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, 2008
 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 of incorporation)
    
    (IRS Employer Identification No.)3030 LBJ Freeway, Suite 1320
Dallas, Texas 75234
    
    75234(Address of Principal Executive Office)
    
    Zip Code
     o
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 o þ
 þ
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  Large accelerated filer o
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company þ
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PART I
 ITEM 1. BUSINESS
     2




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3




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4




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ITEM 1A. BUSINESS RISKS
 Our ability to continue as a going concern is dependent upon our ability to attract additional
capital
  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 inclement 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.
  Oil and natural gas prices are volatile. A substantial decrease in oil and natural gas prices
could adversely affect our financial results.
 5




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
    
    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.
  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;
 6




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
    
    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.
  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.
  8




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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.
     9




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ITEM 2. PROPERTIES
     Oil
    
    
    Gas(BBL)
    
    
    (MCF)Proved Reserves November 30, 2006
    
    
    14,953
    
    
    
    61,595Revisions to previous estimates
    
    
    8,164
    
    
    
    35,321Purchases
    
    
    
    
    
    
    Production
    
    
    (3,446
    )
    
    
    (18,731
    )Sales, transfers and retirements
    
    
    
    
    
    
    Proved Reserves November 30, 2007
    
    
    19,671
    
    
    
    78,185Revisions to previous estimates
    
    
    (396
    )
    
    
    5,686Purchases
    
    
    
    
    
    
    Production
    
    
    (1,153
    )
    
    
    (21,754
    )Sales, transfers and retirements
    
    
    (17,085
    )
    
    
    Proved Reserves November 30, 2008
    
    
    1,037
    
    
    
    62,117
  Gross
    
    NetProducing
    
    ProducingName of Field or Well
    
    Well Count
    
    Well CountNewark East, Working Interest
    
    
    2
    
    
    
    0.74Newark East, Override Interest
    
    
    8
    
    
    
    0.03Camargo NW Field
    
    
    2
    
    
    
    0.42Harmon SE Field
    
    
    1
    
    
    
    0.01
  Total
    
    
    
    
    
    
    Total
    
    
    Net
    
    
    Total
    
    
    TotalGross
    
    
    Net
    
    
    Gross
    
    
    Productive
    
    
    Gross
    
    
    NetOil
    
    
    Productive
    
    
    Gass
    
    
    Gass
    
    
    Developed
    
    
    DevelopedGeographic Area
    
    Wells
    
    
    Oil Wells
    
    
    Wells
    
    
    Wells
    
    
    Acres
    
    
    AcresWise County
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    .74
    
    
    
    224
    
    
    
    83.14Denton County
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    .03
    
    
    
    566
    
    
    
    18.11Anadarko Basin
    
    
    3
    
    
    
    .44
    
    
    
    
    
    
    
    
    
    
    
    480
    
    
    
    69.75
 10




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1.
    
    Total Gross Wells are those wells in which the Company holds a working or overriding interest
in as of November 30, 2008.2.
    
    Net Productive Wells was calculated by multiplying the working or overriding interest held by
the Company in each of the 13 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 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, 2008 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.
 ANADARKO BASIN- WESTERN OKLAHOMA
  OIL AND GAS PARTNERSHIP INTERESTS
  ITEM 3. LEGAL PROCEEDINGS
 th
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  11




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PART II
 ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
  QUARTER
    
    LOW BID
    
    HIGH BIDQuarter ending February 29, 2008
    
    $
    0.35
    
    
    $
    3.00Quarter ending May 31, 2008
    
    $
    0.75
    
    
    $
    1.75Quarter ending August 31, 2008
    
    $
    0.27
    
    
    $
    0.80Quarter ending November 30, 2008
    
    $
    0.13
    
    
    $
    0.36
 QUARTER
    
    LOW BID
    
    HIGH BIDQuarter ending February 28, 2007
    
    $
    2.85
    
    
    $
    2.85Quarter ending May 31, 2007
    
    $
    2.75
    
    
    $
    2.80Quarter ending August 31, 2007
    
    $
    1.55
    
    
    $
    1.55Quarter ending November 30, 2007
    
    $
    1.75
    
    
    $
    1.75
  ITEM 6. SELECTED FIANANCIAL DATA
  ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS AND PLAN OF OPERATION.
     th
 12




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Going Concern and Liquidity Problems
          13




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Gas
    
    
    MBTU
    
    
    Price/
    
    
    Oil
    
    
    Bbls
    
    
    Price/Sales
    
    
    Sold
    
    
    MBTU
    
    
    Sales
    
    
    Sold
    
    
    Bbl
    
    
    TotalsNovember 30, 2008
    
    $
    184,947
    
    
    
    21,754.74
    
    
    $
    8.50
    
    
    $
    103,504
    
    
    
    1,267.19
    
    
    $
    81.68
    
    
    $
    288,451November 30, 2007
    
    $
    117,071
    
    
    
    18,832.85
    
    
    $
    6.22
    
    
    $
    191,377
    
    
    
    3,587.11
    
    
    $
    53.65
    
    
    $
    308,44912 Month Change2008 vs 2007Amount
    
    $
    67,875
    
    
    
    2,921.89
    
    
    $
    2.28
    
    
    $
    (87,873
    )
    
    
    -2,319.92
    
    
    $
    28.03Percentage
    
    
    57.98
    %
    
    
    15.51
    %
    
    
    36.60
    %
    
    
    -45.92
    %
    
    
    -64.67
    %
    
    
    52.25
    %
     14




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Operating
    
    
    Net
    
    
    Net Income (Loss)Total
    
    
    Income
    
    
    Income
    
    
    Per ShareRevenues
    
    
    (Loss) 1
    
    
    (Loss)
    
    
    Basic
    
    
    Diluted2008lst Quarter
    
    $
    90,977
    
    
    $
    (212,627
    )
    
    $
    (212,627
    )
    
    $
    (0.05
    )
    
    $
    (0.05
    )2nd Quarter
    
    
    66,304
    
    
    
    (75,048
    )
    
    
    1,016,992
    
    
    
    0.25
    
    
    
    0.253rd Quarter
    
    
    53,607
    
    
    
    (45,074
    )
    
    
    (45,074
    )
    
    
    (0.01
    )
    
    
    (0.01
    )4th Quarter
    
    
    75,718
    
    
    
    (73,105
    )
    
    
    (73,105
    )
    
    
    (0.02
    )
    
    
    (0.02
    )Total
    
    $
    286,606
    
    
    $
    (405,854
    )
    
    $
    686,186
    
    
    $
    0.17
    
    
    $
    0.172007lst Quarter
    
    $
    67,357
    
    
    $
    (207,099
    )
    
    $
    (207,099
    )
    
    $
    (0.05
    )
    
    $
    (0.05
    )2nd Quarter
    
    
    75,809
    
    
    
    (293,366
    )
    
    
    (287,116
    )
    
    
    (0.07
    )
    
    
    (0.07
    )3rd Quarter
    
    
    42,359
    
    
    
    (180,046
    )
    
    
    (180,046
    )
    
    
    (0.05
    )
    
    
    (0.05
    )4th Quarter
    
    
    114,747
    
    
    
    (101,128
    )
    
    
    (101,128
    )
    
    
    (0.03
    )
    
    
    (0.03
    )Total
    
    $
    300,272
    
    
    $
    (781,639
    )
    
    $
    (775,389
    )
    
    $
    (0.20
    )
    
    $
    (0.20
    )
 
 1
    
    Operating income is oil and gas sales less oil and gas production costs, impairment
losses, depreciation, depletion and amortization, and general and administrative expenses. 15




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TBX RESOURCES, INC.
LIQUIDITY AND CAPITAL RESOURCES
       ITEM 7A. QUANTITIATIVE AND QUALITATIVE DISCLOUSURES ABOUT MARKET RISK
  16




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ITEM 8. FINANCIAL STATEMENTS.
 
 PAGEReport of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets  November 30, 2008 and 2007
    
    
    F-3Consolidated Statements of Operations-
For The Years Ended November 30, 2008 and 2007
    
    
    F-4Consolidated Statements of Cash Flows-
For The Years Ended November 30, 2008 and 2007
    
    
    F-5Consolidated Statements of Changes In Stockholders Deficit-
For The Years Ended November 30, 2008 and 2007
    
    
    F-6Notes to Consolidated Financial Statements
    
    
    F-7
  F-1




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      
 F-2




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TBX RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
 November 30,2008
    
    
    2007ASSETSCurrent AssetsCash
    
    $
    2,506
    
    
    $
    23,821Oil and gas revenue receivable
    
    
    175,812
    
    
    
    63,379Accounts receivable from affiliate
    
    
    21,824
    
    
    
    Prepaid expense
    
    
    10,000
    
    
    
    Inventory
    
    
    
    
    
    
    2,584Total current assets
    
    
    210,142
    
    
    
    89,784Oil and gas properties (successful efforts)Proved properties (acreage costs)
    
    
    165,926
    
    
    
    394,968Lease and well equipment
    
    
    581,647
    
    
    
    918,382747,573
    
    
    
    1,313,350Less: depreciation, depletion and amortization
    
    
    (689,954
    )
    
    
    (1,089,712
    )Oil and gas properties, net
    
    
    57,619
    
    
    
    223,638Other
    
    
    6,211
    
    
    
    6,211Total Assets
    
    $
    273,972
    
    
    $
    319,633LIABILITIES AND STOCKHOLDERS DEFICITCurrent LiabilitiesTrade accounts payable
    
    $
    19,888
    
    
    $
    25,415Accounts payable to affiliate
    
    
    
    
    
    
    110,174Accrued expenses
    
    
    70,901
    
    
    
    39,128Advances from affiliate
    
    
    173,786
    
    
    
    759,018Asset retirement obligations  current portion
    
    
    
    
    
    
    29,964Deferred revenue
    
    
    
    
    
    
    2,584Total current liabilities
    
    
    264,575
    
    
    
    966,283Long-term LiabilitiesAsset retirement obligations
    
    
    20,981
    
    
    
    153,370Non-controlling interest in consolidated subsidiary
    
    
    72,000
    
    
    
    72,000Commitments 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, 2008,
4,002,442 shares issued and outstanding at November 30, 2007
    
    
    40,274
    
    
    
    40,024Additional paid-in capital
    
    
    10,929,440
    
    
    
    10,827,440Accumulated deficit
    
    
    (11,053,298
    )
    
    
    (11,739,484
    )Total stockholders deficit
    
    
    (83,584
    )
    
    
    (872,020
    )Total Liabilities and Stockholders Deficit
    
    $
    273,972
    
    
    $
    319,633
  F-3




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TBX RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 For The Years Ended November 30,2008
    
    
    2007Revenues:Oil and gas sales
    
    $
    286,606
    
    
    $
    300,272Total revenues
    
    
    286,606
    
    
    
    300,272Expenses:Lease operating and taxes (including $3,200 for 2008
and $9,600 for 2007 to related party)
    
    
    236,980
    
    
    
    297,339General and administrative
    
    
    367,623
    
    
    
    735,404Loss on impairment of oil and gas properties
    
    
    62,086
    
    
    
    Depreciation, depletion, amortization and accretion
    
    
    39,497
    
    
    
    49,168(Gain) on sale of oil and gas properties
    
    
    (1,105,766
    )
    
    
    (6,250
    )Total expenses
    
    
    (399,580
    )
    
    
    1,075,661Income (Loss) Before Provision for Income Taxes
    
    
    686,186
    
    
    
    (775,389
    )Provision for income taxes (Note 10)
    
    
    
    
    
    
    Net Income (Loss)
    
    $
    686,186
    
    
    $
    (775,389
    )Net Income (Loss) per Common Share, Basic
    
    $
    0.17
    
    
    $
    (0.20
    )Net Income (Loss) per Common Share, Diluted
    
    $
    0.17
    
    
    $
    (0.20
    )Weighted Average Common Shares Outstanding:Basic
    
    
    4,022,729
    
    
    
    3,953,751Diluted
    
    
    4,125,256
    
    
    
    3,953,751
  F-4




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TBX RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 For The Years Ended November 30,2008
    
    
    2007Cash Flows From Operating Activities:Net income (loss)
    
    $
    686,186
    
    
    $
    (775,389
    )Adjustments to reconcile net income (loss) to net cash used in
operating activities:Depreciation, depletion and amortization
    
    
    25,963
    
    
    
    52,595Accretion (reversal) of asset retirement obligations
    
    
    13,534
    
    
    
    (3,427
    )Stock based compensation
    
    
    98,500
    
    
    
    247,500Gain on sale of oil and gas properties
    
    
    (1,105,766
    )
    
    
    (6,250
    )Loss on impairment of oil and gas properties
    
    
    62,086
    
    
    
    Correction to shares issued and outstanding
    
    
    
    
    
    
    (1
    )Changes in operating assets and liabilities other than advances
from affiliate:Decrease (increase) in:Oil and gas revenue receivable
    
    
    (112,433
    )
    
    
    (49,514
    )Accounts receivable from affiliate
    
    
    (21,824
    )
    
    
    Inventory
    
    
    2,584
    
    
    
    10,716Prepaid expenses
    
    
    (10,000
    )
    
    
    Increase (decrease) in:Trade accounts payable
    
    
    (5,527
    )
    
    
    (47,697
    )Accounts payable to affiliate
    
    
    183,355
    
    
    
    82,958Deferred revenue
    
    
    (2,584
    )
    
    
    (10,716
    )Asset retirement obligations  current portion
    
    
    (29,964
    )
    
    
    Accrued expenses
    
    
    31,773
    
    
    
    6,947Net cash used in operating activities
    
    
    (184,117
    )
    
    
    (492,278
    )Cash Flows From Investing Activities:Proceeds from sale of oil and gas property
    
    
    
    
    
    
    6,250Development of oil and gas properties
    
    
    (14,734
    )
    
    
    (13,651
    )Net cash used in investing activities
    
    
    (14,734
    )
    
    
    (7,401
    )Cash Flows From Financing Activities:Advances from affiliate
    
    
    173,786
    
    
    
    507,000Exercise of common stock options
    
    
    3,750
    
    
    
    11,250Net cash provided by financing activities
    
    
    177,536
    
    
    
    518,250Net Increase (Decrease) In Cash
    
    
    (21,315
    )
    
    
    18,571Cash at beginning of year
    
    
    23,821
    
    
    
    5,250Cash at end of year
    
    $
    2,506
    
    
    $
    23,821Supplemental Schedule of Non-Cash Investing and Financing
Activities:Sale of oil and gas properties
    
    $
    92,704
    
    
    $
    Payables to and advances from affiliate
    
    $
    (1,052,547
    )
    
    $
    Asset retirement obligations settled
    
    $
    (145,923
    )
    
    $
    Increase (decrease) in asset retirement obligations
    
    $
    13,534
    
    
    $
    (14,355
    )
  F-5




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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, 2006
    
    
    3,907,417
    
    
    $
    39,074
    
    
    $
    10,569,640
    
    
    $
    (10,964,095
    )
    
    $
    (355,381
    )Issuance of common stock options for services
    
    
    
    
    
    
    
    
    
    
    247,500
    
    
    
    
    
    
    
    247,500Exercise of common stock options
    
    
    75,000
    
    
    
    750
    
    
    
    10,500
    
    
    
    
    
    
    
    11,250Adjustment to shares issued and outstanding
    
    
    20,025
    
    
    
    200
    
    
    
    (200
    )
    
    
    
    
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (775,389
    )
    
    
    (775,389
    )Balance November 30, 2007
    
    
    4,002,442
    
    
    
    40,024
    
    
    
    10,827,440
    
    
    
    (11,739,484
    )
    
    
    (872,020
    )Issuance of common stock options for services
    
    
    
    
    
    
    
    
    
    
    98,500
    
    
    
    
    
    
    
    98,500Exercise of common stock options
    
    
    25,000
    
    
    
    250
    
    
    
    3,500
    
    
    
    
    
    
    
    3,750Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    686,186
    
    
    
    686,186Balance November 30, 2008
    
    
    4,027,442
    
    
    $
    40,274
    
    
    $
    10,929,440
    
    
    $
    (11,053,298
    )
    
    $
    (83,584
    )
  F-6




---



##### 



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
  F-7




---



##### 



Receivables
  Inventory
  Property and Equipment
  Oil and Gas Properties
     November 30,2008
    
    
    2007Proved oil and gas properties
    
    $
    747,573
    
    
    $
    1,313,350Accmulated depreciation, depletion and amortization
    
    
    (689,954
    )
    
    
    (1,089,712
    )$
    57,619
    
    
    $
    223,638
 F-8




---



##### 



November 30,2008
    
    
    2007Office furniture, equipment, and software
    
    $
    112,768
    
    
    $
    112,768Accumulated depreciation and amortization
    
    
    (112,768
    )
    
    
    (112,768
    )$
    
    
    
    $
    
  Long-lived Assets
  Asset Retirement Obligations
   ARO at November 30, 2006
    
    $
    186,761Accretion expense
    
    
    10,928Changes in estimates
    
    
    (14,355
    )ARO at November 30, 2007
    
    
    183,334Accretion expense
    
    
    3,646Liabilities settled
    
    
    (175,888
    )Changes in estimates
    
    
    9,889ARO at November 30, 2008
    
    $
    20,981
 Income Taxes
  F-9




---



##### 



Equity Instruments Issued for Goods and Services
  Earnings Per Share (EPS)
  Use of Estimates
  Reclassifications
  3. RECENT ACCOUNTING PRONOUNCEMENTS:
  F-10




---



##### 



4. GOING CONCERN:
  5. RELATED PARTY TRANSACTIONS:
  a.
    
    The operator of the East Texas oil and gas leases, Gulftex Operating, Inc. (Gulftex) is
an affiliate of TBX. Mr. Burroughs, a major stockholder and president of the Company, is a
50% shareholder of Gulftex. TBX paid Gulftex $3,200 in 2008 and $9,600 in 2007 for
activities associated with operating certain wells.b.
    
    Gulftex operates certain oil and gas properties on behalf of the Company. At November
30, 2008 and 2007 the Company has a liability to Gulftex in the amount of $0 and $110,174,
respectively.c.
    
    The Company received cash advances of $173,786 and non-cash advances of $9,235 from
Gulftex in the current fiscal year. The balance due Gulftex at November 30, 2008 is
$173,786. Advances totaled $507,000 in the previous fiscal year and the balance due Gulftex
at November 30, 2007 is $759,018.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 relate to
Gulftexs operations. The Company charged Gulftex $96,195 in the current fiscal year and
$48,097 in the previous fiscal year. The balance due from Gultex at November 30, 2008 is
$21,824.e.
    
    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 $92,704 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
 F-11




---



##### 



assumed the Companys asset retirement obligations with a
book value of $145,923. The Company recorded a gain of $1,105,766 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.
 6. COMMITMENTS AND CONTINGENCIES:
 a.
    
    The Company is obligated for $160,437 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
$5,942. The base lease payment for the current fiscal year is $65,509. Following is a schedule
of base lease payments by year:
 Year
    
    Amount2009
    
    $
    65,5092010
    
    
    75,9422011
    
    
    18,986$
    160,437
 Rent expense for fiscal years 2008 and 2007 was $70,956 and $79,059, respectively.b.
    
    Gulftex is the bonded operator for TBX Resources and is 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-12




---



##### 



Weighted-AverageShares
    
    
    Exercise PriceOutstanding November 30, 2006
    
    
    75,000
    
    
    $
    0.15Granted
    
    
    100,000
    
    
    $
    0.15Exercised
    
    
    (75,000
    )
    
    
    0.15Forfeited
    
    
    
    
    
    
    0.15Outstanding November 30, 2007
    
    
    100,000
    
    
    $
    0.15Granted
    
    
    100,000
    
    
    $
    0.15Exercised
    
    
    (25,000
    )
    
    $
    0.15Forfeited
    
    
    (75,000
    )
    
    $
    0.15Outstanding November 30, 2008
    
    
    100,000
    
    
    $
    0.15Options exercisable at November 30, 2007
    
    
    100,000
    
    
    $
    0.15Options exercisable at November 30, 2008
    
    
    100,000
    
    
    $
    0.15
   2008
    
    2007Average expected life in years
    
    
    1
    
    
    
    1Average interest rate
    
    
    4.38
    %
    
    
    5.25
    %Average volatility
    
    
    95
    %
    
    
    72
    %Dividend yield
    
    
    0
    %
    
    
    0
    %
  F-13




---



##### 



Weighted AverageGrant DateShares
    
    Fair Value per ShareNonvested at December 1, 2006
    
    
    
    
    
    
    Granted
    
    
    100,000
    
    
    $
    2.475Vested
    
    
    (100,000
    )
    
    $
    2.475Forfeited
    
    
    
    
    
    
    Nonvested at November 30, 2007
    
    
    Granted
    
    
    100,000
    
    
    $
    0.990Vested
    
    
    (100,000
    )
    
    $
    0.990Forfeited
    
    
    
    
    
    
    Nonvested at November 30, 2008
    
    
    
  8. OIL AND GAS PROPERTIES IMPAIRMENT LOSSES:
  9. NON-CONTROLLING INTEREST IN CONSOLIDATED SUBSIDIARY
  10. INCOME TAXES:
  ,
 F-14




---



##### 



November 30,2008
    
    2007Statutory rate
    
    
    35
    %
    
    
    35
    %Change in valuation allowance
    
    
    -35
    %
    
    
    -35
    %Tax provision
    
    
    0
    %
    
    
    0
    %
 Deferred Income Taxes
  November 30,2008
    
    
    2007Deferred tax assets:Net operating loss carryforward
    
    $
    3,270,000
    
    
    $
    3,573,000Oil and gas properties
    
    
    100,000
    
    
    
    129,000Cash/accrual method differences
    
    
    97,000
    
    
    
    39,000Total deferred tax assets
    
    
    3,467,000
    
    
    
    3,741,000Valuation allowance
    
    
    (3,467,000
    )
    
    
    (3,741,000
    )Total net deferred tax assets
    
    $
    
    
    
    $
    
  11. SUBSEQUENT EVENT:
 th Loss Contingencies
 12. SUPPLEMENTARY DISCLOSURE AND OIL AND GAS INFORMATION -UNAUDITED:
  F-15




---



##### 



Results of operations for oil and gas producing activities are as follows:
 For The Year Ended Nov. 30,2008
    
    
    2007Oil and gas sales
    
    $
    286,605
    
    
    $
    300,272Production costs
    
    
    (236,980
    )
    
    
    (297,338
    )Depreciation, depletion, amortization and accretion
    
    
    (39,497
    )
    
    
    (49,169
    )Impairment of oil and gas properties
    
    
    (62,086
    )
    
    
    (51,958
    )
    
    
    (46,235
    )Income tax benefit
    
    
    
    
    
    
    Results of Operations Excluding Selling, General and
Administrative and Joint Venture Activities
    
    $
    (51,958
    )
    
    $
    (46,235
    )
 Capitalized costs relating to oil and gas producing activities are as follows:
 November 30,2008
    
    
    2007Property (acreage costs)- Proved
    
    $
    165,926
    
    
    $
    394,968Producing assets
    
    
    581,647
    
    
    
    918,382747,573
    
    
    
    1,313,350Less: depreciation depletion and amortization
    
    
    (689,954
    )
    
    
    (1,089,712
    )Net Capitalized Costs
    
    $
    57,619
    
    
    $
    223,638
 Oil and Gas Reserve Quantities
   Oil
    
    
    Gas(BBL)
    
    
    (MCF)Proved Reserves November 30, 2006
    
    
    14,953
    
    
    
    61,595Revisions to previous estimates
    
    
    8,164
    
    
    
    35,321Purchases
    
    
    
    
    
    
    Production
    
    
    (3,446
    )
    
    
    (18,731
    )Sales, transfers and retirements
    
    
    
    
    
    
    Proved Reserves November 30, 2007
    
    
    19,671
    
    
    
    78,185Revisions to previous estimates
    
    
    (396
    )
    
    
    5,686Purchases
    
    
    
    
    
    
    Production
    
    
    (1,153
    )
    
    
    (21,754
    )Sales, transfers and retirements
    
    
    (17,085
    )
    
    
    Proved Reserves November 30, 2008
    
    
    1,037
    
    
    
    62,117
 F-16




---



##### 



Standardized Measure of Discounted Cash Flows Relating to Proved Oil and Gas Reserves
    November 30,2008
    
    
    2007Future cash inflows
    
    $
    292,410
    
    
    $
    2,003,255Future production costs
    
    
    (204,484
    )
    
    
    (966,878
    )Future net cash flows
    
    
    87,926
    
    
    
    1,036,37710% annual discount for estimated timing of cash flows
    
    
    (18,526
    )
    
    
    (306,658
    )Standardized measure of discounted future net cash
    
    $
    69,400
    
    
    $
    729,719Standardized measure of discounted future net cash flows, begenning
of year
    
    $
    729,719
    
    
    $
    230,733Sales of oil and gas produced, net of production costs
    
    
    (101,059
    )
    
    
    (53,318
    )Net changes in prices and production costs
    
    
    (149,307
    )
    
    
    131,340Net change in future development costs
    
    
    
    
    
    
    2,623Revisions to previous quantity estimates
    
    
    6,642
    
    
    
    332,792Net change from sales, transfers and disposals of minerals in place
    
    
    (471,852
    )
    
    
    Accretion of discount
    
    
    55,257
    
    
    
    (26,939
    )Net change in income taxes
    
    
    
    
    
    
    112,488(660,319
    )
    
    
    498,986Standardized measure of discounted future net cash flows, end of year
    
    $
    69,400
    
    
    $
    729,719
 Disclosure
  F-17




---



##### 



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




---



##### 



PART III
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS: COMPLIANCE WITH SECTION
16(A) OF THE EXCHANGE ACT.
  NAME
    
    AGE
    
    
    POSITIONTim Burroughs
    
    
    49
    
    
    Chief Executive Officer/Chief Financial OfficerSherri Cecotti
    
    
    44
    
    
    Secretary/Treasurer
     18




---



##### 



ITEM 11. COMPENSATION DISCUSSION AND ANALYSIS.
 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,
    
    
    2008
    
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    President
    
    
    2007
    
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    Sherri Cecotti,
    
    
    2008
    
    
    
    52,300
    
    
    
    
    
    
    
    
    
    
    
    Secretary/Treasurer
    
    
    2007
    
    
    
    52,300
    
    
    
    
    
    
    
    
    
    
    
    Dick ODonnell,
    
    
    2008
    
    
    
    
    
    
    
    
    
    
    
    98,500
    
    
    
    100,000Vice President of Operations
    
    
    2007
    
    
    
    
    
    
    
    
    
    
    
    247,500
    
    
    
    100,000
 Option Grants in the Last Fiscal Year
  Individual Stock Option 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
    
    
    2008
    
    
    
    100,000
    
    
    
    100
    %
    
    
    1.11
    
    
    
    (1
    )Dick ODonnell
    
    
    2007
    
    
    
    100,000
    
    
    
    100
    %
    
    
    2.62
    
    
    
    (1
    )
 19




---



##### 



(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 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
    
    
    2008
    
    
    
    25,000
    
    
    
    46,500
    
    
    
    100,000
    
    
    
    
    
    
    
    5,000
    
    
    
    Dick ODonnell
    
    
    2007
    
    
    
    75,000
    
    
    
    174,000
    
    
    
    100,000
    
    
    
    
    
    
    
    160,000
    
    
    
    
 
 (1)
    
    Based on the closing price of our common stock on November 30, 2008 and 2007 of $0.20
and $1.75 per share respectively, less the exercise price payable for those shares. Perquisites
  Employment Agreements
   Compensation of Directors
  Compensation Committee
  20




---



##### 



Compensation Philosophy
  
    
    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
  ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
   NAME AND ADDRESS
    
    
    
    
    
    PERCENT OFTITLE OF CLASS
    
    OF OWNER
    
    AMOUNT OWNED
    
    CLASScommon stock
    
    Tim Burroughs(1)
3330 LBJ Freeway, Suite 1320
Dallas, TX 75234
    
    
    313,259
    
    
    
    07.78
    %common stock
    
    Tim Burroughs Family Tr (2)
3330 LBJ Freeway, Suite 1320
Dallas, TX 75234
    
    
    500,000
    
    
    
    12.41
    %common stock
    
    Dick ODonnell
3330 LBJ Freeway, Suite 1320
Dallas, Texas 75234
    
    
    200,000
    
    
    
    04.97
    %All Directors and
Officers as a Group
    
    
    1,013,259
    
    
    
    25.16
    %
 21




---



##### 



(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. Mr. Burroughs did not call any of his
potential stock options as of November 30, 2008.(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.
  ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
         22




---



##### 



PART IV
 ITEM 15. EXHIBITS AND REPORTS ON FORM 8-K
 EXHIBITSNUMBER
    
    EXHIBIT31.1
    
    
    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.REPORTS ON FORM 8-Ka. Form 8-K Current Report, Items 4.01 and 9.01 filed January 18, 2008b. Form 8-K Current Report, Items 4.01 and 9.01 filed July 23, 2008c. Form 8-K Current Report, Items 4.01 and 9.01 filed October 17, 2008
 23




---



##### 



SIGNATURES
   /s/ Tim Burroughs
  Signature
    
    Capacity/s/ Tim Burroughs
    
    President, Chief Executive Officer and Chief Financial
OfficerTim Burroughs
 24