<PAGE>
                        SECURITY AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

(Mark One)

(X)   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

For the Fiscal Year Ended November 30, 2001

                                       OR

( )   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

Commission File No.   0-30746

                               TBX RESOURCES, INC.
                 (Name of Small Business Issuer in its charter)


                 Texas                                   75-2592165
       ------------------------                     -------------------
       (State of incorporation)                       (IRS Employer
                                                    Identification No.)
    12300 Rambler Road, Suite 304
            Dallas, Texas                                 75234
---------------------------------------                 --------
(Address of Principal Executive Office)                 Zip Code

Registrant's telephone number, including Area Code: 972) 243-2610

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

                                  Common Stock
                                (Title of Class)

Check whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the Registrant was required to file such
reports) and (2) has been subject to such filing requirements for the past 90
days.
                             X
                            ---                 ---
                            YES                  NO

Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

The Company's revenues for the most recent fiscal year were $221,398.

The aggregate market value of the voting stock held by non-affiliates of the
Company on February 27, 2002, was $4,575,130.

As of February 27, 2002, the Company had 22,539,750 issued and outstanding
shares of common stock.




<PAGE>

ITEM 1. DESCRIPTION OF BUSINESS.

BACKGROUND

         TBX Resources, Inc., was incorporated in the state of Texas in March,
1995, by our president, Mr. Tim Burroughs. Our primary focus has been to acquire
producing oil and gas properties with opportunities for future development.
Prior to acquiring a property, we analyze the previous production and operating
history of the property, as well as the production history and related operating
procedures for similar wells producing from the same formations in the general
area. By acquiring producing properties which respond positively to improved
production practices and enhanced recovery techniques, we have built an
inventory of infield development drilling locations.

         As of November 30, 2001, our company had total assets of $3,729,248 of
which net oil and gas properties amounted to $3,052,130 or 82.1% of our total
assets. At November 30, 2001, we had approximately $111,451 in cash and money
market accounts and $94,572 in working capital. Our accumulative losses through
November 30, 2001, totaled $4,404,267. Our revenues for our fiscal year ended
November 30, 2001 were $221,398 and our net losses for the same period were
$(1,171,861). Our ratio of current assets to current liabilities is 1.5:1; we
have no long-term debt. As of November 30, 2001, our shareholders equity was a
positive $3,729,248.

         Our company has experienced losses over the past years. However, our
management is projecting a decrease in general and administrative expenses, an
increase in prices obtained for our oil and gas produced and an increase in our
total production, due to more of our wells being brought on-line. Our management
believes that, with the projected lower general and administrative expenses,
increases in production and higher prices for our production, our company's
financial success should improve for the fiscal year ending November 30, 2002.
However, this success is dependent upon many factors, some of which are not
within our control and there can be no assurance that our actual results will
improve.

         Our goal is to be a publicly traded, independent oil and gas
exploration and production company which can take full advantage of
opportunities resulting from the major oil companies' divestiture of domestic
oil and gas properties. In particular, most major oil companies are currently
more interested in devoting their exploration dollars toward the development of
oil and gas fields that are not located in the United States, primarily because
of the assumption by the major oil companies that domestic oil and gas
properties have been significantly depleted. In addition, due to the extent of
the development of domestic oil and gas properties, it is more likely that a
significant new discovery in the oil and gas industry would likely be conducted
in those areas that have not been so heavily developed, generally being
properties that are not contained within the United States. Because major oil
companies are more interested in developing their overseas holdings, they often
sell their domestic properties at prices that are attractive to independent oil
companies, especially since we have significantly lower administrative costs
than large oil companies. Due to our lower infrastructure costs, we believe that
our costs of owning and operating domestic oil and gas properties are lower than
those same costs as experienced by major oil companies.



                                       2
<PAGE>


PREVIOUS JOINT VENTURES

         Since our inception, we have acted as the joint venture manager of 11
Joint Ventures, all of which have been located in east Texas and western
Louisiana. The joint ventures we developed were essentially "rolled up" into our
company in that we exchanged shares of our common stock in return for our joint
venture partners' interest in the properties developed by their joint ventures.

WELLS HELD BY THE COMPANY

         As more particularly described in the description of properties
section, we own or operate all or a portion of 53 wells located in Gregg,
Hopkins, Franklin, Panola and Wood Counties, Texas. Of these 53 wells, 8 wells
have been designated as injection wells and 3 wells have been designated as
water supply wells. Injection wells are wells into which salt water is injected
to either assist in causing oil or gas to flow to a particular well that is
designated as a production well or to simply dispose of salt water that is often
produced along with oil. In addition, 8 wells are currently producing oil. The
remaining 34 wells are either currently shut-in, scheduled to be brought back
into production or are designated as injection wells. During the next twelve
months, we hope to be able to bring some of the wells that are currently shut-in
on-line so that the same will begin to produce oil. However, our ability to
re-open these wells is dependent upon us obtaining sufficient financing to pay
the costs associated with re-opening these wells and operating the same once
re-opened. We recently added an additional 7 wells in our inventory. These well
are located in Ellis, Beckham, Garfield, Caddo and Canadian Counties, Oklahoma.
All 7 wells are producing natural gas however they are new wells and have not
seasoned to the point where a reliable estimate of production and provable
reserves can be made.

DEVELOPMENT AND EXPLORATION ACTIVITIES

         Economic factors prevailing in the oil and gas industry change from
time to time. The uncertain nature and trend of economic conditions and energy
policy in the oil and gas business generally make flexibility of operating
policies important in achieving desired profitability. We intend to evaluate
continuously all conditions affecting our potential activities and to react to
those conditions as we deem appropriate from time to time by engaging in
businesses most profitable for us.

         In addition, in order to finance future development and exploration
activities, we will consider sponsoring public or private partnerships depending
upon the number, size and economic feasibility of our generated prospects, the
level of participation of our industry partners and various other factors.
However, potential investors should note that we currently do not have in place
any definite financing opportunities and there can be no assurance that we will
be able to enter into such financing arrangements or that if we are able to
enter into such arrangements, we will be able to achieve any profitability as a
result of our operations.

         We expect that the principal source of funds in the near future will be
from the sale of our common stock. On October 1, 2001 we entered into a
Regulation S Stock Purchase Agreement ("Stock Purchase Agreement") with Citizen
Asia Pacific Limited (CAPL), a Hong Kong company whereby we agreed to offer and
sale shares of our common stock in reliance of an exemption from the
registration requirements of the United States and state securities laws under
Regulation S promulgated under the Securities Act of 1933. The Stock Purchase



                                       3
<PAGE>

Agreement stipulates that CAPL will use its best efforts to purchase from us up
to 500,000 restricted shares of common stock at a per share price which shall be
38% of the moving ten day average closing prices of our shares of common stock
as quoted on the OTC Bulletin Board or other public trading market. We have the
right to accept or reject subscriptions for the shares, in whole or in part. The
agreement runs from October 1, 2001 to September 30, 2002. We expect the
principal use of funds generated from the Stock Purchase Agreement in the
foreseeable future will be for developing existing oil and gas properties and/or
the acquisition of new properties.

BUSINESS RISKS

         TBX Resources is subject to all of the risks normally associated with
the exploration for and production of oil and gas, including uncontrollable
flows of oil, gas or well fluids into the atmosphere, pollution, and fires, each
of which could result in damage to or destruction of oil and gas wells,
producing formations, or production facilities or damage to persons and other
property. As is common in the industry, we do not fully insure against all these
risks either because insurance is not available or because we elect not to
insure due to prohibitive premium costs. The occurrence of an event affecting
TBX Resources could have a material adverse effect on the financial position and
results of our operations.

         Our exploration activities carry risks that the value of the related
acreage may be decreased by adverse geological studies, unfavorable drilling
results on nearby acreage, or lease expirations. In addition, drilling carries a
significant risk that no commercial oil or gas production will be obtained and
the investment will not be recovered. We prefer to re-complete or rework
producing properties to minimize this risk. The ultimate cost of drilling,
completing, and operating wells is often uncertain. Moreover, drilling
operations may be curtailed or delayed, with the likelihood of increased costs,
as a result of, among other factors, title problems, wellhead prices, weather
conditions, and geologic uncertainty.

         Our competitors include major oil companies and numerous independent
oil and gas companies, individuals and drilling and income programs. Many of our
larger competitors possess and employ financial and personnel resources
substantially greater than those available to us. Such companies are able to pay
more for oil and gas properties and to define, evaluate, bid for and purchase a
greater number of properties than our financial or human resources permit. Our
ability to acquire additional properties and to discover reserves in the future
will be dependent upon our ability to evaluate and select suitable properties
and to consummate transactions in a highly competitive environment.

         The availability of a ready market for oil and gas produced from
properties now owned or hereafter acquired by us and the prices for such
production are dependent upon numerous factors, many of which are beyond our
control. These factors include, among other things, the level of domestic
production, the availability of imported oil and gas, actions taken by foreign
oil and gas producing nations, the availability of pipelines with adequate
capacity and other transportation facilities, the availability and marketing of
other competitive fuels, fluctuating demand for oil, gas and refined products,
and the extent of government regulation and taxation (under both present and
future legislation) of the production, refining, transportation, pricing, use
and allocation of oil, natural gas, refined products, and substitute fuels. In
view of the many uncertainties affecting the supply and demand for crude oil,



                                       4
<PAGE>

natural gas, and refined petroleum products, we cannot predict the prices or
marketability of our oil and gas production.

         Our oil production is sold at or near our wells under short-term
purchase contracts at prevailing prices in accordance with arrangements which
are customary in the oil industry. We currently do not have any gas production,
but when we do, we expect substantially all of our gas production to be sold on
the spot market and not, therefore, subject to long term contracts. Although
this may prevent us from being required to dispose of our production at low
rates, there can be no assurance that purchasers will be willing to continue to
purchase our natural gas on the spot market.

         The production of oil and gas is subject to extensive federal, state
and city laws, rules, orders and regulations governing a wide variety of
matters, including the drilling and spacing of wells, allowable rates of
production, prevention of waste and pollution and protection of the environment.
In addition to the direct costs borne in complying with such regulations,
operations and revenues may be impacted to the extent that certain regulations
limit oil and gas production to below economic levels. Although the particular
regulations applicable in each state in which operations are conducted vary,
such regulations are generally designed to ensure that oil and gas operations
are carried out in a safe and efficient manner and to ensure that
similarly-situated operators are provided with reasonable opportunities to
produce their respective fair share of available oil and gas reserves. However,
since these regulations generally apply to all oil and gas producers, our
management believes that these regulations should not put us at a material
disadvantage to other oil and gas producers.

         State initiatives to regulate further the disposal of oil and gas
wastes could have a major impact on us. In addition, we are subject to laws and
regulations concerning occupational health and safety. We do not anticipate
being required in the near future to expend amounts that are material in
relation to our total capital expenditures program by reason of environmental or
occupation health and safety laws and regulations, but insomuch as such laws and
regulations are frequently changed, we are unable to predict the ultimate cost
of compliance with these laws. However, we do not believe that our environmental
risks are materially different from those of comparable gas and oil companies
operating in similar geographic areas.

OFFICES

         We maintain our corporate offices at 12300 Ford Road, Suite 194,
Dallas, Texas, and pay a monthly rental of approximately $2,100.00 per month.
Our lease originally terminated on April 30, 1996, but in January, 2000, we
entered into an agreement by which our lease was extended until July 31, 2000.
In July, 2000, we began negotiations with our landlord, the result of which was
that in September, 2001, we entered into a new lease that terminates in
September, 2002. We currently have no plans to move our offices. Although we
currently do not have any plans to terminate our lease, because of the small
amount of space required for our offices, together with the abundance of office
space available in the Dallas/Ft. Worth metroplex, we do not anticipate any
problems in obtaining suitable office space if our lease were terminated.



                                       5

<PAGE>

ITEM 2. DESCRIPTION OF PROPERTY

         GENERAL: The following is various information concerning production
from our oil and gas wells, and our productive wells and acreage and undeveloped
acreage. Our oil and gas properties are located within the northern part of the
east Texas salt basin. The earliest exploration in this area dates back to the
early 1920s and 1930s, when frontier oil producers were exploring areas adjacent
to the famous "east Texas field" located near the town of Kilgore, Texas. We
have leasehold rights in three oil and gas fields located in Gregg, Hopkins,
Franklin, Panola, and Wood Counties, Texas. We have recently acquired several
wells and acreages in Oklahoma which are described below after the Texas
properties.

         RESERVES REPORTED TO OTHER AGENCIES. We are not required and do not
file any estimates of total, proved net oil or gas reserves with reports to any
federal authority or agency.

         PROPERTIES. The following is a breakdown of our properties:

<Table>
<Caption>
            Name of Field           Gross Producing Well Count        Net Producing Well Count
--------------------------------    --------------------------        ------------------------
<S>                                 <C>                               <C>
East Texas Field                             0                                 0

Mitchell Creek & Talco Field                 4                                 2

Manziel & Quitman Field                      3                                 3

Bethany Field(1)                             4                                 3
</Table>

         (1) Although these wells are classified as producing wells, since they
have only recently been brought back to on-line status and are currently
undergoing testing, we do not have sufficient information to record the current
production from these wells.



                                       6
<PAGE>


         The following information pertains to our properties as of November 30,
2001:


<Table>
<Caption>

 Name of               Proved        Proved          Proved          Proved      Current       Percentage of
 Field                 Reserves:     Reserves:       Developed       Developed   Production:   Reserves in Field
                       Oil           Gas             Reserves:       Reserves:   Oil           to Total Reserves
                       (bbls)        (mcf)           Oil             Gas         (bbls)(1)     Held by the
                                                     (bbls)          (mcf)                      Company
---------------        ---------     ---------       ---------       ---------   -----------   -----------------
<S>                    <C>           <C>             <C>             <C>         <C>           <C>     <C>
East
Texas                                                                                          oil       5.0
Field                    7,557               0           7,557               0            0    gas         0

Mitchell Creek                                                                                 oil      40.1
& Talco Field          101,173               0         101,173               0        1,029    gas         0

Manziel &                                                                                      oil      54.9
Quitman Field          125,800               0         125,800               0        3,315    gas         0

Bethany Field                                                                                  oil         0
                       499,327       1,455,915         499,327               0           37    gas       100
</Table>

(1) The current production figure specified above is for the production for the
month of November, 2001.

PRODUCTIVE WELLS AND ACREAGE

<Table>
<Caption>
                   Total Gross         Net       Total Gross    Net Productive     Total Gross       Net
Geographic Area     Oil Wells      Productive     Gas Wells        Gas Wells        Developed     Developed
                                    Oil Wells                                         Acres         Acres
---------------    -----------     ----------    -----------    --------------     -----------    ---------
<S>                <C>             <C>           <C>            <C>                <C>            <C>
East Texas
Region                 53              8              1               1              3,507.2       3,502.34
</Table>

(1)      We have drilled a gas well that appears to be capable of production
         after all completion efforts have been finished. However, as of
         November 30, 2001, no production of gas from this well had been
         obtained.

         In addition to our ownership in the above described wells, we own 20%
of the common stock of Southern Oil & Gas Company ("Southern").Southern is an
oil and gas company that owns interests in approximately 435 wells, primarily in
north east Louisiana, which wells produce on average approximately
3,000 barrels of oil each month. When we originally entered into this agreement
with Southern, we also entered into an operations and management contract (the
"Operations Contract") providing that we were to be paid those profits of
Southern that exceeded $40,000 each month. Because the amounts we have been paid
under the Operations Contract have not been at the levels we anticipated, we
have decided not to increase our ownership interest in Southern.

Notes:

1. Total Gross Oil Wells were calculated by subtracting 8 wells designated as
Injection Wells, 3 wells designated as water supply wells and 15 wells either
sold or plugged and abandoned from the 69 wells owned and/or operated by TBX
Resources, Inc. as of November 30, 1999.

2. Net Productive Oil Wells were calculated by multiplying the working interest
held by TBX Resources, Inc. in each of the 43 Gross Oil Wells and adding the
resulting products.

3. Total Gross Developed Acres is equal to the total surface acres of the
properties in which TBX Resources, Inc. holds an Interest.



                                       7
<PAGE>
4. Net Developed Acres is equal to the Total Gross Developed Acres multiplied by
the percentage of the total working interest held by TBX Resources, Inc. in the
respective properties.

5. All acreage in which we hold a working interest as of November 30, 1999 had
existing wells located thereon; thus all acreage leased by TBX Resources, Inc.
may be accurately classified as developed.

<Table>
<Caption>

GEOGRAPHIC AREA                  GROSS ACRES           NET ACRES
---------------                  -----------           ---------
<S>                              <C>                   <C>
East Texas Region                  3,507.2             3,502.34
</Table>


Notes:

1. 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.

2. A more comprehensive study of all properties currently leased by us would be
required to determine precise developmental potential. Currently, only the 2,336
acres which make up the NE Bethany Waterflood Unit #3 and its associated leases
have been studied in enough depth to have determined a developmental program
which will be implemented over the entirety of the acreage.

ANADARKO BASIN-WESTERN OKLAHOMA

         We recently added seven additional wells and two acreages located in
the Anadarko Basin which is situated in western Oklahoma:

1. We purchased for $5,000 a .01038550 working interest in the Safari 1-33 well
located on 620 acres in Section 33-19N-21W Ellis County.

2. In return for the sum of $35,980 we purchased a 3% working interest in the
Alan 1-11 well located on 320 acres in Section 11-10N-23W Beckham County.

3. We also purchased a 1 1/2% working interest in the Amanda 1-22 well for
$2,800 and is located on 320 acres in Section 22-21N-6W, Garfield County.

4. For the sum of $2,800 we purchased a 1 1/2% working interest in the Albert
1-22 well located in Section 22-31N-6W, Garfield County.

5. A 3% working interest was purchased for the sum of $19,600 in the Lillie
2-11 well located in Section 11-10N-23W in Beckham County.

6. For the sum of $50,000 we purchased a 25% working interest in the Soddie
well located in Section 2-12N-12W Caddo County.

7. We purchased a 20% working interest in the Josephus well located on 640
acres in Ellis County for $174,680.

All seven wells are currently producing natural gas however each of the wells
was recently drilled and have not been working long enough to allow our
consulting engineers to estimate the available provable reserves. Although the
wells are currently producing natural gas there can be no assurance that they
will continue to do so.

In addition to the above described wells we have purchase working interests in
two lease tracts; one located in Ellis County, Oklahoma constituting a 37.5%
working interest in 1,505 acres and the second located in Canadian County,
Oklahoma, constituting a 20% working interest in 240 acres. The leases were
purchased for the sum of $83,700 and $19,200 respectively.

ITEM 3. LEGAL PROCEEDINGS

         There are no material pending legal proceedings, other than ordinary
routine litigation incidental to the business, to which we are a party or of
which our property is the subject.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         No matter was submitted during the forth quarter of the fiscal year
ended November 30, 2000, to a vote of securities holders, through the
solicitation of proxies or otherwise.



                                       8
<PAGE>


ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         Prices for our common stock are currently quoted in the over the
counter Bulletin Board maintained by the NASD and our ticker symbol is TBXR.
Prices for our stock were approved for quotation on the Bulletin Board on
January 27, 2001. The following table shows the high and low bid information for
our common stock for each quarter during which prices for our common stock have
been quoted.

<Table>
<Caption>

QUARTER                                    LOW BID    HIGH BID
-------                                    -------   ---------
<S>                                        <C>       <C>

Quarter ending February 29, 2001           $ 2.80       $ 2.80

Quarter ending May 31, 2001                $ 1.20       $ 1.41

Quarter ending August 31, 2001             $ 1.65       $ 1.69

Quarter ending November 30, 2001           $ 1.01       $ 1.03
</Table>

         The above information was obtained from the NASD. Because these are
over-the-counter market quotations, these quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commissions and may not represent
actual transactions.

         We have approximately 2,240 shareholders of our common stock as of
November 30, 2001.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE TWELVE MONTHS ENDED NOVEMBER 30, 2001 AND 2000

         The Company incurred an operating loss of $1,179,465 for the fiscal
year ended November 30, 2001 as compared to a net loss of $1,454,544 for fiscal
year ended November 30, 2000. The decrease in our operating loss of $275,079,
18.9%, is discussed below.

         REVENUE - Total revenue decreased $22,594, 09.3%, from $243,992 for the
twelve months ended November 30, 2000 to $221,398 for the twelve months ended
November 30, 2001.

         During the twelve months ended November 30, 2001, the Company generated
approximately $170,709 in revenue from oil and gas sales as compared to $52,070
for the twelve months ended November 30, 2000. The $118,639 increase is
attributable to the production from the five new wells located in the Anadarko
Basin of Oklahoma. Revenue from the East Texas properties remained approximately
the same as the previous year.

         Joint venture income for the twelve months ended November 30, 2000 was
$191,922 while there is none for the year ending November 30, 2001. The reason
for the decrease is that the Company did not sponsor a joint venture partnership
since May of 1999. The Company purchased the partnership interests in the joint
venture during the previous fiscal year that was recorded as an increase in the
oil and gas properties. The current efforts of the Company to continue to
develop its existing properties preclude it from sponsoring joint venture
partnerships at this time.



                                       9
<PAGE>

         Gains on the sale of oil and gas properties of $50,689 for the current
fiscal year resulted from the Company selling a partial interest in two
prospects. There were no sales of Company interests for a profit in the previous
fiscal year.

         EXPENSES - Total expenses decreased $297,673, 17.5%, from $1,698,536
for the twelve months ended November 30, 2000 to $1,400,863 for the twelve
months ended November 30, 2001.

         Lease operating expenses and taxes decreased $13,467 form $163,967 for
the twelve months ended November 30, 2000 to $150,500 for the twelve months
ended November 30, 2001. The decrease is primarily the result of the shut-in of
producing wells and a reduction in work over costs.

         There were no joint venture costs in the current year while there was
$191,922 for the same period last year. The reason for the decrease is that the
Company did not sponsor a joint venture partnership since May of 1999. As stated
above, during the previous year, the Company purchased the partnership interests
in the joint venture. Costs in excess of joint venture revenue that totaled
$143,034 were recorded as an increase in the Company's basis in the partnership.

         General and administrative expenses increased $9,458 from $1,044,206
for the twelve months ended November 30, 2000 to $1,053,664 for the twelve
months ended November 30, 2001. The increase is primarily due to higher
professional and consulting fees, and public relations costs offset by decreased
property taxes, office expenses and compensation and employee related costs.

         Geological and engineering fees of $101,857 for the twelve months ended
November 30, 2000 relate to reserve studies for a proposed acquisition. The
acquisition was not consummated, and the fees were charged to operations.

         During the previous fiscal year, the Company recorded a loss of
$100,000 on the lapse of its option to purchase additional shares of Southern
Oil & Gas Company, Inc. On January 6, 1999 the Company entered into an option
agreement, as amended, to purchase all of Southern Oil & Gas Company's
(Southern) stock for $1,000,000. Southern is an oil and gas company that owns
interests in approximately 435 wells, primarily in north east Louisiana, that
produce on average approximately 3,500 barrels of oil each month. Under the
terms of the agreement, TBX paid $100,000 for the option to purchase the shares
that ran up to and including March 31, 2000. When the Company originally entered
into this agreement with Southern, it also entered into an operations and
management contract (the "Operations Contract") providing that TBX was to be
paid the profits of Southern that exceeded $40,000 each month. Because the
amounts TBX have been paid under the Operations Contract have not been at the
levels anticipated, TBX decided not to increase its ownership interest in
Southern and wrote-off the option amount. The Company currently holds a 20%
interest in Southern.



                                       10
<PAGE>

         Loss on sale and abandonment of oil and gas properties was $52,791 for
the twelve months ended November 30, 2000.The Company disposed of two wells and
abandoned one well in the previous fiscal year. Management is of the opinion
that the costs of re-working, developing and producing these wells would have
exceeded the potential revenues from the wells. Management elected to transfer
all of the Company's interest in two wells to a third party for nominal
consideration and plugged and abandoned one well. The net book value of the
wells was $52,791, which was charged to operations.

         Property and equipment impairment charge for the current fiscal year is
$135,000. The loss is recognized for two properties located in East Texas. The
loss was determined by comparing the future undiscounted cash flows, as shown in
the most recent engineering report, to the Company's net book value. The
impairment is the result of the significant decrease in oil and gas prices over
the past year. There was no impairment of oil and gas properties during the
previous year.

         Depreciation, depletion and amortization increased $17,906 from $43,793
for the twelve months ended November 30,2000 to $61,699 for the twelve months
ended November 30, 2001. The increase is due to a change in estimate. Future
charges to depreciation, depletion, and amortization may be substantially higher
as a result of increased production or changes in reserve prices and/or
quantities.

         OTHER INCOME - Interest income for the twelve months ended November 30,
2000 was $25,327 as compared to $7,604 for the same period this year. The
Company's cash balances have declined during the past year thus the decrease of
$14,923 in interest income. Management fee income of $28,000 for the fiscal year
ended November 30, 2000 relates to administrative services performed by TBX
Resources for several companies in which Mr. Burroughs is a shareholder. No
services were performed in the current fiscal year.

         PROVISION FOR INCOME TAXES - During the twelve months ended November
30, 2000, the Company reversed tax benefits totaling $235,742 that corresponded
to losses sustained in prior years. No tax benefits were recorded for the twelve
months ended November 30, 2001 and 2000.

         NET LOSS - The Company's net loss decreased $465,098, 28.4%, from
$1,636,959 for the twelve months ended November 30, 2000 to $1,171,861 for the
twelve months ended November 30, 2001. The decrease in the loss is attributable
to an increase in operating income of $118,639, plus the elimination of one-time
charges for acquisition engineering services of $101,857, the write-off of
Southern Oil & Gas Co. options in the amount of $100,000 and the reversal of the
Company's previous income tax benefits of $235,742, offset by a charge for
impairment of properties totaling $135,000 plus all other income and expense
items that net to $43,860.

         Effective December 1, 1999, our president, Mr. Tim Burroughs received
stock options good for five years from the date of issuance to purchase up to
500,000 shares of the Company's common stock a year at a price which shall not
be greater than 50% of the average bid price for the shares during the previous
quarter in which they are exercised. The fair value of the options will be
recorded as compensation expense when a reasonable estimate of such costs are
available or the amount Mr. Burroughs has to pay is known. Based on the formula
for calculating the purchase price, material charges to compensation expense may
be recorded in future years. As of November 30, 2001, Mr. Burroughs has the
option to purchase 1,000,000 shares of the Company's common stock.



                                       11
<PAGE>

TBX RESOURCES, INC.
LIQUIDITY AND CAPITAL RESOURCES

         As of November 30, 2001, we had total assets of $3,729,248 of which net
oil and gas properties amounted to $3,052,130 or 82.1% of the total assets. The
Company's accumulated losses through November 30, 2001 totaled $4,404,267. At
November 30, 2001, we had $111,451 in cash and money market accounts and $94,572
in working capital. The ratio of current assets to current liabilities is 1.5:1;
the Company has no long-term debt. As of November 30, 2001, the Company's
stockholders' equity was a positive $3,729,248.

         We have funded its operations primarily from cash generated from the
sale of its common stock. The Company's cash used for operating activities
totaled $611,690 and $920,217 for the twelve months ended November 30 2001 and
November 30, 2000, respectively. Cash provided by the disposal of oil and gas
properties totaled $91,400 in the current year while in the previous year the
amount was $2,062. The Company spent $150,000 in the current year for the
non-exclusive option to purchase 3,231 acres in Montague County, Texas for
development in the Barnett Shale. The Company's capital investments totaled
$380,916 and $236,876 for the twelve months ended November 30, 2001 and November
30, 2000, respectively. Cash used for legal and professional services for the
Company's public registration and the change in other assets totaled $112,535
for the twelve months ended November 30, 2000. Cash provided by the sale of
common stock totaled $852,811 during the twelve months ended November 30, 2001
while cash provided by the sale of common stock totaled $1,589,308 for the same
period last year.

         In December 2001, TBX Resources completed its 6th successful
development well by staying the course with the business plan for development of
approximately 80 wells in the next two to five years on the 76,800 acres in the
Anadarko Basin in Oklahoma. Based on the initial production figures from the
most recently completed well which is the Vici prospect near Vici, Oklahoma. The
independent geologist has informed us he considers the well to be a material
discovery. We estimate that this one well may generate net income of
approximately $30,000 per month however, there can be no assurance that such
level of production will continue now or in the future as the well is a new
well and current data may prove to be unreliable. TBX Resources anticipates
drilling nine additional wells on this property to potentially increase our
income base.

         Our principal source of funds in the near future will be from the
continued sale of our common stock. On October 1, 2001 the Company renewed its
Regulation S Stock Purchase agreement with Citizen Asia Pacific Limited (CAPL),
a Hong Kong company. The shares are being offered and sold in reliance upon an
exemption from registration requirements of the United States federal and state
securities laws under Regulation S promulgated under the Securities Act. The
agreement stipulates that CAPL will use its best efforts to purchase from the
Company 500,000 restricted shares of common stock (renewable for additional
amounts) at a per share price which shall be 38% of the moving ten day average
closing prices of the Company's shares of common stock as quoted on the OTC
Bulletin Board or other public trading market. We have the right to accept or
reject subscriptions for the shares, in whole or in part. The agreement runs
from October 1, 2001 to September 30, 2002. We expect that the principal use of
funds in the foreseeable future will be for operations and developing existing
oil and gas properties and/or the acquisition of new properties.

CAUTIONARY STATEMENT

         Statements in this report which are not purely historical facts,
including statements regarding the Company's anticipations, beliefs,
expectations, hopes, intentions or strategies for the future, may be
forward-looking statements within the meaning of Section 21E of the Securities
Act of 1934, as amended. All forward-looking statements in this report are based
upon information available to us on the date of the report. Any forward-looking
statements involve risks and uncertainties that could cause actual results or
events to differ materially from events or results described in the
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements.


                                       12
<PAGE>

ITEM 7. FINANCIAL STATEMENTS.

                               TBX RESOURCES, INC.
                   INDEX TO FINANCIAL STATEMENTS AND SCHEDULES



<Table>
<Caption>

                                                                                             PAGE
                                                                                             ----

<S>                                                                                          <C>
Independent Accountant's Audit Report Dated February 26, 2001                                F-2

Balance Sheet - November 30, 2001                                                            F-3

Statements of Operations-
         For The Twelve Months Ended November 30, 2001 and 2000                              F-4

Statements of Cash Flows-
     For The Twelve Months Ended November 30, 2001 and 2000                                  F-5

Statements of Changes in Stockholders' Equity-
     For The Twelve Months Ended November 30, 2001 and 2000                                  F-6

Supplemental Statements of Noncash Investing and Financing Activities-
     For The Twelve Months Ended November 30, 2001 and 2000                                  F-7

Notes to Audited Financial Statements                                                        F-8
</Table>


                                       F-1
<PAGE>



                              JAMES A. MOYERS, CPA
                    10300 NORTH CENTRAL EXPRESSWAY, SUITE 530
                               DALLAS, TEXAS 75231
                        (214) 987-4687 FAX (214) 987-4693


To the Board of Directors and Stockholders
TBX Resources, Inc.
Dallas, Texas


                      INDEPENDENT ACCOUNTANT'S AUDIT REPORT


         I have audited the accompanying balance sheet of TBX Resources, Inc. as
of November 30, 2001 and the related statements of operations, changes in
stockholders' equity, cash flows and noncash investing and financing activities
for each of the two years in the period ended November 30, 2001 and 2000, as
required by Item 310(a) of Regulation S-B. All information included in these
financial statements is the responsibility of the management. My responsibility
is to express an opinion on these financial statements based on my audit work.

         I have conducted my audit in accordance with generally accepted
auditing standards in the United States. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts disclosed in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. I believe that my audit provides a reasonable
basis for my opinion.

         In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of TBX Resources, Inc.
as of November 30, 2001, and the results of its operations, cash flows and
noncash investing and financing activities for each of the two years in the
period ended November 30, 2001 and 2000, in conformity with generally accepted
accounting principles in the United States.


February 26, 2002

                                                     James A. Moyers, CPA



                                       F-2
<PAGE>
                               TBX RESOURCES, INC.
                                  BALANCE SHEET
                                NOVEMBER 30, 2001
                                    (Audited)


<Table>
<S>                                                                   <C>

                                   ASSETS
CURRENT ASSETS
  Cash and equivalents                                                $    111,451
  Trade accounts receivable                                                 11,685
  Prepaid consulting fees                                                  169,442
                                                                      ------------
     Total current assets                                                  292,578
                                                                      ------------
EQUIPMENT AND PROPERTY
  Office furniture, fixtures and equipment                                  72,086
  Oil and gas properties, using successful efforts accounting
     Proved properties and related equipment                             3,306,978
                                                                      ------------
                                                                         3,379,064
  Less accumulated depreciation, depletion and amortization                320,149
                                                                      ------------
        Total equipment and property                                     3,058,915
                                                                      ------------
INVESTMENT IN SOUTHERN OIL & GAS COMPANY, INC                              200,000
                                                                      ------------
PURCHASE OPTION AND OTHER                                                  177,755
                                                                      ------------
     TOTAL ASSETS                                                     $  3,729,248
                                                                      ============
                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Trade accounts payable                                              $    116,056
  Taxes payable                                                             21,770
  Accrued compensation                                                      60,000
                                                                      ------------
     Total current liabilities                                             197,826
                                                                      ------------
COMMITMENTS AND CONTINGENCIES                                                   --

STOCKHOLDERS' EQUITY
  Preferred stock- $.01 par value; authorized 10,000,000 shares;
  no shares outstanding                                                         --
  Common stock- $.01 par value; authorized 100,000,000 shares;
  19,874,389 shares outstanding at November 30, 2001                       198,744
  Additional paid-in capital                                             7,736,945
  Accumulated deficit                                                   (4,404,267)
                                                                      ------------
    Total stockholders' equity                                           3,531,422
                                                                      ------------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                       $  3,729,248
                                                                      ============
</Table>


The accompanying notes are an integral part of these financial




                                      F-3
<PAGE>

                               TBX RESOURCES, INC.
                            STATEMENTS OF OPERATIONS
                                    (Audited)


<Table>
<Caption>

                                                                           For the Twelve Months Ended
                                                                                  November 30,
                                                                       ----------------------------------
                                                                           2001                   2000
                                                                       ------------          ------------
<S>                                                                    <C>                   <C>
REVENUES:
  Oil and gas sales                                                    $    170,709          $     52,070
  Joint venture income                                                           --               191,922
  Gain on sale of oil and gas properties                                     50,689                    --
                                                                       ------------          ------------
    Total revenues                                                          221,398               243,992
                                                                       ------------          ------------

EXPENSES:
  Lease operating and taxes                                                 150,500               163,967
  Joint venture costs and expenses                                               --               191,922
  General and administrative                                              1,053,664             1,044,206
  Geological and engineering                                                     --               101,857
  Loss on option to purchase shares of Southern Oil & Gas Company                --               100,000
  Loss on sale and abandonment of oil and gas properties                         --                52,791
  Oil and gas properties impairment                                         135,000                    --
  Depreciation, depletion and amortization                                   61,699                43,793
                                                                       ------------          ------------
    Total expenses                                                        1,400,863             1,698,536
                                                                       ------------          ------------
OPERATING LOSS                                                           (1,179,465)           (1,454,544)
OTHER INCOME (EXPENSE):
  Interest and other                                                          7,604                25,327
  Management fees                                                                --                28,000
                                                                       ------------          ------------
LOSS BEFORE PROVISION FOR INCOME TAXES                                   (1,171,861)           (1,401,217)
  Provision for income taxes                                                     --              (235,742)
                                                                       ------------          ------------
NET LOSS                                                               $ (1,171,861)         $ (1,636,959)
                                                                       ============          ============
NET LOSS PER COMMON SHARE, BASIC AND DILUTED                           $      (0.07)         $      (0.10)
                                                                       ============          ============
Weighted average common shares used in per share calculations:
  Basic and Diluted                                                      17,719,962            15,983,593
                                                                       ============          ============
</Table>


The accompanying notes are an integral part of these financial statements.





                                      F-4
<PAGE>

                              TBX RESOURCES, INC.
                            STATEMENTS OF CASH FLOWS
                                   (Audited)


<Table>
<Caption>

                                                                  For the Twelve Months Ended
                                                                         November 30,
                                                                 ----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:                                2001             2000
                                                                 ------------    ------------
<S>                                                              <C>             <C>
  Net loss                                                       $ (1,171,861)   $ (1,636,959)
  Adjustments to reconcile net loss to net cash
  provided (used) by operating activities:
    Depreciation, depletion and amortization                           61,699          43,793
    Impairment of oil and gas                                         135,000              --
    Reversal of long-term deferred income tax benefit                      --         179,073
    Allowance for doubtful accounts                                    27,557              --
    Issuance of common stock for consulting services                  383,347         171,000
    Issuance of common stock to employees                              55,700          10,500
    Loss on option to purchase shares of Southern Oil & Gas Co.            --         100,000
    (Gain) loss on disposal of oil & gas properties                   (50,689)         52,791
    Changes in operating assets and liabilities:
       Decrease (increase) in:
        Trade receivables                                                 804          (9,522)
        Affiliate receivables                                          70,531           8,916
        Other receivables                                              25,334          98,221
        Deferred income tax benefit                                        --          56,669
        Other current assets                                         (135,288)        (33,744)
       Increase (decrease) in:
        Trade accounts payable                                         42,646         (17,881)
        Taxes payable                                                 (24,518)         (8,131)
        Accrued payroll and other                                     (31,952)         65,057
                                                                 ------------    ------------
Net cash provided by (used) for operating activities                 (611,690)       (920,217)
                                                                 ------------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Cash provided by the disposal of oil and gas properties              91,400           2,062
  Cash used for the option to purchases oil and gas leases           (165,070)             --
  Cash used in the acquisition and development
    of oil and gas properties                                        (380,916)       (236,876)
                                                                 ------------    ------------
                                                                     (454,586)       (234,814)
                                                                 ------------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Cash used for legal and professional services for public
    registration                                                           --        (112,535)
  Cash provided by the issuance of common stock                       852,811       1,589,308
                                                                 ------------    ------------
                                                                      852,811       1,476,773
                                                                 ------------    ------------
NET INCREASE (DECREASE) IN CASH                                      (213,465)        321,742
Cash at beginning of period                                           324,916           3,174
                                                                 ------------    ------------
Cash at end of period                                            $    111,451    $    324,916
                                                                 ------------    ------------
</Table>


The accompanying notes are an integral part of these financial





                                      F-5
<PAGE>

                               TBX RESOURCES, INC.
                 STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                    (Audited)


<Table>
<Caption>

                                                                                                                TOTAL
                                                   COMMON STOCK             ADDITIONAL        ACCUM-            STOCK-
                                           ----------------------------      PAID-IN          ULATED            HOLDERS'
                                              SHARES         PAR VALUE       CAPITAL          DEFICIT           EQUITY
                                           ------------    ------------    ------------     ------------     ------------
<S>                                        <C>             <C>             <C>              <C>              <C>
BALANCE NOVEMBER 30, 1999                    14,559,027    $    145,590    $  4,422,318     $ (1,595,447)    $  2,972,461
Issuance of common stock for cash             1,144,531          11,445       1,577,863               --        1,589,308
Issuance of common stock for properties         648,792           6,488         355,223               --          361,711
Issuance of common stock for services           126,000           1,260         180,240               --          181,500
Costs for public registration                        --              --        (145,562)              --         (145,562)
Net loss for period                                  --              --              --       (1,636,959)      (1,636,959)
                                           ------------    ------------    ------------     ------------     ------------
BALANCE NOVEMBER 30, 2000                    16,478,350         164,783       6,390,082       (3,232,406)       3,322,459
Issuance of common stock for cash             1,445,104          14,451         838,360               --          852,811
Issuance of common stock for services         1,950,935          19,510         508,503               --          528,013
Net loss for period                                  --              --              --       (1,171,861)      (1,171,861)
                                           ------------    ------------    ------------     ------------     ------------
BALANCE NOVEMBER 30, 2001                    19,874,389    $    198,744    $  7,736,945     $ (4,404,267)    $  3,531,422
                                           ============    ============    ============     ============     ============
</Table>


The accompanying notes are an integral part of these financial statements.




                                      F-6
<PAGE>

                              TBX RESOURCES, INC.
                  SUPPLEMENTAL STATEMENT OF NONCASH INVESTING
                            AND FINANCING ACTIVITIES
                                   (Audited)

<Table>
<Caption>

                                                  For the Twelve Months Ended
                                                          November 30,
                                                     2001            2000
                                                 ------------    ------------


<S>                                              <C>             <C>
Fair value of oil and gas properties acquired    $         --    $    361,711
Issuance of common stock for                               --        (361,711)
                                                 ------------    ------------
                                                 $         --    $         --
                                                 ============    ============
</Table>


The accompanying notes are an integral part of these financial



                                      F-7
<PAGE>



1. BUSINESS ACTIVITIES:

TBX Resources, Inc., a Texas Corporation, was organized on March 24, 1995. The
Company's principal business activity is acquiring and developing oil and gas
properties. The Company owns 53 wells and operates another 7 wells located in
East Texas. Of the 53 wells located in East Texas, 8 wells have been designated
as injection wells and 3 wells have been designated as water supply wells. In
addition, 8 wells are currently producing oil. The remaining 34 wells are either
currently shut-in, scheduled to be brought back into production or are
designated as injection wells. Also, the Company has an interest in 7 producing
wells in Oklahoma and one additional well that is currently being drilled in
Oklahoma. In addition, TBX Resources has an interest in 76,800 acres that is 120
sections of prime increased density development leases in the Anadarko Basin in
Oklahoma. The Company's philosophy is to acquire properties with the purpose of
reworking existing wells and/or drilling development wells to make a profit. The
Company has sponsored joint venture development partnerships for the purpose of
developing oil and gas properties for profit.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

CASH EQUIVALENTS

The Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.

OIL AND GAS REVENUE

Oil and gas revenue is reported when production is sold. The Company accrues
revenue for oil and gas production sold but not paid.

JOINT VENTURE INCOME AND EXPENSES

The Company sponsors joint venture partnerships. Income from the ventures is
recorded as funds are transferred from the partnership to the Company. The
programs are undertaken on a turnkey basis. Accordingly, all monies raised are
recorded as joint venture income and all expenses to acquire, rework and operate
the wells are charged to joint venture costs and expenses. Profit is recorded as
earned. A provision for loss is reported in the period program cost is estimated
to exceed turnkey revenue.

OFFICE FURNITURE, FIXTURES AND EQUIPMENT

These assets are stated at the Company's cost and depreciated on an accelerated
basis over five to seven years. Maintenance and repair costs are expensed when
incurred, while major improvements are capitalized.

OIL AND GAS PROPERTIES

The Company follows the successful efforts method of accounting for oil and gas
exploration and development expenditures. Under this method, costs of successful
exploratory wells and all development wells are capitalized. Costs to drill
exploratory wells that do not find proved reserves are expensed. In the absence
of a determination as to whether the reserves that have been found can be
classified as proved, TBX Resources carries the costs of drilling such an
exploratory well as an asset for no more than one year following completion of
drilling. If, after that year has passed, a determination that proved reserves
have been found cannot be made, TBX Resources assumes that the well is impaired,
and charges its costs to expense. Significant costs associated with the
acquisition of oil and gas properties are capitalized. Upon sale or abandonment
of units of property or the disposition of miscellaneous equipment, the cost is
removed from the asset account, the related reserves relieved of the accumulated
depreciation or depletion and the gain or loss is credited to or charged against
operations.

Both proved and unproved oil and gas properties that are individually
significant are periodically assessed



                                      F-8
<PAGE>



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

OIL AND GAS PROPERTIES (CONTINUED)

for impairment of value, and a loss is recognized at the time of impairment by
providing an impairment allowance. Other unproved properties are amortized based
on the Company's experience and average holding period. Capitalized costs of
producing oil and gas properties, after considering estimated dismantlement and
abandonment costs and estimated salvage values, are depreciated and depleted by
the unit-of-production method. Support equipment and other property and
equipment are depreciated over their estimated useful lives.

On the sale or retirement of a complete unit of a proved property, the cost and
related accumulated depreciation, depletion, and amortization are eliminated
from the property accounts, and the resultant gain or loss is recognized. On the
retirement or sale of a partial unit of proved property, the cost is charged to
accumulated depreciation, depletion, and amortization with a resulting gain or
loss recognized in income.

On the sale of an entire interest in an unproved property for cash or cash
equivalent, gain or loss on the sale is recognized, taking into consideration
the amount of any recorded impairment if the property had been assessed
individually. If a partial interest in an unproved property is sold, the amount
received is treated as a reduction of the cost of the interest retained.

Maintenance and repairs are charged to expense; betterments of property are
capitalized and depreciated as described below.

DEPRECIATION, DEPLETION AND AMORTIZATION

The Company provides for depreciation, depletion and amortization of its
investment in producing oil and gas properties on the unit-of-production method,
based upon independent reserve engineers' estimates of recoverable oil and gas
reserves from the property.

INVESTMENT IN SOUTHERN OIL & GAS COMPANY, INC.

The Company's investment in Southern Oil & Gas Company, Inc. is accounted for by
the cost method. The impact of the cost versus equity method (the preferred
method) of accounting for the investment is not considered material.

INCOME TAXES

The Company computes income tax expense using Statement of Financial Accounting
Standards (SFAS) No. 109, "Accounting for Income Taxes". SFAS 109 requires the
measurement of deferred tax assets for deductible temporary differences and
operating loss carry forwards and of deferred tax liabilities for taxable
temporary differences. Measurement of current and deferred tax liabilities and
assets is based on provisions of enacted law. The effects of future changes in
tax laws and rates are not anticipated.

EARNINGS PER SHARE (EPS)

The Company computes earnings per share using Statement of Financial Accounting
Standards (SFAS) No. 128, "Earnings Per Share". Basic earnings per common share
is calculated by dividing net income or loss by the average number of shares
outstanding during the year. Diluted earnings per common share is calculated by
adjusting outstanding shares, assuming conversion of all potentially dilutive
stock options. The computation of diluted EPS does not assume conversion,
exercise, or contingent issuance of shares that would have an antidilutive
effect on earnings per common share. Antidilution results from an increase in
earnings per share or reduction in loss per share from the inclusion of
potentially dilutive shares in EPS calculations.



                                      F-9
<PAGE>

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

STOCK-BASED COMPENSATION

The Company recognizes compensation expense for options granted to employees
using Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting
for Stock-Based Compensation". Under SFAS 123, compensation to be recognized by
the Company for stock options issued is measured by the difference between the
quoted market price of the stock at the measurement date less the amount the
employee is required to pay.

ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.

NEW ACCOUNTING PRONOUNCEMENT

On August 15, 2001, the FASB issued Statement No. 143, Accounting for Asset
Retirement Obligations. Initiated in 1994 as a project to account for the costs
of nuclear decommissioning, the FASB expanded the scope to include similar
closure or removal-type costs in other industries that are incurred at any time
during the life of an asset. That standard requires entities to record the fair
value of a liability for an asset retirement obligation in the period in which
it is incurred. When the liability is initially recorded, the entity capitalizes
a cost by increasing the carrying amount of the related long-lived asset. Over
time, the liability is accreted to its present value each period, and the
capitalized cost is depreciated over the useful life of the related asset. Upon
settlement of the liability, an entity either settles the obligation for its
recorded amount or incurs a gain or loss upon settlement. The standard is
effective for fiscal years beginning after June 15, 2002, with earlier
application encouraged. Accordingly, TBX Resources will adopt this standard on
December 1, 2002. TBX Resources has not completed the process of determining the
impact of adopting the standard.

3. ACCUMULATED OPERATING LOSSES:

At November 30, 2001, the Company had accumulated losses of $4.4 million. The
Company's ability to continue as a going concern is based on future plans and
past successes of its officers. The Company is attempting to raise addition
equity funds that will be used to develop existing oil and gas properties and/or
purchase additional properties. The ability of the Company to attain profitable
operations is dependent on the Company operating in an environment of stable
prices and increasing production over current levels. These financial statements
have been prepared on the basis that the Company will realize its assets and
discharge its liabilities in the normal course of business.

4. AFFILIATED PARTY TRANSACTIONS:

   a. The operator of the East Texas oil and gas leases, Gulftex Operating, Inc.
      is an affiliates of TBX Resources. Mr. Burroughs, a major stockholder and
      president of the Company, is the sole shareholder of Gulftex. TBX
      Resources paid Gulftex $9,600 this year and $8,200 last year for
      activities associated with operating the wells.

   b. Management fee income of $28,000 for the fiscal year ended November 30,
      2000 relates to administrative services performed by TBX Resources for
      several companies in which Mr. Burroughs is a shareholder. No services
      were performed in the current fiscal year.




                                      F-10
<PAGE>

4. AFFILIATED PARTY TRANSACTIONS (CONTINUED):

   c. Mr. Burroughs is a shareholder in a company named Marketing Research
      Group, Inc. During the year ended November 30, 2000 the Company paid
      Marketing Research Group consulting fees of approximately $135,000 for
      services rendered. No services were performed in the current fiscal year.

5. INVESTMENT IN SOUTHERN OIL & GAS COMPANY, INC:

On January 6, 1999 the Company entered into an option agreement, as amended, to
purchase all of Southern Oil & Gas Company's (Southern) stock for $1,000,000.
Southern is an oil and gas company that owns interests in approximately 435
wells, primarily in north east Louisiana, which wells produce on average
approximately 3,500 barrels of oil each month. Under the terms of the agreement,
TBX paid $100,000 for the option to purchase the shares that ran up to and
including March 31, 2000. When the Company originally entered into this
agreement with Southern, it also entered into an operations and management
contract (the "Operations Contract") providing that TBX was to be paid the
profits of Southern that exceeded $40,000 each month. Because the amounts TBX
have been paid under the Operations Contract have not been at the levels
anticipated, TBX decided not to increase its ownership interest in Southern and
wrote-off the option amount. The Company currently holds a 20% interest in
Southern.

6. PURCHASE OPTION AND OTHER:

Included in the total is $150,000 for the Company's non-exclusive option to
purchase five prospects covering 3,323 acres in Montague County, Texas. The
option will expire in January 2003.

7. COMMITMENTS AND CONTINGENCIES:

   a. The Company executed an Employment Agreement effective December 1, 1999
      with Mr. Tim Burroughs, President, for 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, plus bonuses of up
      to 10% for material changes to the Company for example, when the Company
      completes a major acquisition, funding or financing. For the twelve months
      ended November 30, 2001 the Company accrued a bonus of approximately
      $55,200. For the twelve months ended November 30, 2000 the Company paid a
      bonus of approximately $126,000. In addition, under the terms of the
      employment agreement, Mr. Burroughs received stock options good for five
      years from the date of issuance to purchase up to 500,000 shares of the
      Company's common stock a year for five years at a price which shall not be
      greater than 50% of the average bid price for the shares during the
      previous quarter in which the options are exercised. The options are
      cumulative which allow Mr. Burroughs to exercise his options through
      November 30, 2004 for a total of 2,500,000 shares. As of November 30,
      2001, Mr. Burroughs has the option to purchase 1,000,000 shares of the
      Company's common stock. The fair value of the options will be recorded as
      compensation expense when a reasonable estimate of such costs are
      available or the amount Mr. Burroughs has to pay is known. Based on the
      formula for calculating the purchase price, material charges to
      compensation expense may be recorded in future years.

   b. On July 12, 2000 the Company entered into a joint venture agreement with
      Getty Natural Gas Corporation (Getty) to participate in the drilling and
      development of oil properties owned by PAX



                                      F-11
<PAGE>


7. COMMITMENTS AND CONTINGENCIES (CONTINUED):

      Energy, LLC (PAX). Under the terms of the agreement the Company could
      acquire 50% of Getty's right to acquire, drill, and participate in 76,800
      acres which is 120 sections of prime increased density development leases
      in the Anadarko Basin in Oklahoma. As part of the agreement with Getty,
      the Company issued 110,000 of restricted common shares. TBX Resources
      assigned a $50,000 value for the shares and increased property and
      equipment for that amount. The Company terminated its agreement with Getty
      on October 20, 2000 and entered into a joint venture agreement directly
      with PAX. The agreement ran from December 12, 2000 until December 31,
      2001. As part of the agreement, TBX issued 55,000 share of common stock in
      January 2001 and another 55,000 shares in July 2001. The shares are in
      lieu of payment of administrative overhead fees. The Company expects to
      renew the agreement with PAX under similar terms and conditions by the end
      of the first quarter of 2002.

   c. The Company is obligated for $19,726 under a new lease agreement for rent
      of its current office space that terminates on August 31, 2002. Rent
      expense for the year ended November 30, 2000 is $27,950.

   d. Gulftex Operating is the bonded operator for TBX Resources and has
      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.

8. AFFILIATED OIL AND GAS PARTNERSHIPS:

   The Company sponsored the formation of the Bethany Field Joint Venture for
   the purpose of conducting oil and gas development and production activities
   on approximately 229 acres in Panola County, Texas. During the previous year,
   the Company purchased the partnership interests. The Company's common stock
   was used to purchase the interests that were valued at $1.00 per share for
   each dollar invested in the partnership. The transaction totaled $309,417
   that the Company recorded as an addition to property and equipment. Prior
   year costs in excess of Bethany Field revenue were recorded as an increase in
   the Company's basis in the partnership. The Company's interest in the
   partnership was increased by $143,034 and was recorded as an addition to
   property and equipment. Also, the Company issued common shares to former
   partners in earlier joint ventures to correct number of shares previously
   issued. The Company issued 229,375 common shares that were recorded at par
   value since the oil and gas properties to which they relate were previously
   recorded at their fair value. The Company increased property and equipment by
   $2,294.

9. IMPAIRMENT OF OIL AND GAS PROPERTIES:

   An impairment loss of $135,000 has been recognized for two properties located
   in East Texas and included as a component of operating expenses. The
   impairment loss was determined by comparing the future undiscounted net cash
   flows, as shown in the most recent engineering report, to the Company's net
   book value pursuant to FASB Statement No. 121.




                                      F-12
<PAGE>

10. STOCKHOLDERS' EQUITY:

    a.  The Company amended its Articles of Incorporation on July 11, 2001 to
        grant the Company the authority to issue 10,000,000 of the par value of
        $0.01 (one cent) each all of which shares shall be known as preferred
        stock. The shares of preferred stock have no preemptive or other
        subscription rights, have no conversion rights and are not subject to
        redemption. No personal liability should attach to the ownership of TBX
        preferred stock. In the event of a liquidation of TBX Resources, the
        preferred shareholders, if any, would be entitled to their proportionate
        part of the assets of TBX Resources, but only after the satisfaction of
        all secured and unsecured creditors. No shares of preferred stock are
        outstanding at November 30, 2001.

    b.  On October 1, 2001 the Company renewed its Regulation S Stock Purchase
        agreement with Citizen Asia Pacific Limited (CAPL), a Hong Kong company.
        The shares are being offered and sold on reliance of an exemption from
        registration requirements of the United States Federal and state
        securities laws under Regulation S promulgated under the Securities Act.
        The agreement stipulates that CAPL will use its best efforts to purchase
        from the Company 500,000 restricted shares of common stock (renewable
        for additional amounts)at a per share price which shall be 38% of the
        average closing prices of the Company's shares of common stock as quoted
        on the OTC Bulletin Board or other public trading market. The Company
        has the right to accept or reject subscriptions for the shares, in whole
        or in part. The agreement runs to September 30, 2002.

    c.  Options to purchase shares of common stock are not included in the
        computation of diluted earnings per share because the effect would be
        antidilutive.

11. INCOME TAXES:

    Due to continued losses sustained by the Company, net deferred tax assets
    totaling $235,743 were written-off in the previous fiscal year. The
    components of federal income taxes for the current and previous fiscal year
    are as follows:

<Table>
<Caption>

                                                    2001                2000
                                                ------------       ------------
<S>                                             <C>                <C>
Current tax benefit                             $    473,900       $    666,416
Valuation allowance                                 (473,900)          (666,416)
                                                ------------       ------------
    Net income tax benefit                      $        -0-       $        -0-
                                                ============       ============
</Table>

    At November 30, 2001, the Company has Federal tax loss carry forwards of
    approximately $5,250,000 available to offset future taxable income. The
    Federal tax loss carry forwards expire in varying amounts from 2010 to 2020.

12. SUBSEQUENT EVENT:

    In December 2001, the Company completed a development well on the Vici
    prospect just west of Vici, Oklahoma in the Anadarko Basin. Initial
    production was such that the Company is planning to drill up to nine
    additional development wells with its joint venture partners. The Company
    currently has from 20% to 37.5% working interest in this prospect.



                                      F-13
<PAGE>

13.  SUPPLEMENTARY OIL AND GAS INFORMATION -UNAUDITED:

<Table>
<Caption>

                                                                          November 30,
                                                                     2001                2000
                                                                 ------------       ------------
<S>                                                              <C>                <C>
Capitalized Costs Relating to Oil and Gas
Producing Activities:
Property (acreage costs)- Proved                                 $    939,751       $    840,008
Producing assets                                                    2,367,227          2,067,126
                                                                 ------------       ------------
                                                                    3,306,978          2,907,134
Less: accumulated depreciation, depletion and amortization            254,848             68,584
                                                                 ------------       ------------
Net Capitalized Costs                                            $  3,052,130       $  2,838,550
                                                                 ============       ============
Costs Incurred in Property Acquisition,
Exploration and Development Activities:
Property acquisition costs                                       $     99,743       $     98,951
Exploration costs                                                     281,172                 --
Development costs                                                          --            500,036
                                                                 ------------       ------------
Total                                                            $    380,915       $    598,987
                                                                 ============       ============
Results of Operations for Producing Activities:
Oil and gas sales                                                $    170,709       $     52,070
Gain on sale of properties
                                                                       50,689                 --
Production costs
                                                                     (150,500)          (182,094)
Loss on sale and abandonment of properties                                 --            (52,791)
Depreciation, depletion and amortization                              (53,034)           (31,056)
Impairment of oil and gas properties due to changing prices          (135,000)                --
                                                                 ------------       ------------
                                                                     (117,136)          (213,871)
Income tax benefit                                                         --                 --
                                                                 ------------       ------------
Results of Operations Excluding General and Administrative,
Geological and Engineering, and Joint Venture Activities         $   (117,136)      $ ( 213,871)
                                                                 ============       ============
</Table>



                                      F-14
<PAGE>

13.  SUPPLEMENTARY OIL AND GAS INFORMATION-UNAUDITED (CONTINUED):

OIL AND GAS RESERVE QUANTITIES

An independent petroleum engineer determined estimated reserves and related
valuations for the East Texas properties. Estimates of proved reserves are
inherently imprecise and are subject to revisions based on production history,
results of additional exploration and development and other factors. Proved
reserves are reserves judged to be economically producible in future years from
known reservoirs under existing economic and operating conditions. Proven
developed reserves are expected to be recovered through existing wells,
equipment and operating methods. Sufficient production information is not
available to prepare an adequate reserve report for five newly drilled and
successful Oklahoma wells. The Company has varying interests in the wells and
the reserve quantities would not materially affect the Company's total estimated
reserves and valuations at this time.

Following is a summary of the changes in estimated proved developed and
undeveloped oil and gas reserves of the Company, which are located in East
Texas, for the years ended November 30, 2001 and 2000:

<Table>
<Caption>

                                                Oil                 Gas
                                               (BBL)               (MCF)
                                           ------------       ------------
<S>                                        <C>                <C>
Proved reserves December 1, 1999              1,253,433          4,955,833
Revisions to previous estimates                (398,318)        (3,499,918)
Production                                       (4,089)                --
Sales, transfers and retirements                (25,164)                --
                                           ------------       ------------
    Proved reserves November 30, 2000           825,862          1,455,915
Revisions to previous estimates                 (66,624)           (37,911)
Production                                       (4,381)                --
sales, transfers and retirements                (21,000)                --
                                           ------------       ------------
    Proved reserves November 30, 2001           733,857          1,418,004
                                           ============       ============

Proved developed reserves:
    November 30, 1999                           503,532                 --
    November 30, 2000                           311,735                 --
    November 30, 2001                           254,857                 --
</Table>

STANDARDIZED MEASURE OF DISCOUNTED CASH FLOWS RELATING TO PROVED OIL AND GAS
RESERVES

Statement of Financial Accounting Standards No. 69 prescribes guidelines for
computing a standardized measure of future net cash flows relating to estimated
proven reserves. The Company has followed these guidelines, which are briefly
discussed in the following paragraph.

Future cash inflows and future production and development costs are determined
by applying year-end prices for 2001 of $20.00/bbl and $2.50/MCF and for 2000,
$30.00/bbl and $6.25/MCF and costs to the estimated quantities of oil and gas to
be produced. Estimated future income taxes are computed by using statutory rates
including consideration for previously legislated future statutory depletion
rates. The resulting future net cash flows are reduced to present value amount
by applying a 10% annual discount factor. The assumptions used to compute the
standardized measure are those prescribed by the Financial



                                      F-15
<PAGE>

13. SUPPLEMENTARY OIL AND GAS INFORMATION-UNAUDITED (CONTINUED):

Accounting Standards Board and, as such, do not necessarily reflect the
Company's expectations of actual revenues to be derived from those reserves or
their present worth. The limitations inherent in the reserve quantity estimation
process, as discussed previously are equally applicable to the standardized
measure computations since these estimates are the basis for the valuation
process. Presented below is the standardized measure of discounted future net
cash flows relating to proved oil reserves as of November 30, 2001 and 2000.

<Table>
<Caption>

                                                        2001               2000
                                                    ------------       ------------
<S>                                                 <C>                <C>
Future cash inflows                                 $ 18,222,160       $ 33,877,620
Future production costs                               (8,366,225)       (10,895,240)
Future development costs                              (3,835,412)        (3,849,872)
Future income tax expense                             (2,046,298)        (6,505,053)
                                                    ------------       ------------
    Future net cash flows                              3,972,225         12,627,455
10% annual discount for estimated
    timing of cash flows                              (1,913,421)        (6,517,030)
                                                    ------------       ------------
Standardized measure of discounted future
    net cash flows relating to proved reserves      $  2,058,804       $  6,110,426
                                                    ============       ============
</Table>

The following reconciles the change in the standardized measure of discounted
future net cash flow:

<Table>
<S>                                                                      <C>
December 1, 1999                                                         $ 7,448,164
Increase (decrease) due to:

Sales of oil and gas produced, net of production costs                       164,497
Net changes in prices and production costs                                 6,026,291
Net change in future development costs                                       534,333
Revisions to previous quantity estimates                                  (9,063,292)
Net change from sales, transfers and disposals of minerals in place          (64,569)

Accretion of discount                                                       (133,774)
Net change in income taxes                                                   967,357
Other                                                                        231,419
                                                                         -----------
    November 30, 2000                                                      6,110,425

Sales of oil and gas produced, net of production costs                       (20,209)
Net changes in prices and production costs                                 5,007,659

Net change in future development costs                                         6,965
Revisions to previous quantity estimates                                    (962,783)

Net change from sales, transfers and disposals of minerals in place          (10,116)

Accretion of discount                                                       (191,342)
Net change in income taxes                                                 2,217,559

Other                                                                        (84,036)
                                                                         -----------
    November 30, 2001                                                    $ 2,058,804
                                                                         ===========
</Table>



                                      F-16
<PAGE>

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE.

         Not applicable.


ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS: COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT.

         Our current executive officers and directors, their ages and present
positions with TBX Resources are identified below. Our directors hold office
until the annual meeting of the shareholders following their election or
appointment and until their successors have been duly elected and qualified. Our
officers are elected by and serve at the pleasure of our Board of Directors.

<Table>
<Caption>

                                 NAME                     AGE                    POSITION
<S>                                                       <C>          <C>

                            Tim Burroughs                  42          President and Director

                            Joe A. Ayres                   72          Chairman of the Board of Directors

                           John O. Clayton                 71          Director

                           Sherri Cecotti                  37          Secretary/Treasurer
</Table>

         TIM BURROUGHS is the President, and founder of TBX Resources, Inc. Mr.
Burroughs has been our President and Chairman of the Board of Directors since
our company's inception in 1995. Prior to founding our company, Mr. Burroughs
worked for several Dallas/Ft. Worth area based energy companies. Mr. Burroughs
also studied business administration at Texas Christian University in Ft. Worth,
Texas.

         In addition to serving as the President of our Company, Mr. Burroughs
is also the President of Petroleum Holdings, Inc., Marketing Research Group,
Inc. and Sweetwater Land & Oil Co. These companies were all organized by Mr.
Burroughs in 1997 to participate in various opportunities in the oil and gas
industry. However, since the organization of these companies, Mr. Burroughs has
decided to not aggressively pursue through these companies the business he
originally intended and has instead spent the majority of his professional time
devoted to our business. In the future, Mr. Burroughs expects to spend little or
no time on the business of these other companies. Mr. Burroughs is also the sole
shareholder of Gulftex Operating, Inc. an oil and gas operating company which
performs services on behalf of TBX and from which Mr. Burroughs benefits
financially. See "Certain Relationships and Related Transactions."



                                       13
<PAGE>

         On May 17, 2000, the Texas Securities Commissioner ordered that the
exemption provided under Section 5.O of the Texas Securities Act in connection
with the offer for sale and sale of the common stock of our company was
suspended, meaning that no securities dealer shall offer for sale or sell our
common stock in the State of Texas while this suspension is in effect. A copy of
the order issued by the Texas Securities Commissioner has been filed under the
EDGAR system as an attachment to an 8-k filing made by us on July 24, 2000,
reference to which 8-k is made for all purposes.

         On July 31, 2000, the Texas Securities Commissioner ordered that the
above described order of suspension of exemption provided under Section 5.O of
the Texas Securities Act be lifted and that Mr. Burroughs and our company be
ordered to comply with an undertaking attached to the July 31, 2000, order. A
copy of the July 31, 2000, order and related exhibits is attached to this
Registration Statement as an exhibit, to which exhibit reference is made for all
purposes.

         JOE A. AYRES, who was elected to be the Chairman of our Board of
Directors in August, 2000, has been retired since 1993. During that time to
present, Mr. Ayres has occasionally served as a consultant to the U.S.
Departments of Navy and Justice. Prior to his retirement, Mr. Ayres served as
the vice president - product development for Vought Aircraft Company. While at
Vought Aircraft Company and its predecessor, LTV, Mr. Ayres served as a design
engineer through a series of increasingly responsible engineering positions. Mr.
Ayres is a graduate of the University of Texas at Austin and has done graduate
work at Southern Methodist University.

         JOHN O. CLAYTON, who was elected to be a Director of our company in
August, 2000, has served as president and director or Economy Supply Company,
Economy Supply Company of Austin, Economy Supply Company of Irving, Economy
Supply Company of Dallas, Economy Supply Company of San Antonio and Economy
Supply Company of Waco for the period from 1965 to 1991. All of these companies
are generally involved in the construction and plumbing supply business. Since
1991, Mr. Clayton has served as the secretary, treasurer and director of all of
the above named companies. Mr. Clayton received BSC and MBA degrees from Texas
Christian University

         SHERRI CECOTTI is the Secretary-Treasurer and recently joined our
company in February 2002. Prior to joining our company Ms. Cecotti was employed
by the Expo Design Center/Home Depot, from 1999 to 2001 as an assistant store
manager in their central installation office. From 1992-1998 Ms. Cecotti was
operations manager for Marshall Fields in Dallas, Texas.


ITEM 10. EXECUTIVE COMPENSATION

         The following table sets forth the compensation awarded to, earned by,
or paid to the executive officers named:

<Table>
<Caption>

            NAME AND POSITION           YEAR        ANNUAL SALARY            BONUS
<S>                                     <C>       <C>                    <C>

            Tim Burroughs               2000      $   150,000.00         $ 126,000(1)
            President                   2001      $   150,000.00         $  55,200


            Christine Coley             2000      $    42,000.00(2)
            Secretary/Treasurer         2001      $    60,000.00

</Table>

         (1) Mr. Burroughs' contractual salary amount to which he was entitled
in 1999 was $100,000. However, Mr. Burroughs deferred part of his salary in 1999
with the amount he was actually paid in 1999 being 37,000. To remedy this
underpayment of Mr. Burroughs' salary, through August 31, 2000, Mr. Burroughs
has been paid $126,000 in cash bonuses.

         Effective December 1, 1999, we entered into an employment agreement
with our President, Mr. Burroughs, whereby Mr. Burroughs shall receive stock
options good for five years from the date of issuance to purchase up to 500,000
of our common stock each year at a price which shall not be greater than 50% of
the average bid price for our common stock during the previous year.



                                       14
<PAGE>

         (2) Ms. Coley was issued 50,000 shares during the second fiscal quarter
of 2000 in line of cash compensation.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

          SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS

         The following table sets forth the stock ownership of the officers,
directors and shareholders holding more than 5% of the common stock of TBX
Resources as of August 31, 2000:

<Table>
<Caption>

                         TITLE OF CLASS           NAME AND ADDRESS OF       AMOUNT OWNED    PERCENT OF CLASS
                                                         OWNER
<S>                                          <C>                            <C>             <C>
                       Common Stock          Tim Burroughs(1)                  1,200,000          .0532%
                                             12300 Ford Road
                                             Suite 194
                                             Dallas, Texas 75234

                       Common Stock          John O. Clayton(2)
                                             12300 Ford Road
                                             Suite 194
                                             Dallas, Texas 75234                 109,000          .0048%

                       Common Stock          Joe A. Ayres(3)
                                             12300 Ford Road
                                             Suite 194
                                             Dallas, Texas 75234                  74,998          .0033%

                       Common Stock          Burroughs Family Trust(4)
                                             12300 Ford Road
                                             Suite 194
                                             Dallas, Texas 75234               5,000,000          22.18%

                       Common Stock          Christine Coley
                                             12300 Ford Road
                                             Suite 194
                                             Dallas, Texas 75234                 100,000         0.0044%
</Table>

(1) Effective December 1, 1999, we entered into an employment agreement with our
President, Mr. Burroughs, whereby Mr. Burroughs shall receive stock options good
for five years from the date of issuance to purchase up to 500,000 shares of our
common stock each year at a price which shall not be greater than 50% of the
average bid price for our common stock during the previous year. This right to
purchase cumulates so that if Mr. Burroughs does not purchase the shares to
which he is entitled from a year, that amount of shares that are not purchased
is added to the previous number of shares that Mr. Burroughs may purchase. The
result is that Mr. Burroughs shall have the right to acquire an additional
2,500,000 shares of our common stock over a five year period. Mr. Burroughs
currently owns 1,500,000 shares of our common stock and is also currently
entitled to purchase 1,000,000 additional shares pursuant to his employment
agreement, which results in Mr. Burroughs owning or being currently entitled to
purchase a total of 2,500,000 shares of our common stock.

(2) John O. Clayton currently owns 99,000 shares of our common stock and is also
currently entitled to purchase 10,000 additional shares pursuant to an agreement
with our company, which results in Mr. Clayton owning or being currently
entitled to purchase a total of 109,000 shares of our common stock. . Mr.
Clayton's options to purchase are exercisable for the period commencing August
4, 2000, and terminating August 4, 2005, and provide that these additional
shares may be acquired on the basis of $2.50 per share of common stock, if
exercised.

(3) Joe A. Ayres currently owns 64,998 shares of our common stock and is also
currently entitled to purchase 10,000 additional shares pursuant to an agreement
with our company, which results in Mr. Ayres owning or being currently entitled
to purchase a total of 74,998 shares of our common stock. Mr. Ayres' options to
purchase are exercisable for the period commencing August 4, 2000, and
terminating August 4, 2005, and provide that these additional shares may be
acquired on the basis of $2.50 per share of common stock, if exercised

(4) The beneficiary of the Burroughs Family Trust is Becca Burroughs, the
daughter of Tim Burroughs, our President.


                                       15
<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         All of the operations conducted in the field on behalf of our company
are conducted by Gulftex Operating, Inc. Our president, Tim Burroughs, owns all
of the common stock of Gulftex Operating, Inc. In the past, no compensation was
paid to Gulftex Operating, Inc. or Tim Burroughs for the ownership of Gulftex
Operating, Inc. or for the management activities conducted by Gulftex Operating,
Inc. However, we have now begun to pay Gulftex Operating, Inc., $800.00 per
month for the activities conducted by Gulftex Operating, Inc., in operating our
wells.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

<Table>
<Caption>

                                      NUMBER             EXHIBIT

<S>                                              <C>
                                       3.1       Amended Articles
                                      10.1       Leases and lease assignments
                                                 for Oklahoma wells and acreage.
                                      10.2       Stock Purchase Agreement
</Table>


(b) We filed the following reports on Form 8-K during the fiscal year ending
November 30, 2001:

1. Report 8K filed on July 20, 2001.



                                       16
<PAGE>

SIGNATURES

         Pursuant to the requirements of Section 13 of 15(a) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Date: February 28, 2002

(Registrant)                               TBX Resources, Inc.

By (Signature and Title):                  /s/ Tim Burroughs
                                           -------------------------------------
                                           Tim Burroughs, President and Director

                                           /s/ Joe Ayres
                                           -------------------------------------
                                           Joe Ayres, Director

                                           /s/ John O. Clayton
                                           -------------------------------------
                                           John O. Clayton, Director

                                       17
<PAGE>


                               INDEX TO EXHIBITS

<Table>
<Caption>
EXHIBIT
NUMBER     DESCRIPTION
------     -----------
<S>        <C>
  3.1       Amended Articles
 10.1       Leases and lease assignments for Oklahoma wells and acreage.
 10.2       Stock Purchase Agreement
</Table>