##### Table of Contents



SECURITY AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
 FORM 10-KSB (Mark One)  þ
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended November 30, 2004 OR  o
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 Commission File No. 0-30746 TBX RESOURCES, INC.  Texas
    
    75-2592165(State of incorporation)
    
    (IRS Employer Identification No.)
 3030 LBJ Freeway, Suite 1320
Dallas, Texas 75234
    
    75234(Address of Principal Executive Office)
    
    Zip Code
 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  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. þ
    
    oYES
    
    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. þ The Companys revenues for the most recent fiscal year were $1,063,753. The aggregate market value of the voting stock held by non-affiliates of the Company on March 11,
2005, was $7,504,059. As of February 29, 2005, the Company had 33,272,537 issued and outstanding shares of common stock.   1




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TABLE OF CONTENTS  ITEM 1. DESCRIPTION OF BUSINESSITEM 2. DESCRIPTION OF PROPERTYITEM 3. LEGAL PROCEEDINGSITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERSITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONITEM 7. FINANCIAL STATEMENTSREPORT OF INDEPENDENT REGISTERED ACCOUNTANTING FIRMITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSUREITEM 8A. CONTROLS AND PROCEEDURESITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS: COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACTITEM 10. EXECUTIVE COMPENSATIONITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSITEM 13. EXHIBITS AND REPORTS ON FORM 8-KITEM 14. CONTROLS AND PROCEDURESITEM 15. PRINCIPAL ACCOUNTING FEES AND SERVICESSIGNATURESCertifications of CEO & CFO Pursuant to Section 302Certifications of CEO & CFO Pursuant to Section 906    Table of Contents  
 ITEM 1. DESCRIPTION OF BUSINESS. BACKGROUND TBX Resources, Inc., was incorporated in the state of Texas in March 1995. Currently, our
primary focus is providing assistance to an affiliate company in the management of its joint
venture activities. In the past we have acquired producing oil and gas properties with
opportunities for future development. Prior to acquiring a property, we analyzed 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 that respond positively to improved production practices and
enhanced recovery techniques, we built an inventory of infield development drilling locations. As of November 30, 2004, our company had total assets of $688,087 of which net oil and gas
properties amounted to $414,877 or 60.2% of our total assets. At November 30, 2004, we had
approximately $8,843 in cash and a negative $317,848 in working capital. Our accumulative losses
through November 30, 2004, totaled $8,747,805. Our revenues for our fiscal year ended November 30,
2004 were $1,063,753 and our net loss for the same period was $831,955. Our ratio of current assets
to current liabilities is 0.3:1; we have no long-term debt. As of November 30, 2004, our
shareholders equity was a positive $243,817. Our company has experienced operating losses over the past several years. However, our
management is projecting a decrease in general and administrative expenses, an increase in joint
venture management fees, an increase in prices obtained for our oil and gas produced and an
increase in our total production, due to more reworking of our wells. Our management believes
that, with the projected lower general and administrative expenses, increases in production, higher
prices for our production, and joint venture management fees our companys financial position
should improve for the fiscal year ending November 30, 2005. However, this improvement 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 mission 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. JOINT VENTURE ACTIVITIES During the third quarter of the previous fiscal year, the Company entered into a management
contract with a company in which Mr. Burroughs is the sole shareholder, Gulftex Operating, Inc.
Under the agreement, the Company performs administrative and drilling supervision services on a
well-by-well basis for a fixed fee. In September of 2002, we obtained an option to purchase oil and gas leases in the Barnett
Shale play in the Fort Worth Basin of Wise County, Texas. In October of the same year, we formed
the Grasslands I, Limited Partnership in which we are acting as the General Partner for the
purpose of acquiring the Wise County acreage for development drilling. The Company has a 20%
interest in the Partnership and is reimbursed on a turnkey basis for 100% of the organization and
offering costs, lease acquisition costs and administrative expenses. 2




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Previously the Company acted as the joint venture manager for 11 Joint Ventures, all of which
were 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 all or a portion of
23 wells located in Gregg, Hopkins, Franklin, Panola and Wood Counties, Texas. Of these 23 wells, 2
wells have been designated as injection 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, 4 wells are currently producing oil. The remaining 17 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 they will begin to produce oil. However, our ability to re-open these wells is dependent upon
obtaining sufficient financing to pay the costs associated with re-opening these wells and
operating the same once re-opened. Also, the Company has an interest in 6 proven wells in Oklahoma.
These wells are located in Ellis, Beckham, Garfield, Caddo and Canadian Counties, Oklahoma. All 6
of the wells are in production for natural gas. Engineering estimates of provable reserves were not
obtained for these wells since their production is minor and will not have a material impact on the
Companys reserve value. 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
sponsor or manage public or private partnerships depending upon the number, size and economic
feasibility of our generated prospects, the level of participation of 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. BUSINESS RISKS Our company 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 the Company 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 3




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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, 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. Our gas
production is 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
occupational 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 3030 LBJ Freeway, Suite 1320, Dallas, Texas 75234, and
pay an average monthly rental of approximately $5,074.00. Our lease runs from February 1, 2004
through July 31, 2009 at a cost of approximately $335,000. As of November 30th, the
Companys continuing obligation under the lease is approximately $302,000. 4




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ITEM 2. DESCRIPTION OF PROPERTY GENERAL. Following is information concerning production from our oil and gas wells, productive
well counts and both producing 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.
More recently, we acquired several wells and acreages in Oklahoma that are described following the
Texas properties below. 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: Name of Field
    
    Gross Producing Well Count
    
    Net Producing Well CountEast Texas Field
    
    0
    
    0Mitchell Creek & Talco Field
    
    1
    
    1Manziel & Quitman Field
    
    3
    
    3
 The following information pertains to our properties as of November 30, 2004 (1): Proved
    
    
    Proved
    
    
    
    
    
    
    Percentage ofProved
    
    
    Proved
    
    
    Developed
    
    
    Developed
    
    
    Current
    
    
    Reserves in FieldReserves:
    
    
    Reserves:
    
    
    Reserves:
    
    
    Reserves:
    
    
    Production:
    
    
    to Total ReservesOil
    
    
    Gas
    
    
    Oil
    
    
    Gas
    
    
    Oil
    
    
    Held by theName of Field
    
    (bbls)
    
    
    (mcf)
    
    
    (bbls)
    
    
    (mcf)
    
    
    (bbls)(1)
    
    
    CompanyEast
Texas
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    oil
    
    
    0Field
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    gas
    
    
    0Mitchell Creek
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    oil
    
    
    2.0& Talco Field
    
    
    494
    
    
    
    0
    
    
    
    494
    
    
    
    0
    
    
    
    350
    
    
    gas
    
    
    0Manziel &
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    oil
    
    
    98.0Quitman Field
    
    
    23,185
    
    
    
    0
    
    
    
    23,185
    
    
    
    0
    
    
    
    425
    
    
    gas
    
    
    0
    PRODUCTIVE WELLS AND ACREAGE Net
    
    
    
    
    
    Total Gross
    
    NetTotal Gross
    
    Productive
    
    Total Gross
    
    Net Productive
    
    Developed
    
    DevelopedGeographic Area
    
    Oil Wells
    
    Oil Wells
    
    Gas Wells
    
    Gas Wells
    
    Acres
    
    AcresEast Texas
Region
    
    21
    
    21
    
    0
    
    0
    
    843.20
    
    838.34
 Notes:  1.
    Total Gross Oil Wells was calculated by subtracting 2 wells designated as Injection Wells
from the 23 wells owned and/or operated by TBX Resources, Inc. as of November 30, 2004.  2.
    Net Productive Oil Wells were calculated by multiplying the working interest held by TBX
Resources, Inc. in each of the 21 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. 5




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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. GEOGRAPHIC AREA
    
    GROSS ACRES
    
    
    NET ACRESEast Texas Region
    
    
    843.20
    
    
    
    838.34
 Note:  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. A more comprehensive study of all properties currently leased by us would
be required to determine precise developmental potential. ANADARKO BASIN-WESTERN OKLAHOMA The Company has an interest in 6 proven gas wells in Oklahoma. These wells are located in
Ellis, Beckham, Garfield, Caddo and Canadian Counties, Oklahoma. All six of the wells are in
production. No additional acreage was purchased in the current fiscal year. We completed a gas
well that is located on our Vici prospect in the first quarter of 2003. The Company has a 13.31%
working interest in the well. In addition to the above described wells we own working interests in two lease tracts; one
located in Ellis County, Oklahoma with a gross acreage interest of 27.5% 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. The Company also has a 3%
interest in 640 acres in Beckham County, Oklahoma. 
 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. We held our annual meeting on November 2, 2004, at which time the stockholders took the
following actions: (a) elected one director, Tim Burroughs, to a one (1) year term or until his successor is duly
elected and qualified; (b) selected James George Somma, CPA, as its independent accountant for the fiscal year
beginning December 1, 2004, and ending November 30, 2005. There were no proposals from stockholders of the Company. 
 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. 6




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QUARTER
    
    LOW BID
    
    
    HIGH BIDQuarter ending February 28, 2004
    
    $
    0.03
    
    
    $
    0.05Quarter ending May 31, 20034
    
    $
    0.02
    
    
    $
    0.04Quarter ending August 31, 2004
    
    $
    0.01
    
    
    $
    0.03Quarter ending November 30, 2004
    
    $
    0.03
    
    
    $
    0.13
 QUARTER
    
    LOW BID
    
    
    HIGH BIDQuarter ending February 29, 2003
    
    $
    0.045
    
    
    $
    0.09Quarter ending May 31, 2003
    
    $
    0.035
    
    
    $
    0.08Quarter ending August 31, 2003
    
    $
    0.040
    
    
    $
    0.08Quarter ending November 30, 2003
    
    $
    0.030
    
    
    $
    0.05
 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, markdown or
commissions and may not represent actual transactions. We have 819 shareholders of record for our common stock as of February 29, 2005. 
 ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS AND PLAN OF OPERATION. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE
TWELVE MONTHS ENDED NOVEMBER 30, 2004 AND 2003 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. RECENT DEVELOPMENTS On November 30, 2004 our president, Tim Burroughs, exercised his options to purchase 2,500,000
shares of the Companys common stock under the terms of his employment contract. The shares were
paid for by reducing the Companys note to Mr. Burroughs by $37,500.During the third quarter of the
previous fiscal year, the Company entered into a management contract with a company in which Mr.
Burroughs is the sole shareholder. Under the agreement, the Company performs administrative and
drilling supervision services on a well-by-well basis for a fee. The Company has earned
approximately $928,087 and incurred costs of approximately $468,817 through November 30, 2004. On
November 30, 2004 the Company wrote down the book value of its East Texas properties by $796,605
based on an independent engineering report that showed a reduction in oil and gas reserves. The
Company reworked 4 wells during the current fiscal year. The Company believes that if more
production data was available, the reserve report would have shown higher reserve values for the
East Texas properties. During the previous fiscal year, the Company recorded a loss on its Talco
Field property in East Texas due to expired leases. The Company wrote-off the costs of the acreage,
wells and related depreciation, depletion and amortization and recorded a loss of approximately
$484,424. Management is of the opinion that the estimated cost of $1 million to re-work and develop
the property will not yield an adequate return on its investment given its limited resources.
Also, by relinquishing title to the property at this time, the Company was able to avoid a remedial
liability estimated to be approximately $200,000. The property was shut-in; accordingly, there were
no income or expense items associated with this property during the current fiscal year. In
addition, during the previous 7




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fiscal year, the Company abandoned its Jefferson Farms prospect in Oklahoma and its Florence
property in East Texas and wrote-off the costs of the acreage, wells and related depreciation,
depletion and amortization and recorded a loss on disposal of approximately $202,893. Jenson Farms
and Florence were non-producing properties; accordingly, there were no income or expense items
associated with these properties during the previous fiscal year. RESULTS OF OPERATIONS The Company incurred a net loss of $831,955 for the fiscal year ended November 30, 2004 as
compared to a net loss of $1,247,713 for fiscal year ended November 30, 2003. The decrease in our
loss of $415,758 or 33.3%, is discussed below. REVENUE  Total revenue increased $624,146, 142.0%, from $439,607 for the twelve months ended
November 30, 2003 to $1,063,753 for the twelve months ended November 30, 2004. During the twelve months ended November 30, 2004, the Company generated approximately $135,666 in
revenue from oil and gas sales as compared to $176,229 for the twelve months ended November 30,
2003. The $40,563 decrease, 23.0%, is attributable to the payment of approximately $52,000 in prior
years oil runs for the correction of an error offset by both increased production and higher oil
prices. The majority of the Texas wells remain shut-in awaiting re-work or the designation as
injection wells. Revenue from the Companys Oklahoma properties are approximately $2,217 in the
current fiscal year and $4,359 in the previous fiscal year. Joint venture management fee income for the twelve months ended November 30, 2004 was $928,087
while there was $263,378 for the year ending November 30, 2003. The $664,709 increase, 252.4%, is
attributable to the following factor. During the third quarter of the previous fiscal year, the
Company entered into a management contract with a company in which Mr. Burroughs is the sole
shareholder. Under the agreement, the Company performs administrative and drilling supervision
services on a well-by-well basis for a fee. The Company has earned $463,270 in the current fiscal
year. In September of 2002, the Company formed and is acting as the general partner for The
Grasslands I, Texas Limited Partnership. The purpose of the partnership is to acquire 2,800 acres
of oil and gas leases in the Barnett Shale play in the Fort Worth Basin for developmental drilling.
There was no earned income from the Grasslands I limited partnership in the current or previous
fiscal year. EXPENSES  Total expenses increased $207,935, 12.4%, from $1,678,261 for the twelve months
ended November 30, 2003 to $1,886,196 for the twelve months ended November 30, 2004. Lease operating expenses and taxes decreased $35,397, 32.6% from $108,507 for the twelve
months ended November 30, 2003 to $73,110 for the twelve months ended November 30, 2004. The
decrease is primarily the result of reduced operating costs during the workover of four East Texas
wells. Joint venture costs and expenses increased $366,745, 374.0%, from $98,072 for the twelve
months ended November 30, 2003 to $464,817 for the current fiscal year. The increase primarily
relates to the addition of four contracts with an affiliated company for the organization and
management of drilling activities of joint venture partnerships (see joint venture management fees
above). General and administrative expenses decreased $247,827, 40.2%, from $616,088 for the twelve
months ended November 30, 2003 to $368,261 for the twelve months ended November 30, 2004. The
decrease of is primarily due to the allocation of $297,572 of general and administrative expenses
to joint venture expenses, lower consulting and legal and fees, public relations costs and contract
services in the amount of $94,158, offset by an increase in payroll related costs and general
office expenses in the amount of $164,847. Loss on expiration of leases and abandonment of oil and gas properties was $687,317 for the
twelve months ended November 30, 2003. The Company recorded a loss on its Talco Field property in
East Texas due to expired leases. The Company wrote-off the costs of the acreage, wells and related
depreciation, 8




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depletion and amortization and recorded a loss of approximately $484,424. Management is of the
opinion that the estimated cost of $1 million to re-work and develop the property will not yield an
adequate return on its investment given its limited resources. Also, by relinquishing title to the
property, the Company was able to avoid a remedial liability estimated to be approximately
$200,000. The property was shut-in; accordingly, there were no income or expense items associated
with this property during the previous fiscal year. In addition, , the Company abandoned its
Jefferson Farms prospect in Oklahoma and its Florence property in East Texas and wrote-off the
costs of the acreage, wells and related depreciation, depletion and amortization and recorded a
loss on abandonment of approximately $186,722 and $16,171, respectively. Both were non-producing
properties; accordingly, there were no income or expense items associated with these properties
during the previous year. Loss on impairment of oil and gas properties was $796,605 in the current fiscal year. There
was no comparable loss in the previous fiscal year. The Company wrote down the value of its East
Texas properties as a result of its most recent engineering report showing lower reserve values.
The Company reworked 4 wells during the current fiscal year. The Company believes that if more
production data was available, the reserve report would have shown higher reserve values for the
East Texas properties. While the Company was obligated to record the lower values, it believes that
the East Texas wells will produce revenue streams greater than that shown in the engineering
report. Depreciation, depletion and amortization increased $15,127, 9.0%, from $168,277 for the twelve
months ended November 30, 2003 to $183,404 for the twelve months ended November 30, 2004. The
increase is due to higher charges for its properties. Future charges to depreciation, depletion,
and amortization may be substantially higher or lower as a result of increased production or
changes in reserve prices and/or quantities. OTHER INCOME AND EXPENSE  Interest income for the twelve months ended November 30, 2004 was
$332 as compared to $734 for the same period last fiscal year. Interest expense was approximately
$10,016 in the current fiscal year and $10,000 in the previous fiscal year that relates to
advances/loans from our president, Tim Burroughs. Other miscellaneous income was approximately $174
in the current fiscal year as compared to $209 in the previous fiscal year. PROVISION FOR INCOME TAXES  No tax benefits were recorded for the twelve months ended
November 30, 2004 and 2003 due to the losses the Company has experienced. NET LOSS  The Companys net loss decreased $415,758 33.3%; from $1,247,713 for the twelve
months ended November 30, 2003 to $831,955 for the twelve months ended November 30, 2004. The
decrease in the loss is attributable to an increase in operating income of $624,146, the reduction
of losses on the disposal of oil and gas properties of $687,317, decreased general and
administrative expenses totaling $247,827 and, lease operating expenses totaling $35,398 offset by
increased joint venture expenses totaling $366,745, loss due to impairment of oil and gas
properties totaling $796,605 and, depreciation depletion, amortization and other totaling $15,580. TBX RESOURCES, INC.LIQUIDITY AND CAPITAL RESOURCES As of November 30, 2004, we have total assets of $688,087 of which net oil and gas properties
amount to $414,877 or 60.2% of the total assets. The Companys accumulated losses through November
30, 2004 totaled $8,747,805. At November 30, 2004, we have $8,843 in cash. The ratio of current
assets to current liabilities is 0.3:1, we have no long-term debt. As of November 30, 2004, our
shareholders equity was a positive $243,817. We have funded operations from cash generated from the sale of common stock, the sale of oil
and gas properties, joint venture fees and loans from affiliates. The Companys cash provided by
operations totaled $284,047 in the current fiscal year while the cash used for operating activities
totaled $123,591 for the twelve months ended November 30, 2003. This represents an improvement of
$407,638 in cash provided 9




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for operating activities. The Companys capital investments totaled $282,641 and $10,856 for
the twelve months ended November 30, 2004 and November 30, 2003, respectively. Cash provided by the
sale of common stock totaled $107,568 during the twelve months ended November 30, 2003. There were
no cash sales of common stock in the current fiscal year. We want to manage more joint venture limited partnerships. As manager of these programs, we
should receive sufficient fees to earn a profit on our work. We expect that fees from this activity
will be our primary source of funds in the near future. Also, the Company reworked three East Texas
wells. We estimate that these wells may generate net income of approximately $10,000 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. In addition, we plan
to re-work of our East Texas wells in the coming year which may increase revenue by approximately
$100,000 to $150,000 a year. However, there can be no assurance that our planned and projected
level of production will materialize in the future. We expect that the principal source of funds in the near future will be from joint venture
management fees and oil and gas revenues and developing our oil and gas properties and/or the
acquisition of new properties. We are also actively pursuing raising capital through private
placement offerings and joint venture drilling programs. Based on the aforementioned plans
management expects to reduce its losses and generate positive cash flows from operations. However,
there can be no assurance that such plans will materialize. In addition, actual results may vary
from managements plans and the amount may be material. 10




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ITEM 7. FINANCIAL STATEMENTS. TBX RESOURCES, INC.
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES PAGEReport of Independent Registered Accounting Firm Dated March 11, 2005
    
    F-2Balance Sheet  November 30, 2004
    
    F-3Statements of Operations-For The Twelve Months Ended November 30, 2004 and 2003
    
    F-4Statements of Cash Flows-For The Twelve Months Ended November 30, 2004 and 2003
    
    F-5Statements of Stockholders Equity-For The Twelve Months Ended November 30, 2004 and 2003
    
    F-6Notes to Audited Financial Statements
    
    F-7
 F-1




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JAMES G. SOMMA, CPA 1000 E. Ash Lane, Suite 1703
Euless, Texas 76039
 The Board of Directors and Stockholders
TBX Resources, Inc.
Dallas, Texas 
 REPORT OF INDEPENDENT REGISTERED ACCOUNTANTING FIRM I have audited the accompanying balance sheet of TBX Resources, Inc. as of November 30, 2004
and the related statements of operations, stockholders equity and cash flows for each of the two
years in the period ended November 30, 2004. These financial statements are the responsibility of
the Companys management. My responsibility is to express an opinion on these financial statements
based on my audit. I have conducted my audits in accordance with the standards of the Public Company Accounting
Oversight Board (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 audits provide 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, 2004, and the results of
its operations and cash flows for each of the two years in the period ended November 30, 2004, in
conformity with accounting principles generally accepted in the United States of America. The Supplementary Information Regarding Oil and Gas Producing Activities on pages F-13 through
F-15 is not a required part of the basic financial statements but is supplementary information
required by the Financial Accounting Standards Board. I have applied certain limited procedures,
which consisted principally of inquiries of management regarding the methods of measurement and
presentation of the supplementary information. However, I did not audit the information and express
no opinion on it. March 11, 2005 James G. Somma, CPA F-2




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##### Table of Contents



TBX RESOURCES, INC.
BALANCE SHEET
NOVEMBER 30, 2004 ASSETSCurrent AssetsCash
    
    $
    8,843Trade accounts receivable
    
    
    17,579Prepaid consulting fees- current portion
    
    
    100,000Total current assets
    
    
    126,422Equipment and PropertyOffice furniture, fixtures and equipment
    
    
    107,164Oil and gas properties, using successful efforts accounting
Proved properties and related equipment
    
    
    1,858,3881,965,553Less accumulated depreciation, depletion and amortization
    
    
    (1,535,098
    )Total equipment and property
    
    
    430,454Prepaid Consulting and Other
    
    
    131,211Total Assets
    
    $
    688,087LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesTrade accounts payable
    
    $
    166,605Loan and advances from affiliates
    
    
    250,326Taxes payable
    
    
    7,583Accrued expenses
    
    
    19,756Total current liabilities
    
    
    444,270Commitments and Contingencies
    
    
    Stockholders EquityPreferred stock- $.01 par value; authorized 10,000,000 shares;
no shares outstanding
    
    
    Common stock- $.01 par value; authorized 100,000,000 shares;
33,272,537 shares outstanding at November 30, 2004
    
    
    332,725Additional paid-in capital
    
    
    8,658,897Accumulated deficit
    
    
    (8,747,805
    )Total stockholders equity
    
    
    243,817Total Liabilities and Stockholders Equity
    
    $
    688,087
 The accompanying notes are an integral part of these financial statements. F-3




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TBX RESOURCES, INC.
STATEMENTS OF OPERATIONS For The Twelve Months EndedNov. 30, 2004
    
    
    Nov. 30, 2003Revenues:Oil and gas sales
    
    $
    135,666
    
    
    $
    176,229Joint venture management fees
    
    
    928,087
    
    
    
    263,378Total revenues
    
    
    1,063,753
    
    
    
    439,607Expenses:Lease operating and taxes
    
    
    73,110
    
    
    
    108,507Joint venture expenses
    
    
    464,817
    
    
    
    98,072General and administrative
    
    
    368,261
    
    
    
    616,088Loss on disposal of oil & gas properties
    
    
    
    
    
    
    687,317Loss on impairment of oil and gas properties
    
    
    796,605
    
    
    
    Depreciation, depletion and amortization
    
    
    183,404
    
    
    
    168,277Total expenses
    
    
    1,886,196
    
    
    
    1,678,261Operating Loss
    
    
    (822,443
    )
    
    
    (1,238,654
    )Other Income (Expense):Interest and other
    
    
    (9,512
    )
    
    
    (9,059
    )Net Loss Before Provision for Income Taxes
    
    
    (831,955
    )
    
    
    (1,247,713
    )Provision for income taxes
    
    
    
    
    
    
    Net Loss
    
    $
    (831,955
    )
    
    $
    (1,247,713
    )Net Loss Per Common Share, Basic and Diluted
    
    $
    (0.03
    )
    
    $
    (0.04
    )Weighted average common shares used in calculations:Basic and diluted
    
    
    30,772,537
    
    
    
    30,772,537
 The accompanying notes are an integral part of these financial statements. F-4




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TBX RESOURCES, INC.
STATEMENTS OF CASH FLOWS For The Twelve Months EndedNov. 30, 2004
    
    
    Nov. 30, 2003Cash Flows From Operating Activities:Net loss
    
    $
    (831,955
    )
    
    $
    (1,247,713
    )Adjustments to reconcile net loss to net cash
flow from operating activities:Loss on the disposal of oil and gas interests
    
    
    
    
    
    
    687,317Loss on impairment of oil and gas properties
    
    
    796,605Depreciation, depletion and amortization
    
    
    183,404
    
    
    
    168,277Non-cash consulting services
    
    
    96,544
    
    
    
    100,000Issuance of stock for debt and services
    
    
    125,500
    
    
    
    17,745Changes in operating assets and liabilities:Decrease (increase) in:Trade receivables
    
    
    (4,695
    )
    
    
    (5,660
    )Affiliate receivables
    
    
    
    
    
    
    25,000Other current assets
    
    
    
    
    
    
    5,662Increase (decrease) in:Accounts payable
    
    
    47,594
    
    
    
    8,440Loans from affiliates
    
    
    (97,584
    )
    
    
    187,910Taxes payable
    
    
    (2,668
    )
    
    
    Accrued expenses
    
    
    19,756
    
    
    
    Deferred income
    
    
    (47,954
    )
    
    
    (70,569
    )Net cash provided by (used) for operating activities
    
    
    284,046
    
    
    
    (123,591
    )Cash Flows From Investing Activities:Cash used for the development of properties
    
    
    (282,641
    )
    
    
    (10,856
    )(282,641
    )
    
    
    (10,856
    )Cash Flows From Financing Activities:Cash provided by the issuance of common stock
    
    
    
    
    
    
    107,568
    
    
    
    107,568Net Increase (Decrease) In Cash
    
    
    1,405
    
    
    
    (26,879
    )Cash at beginning of period
    
    
    7,438
    
    
    
    34,317Cash at end of period
    
    $
    8,843
    
    
    $
    7,438
 The accompanying notes are an integral part of these financial statements. F-5




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TBX RESOURCES, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY Additional
    
    
    Accum-
    
    
    TotalCommon Stock
    
    
    Paid-In
    
    
    ulated
    
    
    Stockholders'Shares
    
    
    Par Value
    
    
    Capital
    
    
    Deficit
    
    
    EquityBalance November 30, 2002
    
    
    26,692,373
    
    
    $
    266,924
    
    
    $
    8,474,386
    
    
    $
    (6,668,137
    )
    
    $
    2,073,173Issuance of common stock for cash
    
    
    3,760,836
    
    
    
    37,608
    
    
    
    69,959
    
    
    
    
    
    
    
    107,567Issuance of common stock for services
    
    
    319,328
    
    
    
    3,193
    
    
    
    14,552
    
    
    
    
    
    
    
    17,745Net loss for period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,247,713
    )
    
    
    (1,247,713
    )Balance November 30, 2003
    
    
    30,772,537
    
    
    
    307,725
    
    
    
    8,558,897
    
    
    
    (7,915,850
    )
    
    
    950,772Issuance of common stock: debt and
compensation
    
    
    2,500,000
    
    
    
    25,000
    
    
    
    100,000
    
    
    
    
    
    
    
    125,000Net loss for period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (831,955
    )
    
    
    (831,955
    )Balance November 30, 2004
    
    
    33,272,537
    
    
    $
    332,725
    
    
    $
    8,658,897
    
    
    $
    (8,747,805
    )
    
    $
    243,817
 The accompanying notes are an integral part of these financial statements. F-6




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TBX RESOURCES, INC.
NOTES TO FINANCIAL STATEMENTS 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 23 wells and
operates another 7 wells located in East Texas. Of the 23 wells located in East Texas, 4 wells are
currently producing oil and 2 wells have been designated as injection wells. The remaining 17
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 6 proven wells 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. In addition, the Company has sponsored and/or managed 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 generally recorded as
funds are transferred from the partnership to the Company. Payments made to the Company in
excess of amounts earned are recorded as deferred income. 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 costs are 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 not been found, 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 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 F-7




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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued): Oil and Gas Properties (continued): on the Companys experience and average holding period. Capitalized costs of producing oil and gas,
prop-
erties, 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. 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. Estimates The preparation of financial statements in conformity with generally accepted accounting
principles re            quires 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. Recent Accounting Pronouncements In December 2003, the SEC issued Staff Accounting Bulletin No. 104, Revenue Recognition (SAB
104), which codifies, revises and rescinds certain sections of SAB No. 101, Revenue Recognition,
in order to make this interpretive guidance consistent with current authoritative accounting and F-8




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Recent Accounting Pronouncements (continued) auditing guidance and SEC rules and regulations. The changes noted in SAB 104 did not have a
a material effect on our financial statements. In December 2003, the Financial Accounting Standards Board (FASB) revised FASB
Interpretation No. 46 (FIN46 (R)), Consolidation of Variable Interest Entities, an
Interpretation of ARB No. 51. FIN 46 (R) requires certain variable interest entities to be
consolidated by the primary beneficiary of the entity if the equity investors in the entity do not
have the characteristics of controlling financial interest or do not have sufficient equity at risk
for the entity to finance its activities without additional subordinated financial support from the
other parties. FIN 46 (R) is effective for all new variable interest entities created or acquired
after December 31, 2003. The adoption of this standard did not have a material impact on our
financial statements, as we have no interest in any variable interest entities. In December 2003, the FASB revised SFAS No. 132 (SFAS 132 (R)). SFAS 132 (R), Employers
Disclosure about Pensions and Other Postretirement Benefitsan amendment of FASB Statements No 87,
88 and 106, requires additional disclosures to those in the original SFAS 132 about the assets,
obligations, cash flows and net periodic benefit cost of defined benefit pension plans and other
defined benefit post retirement plans. SFAS 132 (R) is effective for financial statements with
fiscal years ending after December 15, 2003. The adoption of this standard did not have a material
impact on our financial statements, as we do not offer pension or other postretirement benefits. In March 2004, the Emerging Issues Task Force (EITF) issued EITF 03-1 The Meaning of
Other-Than-Temporary Impairment and its Application to certain Investments (EITF 03-1). EITF03-1
provides guidance for evaluating whether an investment is other-than-temporarily impaired. The
disclosure guidance was effective for other-than-temporary impairment evaluations made in reporting
periods beginning after June 15, 2004 whereas the recognition and measurement guidance has been
deferred. The guidance provided by EITF 03-1 did not have a material impact on our financial
statements, as we do not have any investments that are other-than-temporarily impaired. In November 2004, the FASB issued SFAS No. 151, Inventory Costsan amendment of ARB No. 43,
Chapter 4. (SFAS 151). SFAS 151 amends ARB 43, Chapter 4 to clarify that abnormal amounts of
idle freight, handling costs and spoilage should be recognized as current period charges. SFAS 151
is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. We do
not anticipate that the adoption of this standard will not have a material impact on our financial
statements, as we do not have any inventory costs. In December 2004 the FASB issued a revised Statement 123 (SFAS 123R), Accounting for Stock-Based
Compensation requiring public entities to measure the cost of employee services received in
exchange for an award of equity instruments based on grant date fair value. The cost will be
recognized over the period during which an employee is required to provide service in exchange for
the award  usually the vesting period. The effective date for this statement is as of the first
interim period that begins after June 15, 2005. We do not anticipate that the adoption of this
standard will have a material impact on our financial statements, as we currently do not have stock
based compensation. In December 2004, the FASB issued SFAS No. 152 Accounting for Real Estate Time-Sharing
Transactionsan amendment of FASB statements No. 66 and 67 (SFAS 152). SFAS 152 amends SFAS 66
and 67 to reference the financial accounting and reporting guidance for real estate time-sharing
transactions that is provided in AICPA Statement of Position (SOP) 04-2, Accounting for Real Estate
Time-Sharing Transactions. SFAS 152 is effective for financial statement for fiscal years beginning
after June 15, 2005. We do not anticipate that the adoption of this standard will have a material
impact on our financial statements, as we do not have any real estate time sharing transactions. F-9




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Recent Accounting Pronouncements (continued) In December 2004, FASB issued Statement No. 153, Exchange of Nonmonetary Assets. This statement
addresses the measurement of exchanges of nonmonetary assets and eliminates the exception from
fair value measurement for nonmonetary exchanges of similar productive assets and replaces it
with an
exception for exchanges that do not have commercial substance. A nonmonetary exchange has
commercial substance if the future cash flows of the entity are expected to change significantly as
a result of the exchange. This Statement is effective for periods beginning after June 15, 2005.
The Company does not expect the application of Statement No.153 to have a material impact on out
financial statements, as we do not have any exchanges of nonmonetary assets. 3. ACCUMULATED OPERATING LOSSES: At November 30, 2004, the Company has accumulated losses of approximately $8.7 million. The
Companys ability to continue is based on future plans and past successes of its officers. The
Company is attempting to raise additional equity funds and to provide fee based technical and
management service for joint venture partnerships sponsored by an affiliated company. The ability
of the Company to attain profitable operations is dependent on the Company continuing its fee based
services, 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. (Gulftex) is
an affiliate 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 for both
this year and last year for activities associated with operating the wells. Included in
trade accounts payable at November 30, 2004 is $9,600 due Gulftex for lease operating
expenses.b.
    During the third quarter of the previous fiscal year, the Company entered into a
management contract with Gulftex. Under the agreement, the Company performs administrative
and drilling supervision services on a well-by-well basis for a fee. During previous fiscal
year the Company earned approximately $263,368 and incurred costs of approximately $98,072.
The Company has earned approximately $928,087 and incurred costs of approximately $468,817
in the current fiscal year ended. As of November 30, 2004, Gulftex owes the Company
approximately $8,846 from these activities.c.
    During the previous fiscal year the company paid back approximately $20,000 of a
$40,000 loan from its president, Mr. Tim Burroughs. The Company also owes Mr. Burroughs
$125,000 for a loan from an affiliate in which Mr. Burroughs is the sole shareholder. The
two loans were combined and the Company recorded accrued interest of approximately $10,000
as of November 30, 2003.On November 30, 2004, Mr. Burroughs exercised his option to
purchase 2.5 million shares of the Companys common stock that was paid for by reducing the
amount the Company owes him by $37,500 (see Note 6, Commitments and Contingencies and
Note 9, Stockholders Equity). In addition, the Company accrued interest due Mr. Burroughs
in the amount of $10,016.50 for the current fiscal year. The loan balance as of November
30, 2004 is approximately $126,616 and is payable on demand at an interest rate of 6% per
annum. The loan is secured by the Companys oil and gas properties.d.
    During the previous fiscal year, the Grasslands I partnership advanced the Company
approximately $195,000. The funds were used to fund operations expenses. The Company paid
$9,000 of interest in the previous fiscal year. The Company paid $60,000 of the principal
balance and an additional $33,000 of interest in the current fiscal year. The Company
expects to repay the balance of the loan within the next twelve months (see Note 8,
Affiliated Oil and Gas Joint Venture Partnerships). F-10




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5. PREPAID CONSULTING AND OTHER: On March 7, 2002 the Company executed a professional services agreement with Mr. Samuel Warren,
President of both Warren Drilling, Inc. and Drill Pipe Industries, Inc. Under the terms of the
agreement,
which is to run for five years, the Company is receiving assistance in developing new business
opportunities and strategies, expanding existing operations, and facilitating any other normal
business transactions requested by the Company. The Company compensated Mr. Warren by issuing him
4,271,089 shares of the Companys common stock valued for the purpose of this transaction at
$500,000. The amount is included in prepaid consulting. The Company is amortizing the cost of Mr.
Warrens services over the term of the agreement (5 years). To date, the company has amortized
$275,000 of the contracts value. 6. 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. No bonuses were paid or
accrued for the twelve months ended November 30, 2004 and 2003. 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 per year of the Companys common
stock 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 and allow Mr. Burroughs to exercise his options through November 30,
2004 for a total of 2,500,000 shares. On November 30, 2004, Mr. Burroughs exercised his
option to purchase 2,500,000 shares of the Companys common stock (see Note 9,
Stockholders Equity).b.
    The Company is obligated for $334,900 under a lease agreement for rent of its new
office space in Dallas, Texas. The lease runs from February 1, 2004 through July 31, 2009.
The average lease payment over the term of the lease is approximately $5,074. The actual
lease payment for the current fiscal year is $42,331. Following is a schedule of lease
payments by year: Year
    
    Amount2005
    
    $
    67,7332006
    
    
    67,7332007
    
    
    67,7332008
    
    
    64,0122009
    
    
    34,891$
    302,102
  Rent expense for fiscal year 2004 and 2003 is $42,331 and $30,732, respectively.c.
    Gulftex Operating is the bonded operator for TBX Resources and is responsible for
compliance with the laws and regulations relating to the protection of the environment. While
it is not possible to quantify with certainty the potential impact of actions regarding
environmental matters, particularly any future remediation and other compliance efforts, in
the opinion of management, compliance with the present environmental protection laws will not
have a material adverse affect on the financial condition, competitive position or capital
expenditures of TBX Resources. However, the Companys cost to comply with increasingly
stringent environmental regulations may have an adverse effect on the Companys future
earnings. F-11




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7. AFFILIATED OIL AND GAS JOINT VENTURE PARTNERSHIPS: In October of 2002, the Company formed and is acting as the general partner for the Grasslands I,
Limited Partnership. The purpose of the partnership is to acquire leases for oil and gas
development in the Barnett Shale play in the Fort Worth Basin of Wise County, Texas. The Company is
to be reimbursed on a turnkey basis for organization and offering cost, lease acquisition costs and
administrative expenses. Revenue earned to date is $88,477 offset by expenses of $49,233. (see
Note 4, Affiliated Party Transactions). 8. DISPOSAL OF OIL AND GAS
PROPERTIES AND IMPARIMENT LOSS: The Company wrote-off its investment in the Talco Field property in East Texas in the period. The
Company wrote-off 80% of the costs of the acreage, wells and related depreciation, depletion and
amortization and recorded a loss on the property of $484,424. This was a non-producing property;
accordingly there were no income or expense items associated with this property during the current
fiscal year. The Company retained a 5% overriding interest and a 15% back in interest after payout
to third party investors. In addition, during the previous fiscal year, the Company abandoned its
Jefferson Farms prospect in Oklahoma and its Florence property in East Texas. In this regard the
Company wrote-off the costs of the acreage, wells and related depreciation, depletion and
amortization and recorded a loss on abandonment of $186,722 and $16,171, respectively. The
Jefferson Farms and Florence properties were non-producing properties; accordingly there were no
income or expense items associated with these properties during the current fiscal year. As of November 30, 2004 an impairment loss of $796,605 was recognized for 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. 144. There was no impairment loss in
the previous fiscal year. 9. 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 shares with a 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, 2004.b.
    Mr. Burroughs exercised his option to purchase 2,500,000 shares of the Companys common
stock on November 30, 2004. The options were exercised at a price of $.015 per share for a
total of $37,500 that was paid for by reducing the Companys note payable to Mr. Burroughs.
In addition, the difference between the option price paid and the November 30, 2004 market
price of $.05 per share totaled $87,500 that was charged to compensation expense (see Note
4. c. Affiliated Party Transactions). Mr. Burroughs employment contract was extended for an
additional year or until a new agreement can be executed.c.
    During the previous fiscal year, the Company used the services of consultants who
received 319,328 shares of common stock. The Company recorded the transactions as a $17,745
charge to expense with an offsetting credit to capital.d. On October 3, 2002, we entered into a consulting agreement with Telvest, Inc. Under the
terms of this agreement, Telvest provides advisory services for foreign investments
(Regulation S) for a fee of 3 % of all funds raised. The
agreement ran through January 31, 2003. The Company F-12




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9. STOCKHOLDERS EQUITY (continued): realized approximately $108,000 through the sales of its common stock. 10. INCOME TAXES: The components of federal income taxes for the current and previous fiscal year are as follows: 2004
    
    
    2003Current tax benefit
    
    $
    282,864
    
    
    $
    424,222Valuation allowance
    
    
    (282,864
    )
    
    
    (424,222
    )Net income tax benefit
    
    $
    -0-
    
    
    $
    -0-
 At November 30, 2004, the Company has Federal tax loss carry forwards of approximately $8.7 million
available to offset future taxable income. The Federal tax loss carry forwards expire in varying
amounts from 2012 to 2025. 11. SUPPLEMENTARY OIL AND GAS INFORMATION -UNAUDITED: November 30,2004
    
    
    2003Capitalized Costs Relating to Oil and GasProducing Activities:Property (acreage costs)- Proved
    
    $
    545,571
    
    
    $
    545,571Producing assets
    
    
    1,312,818
    
    
    
    1,030,1911,858,389
    
    
    
    1,576,502Less: accumulated depreciation and depletion
    
    
    1,443,512
    
    
    
    476,663Net Capitalized Costs
    
    $
    414,877
    
    
    $
    1,099,839Costs Incurred in Property Acquisition,Exploration and Development Activities:Property acquisition costs
    
    $
    
    
    
    $
    Exploration costs
    
    
    
    
    
    
    Development costs
    
    
    282,641
    
    
    
    10,856Total
    
    $
    282,641
    
    
    $
    10,856Results of Operations for Producing Activities:Oil and gas sales
    
    $
    135,665
    
    
    $
    176,229Gain (loss) on disposal of properties
    
    
    
    
    
    
    (687,317
    )Production costs
    
    
    (73,110
    )
    
    
    (108,507
    )Depreciation, depletion and amortization
    
    
    (181,530
    )
    
    
    (154,320
    )Impairment of oil and gas properties
    
    
    (796,605
    )
    
    
    (915,579
    )
    
    
    (773,915
    )Income tax benefit
    
    
    
    
    
    
    Results of Operations Excluding Selling, General and
Administrative and Joint Venture Activities
    
    $
    (915,579
    )
    
    $
    (773,915
    )
 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 F-13




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11. SUPPLEMENTARY OIL AND GAS INFORMATION-UNAUDITED (continued): 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. The Company has a minor interest in six producing wells in Oklahoma. The Company has varying interests in the wells and does not have access to sufficient data to prepare an engineering report. The Company believes that 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, 2004 and
2003: Oil
    
    
    Gas(BBL)
    
    
    (MCF)Proved reserves November 30, 2002
    
    
    246,390
    
    
    
    Revisions to previous estimates
    
    
    (74,118
    )
    
    
    Production
    
    
    (3,400
    )
    
    
    Sales, transfers and retirements
    
    
    (65,909
    )
    
    
    Proved reserves November 30, 2003
    
    
    102,963
    
    
    
    Revisions to previous estimates
    
    
    (74,204
    )
    
    
    Production
    
    
    (5,080
    )
    
    
    Sales, transfers and retirements
    
    
    
    
    
    
    Proved reserves November 30, 2004
    
    
    23,679
    
    
    
    Proved developed reserves:November 30, 2002
    
    
    246,390
    
    
    
    November 30, 2003
    
    
    102,963
    
    
    
    November 30, 2004
    
    
    23,679
    
    
    
    
 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 2004 of $34.00/bbl and for 2003, $27.00/bbl 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
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, 2004 and 2003. F-14




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11. SUPPLEMENTARY OIL AND GAS INFORMATION-UNAUDITED (continued): 2004
    
    
    2003Future cash inflows
    
    $
    777,013
    
    
    $
    2,780,000Future production costs
    
    
    (520,433
    )
    
    
    (2,332,824
    )Future development costs
    
    
    
    
    
    
    (6,933
    )Future income tax expense
    
    
    (64,145
    )
    
    
    (489,683
    )Future net cash flows
    
    
    192,435
    
    
    
    950,56010% annual
discount for estimated timing of cash flows
    
    
    (92,369
    )
    
    
    (457,885
    )Standardized measure of discounted future
net cash flows relating to proved reserves
    
    $
    100,066
    
    
    $
    492,675
 Following reconciles the change in the standardized measure of discounted future net cash flow: December 1, 2002
    
    $
    790,460Increase (decrease) due to:Sales of oil and gas produced, net of production costs
    
    
    (10,072
    )Net changes in prices and production costs
    
    
    923,079Net change in future development costs
    
    
    (108,431
    )Revisions to previous quantity estimates
    
    
    (273,134
    )Net change from sales, transfers and disposals of minerals in place
    
    
    (666,716
    )Accretion of discount
    
    
    (45,788
    )Net change in income taxes
    
    
    (133,313
    )Other
    
    
    16,590November 30, 2003
    
    
    492,675Sales of oil and gas produced, net of production costs
    
    
    (29,787
    )Net changes in prices and production costs
    
    
    (249,269
    )Net change in future development costs
    
    
    3,328Revisions to previous quantity estimates
    
    
    (520,163
    )Net change from sales, transfers and disposals of minerals in place
    
    
    Accretion of discount
    
    
    (36,552
    )Net change in income taxes
    
    
    204,258Other
    
    
    35,443November 30, 2004
    
    $
    (100,066
    )
 F-15




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ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE. 
 ITEM 8A. CONTROLS AND PROCEEDURES. As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the Exchange Act), we
carried out an evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures as of December 31, 2004. This evaluation was carried out under the
supervision and with the participation of our Chief Executive. Based upon that evaluation, our
Chief Executive and Financial Officer concluded that our disclosure controls and procedures are
effective in timely alerting management to material information relating to us required to be
included in our periodic SEC filings. There have been no significant changes in our internal
controls or in other factors that could significantly affect internal controls subsequent to the
date we carried out our evaluation. Disclosure controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in our reports filed or submitted under the
Exchange Act is recorded, processed, summarized and reported, within the time periods specified in
the Securities and Exchange Commissions rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that information required
to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive, to allow timely decisions regarding required disclosure. 
 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. NAME
    
    AGE
    
    POSITIONTim Burroughs
    
    
    45
    
    
    President and DirectorSherri Cecotti
    
    
    40
    
    
    Secretary/Treasurer
 TIM BURROUGHS is the President, Chief Financial Officer and founder of TBX Resources, Inc. Mr.
Burroughs has been our President and Chief Financial Officer 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 and Chief Financial Officer of our Company, Mr.
Burroughs is also the President of Marketing Research Group, Inc. and American Eagle Services, Inc.
These companies were all organized by Mr. Burroughs 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. oil and gas operating company
that performs services on behalf of TBX and from which Mr. Burroughs benefits financially. See
Certain Relationships and Related Transactions. 11




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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 2002 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: Name and Position
    
    Year
    
    
    Annual Salary
    
    
    BonusTim Burroughs,
    
    
    2003
    
    
    $
    150,000
    
    
    $
    -0-President
    
    
    2004
    
    
    $
    150,000
    
    
    $
    -0-Sherri Cerotti,
    
    
    2003
    
    
    $
    48,000
    
    
    $
    -0-Secretary/Treasurer
    
    
    2004
    
    
    $
    48,000
    
    
    $
    5,000
 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 quarter. Mr.
Burroughs exercised his option to purchase the common stock on November 30, 2004. 
 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 February 29, 2004: NAME AND ADDRESS OFTITLE OF CLASS
    
    OWNER
    
    AMOUNT OWNED
    
    PERCENT OF CLASSCommon Stock
    
    Tim Burroughs(1)
    
    
    4,065,896
    
    
    
    12.22
    %3330 LBJ FreewaySuite 1320Dallas, TX 75234
 NAME AND ADDRESS OFTITLE OF CLASS
    
    OWNER
    
    AMOUNT OWNED
    
    PERCENT OF CLASSCommon Stock
    
    Tim Burroughs
    
    
    5,000,000
    
    
    
    15.03
    %Family Tr (2)12300 Ford Road, Ste 194Dallas, Texas 75234Common Stock
    
    Samuel Warren
    
    
    3,378,316
    
    
    
    10.15
    %5Cindywood StreetTexarkana, TX 75503
    12




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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 4,065,896 shares of our common stock after exercising his option to purchase 2,500,000 on
November 30, 2004. Mr. Burroughs current contract is extended for an additional year or until a new
contract can be executed in 2005. (2) The beneficiary of the Burroughs Family Trust is Becca Burroughs, the daughter of Tim
Burroughs, our President. 
 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 pay Gulftex Operating, Inc., $800.00 per month for the activities
conducted by Gulftex Operating, Inc., in operating our wells. In addition, During the fourth
quarter of the previous fiscal year, Gulftex Operating contracted with our Company to perform
management and drilling supervision services on a well-by-well basis. The Company anticipates that
it will continue to provide these services for the foreseeable future 
 ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K NUMBER
    
    
    EXHIBITExhibits: None
 
 ITEM 14. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Our President/Chief Financial Officer conducted an evaluation of our disclosure
controls and procedures (as defined in the Securities Exchange Act of 1934 (the
Exchange Act) Rules 13a-14(c)) within 90 days of the filing date of this Annual Report
on Form 10-KSB (the Evaluation Date). Based on the evaluation, our President/Chief
Financial Officer has concluded that as of the Evaluation Date, our disclosure controls
and procedures are effective to ensure that all material information required to be filed
in this Annual Report on Form 10-KSB has been made known to them in a timely fashion. Changes in Internal Controls There have been no significant changes (including corrective actions with
regard to significant deficiencies or material weaknesses) in our internal controls or in
other factors that could significantly affect these controls subsequent to the evaluation
date set forth above. 
 ITEM 15. PRINCIPAL ACCOUNTING FEES AND SERVICES Audit Fees The aggregate fees billed by our independent auditors, for professional services rendered for the
audit of our annual financial statements on Form 10-KSB and the reviews of the financial reports
included in our Quarterly Reports on Form 10-QSB for the years ended November 30, 2004 and 2003
amounted to $45,000 and $46,000, respectively. Tax Fees 13




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The aggregate fees billed by our auditors for professional services rendered for tax compliance,
tax advice and tax planning for the years ended November 30, 2004 and 2003 amounted to $5,000 and
$5,000 respectively. Such services consisted of U.S. federal, state and local tax planning,; review
of federal, state, local income, franchise, and other tax returns; tax advice and assistance
regarding statutory, regulatory or administrative developments. All Other Fees No fees were billed by our auditors for products and services other than those described above
under Audit Fees and Tax Fees for the year ended November 30, 2004 and 2003. Board of Directors Pre-Approval Policies and Procedures In December 2003, the Board of Directors adopted polices and procedures for pre-approving all audit
and non-audit services provided by our independent auditors prior to the engagement of the
independent auditors with respect to such services. Under the policy, our independent auditors are
prohibited from performing certain non-audit services and are pre-approved to perform certain other
non-audit and tax related services provided that the aggregate fees for such pre-approved non-audit
and tax related services do not exceed a pre-set minimum. All audit services, audit-related
services, tax services and other services provided by James G. Somma, CPA have been pre-approved by
the Board of Directors. 99.1 Certification of Chief Executive Officer/Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 
 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to
be signed by the undersigned, hereunto duly authorized. TBX RESOURCES, INC. DATE: March 25, 2005 SIGNATURE:
    
    /s/ Tim BurroughsTIM BURROUGHS, PRESIDENT/CHIEF FINANCIAL OFFICER
 14