Less: depreciation depletion and amortization
    
    
    (480,972
    )
    
    
    (468,948
    )Net Capitalized Costs
    
    $
    37,567
    
    
    $
    49,591
 Oil and Gas Reserve Quantities
   Oil
    
    
    Gas(BBL)
    
    
    (MCF)Proved Reserves November 30, 2008
    
    
    1,037
    
    
    
    62,117Revisions to previous estimates
    
    
    (60
    )
    
    
    (1,031
    )Purchases
    
    
    
    
    
    
    Production
    
    
    (21
    )
    
    
    (9,656
    )Sales, transfers and retirements
    
    
    
    
    
    
    Proved Reserves November 30, 2009
    
    
    956
    
    
    
    51,430Revisions to previous estimates
    
    
    
    
    
    
    Purchases
    
    
    
    
    
    
    Production
    
    
    (197
    )
    
    
    (9,150
    )Sales, transfers and retirements
    
    
    
    
    
    
    Proved Reserves November 30, 2010
    
    
    759
    
    
    
    42,280
 F-14




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##### Table of Contents



Standardized Measure of Discounted Cash Flows Relating to Proved Oil and Gas Reserves
    November 30,2010
    
    
    2009Future cash inflows
    
    $
    256,924
    
    
    $
    219,074Future production costs
    
    
    (59,268
    )
    
    
    (68,272
    )Future net cash flows
    
    
    197,656
    
    
    
    150,80210% annual discount for estimated timing of cash flows
    
    
    (57,241
    )
    
    
    (43,668
    )Standardized measure of discounted future net cash
    
    $
    140,415
    
    
    $
    107,134Standardized measure of discounted future net cash flows, beginning of year
    
    $
    107,134
    
    
    $
    69,400Sales of oil and gas produced, net of production costs
    
    
    (19,757
    )
    
    
    (13,255
    )Net changes in prices and production costs
    
    
    38,520
    
    
    
    26,696Revisions to previous quantity estimates
    
    
    
    
    
    
    (1,389
    )Net change from sales, transfers and disposals of minerals in place
    
    
    
    
    
    
    Accretion of discount
    
    
    14,518
    
    
    
    10,713Net change in income taxes
    
    
    
    
    
    
    Other  prior period adjustment
    
    
    
    
    
    
    14,96933,281
    
    
    
    37,734Standardized measure of discounted future net cash flows, end of year
    
    $
    140,415
    
    
    $
    107,134
 F-15




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##### Table of Contents



Net IncomeTotal
    
    
    Operating
    
    
    Net
    
    
    (Loss) perRevenues
    
    
    Income (Loss) 1
    
    
    Income (Loss)
    
    
    Share2010lst Quarter
    
    $
    22,368
    
    
    $
    (55,182
    )
    
    $
    (48,240
    )
    
    $
    (0.01
    )2nd Quarter
    
    
    13,741
    
    
    
    (14,892
    )
    
    
    72,230
    
    
    
    0.023rd Quarter
    
    
    22,557
    
    
    
    (23,256
    )
    
    
    (18,194
    )
    
    
    (0.01
    )4th Quarter
    
    
    6,047
    
    
    
    (34,205
    )
    
    
    (34,205
    )
    
    
    (0.01
    )Total
    
    $
    64,713
    
    
    $
    (127,535
    )
    
    $
    (28,409
    )
    
    $
    (0.01
    )2009lst Quarter
    
    $
    14,525
    
    
    $
    (127,959
    )
    
    $
    (127,959
    )
    
    $
    (0.03
    )2nd Quarter
    
    
    10,320
    
    
    
    (92,124
    )
    
    
    (90,437
    )
    
    
    (0.02
    )3rd Quarter
    
    
    15,114
    
    
    
    (69,444
    )
    
    
    (69,444
    )
    
    
    (0.02
    )4th Quarter
    
    
    11,767
    
    
    
    (106,454
    )
    
    
    (36,141
    )
    
    
    (0.01
    )Total
    
    $
    51,726
    
    
    $
    (395,981
    )
    
    $
    (323,981
    )
    
    $
    (0.08
    )
 
 1
    
    Operating income is oil and gas sales less oil and gas production costs, depreciation, depletion
and amortization, selling, general and administrative expenses and gain on sale of properties. F-16




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##### Table of Contents



Item 9. Changes In and Disagreements with Accountants and Financial Disclosure.
 NONE
 
 Item 9A (T). Controls and Procedures.
   Limitations on the Effectiveness of Controls.
 Scope of the Controls Evaluation.
  17




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##### Table of Contents



Item 9B. Other Information.
 NONE
 
 PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance.
  NAME
    
    AGE
    
    POSITIONTim Burroughs
    
    
    50
    
    
    Chief Executive Officer/Chief
Financial OfficerSherri Cecotti
    
    
    45
    
    
    Secretary/Treasurer
     18




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##### Table of Contents



Item 11. Executive Compensation.
 Overview
  Role of our Executive Officers in Establishing Compensation
  Summary Compensation Table
   Long Term CompensationAwardsRestricted
    
    SecuritiesAnnual Compensation
    
    Stock
    
    UnderlyingName and Position
    
    Year
    
    Salary ($)
    
    Bonus ($)
    
    Awards ($)
    
    Options (#)Tim Burroughs,
    
    
    2010
    
    
    
    18,750
    
    
    
    
    
    
    
    
    
    
    
    President
    
    
    2009
    
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    Sherri Cecotti,
    
    
    2010
    
    
    
    6,538
    
    
    
    
    
    
    
    
    
    
    
    Secretary/Treasurer
    
    
    2009
    
    
    
    52,300
    
    
    
    
    
    
    
    
    
    
    
    Dick ODonnell,
    
    
    2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vice President of Operations
    
    
    2009
    
    
    
    
    
    
    
    
    
    
    
    500
    
    
    
    25,000
 19




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##### Table of Contents



Option Grants in the Last Fiscal Year
  Option Grants This Fiscal YearIndividual GrantsPercent
    
    WeightedNumber of
    
    of Total
    
    AverageSecurities
    
    Options
    
    Market PriceUnderlying
    
    Granted
    
    on Date ofOptions
    
    Employees
    
    Issuance
    
    ExpirationName
    
    Year
    
    Granted (#)
    
    in Fiscal Yr.
    
    ($/Share)
    
    DateDick ODonnell
    
    
    2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dick ODonnell
    
    
    2009
    
    
    
    25,000
    
    
    
    100
    %
    
    
    0.05
    
    
    
    (1
    )
 
 (1)
    
    25,000 stock options per quarter for three years beginning April 1, 2006. The options
expire one year from the date of issuance. Aggregated Option Exercises in This Fiscal Year and Fiscal Year-End Option Values
 Number of SecuritiesUnderlying
    
    Value of UnexercisedShares
    
    
    
    
    
    Unexercised Options at
    
    Options atAcquired on
    
    Value
    
    Fiscal Year End
    
    Fiscal Year End ($)(1)Name
    
    Year
    
    Exercise (#)
    
    Realized ($)
    
    Exercisable
    
    Unexercisable
    
    Exercisable
    
    UnexercisableDick ODonnell
    
    
    2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dick ODonnell
    
    
    2009
    
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    
    
    
    
    
    1,250
    
    
    
    
 
 (1)
    
    Based on the closing price of our common stock on November 30, 2009 of $0.05 per share
less the exercise price payable for those shares. Perquisites
  Employment Agreements
   20




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##### Table of Contents



Compensation of Directors
  Compensation Committee
  Compensation Philosophy and Objectives
  
    
    Provide a competitive compensation program that enables us to retain key executives;
    
    Ensure a strong relationship between our performance results and those of our
segments and the total compensation received by an individual;
    
    Balance annual and longer term performance objectives;
    
    Encourage executives to acquire and retain meaningful levels of common shares; and
    
    Work closely with the Chief Executive Officer to ensure that the compensation
program supports our objectives and culture.
  Termination of Employment and Change of Control Arrangement
  21




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##### Table of Contents



ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
  NAME AND ADDRESS
    
    
    
    
    
    PERCENT OFTITLE OF CLASS
    
    OF OWNER
    
    AMOUNT OWNED
    
    CLASSCommon stock
    
    Tim Burroughs(1)
    
    
    313,259
    
    
    
    07.78
    %3330 LBJ Freeway, Suite
    
    
    1320Dallas, TX 75234Common stock
    
    Tim Burroughs Family Tr
    
    (2) 500,000
    
    
    12.41
    %3330 LBJ Freeway, Suite
    
    1320Dallas, TX 75234Common stock
    
    Dick ODonnell
    
    
    200,000
    
    
    
    04.97
    %3330 LBJ Freeway, Suite
    
    1320Dallas, Texas 75234All Directors and Officers as a Group

    
    1,013,259
    
    
    
    25.16
    %
 
 (1)
    
    We executed an amended Employment Agreement effective August 4, 2005 with our
president, Mr. Tim Burroughs, having a term of three years. Under the terms of the agreement, Mr.
Burroughs is entitled to receive an annual compensation of $150,000, and other items enumerated in
the agreement. In addition, we agreed to grant Mr. Burroughs common stock options that are to be
priced at a maximum exercise price of one-half the bid price for TBX common stock as of August 4,
2005 or $0.70 per share (one-half $1.40 the closing bid price on August 4, 2005.) In the event the
closing bid price of TBXs common stock is below $0.70 on the date of a call by Mr. Burroughs, the
exercise price would be reduced to the lower actual bid price. In April 2007, in exchange for TBX
dropping the three year service requirement, Mr. Burroughs agreed to forgo his eligibility to call
for stock options for fiscal years ending November 30, 2005 and 2006. The Employment Agreement was
again amended on December 1, 2010 wherein options were continued for an additional five years at an
option price no greater than 50% of the closing price on December 1, 2010 or $0.02 per share
(one-half of the $0.04 closing bid price on December 1, 2010). Mr. Burroughs did not call any of
his potential stock options as of November 30, 2010.(2)
    
    The beneficiary of the Burroughs Family Trust is Becca Burroughs, the daughter of Mr.
Burroughs, our CEO. 
 Item 13. Certain Relationships and Related Transactions and Director Independence.
  
 Item 14. Principal Accounting Fees and Services.
         22




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##### Table of Contents



PART IV
 
 Item 15. Exhibits, Financial Statement Schedules.
 Financial Statement Schedules
  Report of Independent Registered Public Accounting FirmConsolidated Balance Sheets  November 30, 2010 and 2009Consolidated Statements of Operations-For The Years Ended November 30, 2010 and 2009Consolidated Statements of Cash Flows-For The Years Ended November 30, 2010 and 2009Consolidated Statements of Changes In Stockholders Deficit-For The Years Ended November 30, 2010 and 2009Notes to Consolidated Financial Statements
 Exhibits
 Exhibit Number
    
    Description31.1
    
    Certification of our President, Chief Executive Officer and Principal Financial Officer,
under Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of our President, Chief Executive Officer and Principal Financial Officer,
under Section 906 of the Sarbanes-Oxley Act of 2002.
 23




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##### Table of Contents



SIGNATURES
  TBX RESOURCES, INC.SIGNATURE:

    /s/ Tim BurroughsTIM BURROUGHS, PRESIDENT/CHIEF FINANCIAL OFFICER  Signature
    
    Capacity/s/ Tim Burroughs
    
    President, Chief Executive Officer and Chief FinancialTim Burroughs
    
    Officer
 24