10QSB

UNITED STATES SECURITIES EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

þ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDING May 31, 2006

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from                      to                     .

Commission File Number 0-30746

TBX RESOURCES, INC.

(Exact name of small business issuer as specified in its charter)

Texas	75-2592165
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

3030 LBJ Freeway, Suite 1320
Dallas, TX 75234
(Address of principal executive offices)

Issuer’s telephone number: (972) 243-2610

Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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.

     Yes þ No o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

     Yes o No þ

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 3,807,417 on July 1, 2006.

Transitional Small Business Disclosure Format (check one) Yes o No þ

TBX RESOURCES, INC.

Index

	Page #
PART I – Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheet		F-1
May 31, 2006 (Unaudited)
Condensed Consolidated Statements of Operations		F-2
Three and Six Months Ended May 31, 2006 (Unaudited) and 2005 (Restated)
Condensed Consolidated Statements of Cash Flows		F-3
Three and Six Months Ended May 31, 2006 (Unaudited) and 2005 (Restated)
Notes to Condensed Consolidated Financial Statements		F-4
May 31, 2006 (Unaudited)
Item 2. Management’s Discussion and Analysis		3
Item 3. Controls and Procedures		7
PART II – Other Information		8
Item 1. Legal Proceedings
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits
SIGNATURES		8
Employment Agreement
Certification of CEO and CFO Pursuant to Section 302
Certification of CEO and CFO Pursuant to Section 906

2

PART 1 — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TBX RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET
May 31, 2006 (Unaudited)

ASSETS
Current Assets
Cash	$	180,221
Oil and gas revenue receivable		27,932
Total current assets		208,153
Property and equipment, net		1,097
Oil and gas properties (successful efforts method), net		447,020
Other		6,211
Total Assets	$	662,481
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Accounts payable and accrued expenses	$	77,250
Accrued compensation		460,000
Advances from affiliates		84,759
Accounts payable to affiliate		30,548
Asset retirement liability—current portion		106,273
Total current liabilities		758,830
Long-term Liabilities
Asset retirement obligation		63,285
Minority interest		72,000
Commitments and Contingencies (Note 8)
Stockholders’ Deficit
Preferred stock-$.01 par value; authorized 10,000,000; no shares outstanding		—
Common stock-$.01 par value; authorized 100,000,000 shares; 3,807,417 shares issued and outstanding		38,075
Additional paid-in capital		9,926,139
Accumulated deficit		(10,195,848	)
Total stockholders’ deficit		(231,634	)
Total Liabilities and Stockholders’ Deficit	$	662,481

The accompanying notes are an integral part of these condensed consolidated financial statements

F-1

TBX RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	For Three Months Ended						For Six Months Ended
	May 31, 2006			May 31, 2005			May 31, 2006			May 31, 2005
				(Restated)						(Restated)
Revenues:
Oil and gas sales	$	23,296		$	22,403		$	98,526		$	47,266
Joint venture contract fees (related party)		322,000			217,243			472,000			481,330
Total revenues		345,296			239,646			570,526			528,596
Expenses:
Lease operating expense and production taxes		61,687			22,010			105,876			52,103
General and administrative		372,982			153,632			777,801			327,092
Depreciation, depletion, and amortization		19,467			15,709			37,665			36,777
Accretion of asset retirement obligation		4,900			—			9,800			—
Total expenses		459,036			191,351			931,142			415,972
Operating Income (Loss)		(113,740	)		48,295			(360,616	)		112,624
Other Income (Expense)
Interest and other -		—			(1,777	)		—			(3,598	)
Net Income (Loss)	$	(113,740	)	$	46,518			(360,616	)	$	109,026
Net Income (Loss) per common Share, Basic and Diluted	$	(0.03	)	$	0.01		$	(0.09	)	$	0.03
Weighted average common shares used in calculations:
Basic and diluted		3,807,417			3,327,254			3,806,097			3,327,254

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

F-2

TBX RESOURCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	For the Six Months Ended
	May 31, 2006			May 31, 2005
				(Restated)
Cash Flows From Operating Activities:
Net income (loss)	$	(360,616	)		109,026
Adjustments to reconcile net income (loss) to net cash flow from operating activities:
Depreciation, depletion and amortization		37,665			27,052
Accretion of asset retirement obligation		9,800			9,724
Changes in operating assets and liabilities:
Decrease (increase) in:
Trade/affiliate receivables		73,664			(59,332	)
Increase (decrease) in:
Accounts payable and accrued expenses		(7,370	)		103,384
Accounts payable to affiliates		3,332			25,439
Accrued compensation		335,000			—
Other		(5,674	)		20,200
Net cash provided by (used in) operating activities		85,801			28,725
Cash Flows From Investing Activities:
Purchase of oil and gas properties		(37,031	)		—
Net cash used in investing activities		(37,031	)		—
Cash Flows From Financing Activities:
Payments to minority interest holders		(42,000	)		(40,000	)
Advance from affiliate		24,999			3,799
Issuance of Common Stock for Services		20,000			—
Net cash provided by (used in) financing activities		(2,999	)		(36,201	)
Net Increase In Cash		51,769			(7,476	)
Cash at beginning of period		128,452			8,843
Cash at end of period	$	180,221		$	1,367

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

F-3

TBX RESOURCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2006
(Unaudited)

1. BASIS OF PRESENTATION:

          The condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted. However, in the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the periods presented have been made. The results for interim periods are not necessarily indicative of trends or of results to be expected for the full year. These financial statements should be read in conjunction with the financial statements of the Company for the year ended November 30, 2005 (including the notes thereto) set forth in Form 10-KSB.

Principles of Consolidation

          The consolidated financial statements for the three and six months ended May 31, 2006 and 2005 include the accounts of TBX Resources, Inc. and the Grasslands I, L.P., a limited partnership for which TBX serves as the sole general partner. The accounts of Johnson No. A1, Johnson No. A2, Hagansport Unit I and Unit II joint ventures, in which TBX owns interests, are consolidated on a proportionate basis, in accordance with Emerging Issues Task Force Issue No. 00-1 “Investor Balance Sheet And Income Statement Display Under The Equity Method For Investments in Certain Partnerships And Other Ventures.” All significant intercompany balances and transactions have been eliminated.

2. RESTATEMENT OF PRIOR FINANCIAL STATEMENTS:

          The Company has restated financial statements as of and for the three and six months ended May 31, 2005. The restatement was made primarily to reduce compensation expense and to reduce depreciation and depletion as a result of impairment charges recorded in a previous period.

          The impact of such restatement to the financial statements at May 31, 2005, is:

	As of May 31, 2005
Condensed Consolidated Balance Sheet	As Originally Presented		As Restated
Total current assets	$	178,278	$	71,092
Total assets	$	637,217	$	275,181
Total current liabilities	$	332,220	$	243,749
Total liabilities	$	332,220	$	596,887
Accumulated deficit	$	8,686,625	$	9,313,328
Total stockholders’ equity (deficit)	$	304,997	$	321,706

F-4

	For Three Months Ended				For Six Months Ended
	May 31, 2005				May 31, 2005
	As Originally				As Originally
	Presented		As Restated		Presented			As Restated
Condensed Consolidated Statement of Operations
Total revenue	$	224,399	$	239,646	$	498,102		$	528,596
Total expenses	$	197,490	$	191,351	$	433,324		$	415,972
Operating income	$	26,909	$	48,295	$	64,778		$	112,624
Net income	$	25,132	$	46,518	$	61,180		$	109,026
Net income per common share
Basic and Diluted	$	0.01	$	0.01	$	0.02		$	0.03
Condensed Consolidated Statement of Cash Flows
Net cash provided by operating activities					$	61,180		$	28,725
Net cash used by investing activities						—			—
Net cash used by financing activities					$	(5,615	)	$	(36,201	)

Reclassifications

          Certain 2005 balances have been reclassified to conform with the 2006 presentation with no impact on net income.

3. BUSINESS ACTIVITIES:

          TBX Resources, Inc. (“the Company” or “TBX”), a Texas Corporation, was organized on March 24, 1995. The Company’s principal business activity is acquiring and developing oil and gas properties. However, the Company also provides contract services to an affiliate, Gulftex Operating, Inc. (“Gulftex”). The Company’s philosophy is to locate properties with the opportunity 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.

          The Company owns wells located in East Texas and has an interest in wells in Wise County, Texas. Also, the Company has an interest in wells in Oklahoma.

          The financial statements of the Company have been prepared assuming that the Company is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

          The Company conducts substantial transactions with related parties. These related party transactions have a significant impact on the financial condition and operations of the Company. If these transactions were conducted with third parties, the financial condition and operations of the Company could be materially affected.

4.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
	Revenue Recognition

               Joint Venture Contract Fees. A significant portion of the Company’s revenue is derived from contract services provided to Gulftex, a company in which Chief Executive Officer, Mr. Burroughs is the sole shareholder. Under this arrangement, the Company provides lease and project generation services and administrative assistance to Gulftex for

F-5

a fixed fee, with the revenue being recognized at the time the services are completed and the fees are collectible. Progress payments received are deferred until such time as the revenue is earned.

               Oil & Gas Sales. The Company uses the sales method of accounting for oil and natural gas revenues. Under this method, revenues are based on actual volumes of oil and natural gas sold to purchasers. The volumes of gas sold may differ from the volumes to which the Company is entitled based on its interest in the properties. Differences between volumes sold and volumes based on entitlements create gas imbalances. Material imbalances are reflected as adjustments to reported gas reserves and future cash flows. There were no material gas imbalances as of May 31, 2006 and 2005.

Asset Retirement Obligation

          The Company accounts for asset retirement obligations in accordance with SFAS No. 143, “Accounting for Asset Retirement Obligations” (SFAS 143). SFAS 43 requires that the fair value of a liability for an asset retirement obligation (“ARO”) be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. Under the provisions of SFAS 143, asset retirement obligations are capitalized as part of the carrying value of the long-lived asset.

          The following table describes changes to the asset retirement liability during the six months ended May 31, 2006:

Balance, November 30, 2005	$	167,161
Accretion Expense		9,800
Liabilities incurred		—
Liabilities settled		—
Changes in estimates		(7,403	)
Balance, May 31, 2006	$	169,558

Use of 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. Significant estimates include: estimates of proved reserves as key components of the Company’s depletion rate for oil and gas properties; accruals of operating costs; estimates of production revenues; and calculating asset retirement obligations. Because there are numerous uncertainties inherent in the estimation process, actual results could differ materially from these estimates.

Recent Accounting Pronouncements

          In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123 (R)”) which requires companies to recognize in the statement of operations all share-based payments to employees, including grants of employee stock options based on their fair values. Accounting for share-based compensation transactions using the intrinsic method supplemented by pro forma disclosures will no longer be permissible. In April 2005 the SEC issued a ruling that SFAS 123(R) will be effective for annual reporting periods that begin after December 15, 2005. The Company has not yet completed its analysis of the impact of adopting SFAS 123(R).

5. RELATED PARTY TRANSACTIONS:

          The Company has a services contract with Gulftex, a company in which Mr. Burroughs is the sole shareholder. Under the agreement, the Company performs project generation, administrative and drilling supervision services on a well-by-well basis for an agreed upon fee. During the six months ended May 31, 2006, the Company generated $472,000 in revenues from joint venture management fees as compared to $481,330 in revenues from joint venture management

F-6

fees for the six months ended May 31, 2005. During the three months ended May 31, 2006, the Company generated $322,000 in revenues from joint venture management fees as compared to $217,243 in revenues from joint venture management fees for the three months ended May 31, 2005.

          During the six months ended May 31, 2006, the Company received cash advances from affiliates of $25,000.

          Gulftex is the operator of the Company’s East Texas oil and gas leases. Gulftex is an affiliate of TBX Resources. TBX Resources paid Gulftex $4,800 for the six months ended May 31, 2006 and 2005 for activities associated with operating certain wells. TBX Resources paid Gulftex $2,400 for the three months ended May 31, 2006 and 2005 for activities associated with operating certain wells.

          The Company rents a total of 4,105 square feet of office space of which 292 square feet is used gratis by Gulftex.

6. ACCRUED COMPENSATION:

          The Company executed an amended employment agreement effective August 4, 2005 with our President and Chief Executive Officer, Mr. Tim Burroughs, having a term of three years. Under the terms of the agreement, Mr. Burroughs is entitled to receive an annual compensation of $150,000, and other items enumerated in the agreement, plus bonuses of up to 10% for material changes to the Company; for example, when the Company completes a major acquisition, funding or financing. In addition, the Company agreed to issue Mr. Burroughs options in the future to acquire 50,000 shares of common stock per year beginning December 1, 2004 for five years at an exercise price no greater than 50% of the closing price for the shares as of the date of the amendment. As a result, a contingent liability in the amount of $195,000 was recorded as of May 31, 2006, based upon the difference in the fair value of the Company’s common stock on May 31, 2006, and the exercise price of the options to be issued in the future.

          The Company executed an employment agreement effective April 1, 2006 with our Vice President of Investor Relations, Bernard O’Donnell, having a term of one (1) year, which automatically renews unless otherwise terminated as provided in said agreement. Under the terms of the agreement, Mr. O’Donnell is entitled to receive 100,000 shares of TBX common stock upon execution and Board approval of the agreement. In addition, the Company agreed to issue Mr. O’Donnell options to acquire 25,000 shares of common stock per quarter for a period of up to three (3) years at an exercise price equal to the ending bid price of the last market day prior to the date of the option award. As a result, a contingent liability in the amount of $265,000 was recorded as of May 31, 2006 based upon the fair value of the Company’s common stock on May 31, 2006.

7. STOCKHOLDERS’ EQUITY:

          During the six months ended May 31, 2006 the Company issued 5,000 shares of common stock to a consultant. The fair value of the stock of $20,000 was recorded as a component of general and administrative expenses.

8. COMMITMENTS AND CONTINGENCIES:

          On November 30, 2005, the Company entered into an agreement to purchase, by issuance of 800,000 shares of our common stock, a 50% partnership interest in the proposed Six Wells Joint Venture, a Texas joint venture partnership. This purchase requires the approval of Earthwise Energy, Inc., and Energy Partners International, a Texas joint venture (“Energy Partners”), the initial members of the Six Wells Joint Venture. Energy Partners has agreed to contribute $6,000,000 to the Six Wells Joint Venture. The Six Wells Joint Venture is being created for the purpose of drilling six hydrocarbon wells in the geographic area known as the Barnett Shale in Texas. Gulftex will act as the joint venture manager for the Six Wells Joint Venture. As of May 31, 2006, the approval of Energy Partners had not occurred.

          Rent expense for the six months ended May 31, 2006 and 2005 was $17,610 and $17,006, respectively.

F-7

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS

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.

DESCRIPTION OF PROPERTIES

               GENERAL: The following is 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 Hopkins, Franklin, and Wood Counties, Texas. We also have several wells and acreage in Oklahoma.

               PROPERTIES: The following is a breakdown of our properties as of May 31, 2006:

Name of Field	Gross Producing Well Count		Net Producing Well Count
Mitchell Creek		1		.48
Talco		5		2.0
Quitman		3		2.4
Manziel		1		.8
Newark East		2		.7
Bridgeport		1		.25
Carmargo NW		2		.03
Harmon SE		1		.01

3

     The following information pertains to our properties as of May 31, 2006 (in thousands):

					PROVED		PROVED
	PROVED		PROVED		DEVELOPED		DEVELOPED
	RESERVES:		RESERVES:		RESERVES:		RESERVES:
	OIL		GAS		OIL		GAS
NAME OF FIELD	(bbls)		(mcf)		(bbls)		(mcf)
Mitchell Creek		0		0		0		0
Talco		.332		0		.332		0
Quitman		9.946		0		9.946		0
Manziel		11.120		0		11.120		0
Newark East		5.330		30.347		5.330		30.347
Bridgeport		627		2,363		627		2,363
Carmargo NW		1.658		0		1.658		0
Harmon SE		.047		1.292		.047		1.292

     PRODUCTIVE WELLS AND ACREAGE

			Net						Total Gross		Net
	Total Gross		Productive		Total Gross		Net Productive		Developed		Developed
Geographic Area	Oil Wells		Oil Wells		Gas Wells		Gas Wells		Acres		Acres
East Texas Region		10		6.04		0		0		1,172.2		887.54
Wise County		2		.37		2		.35		224		83
Anadarko Basin		4		.29		0		0		480		14

     Notes:

1. Total Gross Oil Wells was calculated by subtracting 5 wells designated as injection wells, 5 wells currently being reworked, and 5 wells, which are either shut-in or inactive from the 31 wells, owned and/or operated by TBX Resources, Inc as of May 31, 2006.

2. Net Productive Oil Wells were calculated by multiplying the working interest held by TBX Resources, Inc. in each of the 16 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.

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 May 31, 2006 had existing wells located thereon; thus all acreage leased by TBX Resources, Inc. may be classified as developed. 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 development potential.

4

     ANADARKO BASIN- WESTERN OKLAHOMA

     No additional working interests were purchased in the current quarter. Four of the six wells we currently hold an interest in are producing gas. 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 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 gross acreage interest of 20% 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.

     OIL AND GAS PARTNERSHIP INTERESTS

     We did not acquire any additional partnership interests in the current quarter. We have a total of 56 partnership units in the Johnson No. 1-H., Johnson No, 2-H and Hagansport Unit Joint Ventures.

     CRITICAL ACCOUNTING POLICIES

     A summary of significant accounting policies is included in Note 2 to the audited financial statements included on Form 10-KSB for the year ended November 30, 2005 as filed with the United States Securities and Exchange Commission. Management believes that the application of these policies on a consistent basis enables the Company to provide useful and reliable financial information about our operating results and financial condition.

     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 may differ from those estimates.

     RESULTS OF OPERATIONS

     For the second quarter ended May 31, 2006 we incurred a net loss of $113,740 as compared to a profit of $61,180 for the same quarter last year. For six months ending May 31, 2006 we incurred a net loss of $360,016 as compared to profit of $45,517 for the same period last year.

     Revenues — The components of our revenues for both three and six months ended May 31, 2006 and 2005 were as follows:

	Three months ended				% increase			Six months ended				% increase
	May 31, 2006		May 31, 2005		(decrease)			May 31, 2006		May 31, 2005		(decrease)
				(restated)							(restated)
Oil & Gas Sales	$	23,296	$	22,403		3.99	%	$	98,526	$	47,266		108.45	%
Joint Venture Contract Revenue		322,000		217,243		48.22	%		472,000		481,330		-1.94	%
	$	345,296	$	239,646		44.09	%	$	570,526	$	528,596		7.93	%

     Our oil and gas sales increased chiefly due to the production from the Johnson 1, Johnson 2, and Hagansport Unit joint ventures. These were acquired in the third quarter so there was no comparable revenue last year. The revenue recorded this quarter related to these joint ventures was approximately $45,000. For the properties we owned last year, there was a significant increase in price for both oil and gas. For the six months ended May 31, 2006, the Company’s

5

share of gas production was 4,062 mcf as compared to 1,552 for the same period ended May 31, 2005. The average price per mcf for natural gas for the six month period ending May 31, 2006 was $6.24 compared to $4.94 per mcf for the same period ending May 31, 2005. The Company’s share of oil production for the period ended May 31, 2006 was 442 bbls compared to 1,419 bbls for the same period ended May 31, 2005. The average price received per bbl by TBX during the first six months ended May 31, 2006 was $52.45 as compared to $39.84 for the same period ended May 31, 2005. For the three months ended May 31, 2006, TBX’s share of oil production was 3516615 at an average price of 49.53 bbl as compared to 7176615 at an average price of $44.21 bbl for the same period ended May 31, 2005. TBX’s share of gas production, for the three months ended May 31, 2006, was 1439 mcf at an average price of $5.17 mcf as compared to 491 mcf at an average price of $5.49 mcf for the same period ended May 31, 2005.

     Joint venture contract revenue is the revenue earned for services that are provided related to the identification of prospects and the formation of joint ventures. TBX has an agreement with Gulftex that states the fee of $150,000 for each joint venture. Revenue is recognized when the services have been provided, and the fees become collectible. In the second quarter of last year two joint ventures were either completed or in-progress as compared to two in the second quarter of this year. Of the two in progress in the second quarter of this year we recognized revenues related to both ($300,000), as the fees were collected.

     Expenses—The components of our expenses for both three and six months ended May 31, 2006 and 2005 were as follows:

					%							%
	Three months ended				Increase			Six months ended				Increase
	May 31, 2006		May 31, 2005		(Decrease)			May 31, 2006		May 31, 2005		(Decrease)
			RESTATED							RESTATED
Lease operating & taxes	$	61,687	$	22,010		180.27	%	$	105,876	$	52,103		103.21	%
General & administrative		372,982		153,632		142.78	%		777,801		327,092		137.79	%
D D & A		19,467		15,709		23.93	%		37,665		37,667		(0.01	)%
Accretion		4,900		0		100.00	%		9,800		—		100.00	%
	$	459,036	$	191,351		139.89	%	$	931,142	$	416,862		123.37	%

     Lease operating expenses as well as DD & A increased as a direct result of the acquisition of the interests in the Johnson 1, Johnson 2, and Hagansport Unit joint ventures. There are no comparable expenses in the prior year since we did not own any portion of these joint ventures in the first and second quarter of last year and had no other producing wells. During the first six months of operations ending 05/31/2006, TBX paid Gulftex $88,074 for lease operating expenses and an additional $4,800 for contract operating. For six months ended 05/31/2005, TBX paid Gulftex Operating $97,928 for lease operating expenses and an additional $4,800 for contract operating. For the three months ended May 31, 2006, TBX paid Gulftex Operating $56,550 for lease operating expenses and $2,400 for contract operating. For the same period ended May 31, 2005 TBX paid Gulftex $35,745 for lease operating expenses and $2,400 for contract operating.

     General and administrative expenses for the three months ended May 31, 2006 includes $165,000 of compensation expense related to the employment agreement we have with our president, Tim Burroughs. The compensation expense differs from the same period in 2005 due to the price of TBX stock and the timing of the options being issued. For the six months ended May 31, 2006 our general and administrative expense include a total of $335,000 of compensation expense including salary and options for our president Tim Burroughs and the vice president Dick O’Donnell.

     LIQUIDITY AND CAPITAL RESOURCES

     The Company had a cash balance of $180,221 at May 31, 2006. Our current ratio at the end of the second quarter this year was .27:1, and we have no long-term debt other than our asset retirement obligation. As of May 31, 2006, our shareholders’ deficit was $231,634.

     We have funded operations from cash generated from joint venture service fees from Gulftex, oil and gas revenue and loans from affiliates. The Company expects to earn and receive $900,000 in the last two quarters of the current fiscal year from service fees from Gulftex related to six future joint ventures. We believe this amount will be sufficient for us to meet our obligations as they become due. The Company’s operations generated approximately $85,801 in cash for the six months ended May 31, 2006. In our 10-KSB for the year ended November 30, 2005 our auditors modified their report to include an explanatory paragraph expressing substantial doubt regarding our ability to continue as a going concern.

6

     PLAN OF OPERATION FOR THE FUTURE

     We plan to provide more contract services to Gulftex during fiscal year 2006. As a contractor to the managing venturer 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. Management estimates that our current wells may generate net revenues of approximately $30,000 per month; however, there can be no assurance that such level of production will continue now or in the future and current flow and reserve data may prove to be unreliable.

     We expect that the principal source of funds in the near future will be from oil and gas sales, and joint venture lease and project generation services and administrative assistance to Gulftex, and developing our oil and gas properties, including the Six Wells Joint Venture. Based on the aforementioned plans, management expects to generate positive earnings and cash flow from operations in fiscal 2006. 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.

     We may pursue raising capital through public or private placement offerings, additional joint venture drilling programs or we may purchase new oil and gas properties or additional equipment to operate same. Any such additional purchases will be done on an “as needed” basis and will only be done in those instances in which we believe such additional expenditures will increase our profitability. Our ability to acquire additional properties or equipment is strictly contingent upon our ability to locate adequate financing to pay for these additional properties or equipment. There can be no assurance that we will be able to obtain the opportunity to buy properties or equipment that are suitable for our investment or that we may be able to obtain financing to pay for the costs of these additional properties or equipment at terms that are acceptable to us. Additionally, if economic conditions justify the same, we may hire additional employees.

ITEM 3. CONTROLS AND PROCEDURES

Our management evaluated, with the participation of Tim Burroughs our Chief Executive Officer (CEO)/Chief Financial Officer (CFO), the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the quarter covered by this quarterly report on Form 10-QSB. Based on this evaluation and communications from Hein & Associates LLP to our Board of Directors, management has concluded that, as of May 31, 2006 our disclosure controls and procedures were ineffective to ensure that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms due to material weaknesses relating to lack of segregation of duties, inadequate review of sensitive calculations and the failure to establish review procedures to direct errors in the financial statements.

Hein & Associates LLP advised the Board of Directors that each of these internal control deficiencies constitutes material weaknesses as defined in Statement of Auditing Standards No. 60. Certain of these internal control weaknesses may also constitute material weaknesses in our disclosure controls. Due to these material weaknesses, the Company, in preparing its financial statements for the period ended March 31, 2005, performed additional disclosure procedures relating to these items to ensure that such financial statements were stated fairly in all material respects in accordance with U.S. generally accepted accounting principles.

     Subsequent to the current reporting period ending May 31, 2006, we have undertaken efforts to establish a framework to improve internal controls over financial reporting. These efforts included the successful hiring of accounting personnel trained in reporting under generally accepted accounting principles (GAAP), improving recognition of oil and gas impairments, quarterly recognition of certain contract income and improving the interim and annual review and reconciliation process for certain key account balances.

7

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

     None.

Item 2. CHANGES IN SECURITIES

     The Company executed an employment agreement effective April 1, 2006 with our Vice President of Investor Relations, Bernard O’Donnell, having a term of one (1) year, which automatically renews unless otherwise terminated as provided in said agreement. Under the terms of the agreement, Mr. O’Donnell is entitled to receive 100,000 shares of TBX common stock upon execution and Board approval of the agreement. In addition, the Company agreed to issue Mr. O’Donnell options to acquire 25,000 shares of common stock per quarter for a period of up to three (3) years at an exercise price equal to the ending bid price of the last market day prior to the date of the option award.

Item 3. DEFAULTS UPON SENIOR SECURITIES

     None.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS:

     None.

Item 5. OTHER INFORMATION

     None.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a) EXHIBITS:

     10.1 Employment Agreement with Vice President O’Donnell.

     31.1 Certification of Chief Executive Officer/Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

     32.1 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.

     (b) REPORTS ON FORM 8-K

     The Company filed a current report on Form 8-K dated June 30, 2006 that announced the Company has engaged Hein & Associates, LLP as its auditors and certifying accountants for the fiscal year ended November 30, 2006. The former certifying accountant was terminated effective close of business June 28, 2006.

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: July 20, 2006

SIGNATURE: /s/ Tim Burroughs
TIM BURROUGHS, PRESIDENT/
CHIEF FINANCIAL OFFICER

8

EX-10.1

Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

     THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made to be effective as of the 1st day of April, 2006 (the “Commencement Date”), by and between American Eagle Services, Inc., a Texas corporation, (including all affiliates and subsidiaries hereinafter called the “Company”), TBX Resources, Inc., a Texas corporation (“TBX”) and Dick O’Donnell (hereinafter called the “Executive”).

W I T N E S E T H.

     WHEREAS, the Executive desires to enter into an executive employment relationship with the Company; and.

     WHEREAS, both the Company and Executive have read and understood the terms and provisions set forth in this Agreement and have been afforded a reasonable opportunity to review this Agreement with their respective advisors;

     NOW, THEREFORE, in consideration of the mutual promises of each, and other good and valuable consideration, the parties hereby covenant and agree as follows:

     1. SERVICES AND DUTIES

     (a) Positions. The Executive shall serve as the Vice President of Operations of the Company, act as a Principal for the Company’s subsidiary Broker-Dealer, Euro America Capital Corporation and act as Vice President-Investor Relations for TBX. The Executive shall report to the President and Board of Directors of the Company and shall perform all duties consistent with this position and such duties generally consistent therewith, as such duties shall be prescribed and/or amended from time to time by the President.

     (b) Devotion of Time. As of the Commencement Date (as defined above), the Executive shall devote his full time and attention to the Company and TBX. However, it is understood that the Executive has certain other business activities in which he is free to engage, conditioned that such other business activities are disclosed to the Company, do not interfere with the accomplishment of his duties, and are not directly competitive so as to be corporate opportunities of the Company.

     (c) No Joint Venture. The provisions of this Agreement, and especially the compensation provisions, are not intended to create any relationship between the Parties other than that of employer and employee contracting with each other solely for the purpose of effecting the provisions of this Agreement, and this Agreement shall not be construed as creating a partnership or joint venture between the parties.

     2. TERM

     This Agreement shall begin on the Commencement Date and end on the one (1) year anniversary after the Commencement Date (the “Original Term”). Thereafter, this Agreement shall automatically renew for successive one (1) year terms unless otherwise terminated as provided herein.

     3. COMPENSATION AND RELATED MATTERS

     (a) Base Salary. From and after the Commencement Date, the Executive shall receive an initial base salary (the “Base Salary”) paid by American Eagle Services, Inc. of $10,000 per month, payable bi-monthly.

     (b) Shares. The Executive will be entitled to issuance of certain common stock of TBX. Upon execution of this Agreement, 100,000 shares of TBX common stock will be issued to Executive. At the beginning of each calendar quarter of employment, for a period of three years, the Executive will be awarded an option to purchase 25,000 shares of TBX common stock at an exercise price equal to the ending bid price of the last market day prior to the date of the option award. The option exercise period for each option will be one year from its date

of issuance, at which time the option will expire. In the event of a change in ownership, all unexercised options will be accelerated to the current monthly period. The common stock issued to Executive will bear the following legend:

These shares are not registered under the Securities Act of 1933. No sale or transfer of these shares may be accomplished without the shares being registered or exempt from registration. If an exemption is claimed, shareholder must supply the Company with a written legal opinion stating the basis for any claimed exemption and said opinion will be subject to approval by the Company and its legal counsel. The shares of stock herein will not be deemed earned or vested in the named shareholder unless the shareholder is still an employee of the Company, one year from the date of issue hereof. Should shareholder’s employment terminate, for any reason, prior to the date specified, then this Certificate will be automatically canceled by the Company.

     (c) Expenses. During his employment hereunder, the Executive shall be entitled to receive prompt reimbursement for all reasonable business and entertainment expenses incurred by him in performing services hereunder, provided that the Executive properly accounts therefor to the Company.

     (d) Other Benefits. The Executive shall be entitled to participate in other benefit plans to which he is eligible pursuant to Company policy, which may be amended from time to time in the Company’s discretion, and the applicable plan documents (the “Standard Benefit Plans”).

     (e) Vacations. The Executive shall be entitled to reasonable vacation consistent with his position and the Company’s vacation policy.

     4. TERMINATION

     The Executive’s employment hereunder is “at will” and may be terminated by the Company or the Executive, under the following circumstances:

     (a) Mutual Agreement. Termination by mutual written agreement between the Executive and the Company.

     (b) Death. Employment shall terminate upon the death of the Executive.

     (c) Disability. Termination will result if the Executive is unable to perform his duties on a full-time basis because of Executive’s inability to perform his duties under this Agreement, with or without reasonable accommodation, for a period of more than ten (10) days (“Disability”).

     (d) Termination of the Executive’s employment for “Cause.” For purposes of this Agreement, the Company shall have “Cause” to terminate the Executive’s employment hereunder only upon:

     (i) the failure by the Executive to substantially perform his duties as outlined hereunder or to follow the reasonable directions of the Board after demand for substantial performance is delivered by the Board;

     (ii) the engaging by the Executive in conduct that is materially injurious to the Company, monetarily or otherwise;

     (iii) the engaging by the Executive in criminal conduct or conduct constituting moral turpitude;

               (iv) the engaging by the Executive in employment practices which violate federal, state or local law.

               (v) The engaging in conduct by the Executive which results in an action against him by the Securities and Exchange Commission or any similar state regulatory agency or loss of his ability to act as a Principal/licensed representative of an NASD licensed broker-dealer.

          (e) Termination Without Cause. Notwithstanding any provisions of this Agreement to the contrary, the Company may terminate the Executive’s employment for any reason other than those specified in the foregoing paragraphs (a), (b), (c) or (d) (or for no reason) at any time effective upon delivery of ten (10) days written notice by the Board.

          (f) Voluntary Resignation. The Executive may terminate this Agreement (“Voluntary Resignation”) at any time effective upon thirty (30) days written notice to the Board.

     5. COMPENSATION AND PAYMENTS UPON TERMINATION

     The Executive shall be entitled to the following compensation from the Company (in lieu of all other sums payable to the Executive hereunder) upon the termination of Executive’s employment.

          (a) Mutual Agreement. If the Executive’s employment is terminated as a result of mutual agreement, the Company shall pay the Executive’s Base Salary, plus the accrued Net Profits Interest to date of termination, plus a lump sum payment for the value of all accrued, earned and unused benefits under the Standard Benefit Plans through the date of termination, and the Executive will be entitled to receive any vested pension and retirement benefits (for all purposes of this Agreement, all such accrued, earned and unpaid items through the applicable date of termination are referred to as the “Earned Amounts”).

          (b) Death. If the Executive’s employment is terminated as a result of death, the Company will pay to the Executive’s estate the Earned Amounts.

          (c) Disability. If the Executive’s employment is terminated as a result of Disability (as defined in Section 4(c) above), the Executive will be provided long term disability benefits to which he may be eligible (if any) in accordance with the Company’s then existing Standard Benefit Plans, and the Company shall pay to the Executive the Earned Amounts.

          (d) Termination “Without Cause,” or by the Executive. If the Executive’s employment is terminated Without Cause, or in the event the Executive voluntarily elects to terminate this Agreement, the Company shall pay the Executive the Earned Amounts and the Company shall have no further obligation to the Executive.

          (e) Termination for Cause. If the Executive’s employment is terminated for Cause, the Company shall pay the Executive the Earned Amounts except for the accrued Net Profits Interest and the Company shall have no further obligation to the Executive.

     6. NON-DISCLOSURE

          (a) Confidential Information. By virtue of his employment with the Company, the Executive will have access to confidential, proprietary, and highly sensitive information relating to the business of the Company and which is a valuable, competitive and unique asset of the Company (“Confidential Information”), the confidentiality of which is essential to the Company’s ability to differentiate its products and services. Such Confidential Information includes all information which relates to the business of the Company, which is or has been disclosed to the Executive orally or in writing by the Company or obtained by virtue of work performed for the Company, is or was developed by the Company, and is not generally available to or known by individuals or entities within the industry in which the Company is or may become engaged or readily accessible by independent investigation. The Confidential Information sought to be protected includes, without limitation, information pertaining to: (i) the identities of customers and clients with which or whom the Company does or seeks to do

business, as well as the point of contact persons and decision-makers at these customers and clients, including their names, addresses, e-mail addresses and positions; (ii) the past or present purchasing history and the past and/or current job requirements of each past and/or existing customer and client; (iii) the volume of business and the nature of the business relationship between the Company and its customers and clients; (iv) the pricing of the Company’s services, including any deviations from its standard pricing for particular customers and clients; (v) the Company’s business plans and strategy, including customer or client assignments and rearrangements, sales and administrative staff expansions, marketing and sales plans and strategy, proposed adjustments in compensation of sales personnel, revenue, expense and profit projections, industry analyses, and any proposed or actual implemented technology changes; (vi) information regarding the Company’s employees, including their identities, skills, talents, knowledge, experience, and compensation; (vii) the Company’s financial results and business condition; and (viii) computer programs and software developed by the Company and tailored to the Company’s needs by its employees, independent contractors, consultants or vendors; (ix) information relating to the Company’s architects, designers, contractors, or persons likely to become architects, designers, or contractors; (x) any past or present merchandise or supply sources in the future; (xi) technical and non-technical information including patent, copyright, trade secret, proprietary information, methods, ideas, concepts, designs, inventions, know-how, processes, software programs, software source documents and formulae related to the current, future and proposed products and services of the Company including research, experimental work, development, design details and specifications and engineering, financial statements, forecasts, plans (whether business, strategic, marketing or other), client lists, prospective client lists, sales data, sales analysis, equipment and other assets, prices, costs, sources of supplies, pricing methods, personnel, marketing research, and business relationships, whether or not marked “Confidential” or “Proprietary”. Confidential Information may be contained on the Company’s computer network, in computerized documents or files, or in any written or printed documents, including any written reports summarizing such information.

          (b) Non-Disclosure of Confidential Information. The Executive acknowledges that the Company’s Confidential Information will be disclosed to the Executive throughout his employment at the Company in order to enable the Executive to perform his duties for the Company. The Executive further acknowledges that, prior to his employment at the Company, Executive was either unfamiliar with the Company’s Confidential Information or Executive developed such Confidential Information for the benefit of the Company and was otherwise compensated for such services outside of the terms of this Agreement. Finally, Executive acknowledges that the unauthorized disclosure of Confidential Information could place the Company at a competitive disadvantage. Consequently, Executive agrees (i) not to use, publish, disclose or divulge, directly or indirectly, at any time, any Confidential Information for his own benefit and for the benefit of any person, entity, or corporation other than the Company, to any person who is not a current employee of the Company, without the express, written consent of the Company and except in the performance of the duties assigned to him by the Company; (ii) not to make copies of Confidential Information without the prior written consent of the Company; (iii) to take reasonable precautions to protect against the inadvertent disclosure of such Confidential Information or theft or misappropriation by others; and (iv) not to use such Confidential Information except in connection with the specific duties of the Executive in connection with his employment.

          (c) Notwithstanding the foregoing, the confidentiality and nondisclosure provisions contained herein with respect to any portion of the Confidential Information shall terminate when the Executive can document that the Confidential Information:

               (i) was in the public domain at the same time it was communicated to the Executive by the Company;

               (ii) entered the public domain subsequent to the time it was communicated to the Executive by the Company through no fault of the Executive;

               (iii) was in the Executive’s possession free of any obligation of confidence at the time it was communicated to the Executive by the Company;

               (iv) was rightfully communicated to the Executive free of any obligation of confidence subsequent to the time it was communicated to the Executive by the Company;

               (v) was developed by the Executive independently of and without any reference to any information communicated to the Executive by the Company; or

               (vi) was communicated in response to a valid subpoena or order by a court or by a governmental body, provided that the Executive complies with the provisions of Section 6(e) below.

          (d) Survival of Executive’s Obligations. Executive understands and agrees that his obligations under this Section shall survive the termination of this Agreement and/or his employment with the Company. Executive further understands and agrees that his obligations under this Section are in addition to, and not in limitation or preemption of, all other obligations of confidentiality which he may have to the Company under general legal or equitable principles, or other policies implemented by the Company.

          (e) Certain Disclosures. In the event that the Executive receives a request to disclose all or any part of the Confidential Information under the terms of a subpoena or order issued by a court or by a governmental body, the Executive agrees (i) to notify the Company immediately of the existence, terms, and circumstances surrounding such request, (ii) to consult with the Executive on the advisability of taking legal available steps to resist or narrow such request, and (iii) if disclosure of such Confidential Information is required to prevent the Executive from being held in contempt or subject to other penalty, to furnish only such portion of the Confidential Information as, in the opinion of counsel to the Executive, it is legally compelled to disclose and to exercise its best efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to the disclosed Confidential Information.

     7. RETURN OF COMPANY PROPERTY

     Executive acknowledges that all memoranda, notes, correspondence, databases, computer discs, computer files, computer equipment and/or accessories, pagers, telephones, passwords or pass codes, records, reports, manuals, books, papers, letters, CD Roms, keys, Internet database access codes, client profile data, job orders, client and customer lists, contracts, software programs, information and records, drafts of instructions, guides and manuals, and other documentation (whether in draft or final form), and other sales, financial or technological information relating to the Company’s business, and any and all other documents containing Confidential Information furnished to Executive by any representative of the Company or otherwise acquired or developed by him in connection with his association with the Company (collectively, “Recipient Materials”) shall at all times be the property of the Company. Within twenty-four (24) hours of the termination of his employment for any reason, Executive will return to the Company any Recipient Materials which are in his possession, custody or control.

     8. NON-SOLICITATION OF CUSTOMERS/CLIENTS

          (a) Access to Confidential Information. Executive acknowledges that the special relationship of trust and confidence between him, the Company, and its clients and customers creates a high risk and opportunity for Executive to misappropriate the relationship and goodwill existing between the Company and its clients and customers. Executive further acknowledges and agrees that it is fair and reasonable for the Company to take steps to protect itself from the risk of such misappropriation. Executive further acknowledges that, at the outset of his employment with the Company and/or throughout his employment with the Company, Executive has been or will be provided with access to and informed of the Company’s Confidential Information, which will enable him to benefit from the Company’s goodwill and know-how.

          (b) Inevitable Disclosure. Executive acknowledges that it would be inevitable in the performance of his duties as a director, officer, employee, investor, agent or consultant of any person, association, entity, or company which competes with the Company, or which intends to or may compete with the Company, to disclose and/or use the Company’s Confidential Information, as well as to misappropriate the Company’s goodwill and

know-how, to or for the benefit of such other person, association, entity, or company. Executive also acknowledges that, in exchange for the execution of the non-solicitation restriction set forth in this Section 8(b), he has received substantial, valuable consideration, including the consideration set forth in Sections 3 and 5 above. Executive further acknowledges and agrees that this consideration constitutes fair and adequate consideration for the execution of the non-solicitation restriction set forth in this Section.

          (c) Non-Solicitation of Customers. Ancillary to the enforceable promises set forth in this Agreement including, without limitation, the promises contained in Sections 3, 6 and 7, as well as to protect the vital interests described in those Sections, Executive agrees that, while he is employed by the Company and for a period of twelve (12) months following the termination of his employment with the Company, regardless of the reason for such termination, Executive will not, without the prior written consent of the Company, directly or indirectly, alone or for his own account, or as owner, partner, investor, member, trustee, officer, director, shareholder, employee, consultant, distributor, advisor, representative or agent of any partnership, joint venture, corporation, trust, or other business organization or entity, (i) contact, solicit sales of, or sell, deliver or place any product, service or system of the kind and character sold, provided, distributed or placed by Executive on behalf of the Company to any person, association, corporation or other business organization or entity that Executive contacted, solicited, called upon, or served, or that he directed others to solicit, call upon, or serve, on behalf of the Company, during his employment at the Company; or (ii) contact, solicit, or seek to divert the business or patronage of any person, association, corporation, or other business organization or entity with whom or which Executive had business relations on behalf of the Company or with whom or which he met or communicated, or with whom or which he directed others to meet or communicate, for the purpose of offering to sell or place or solicit for sale or placement any product, service, or system of the kind and character sold, provided or distributed by him, on behalf of the Company, during his employment at the Company.

          (d) Reasonable Restrictions. Executive agrees that the restriction set forth above is ancillary to an otherwise enforceable agreement, is supported by independent valuable consideration, and that the limitations as to time, geographical area, and scope of activity to be restrained by this Section are reasonable and acceptable, and do not impose any greater restraint than is reasonably necessary to protect the goodwill and other business interests of the Company. Executive agrees that if, at some later date, a court of competent jurisdiction determines that the non-solicitation agreement set forth in this Section does not meet the criteria set forth in Tex. Bus. & Comm. Code Ann. 15.50(2), this Section may be reformed by the court and enforced to the maximum extent permitted under Texas law.

          (e) Breach. If Executive is found to have violated any of the provisions of this Section, Executive agrees that the restrictive period of each covenant so violated shall be extended by a period of time equal to the period of such violation by him. Executive understands that his obligations under this Section shall survive the termination of his employment with the Company and shall not be assignable by him.

     9. NON-SOLICITATION OF EMPLOYEES AND CONSULTANTS

     Executive acknowledges that, as part of his employment or association with the Company, he will become familiar with the salary, pay scale, capabilities, experiences, skill and desires of the Company’s employees. In order to protect the confidentiality of such information, Executive agrees that, for a period of twelve (12) months following the termination of his employment with the Company, whether such termination occurs at the insistence of Executive or the Company, Executive shall not recruit, hire, solicit, or attempt to recruit, hire or solicit, directly or by assisting others, any other employees or consultants employed by or associated with the Company, nor shall he contact or communicate with any other employees or consultants of the Company for the purpose of inducing other employees or consultants to terminate their employment or association with the Company. For purposes of this covenant, “other employees or consultants” shall refer to permanent employees, temporary employees, or consultants who were employed by, doing business with, or associated with the Company within six (6) months of the time of the attempted recruiting, hiring or solicitation. Executive’s obligations under this Section 9 shall survive the termination of this Agreement and Executive’s employment with the Company.

     10. REMEDIES

     In the event that Executive violates any of the provisions set forth in Sections 6, 7, 8, or 9 of this Agreement, he acknowledges that the Company will suffer immediate and irreparable harm which cannot be accurately calculated in monetary damages. Consequently, Executive acknowledges and agrees that the Company shall be entitled to immediate injunctive relief, either by temporary or permanent injunction, to prevent such a violation. Executive further acknowledges and agrees that this injunctive relief shall be in addition to any other legal or equitable relief, including monetary damages, to which the Company would be entitled.

     11. INVENTIONS, IDEAS/PATENTABLE INVENTIONS

          (a) Inventions. Any discovery, invention, design, improvement, concept or other intellectual properties, either patentable or not, made, developed or conceived by the Executive during the term of the Agreement, and for one year after termination thereof, which relate to or are useful in the business or activities in which the Company is or may become engaged, and which may or may not also constitute Confidential Information (the “Inventions”), shall be the exclusive property of the Company and its successors.

          (b) Disclosure to the Company. The Executive agrees to disclose promptly, in writing, if so requested, to the Company, any Inventions that the Executive may make, develop or conceive during the term of this Agreement by the Company or its successors.

          (c) Work for Hire. The Executive agrees that the Inventions shall be deemed “work made for hire” and hereby assigns, and agrees to assign, to the Company all the Executive’s rights, title and interest in any such Inventions, whether or not during the term of this Agreement such Inventions may be reduced to practice, and to execute all patent applications, copyright applications, assignments and other documents, and to take all other steps necessary (but all at the Company’s expense), to vest in the Company the entire right, title and interest in and to those Inventions and in and to any patents or copyrights obtainable therefor in the United States and in foreign countries.

          (d) Obligation to Assign Inventions to the Company. The Executive shall not be obligated to assign to the Company any Invention made by him during the Relationship or after termination of this Agreement which does not relate to any business or activity in which the Company is or may become engaged, except that the Executive is so obligated if the same relates to or is based on Confidential Information to which the Executive shall have had access during and by virtue of his employment or arises out of work assigned to him by the Company; nor shall the Executive be obligated to assign any Inventions which relate to or would be useful in any business or activities in which the Company is engaged if such Invention was conceived and reduced by practice by the Executive prior to this Agreement with the Company, provided that all such Inventions are listed on Exhibit A attached hereto and made known to the Company.

     12. SUCCESSORS; BINDING AGREEMENT

     This Agreement shall be binding upon, and inure to the benefit of, the Company, Executive, and their respective successors, assigns, personal and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. Without limiting the generality of the foregoing, the Company may assign this Agreement (or the same may remain with the Company as a subsidiary of a larger institution), without the consent of Executive, with such assignee being required to perform the obligations of the Company hereunder, to any successor of the Company.

     13. COMPLETE AGREEMENT

     This Agreement sets forth the entire agreement among the Company and Executive concerning the subject matter hereof, and supersedes all prior written or oral understandings of the parties.

     14. NOTICE

     For purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when (i) delivered personally; (ii) sent by telecopy or similar electronic

device and confirmed; (iii) delivered by overnight express; or (iv) sent by registered or certified mail, postage prepaid, addressed as follows:

If to the Executive:	Dick O’Donnell
	3505 Woodhaven Drive
	Dallas, Texas 75234
If to the Company:	American Eagle Services, Inc.
	3030 LBJ Freeway, Suite 1310
	Dallas, Texas 75234
	Attention: Tim Burroughs, CEO
If to TBX :	TBX Resources, Inc.
	3030 LBJ Freeway, Suite 1320
	Dallas, Texas 75234
	Attention: Tim Burroughs, CEO

or to such other address as any party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

     15. MISCELLANEOUS

     No provision of this Agreement may be modified, waived, or discharged unless such waiver, modification, or discharge is agreed to in writing, signed by the Executive and the Company. No waiver by either party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. Either party hereof has made no agreements or representations, oral or otherwise, express or implied, with respect to the subject matter, which are not set forth expressly in this Agreement.

     16. GOVERNING LAW AND VENUE

     This Agreement is being made and is intended to be performed in the State of Texas, and shall be governed, construed, interpreted, and enforced in accordance with the substantive laws of the State of Texas and venue for any matter in connection with or arising from this Agreement shall be in Dallas County, Texas.

     17. ATTORNEY FEES

     All legal fees and costs incurred in connection with the resolution of any dispute or controversy under or in connection with this Agreement shall be borne by the non-prevailing party.

     18. COUNTERPARTS

     This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same agreement.

     19. VOLUNTARY AGREEMENT

     The parties acknowledge that each has had an opportunity to consult with an attorney or other counselor concerning the meaning, import, and legal significance of this Agreement, and each has read this Agreement, as signified by their respective signatures hereto, and each is voluntarily executing the same after, if sought, advice of counsel for the purposes and consideration herein expressed.

     IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date and year first above written.

COMPANY:
AMERICAN EAGLE SERVICES, INC.
By:	/s/ Tim Burroughs
Name: Tim Burroughs
Title: President
EXECUTIVE:
/s/ Bernard Dick O’Donnell
Dick O’Donnell
TBX RESOURCES, INC.
By:	/s/ Tim Burroughs
Name: Tim Burroughs
Title: President

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

     I, Tim Burroughs, certify that:

     1. I have reviewed this quarterly report on Form 10-QSB of TBX Resources, Inc.

     2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report.

     3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report.

     4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-14 and 15d-14) for the registrant and have:

          (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

          (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

          (c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

          (d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

     5. I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

          (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

          (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls.

Dated this 20^th day of July 2006

/s/ Tim Burroughs

Tim Burroughs, President
Principal Executive and Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Quarterly Report of TBX Resources, Inc. (the “Company”) on Form 10-QSB for the period ended February 28, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tim Burroughs, President, Chief Executive Officer and Principal Executive and Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

     1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as applicable; and

     2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

Dated this 20^th day of July 2006.

By: /s/ Tim Burroughs, President

Principal Executive and Financial Officer