##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal Year Ended November 30, 2009
 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 1320Dallas, Texas 75234
    
    75234(Address of Principal Executive Office)
    
    Zip Code
    o
 o
 o þ
 þ
  o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 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. Description of Properties
    
    
    10Item 3. Legal Proceedings
    
    
    11Item 4. ReservedPart 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
    
    
    16Item 8. Financial Statements and Supplemental Data
    
    
    17Report 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 Stockholders Deficit
    
    
    F-5Notes to Consolidated Financial Statements
    
    
    F-6Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    18Item 9A(T). Controls and Procedures
    
    
    18Item 9B. Other Information
    
    
    19Part IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    19Item 11. Executive Compensation
    
    
    20Item 12. Security Ownership and Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    22Item 13. Certain Relationships and Related Transactions and Director Independence
    
    
    23Item 14. Principal Accounting Fees and Services
    
    
    23Part IVItem 15. Exhibits and Financial Statement Schedules
    
    
    24Signatures
    
    
    25CertificatesEX-31.1EX-32.1




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##### Table of Contents



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
   2




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Development and Operating Activities
   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
 4




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We are currently operating without a Board of Directors and currently there is no oversight of our
operations and the activities of our officers.
  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; andworld 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.
  6




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
    
    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. Properties.
 General
  Reserves Reported To Other Agencies
 Properties
 Oil
    
    
    Gas(BBL)
    
    
    (MCF)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
    
    
    
    62,117Revisions to previous estimates
    
    
    (60
    )
    
    
    (1,031
    )Purchases
    
    
    
    
    
    
    Production
    
    
    (21
    )
    
    
    (9,656
    )Sales, transfers and retirements
    
    
    
    
    
    
    Proved Reserves November 30, 2009
    
    
    956
    
    
    
    51,430
  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
 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, 2009.2.
    
    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.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, 2009 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
 th
 
 PART II
 
 Item 5. Market For Registrants Common Equity and Related Stockholder Matters and Issuer Purchases
of Equity Securities.
  11




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




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Going Concern and Liquidity Problems
   Asset Sales
   Employment Agreements
   13




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Other
   Results Of Operations
  Revenue
   November 30, 2009
    
    $
    45,495
    
    
    
    11,101.85
    
    
    $
    4.10
    
    
    $
    6,231
    
    
    
    131.69
    
    
    $
    47.32
    
    
    $
    51,726November 30, 2008
    
    $
    184,947
    
    
    
    21,754.74
    
    
    $
    8.50
    
    
    $
    103,504
    
    
    
    1,267.19
    
    
    $
    81.68
    
    
    $
    288,45112 Month Change2009 vs 2008Amount
    
    $
    (139,452
    )
    
    
    (10,652.89
    )
    
    $
    (4.40
    )
    
    $
    (97,273
    )
    
    
    (1,135.50
    )
    
    $
    (34.36
    )Percentage
    
    
    -75.40
    %
    
    
    -48.97
    %
    
    
    -51.76
    %
    
    
    -93.98
    %
    
    
    -89.61
    %
    
    
    -42.07
    %
    Expenses
   14




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Gain on
Sale of Properties
  Other
Income
 Provision For Income Taxes
 Liquidity and Capital Resources
    15




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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
  16




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Item 8.
    
    FINANCIAL STATEMENTS.
 
 PAGEReport of Independent Registered Public Accounting Firm
    
    
    F-1Consolidated Balance Sheets  November 30, 2009 and 2008
    
    
    F-2Consolidated Statements of Operations 
For The Years Ended November 30, 2009 and 2008
    
    
    F-3Consolidated Statements of Cash Flows 
For The Years Ended November 30, 2009 and 2008
    
    
    F-4Consolidated Statements of Changes In Stockholders Deficit 
For The Years Ended November 30, 2009 and 2008
    
    
    F-5Notes to Consolidated Financial Statements
    
    
    F-6
 17




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      
 F-1




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##### Table of Contents



TBX RESOURCES, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS
 November 30,2009
    
    
    2008ASSETSCurrent AssetsCash
    
    $
    5,327
    
    
    $
    2,506Oil and gas revenue receivable
    
    
    112,122
    
    
    
    175,812Accounts receivable from affiliate
    
    
    
    
    
    
    21,824Prepaid expense
    
    
    
    
    
    
    10,000Inventory
    
    
    4,494
    
    
    
    Total current assets
    
    
    121,943
    
    
    
    210,142Oil and gas properties (successful efforts)Proved properties (acreage costs)
    
    
    116,514
    
    
    
    165,926Lease and well equipment
    
    
    402,025
    
    
    
    581,647518,539
    
    
    
    747,573Less: depreciation, depletion and amortization
    
    
    (468,948
    )
    
    
    (689,954
    )Oil and gas properties, net
    
    
    49,591
    
    
    
    57,619Other
    
    
    6,211
    
    
    
    6,211Total Assets
    
    $
    177,745
    
    
    $
    273,972LIABILITIES AND STOCKHOLDERS DEFICITCurrent LiabilitiesTrade accounts payable
    
    $
    30,761
    
    
    $
    19,888Accrued expenses
    
    
    31,932
    
    
    
    70,901Advances from affiliate
    
    
    496,602
    
    
    
    173,786Deferred revenue
    
    
    4,494
    
    
    
    Total current liabilities
    
    
    563,789
    
    
    
    264,575Long-term LiabilitiesAsset retirement obligations
    
    
    21,021
    
    
    
    20,981Non-controlling interest in consolidated subsidiary
    
    
    
    
    
    
    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, 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
    
    
    (11,377,279
    )
    
    
    (11,053,298
    )Total stockholders deficit
    
    
    (407,065
    )
    
    
    (83,584
    )Total Liabilities and Stockholders Deficit
    
    $
    177,745
    
    
    $
    273,972
  F-2




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TBX RESOURCES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS
 For The Years Ended November 30,2009
    
    
    2008Revenues:Oil and gas sales
    
    $
    51,726
    
    
    $
    286,606Total revenues
    
    
    51,726
    
    
    
    286,606Expenses:Lease operating and taxes (including $0 for 2009 and
$3,200 for 2008 to related party)
    
    
    67,672
    
    
    
    236,980General and administrative
    
    
    373,653
    
    
    
    367,623Loss on impairment of oil and gas properties
    
    
    
    
    
    
    62,086Depreciation, depletion, amortization and accretion
    
    
    8,068
    
    
    
    39,497Gain on sale of oil and gas properties
    
    
    (1,686
    )
    
    
    (1,105,766
    )Total expenses
    
    
    447,707
    
    
    
    (399,580
    )Operating Income (Loss)
    
    
    (395,981
    )
    
    
    686,186Other Income:Minority interest debt forgiveness
    
    
    72,000
    
    
    
    Income (Loss) Before Provision for Income Taxes
    
    
    (323,981
    )
    
    
    686,186Provision for income taxes
    
    
    
    
    
    
    Net Income (Loss)
    
    $
    (323,981
    )
    
    $
    686,186Net Income (Loss) per Common Share, Basic
    
    $
    (0.08
    )
    
    $
    0.17Net Income (Loss) per Common Share, Diluted
    
    $
    (0.08
    )
    
    $
    0.17Weighted Average Common Shares Outstanding:Basic
    
    
    4,027,442
    
    
    
    4,027,442Diluted
    
    
    4,027,442
    
    
    
    4,027,442
  F-3




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TBX RESOURCES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS
 For The Years Ended November 30,2009
    
    
    2008Cash Flows From Operating Activities:Net income (loss)
    
    $
    (323,981
    )
    
    $
    686,186Adjustments to reconcile net income (loss) to net cash used in
operating activities:Depreciation, depletion and amortization
    
    
    8,028
    
    
    
    25,963Accretion of asset retirement obligations
    
    
    40
    
    
    
    13,534Stock based compensation
    
    
    500
    
    
    
    98,500Gain on sale of oil and gas properties
    
    
    (1,686
    )
    
    
    (1,105,766
    )Allocated expenses to affiliate
    
    
    (61,099
    )
    
    
    Minority interest debt forgiveness
    
    
    (72,000
    )Loss on impairment of oil and gas properties
    
    
    
    
    
    
    62,086Changes in operating assets and liabilities other than advances
from affiliate:Decrease (increase) in:Oil and gas revenue receivable
    
    
    63,690
    
    
    
    (112,433
    )Accounts receivable from affiliates
    
    
    21,824
    
    
    
    (21,824
    )Inventory
    
    
    (4,494
    )
    
    
    2,584Prepaid expense
    
    
    10,000
    
    
    
    (10,000
    )Increase (decrease) in:Trade accounts payable
    
    
    10,873
    
    
    
    (5,527
    )Accounts payable to affiliate
    
    
    
    
    
    
    183,355Deferred revenue
    
    
    4,494
    
    
    
    (2,584
    )Accrued expenses
    
    
    (38,969
    )
    
    
    31,773Asset retirement obligations  current portion
    
    
    
    
    
    
    (29,964
    )Net cash used in operating activities
    
    
    (382,780
    )
    
    
    (184,117
    )Cash Flows From Investing Activities:Proceeds from sale of oil and gas property
    
    
    1,686
    
    
    
    Development of oil and gas properties
    
    
    
    
    
    
    (14,734
    )Net cash provided by (used in) investing activities
    
    
    1,686
    
    
    
    (14,734
    )Cash Flows From Financing Activities:Advances from affiliate
    
    
    383,915
    
    
    
    173,786Exercise of common stock options
    
    
    
    
    
    
    3,750Net cash provided by financing activities
    
    
    383,915
    
    
    
    177,536Net Increase (Decrease) In Cash
    
    
    2,821
    
    
    
    (21,315
    )Cash at beginning of year
    
    
    2,506
    
    
    
    23,821Cash at end of year
    
    $
    5,327
    
    
    $
    2,506Supplemental Schedule of Non-Cash Investing and Financing Activities:Write-off of fully depreciated property and equipment
    
    $
    229,038
    
    
    $
    Sale of oil and gas properties
    
    $
    
    
    
    $
    92,704Payables to and advances from affiliate
    
    $
    
    
    
    $
    (1,052,548
    )Asset retirement obligations settled
    
    $
    
    
    
    $
    (145,923
    )Increase (decrease) in asset retirement obligations
    
    $
    
    
    
    $
    13,534
  F-4




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##### Table of Contents



TBX RESOURCES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS DEFICIT
 Additional
    
    
    
    TotalCommon Stock
    
    Paid-In
    
    Accumulated
    
    StockholdersShares
    
    Par Value
    
    Capital
    
    Deficit
    
    DeficitBalance 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
    )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
    )
  F-5




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##### Table of Contents



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
  F-6




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##### Table of Contents



Inventory
  Property and Equipment
  Oil and Gas Properties
     November 30,2009
    
    
    2008Proved oil and gas properties
    
    $
    518,539
    
    
    $
    747,573Accumulated depreciation, depletion and amortization
    
    
    (468,948
    )
    
    
    (689,954
    )$
    49,591
    
    
    $
    57,619
 F-7




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##### Table of Contents



November 30,2009
    
    
    2008Office 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, 2007
    
    $
    183,334Accretion expense
    
    
    3,646Liabilities settled
    
    
    (175,888
    )Changes in estimates
    
    
    9,889ARO at November 30, 2008
    
    
    20,981Accretion expense
    
    
    1,023Liabilities settled
    
    
    Changes in estimates
    
    
    (983
    )ARO at November 30, 2009
    
    $
    21,021
 Income Taxes
  Equity Instruments Issued for Services
  F-8




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##### Table of Contents



Earnings Per Share (EPS)
  Use of Estimates
  Reclassifications
  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.
  F-9




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##### Table of Contents



3. RECENT ACCOUNTING PRONOUNCEMENTS:
  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 $0 in 2009 and $3,200 in 2008 for activities
associated with operating certain wells.b.
    
    The Company received cash advances of $383,915 from Gulftex in the current fiscal year.
The balance due Gulftex at November 30, 2009 is $496,602. The Company received cash
advances of $173,786 and non-cash advances of $9,235 from Gulftex in the previous fiscal
year. The balance due Gulftex at November 30, 2008 is $173,786.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 relate to
Gulftexs operations. The Company charged Gulftex $89,647 in the current fiscal year and
$96,195 in the previous fiscal year. The balance due from Gultex at November 30, 2009 and
2008 is $0 and $21,824, respectively.d.
    
    See Note 10 below for a discussion of the 2008 sale of oil and gas properties to
Gulftex.
 6. COMMITMENTS AND CONTINGENCIES:
 a.
    
    The Company is obligated for $94,928 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
$65,509. Following is a schedule of base lease payments by year:
 F-10




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##### Table of Contents



Year
    
    Amount2010
    
    $
    75,9422011
    
    
    18,986$
    94,928
 Rent expense for fiscal years 2009 and 2008 was $70,794 and $70,956, respectively.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-11




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##### Table of Contents



Weighted-AverageShares
    
    
    Exercise PriceOutstanding December 1, 2007
    
    
    100,000
    
    
    $
    0.15Granted
    
    
    100,000
    
    
    $
    0.15Exercised
    
    
    (25,000
    )
    
    $
    0.15Forfeited
    
    
    (75,000
    )
    
    $
    0.15Outstanding November 30, 2008
    
    
    100,000
    
    
    $
    0.15Granted
    
    
    25,000
    
    
    $
    0.15Exercised
    
    
    
    
    
    $
    0.15Forfeited
    
    
    (100,000
    )
    
    $
    0.15Outstanding November 30, 2009
    
    
    25,000
    
    
    $
    0.15Options exercisable at November 30, 2008
    
    
    100,000
    
    
    $
    0.15Options exercisable at November 30, 2009
    
    
    25,000
    
    
    $
    0.15
   2009
    
    2008Average expected life in years
    
    
    1
    
    
    
    1Average interest rate
    
    
    4.00
    %
    
    
    4.38
    %Average volatility
    
    
    147
    %
    
    
    95
    %Dividend yield
    
    
    0
    %
    
    
    0
    %
  Weighted AverageGrant DateShares
    
    Fair Value per ShareNonvested at December 1, 2007
    
    
    
    
    
    
    Granted
    
    
    100,000
    
    
    $
    0.99Vested
    
    
    (100,000
    )
    
    $
    0.99Forfeited
    
    
    Nonvested at November 30, 2008
    
    
    Granted
    
    
    25,000
    
    
    $
    0.05Vested
    
    
    (25,000
    )
    
    $
    0.05Forfeited
    
    
    Nonvested at November 30, 2009
    
    
    
  F-12




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##### Table of Contents



8. OIL AND GAS PROPERTIES IMPAIRMENT LOSSES:
  9. NON-CONTROLLING INTEREST IN CONSOLIDATED SUBSIDIARY
  10. SALES OF OIL AND GAS PROPERTIES:
   11. INCOME TAXES:
  ,
  November 30,2009
    
    2008Statutory rate
    
    
    35
    %
    
    
    35
    %Change in valuation allowance
    
    
    -35
    %
    
    
    -35
    %Tax provision
    
    
    0
    %
    
    
    0
    %
 F-13




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##### Table of Contents



Deferred Income Taxes
  November 30,2009
    
    
    2008Deferred tax assets:Net operating loss carryforward
    
    $
    3,385,000
    
    
    $
    3,270,000Oil and gas properties
    
    
    49,000
    
    
    
    100,000Cash/accrual method differences
    
    
    61,000
    
    
    
    97,000Total deferred tax assets
    
    
    3,495,000
    
    
    
    3,467,000Valuation allowance
    
    
    (3,495,000
    )
    
    
    (3,467,000
    )Total net deferred tax assets
    
    $
    
    
    
    $
    
  12. SUBSEQUENT EVENT:
 th
 13. SUPPLEMENTARY DISCLOSURE AND OIL AND GAS INFORMATION -UNAUDITED:
  For The Year Ended Nov. 30,2009
    
    
    2008Oil and gas sales
    
    $
    51,726
    
    
    $
    286,605Production costs
    
    
    (67,672
    )
    
    
    (236,980
    )Depreciation, depletion, amortization and accretion
    
    
    (8,068
    )
    
    
    (39,497
    )Impairment of oil and gas properties
    
    
    
    
    
    
    (62,086
    )(24,014
    )
    
    
    (51,958
    )Income tax benefit
    
    
    
    
    
    
    Results of Operations Excluding Selling, General and
Administrative and Joint Venture Activities
    
    $
    (24,014
    )
    
    $
    (51,958
    )
  November 30,2009
    
    
    2008Property
(acreage costs)   Proved
    
    $
    116,514
    
    
    $
    165,926Producing assets
    
    
    402,025
    
    
    
    581,647518,539
    
    
    
    747,573Less: depreciation depletion and amortization
    
    
    (468,948
    )
    
    
    (689,954
    )Net Capitalized Costs
    
    $
    49,591
    
    
    $
    57,619
 F-14




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##### Table of Contents



Oil and Gas Reserve Quantities
   Oil
    
    
    Gas(BBL)
    
    
    (MCF)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
    
    
    
    62,117Revisions to previous estimates
    
    
    (60
    )
    
    
    (1,031
    )Purchases
    
    
    
    
    
    
    Production
    
    
    (21
    )
    
    
    (9,656
    )Sales, transfers and retirements
    
    
    
    
    
    
    Proved Reserves November 30, 2009
    
    
    956
    
    
    
    51,430
 Standardized Measure of Discounted Cash Flows Relating to Proved Oil and Gas Reserves
   F-15




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##### Table of Contents



November 30,2009
    
    
    2008Future cash inflows
    
    $
    219,074
    
    
    $
    292,410Future production costs
    
    
    (68,272
    )
    
    
    (204,484
    )Future net cash flows
    
    
    150,802
    
    
    
    87,92610% annual discount for estimated timing of cash flows
    
    
    (43,668
    )
    
    
    (18,526
    )Standardized measure of discounted future net cash
    
    $
    107,134
    
    
    $
    69,400Standardized measure of discounted future net cash flows, begenning of year
    
    $
    69,400
    
    
    $
    729,719Sales of oil and gas produced, net of production costs
    
    
    (13,255
    )
    
    
    (101,059
    )Net changes in prices and production costs
    
    
    26,696
    
    
    
    (149,307
    )Revisions to previous quantity estimates
    
    
    (1,389
    )
    
    
    6,642Net change from sales, transfers and disposals of minerals in place
    
    
    
    
    
    
    (471,852
    )Accretion of discount
    
    
    10,713
    
    
    
    55,257Net change in income taxes
    
    
    
    
    
    
    Other  prior period adjustment
    
    
    14,968
    
    
    
    37,734
    
    
    
    (660,319
    )Standardized measure of discounted future net cash flows, end of year
    
    $
    107,134
    
    
    $
    69,400
 F-16




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##### Table of Contents



Quarterly Financial Data (Unaudited)
  Net Income(Loss)Per ShareTotal
    
    
    Operating
    
    
    Net
    
    
    Basic &Revenues
    
    
    Income (Loss) 1
    
    
    Income (Loss)
    
    
    Diluted2009lst 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
    )2008lst Quarter
    
    $
    90,977
    
    
    $
    (212,627
    )
    
    $
    (212,627
    )
    
    $
    (0.05
    )2nd Quarter
    
    
    66,304
    
    
    
    1,016,992
    
    
    
    1,016,992
    
    
    
    0.253rd Quarter
    
    
    53,607
    
    
    
    (45,074
    )
    
    
    (45,074
    )
    
    
    (0.01
    )4th Quarter
    
    
    75,717
    
    
    
    (73,105
    )
    
    
    (73,105
    )
    
    
    (0.02
    )Total
    
    $
    286,605
    
    
    $
    686,186
    
    
    $
    686,186
    
    
    $
    0.17
 
 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-17




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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.
  18




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##### Table of Contents



Item 9B. Other Information.
  
 PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance.
  NAME
    
    AGE
    
    POSITIONTim Burroughs
    
    
    49
    
    
    Chief Executive Officer/Chief Financial OfficerSherri Cecotti
    
    
    44
    
    
    Secretary/Treasurer
     19




---



##### 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,
    
    
    2009
    
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    President
    
    
    2008
    
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    Sherri Cecotti,
    
    
    2009
    
    
    
    52,300
    
    
    
    
    
    
    
    
    
    
    
    Secretary/Treasurer
    
    
    2008
    
    
    
    52,300
    
    
    
    
    
    
    
    
    
    
    
    Dick ODonnell,
    
    
    2009
    
    
    
    
    
    
    
    
    
    
    
    500
    
    
    
    25,000Vice President of Operations
    
    
    2008
    
    
    
    
    
    
    
    
    
    
    
    98,500
    
    
    
    100,000
 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
    
    
    2009
    
    
    
    25,000
    
    
    
    100
    %
    
    
    0.05
    
    
    
    (1
    )Dick ODonnell
    
    
    2008
    
    
    
    100,000
    
    
    
    100
    %
    
    
    1.11
    
    
    
    (1
    )
 20




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##### Table of Contents



(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
    
    
    2009
    
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    
    
    
    
    
    1,250
    
    
    
    Dick ODonnell
    
    
    2008
    
    
    
    25,000
    
    
    
    46,500
    
    
    
    100,000
    
    
    
    
    
    
    
    5,000
    
    
    
    
 
 (1)
    
    Based on the closing price of our common stock on November 30, 2009 and 2008 of $0.05 and
$0.20 per share respectively, less the exercise price payable for those shares. Perquisites
  Employment Agreements
   Compensation of Directors
  Compensation Committee
  21




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##### Table of Contents



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
  
 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, 22




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##### Table of Contents



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, 2009.(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.
         23




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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, 2009 and 2008Consolidated Statements of OperationsFor The Years Ended November 30, 2009 and 2008Consolidated Statements of Cash FlowsFor The Years Ended November 30, 2009 and 2008Consolidated Statements of Changes In Stockholders DeficitFor The Years Ended November 30, 2009 and 2008Notes 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.
 24




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##### Table of Contents



SIGNATURES
   SIGNATURE:
    
    /s/ Tim BurroughsTIM BURROUGHS, PRESIDENT/CHIEF FINANCIAL OFFICER
  Signature
    
    Capacity/s/ Tim Burroughs
    
    President, Chief Executive
Officer and Chief Financial OfficerTim Burroughs
 25