FORM 10-KSB

(Mark One)

QAnnual report under Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended June 30, 2008

 ̈Transition report under Section 13 or 15(d) of the Securities Exchange Act of
1934 
For the transition period from ________ to ________

Commission File Number 33-17598-NY

The Tirex Corporation(Name of Small Business Issuer in Its
Charter)

|Delaware                                 | 22-3282985          
|---------------------------------------- | --------------------
|(State
    or Other Jurisdiction of      | (I.R.S.
    Employer
|Incorporation or Organization)           | Identification No.) 
|                                         |                     
|P.O. Box 1000                            |                     
|Stratford, CT                            | 06614               
|(Address of Principal Executive Offices) | (Zip
    Code)      

(203) 522-3247(Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act:

|                        | Name
    of Each Exchange
|----------------------- | -------------------------
|Title
    of Each Class | on
    Which Registered  
|______________________  | _______________________  
|                        |                          
|NONE                    | NONE                     

Securities registered under Section
12(g) of the Exchange Act:

NONE

Check whether the issuer: (1) filed
all reports required to be filed by Section 13 or 15(d) of the Exchange Act
during the preceding 12 months (or for such shorter period that the Company was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes

Check if there is no disclosure of
delinquent filers in response to Item 405 of Regulation S-B contained in this
form, and if no disclosure will be contained, to the best of the Company'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.

$nil(Issuer's revenues for its most recent fiscal year)

$zero (as of June 30, 2008)(Aggregate market value of the voting stock held by non-affiliates of the
Issuer)

607,920,803 (as of October
2, 2008)(Number of shares outstanding of each of the Issuer's classes of common
stock)

Transitional Small Business
Disclosure Format (check one)

Yes

DOCUMENTS INCORPORATED BY REFERENCE 
into Part I

Annual Report of the Company on Form 10-KSB for the year
ended June 30, 2007

Quarterly Reports of the Company on Form 10-QSB for the
quarters ended September 30, 2007, December 31, 2007, and March 31, 2008

Current Reports on Forms 8-K of the Company

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ITEM 1. DESCRIPTION OF BUSINESS

The Company

The Tirex Corporation (hereinafter
referred to as "we", "us" or the "Company") is engaged in the business of
developing for sale, license or lease an environmentally safe patented "turn
key" cryogenic tire recycling system, known as the "TCS System" The TCS System
was designed and developed by Tirex and separates tires into clean and saleable
rubber crumb, steel wire, and fiber. The Company was incorporated in Delaware on
August 19, 1987 under the name "Concord Enterprises, Inc." The Company's name
was changed to "Stopwatch Inc." on June 20, 1989 and to "Tirex America Inc." on
March 10, 1993. On July 11, 1997, the Company's name was changed to "The Tirex
Corporation". Since 1993, our core business has been to develop and to initiate
marketing efforts by sale or license of an environmentally friendly semi-
cryogenic tire recycling system, which we intend to sell to recycling companies
and governmental agencies to enable them to recycle tires. We have devoted much
of our earlier efforts to completing the design and development of the TCS
Prototype and raising the financing required to do so, but for the last four
years, our efforts have turned to marketing the first commercial facility. The
Company is in the developmental stage until it commercializes its TCS
Technology.

The TCS-System

Our TCS-System comprises a complete,
turn-key, environmentally safe, semi-cryogenic tire recycling system designed
to: (i) disintegrate scrap tires with its patented fracturing mill integrated
with its proprietary rubber freezing process which uses less energy than is
required by existing ambient methods (which shred and/or chop tires at "ambient"
or normal room temperatures) or other currently available cryogenic methods
(which freezes the rubber with the use of liquid nitrogen), and (ii) produce
commercially exploitable, high quality, clean rubber crumb and marketable,
intact steel and fiber strands.

As noted above, the TCS System is a
semi-cryogenic system, in that the precise scientific definition of cryogenics
involves temperatures much colder than what is required to freeze tire pieces to
the point where they can be disintegrated mechanically. Liquid nitrogen systems
are truly cryogenic in that the temperature of liquid nitrogen qualifies for the
truly cryogenic definition. The operating cost of truly cryogenic systems is
significantly higher than that of a semi-cryogenic system because the
incremental cost of attaining cryogenic temperatures, which are not necessary,
imposes a substantial "cost of cold" premium to the process of tire chip
freezing. At issue is that the cost of attaining each additional degree of cold
costs a little more than the previous degree. While not an exponential
relationship, neither is it a linear relationship. The semi-cryogenic process
avoids the cost of acquiring these additional and unnecessary degrees of cold.

The freezing chamber of the TCS
Prototype, previously located in Montreal, was a large tank through which the
tire chips were circulated having temperatures of approximately 170 degrees
below zero, Fahrenheit. The first commercial version of the TCS has been
re-designed to run approximately 20 degrees colder to ensure that no pieces of
rubber can warm up from the "glass point" before being entirely processed by our
patented fracturing mill. Frozen tire parts are passed through a fracturing mill
that separates the component parts of all tires, including rubber powder, clean
steel wire and twine. The mesh is then physically separated from the metal and
twine and is finally subjected to other steps to achieve the desired mesh size.
mesh size. The configuration of the back end of the system can be modified, as
required, to produce proportions of mesh sizes appropriate to local crumb rubber
customers, such as 100% -30 mesh or even finer.

The functions and mechanisms of the
TCS-System were originally designed for the purpose of disintegrating automobile
tires, although relatively minor modifications could be introduced to accept
other kinds of tires as well. Such modifications would focus on the front-end
tire chip operation which is not part of the Tirex technology and which is
widely available.

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The TCS System has been designed to
operate continuously (with minimum amounts of scheduled downtime for
maintenance) and to require less energy than is used, to the best of the
Company's knowledge, by other presently existing tire recycling equipment.

Step-by-Step Operations

The step-by step operations of the
TCS-System comprise the following:

Tire Feedstock Preparation

The TCS System is not designed to
accept whole tires; whole tires must undergo preliminary preparation to produce
pieces of tire having dimensions which permit their introduction into the
patented fracturing mill. Feedstock preparation can be accomplished in a number
of ways including chipping, shredding and removal of sidewalls followed by die
cutting. None of these techniques form part of the TCS System technology and the
technique ultimately chosen by the tire recycling entrepreneur will revolve
around issues of capital and operating costs as well as possible issues of
transportation costs respecting whole tires.

Freezing the Tire Pieces

The prepared tire pieces are
deposited on a conveyor belt that brings a continuous stream of tire pieces to a
freezing chamber. Super cooled air, produced on-site by an Air Plant, is
continuously blown into the freezing chamber, and this cold air freezes the tire
pieces moving through the chamber to the point where these pieces can be made to
shatter like glass when subjected to forces such as pressure and bending. After
approximately thirty minutes in the Freezing Chamber the frozen pieces exit the
Freezing Chamber and enter our patented disintegrators ("Fracturing Mills").

Size Reduction and Materials Separation in the Fracturing
Mill

The frozen tire pieces pass through
our patented disintegrators ("Fracturing Mills") where the pieces are reduced to
three separate output materials, these being rubber crumb of varying degrees of
fineness, intact pieces of steel and intact pieces of fiber. This operation does
not involve any chopping, shredding, or hammer-milling. Therefore, the steel
wires are neither cut nor broken. The fiber threads retain their basic shapes
and characteristics. No steel powder or fiber fluff is produced.

Separation of the Steel from the rubber and fiber

On the front end steel beads can be
removed and, with raspers, steel can be removed, before entering the freezing
chamber and upon completion of the freezing process the pieces enter the
Fracturing Mill which separates the steel from the rubber and fiber and the
output is conveyed to a magnetic separation system where the intact steel wires
are magnetically removed, leaving the rubber crumb and the fiber. The steel can
then be baled for sale.

Fiber Removal

The fiber and rubber crumb is then
passed through vibrating screens to separate the crumb from the fiber threads.
The fiber threads are then conveyed out of the machine. The fiber can then be
baled or put into a container for sale.

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Rubber Crumb Finishing

Rubber crumb finishing operations are
dictated by the output requirements of the entrepreneur and his or her
customers. The basic TCS System has been configured to produce rubber crumb in
mesh sizes ranging from -10 mesh to -30 mesh at the option of the entrepreneur
(limited quantities of even finer mesh rubber are also produced), and in such
proportions of mesh sizes as the entrepreneur decides, according to his market
requirements. Back-end configuration modifications can be added to increase the
proportion of finer mesh crumb rubber, even beyond 30 mesh. This
reconfiguration could imply the addition of auxiliary processing equipment which
does not form part of the TCS System technology.

It is possible that some very small
pieces of steel and fiber can be trapped in the larger pieces of rubber coming
out of the Fracturing Mill. These small amounts of steel and fiber are released
during auxiliary processing and can be separated during the auxiliary processing
operation, magnetically for the steel and by an air separation system for the
residual fiber. Alternatively, these larger pieces could be drawn off and
refrozen and re-introduced into the fracturing mills. The rubber crumb is then
passed through a series of screens to sort the rubber crumb by mesh size, which
is thence packaged for customer requirements.

Manufacturing

Our earlier activities focused
primarily on the design and development of the original TCS Prototype, and, more
recently, on the completion of the design of a second generation version of this
technology. In connection with these activities, we have been dependent upon
arrangements with subcontractors for the manufacture and assembly of the
principal components incorporated into a TCS System Plant. Pursuant to our
signing of the exclusive manufacturing license agreement with Simpro, S.p.A. all
manufacturing activities of our company will now be undertaken by this Italian
company. In the seemingly unlikely scenario where Simpro would refuse a contract
which we believe should be accepted, we would have the right to go to alternate
sources to have such systems manufactured and installed.

We have licensed the manufacturing
respecting our technology to our Manufacturing Partner, Simpro S.p.A. of Turin,
Italy. Simpro is a designer and manufacturer of high-technology production
systems, primarily for the automobile industry, and is active internationally.
Simpro has its ISO 9001, ISO 14001 and EMAS certifications. We have agreed to
this manufacturing partner arrangement because Simpro is in a position to offer
insurance-backed contract performance guarantees and also to guarantee a minimum
tire weight throughput on TCS systems fabricated, installed and commissioned as
a turn key TCS Facility.

The Tirex R&D License

Tirex R&D held an exclusive, ten year
license from the Company, which expired on July 2, 2005. This license, which was
modified in June of 2002, permitted Tirex R&D to design, develop, and
manufacture the TCS-Systems on a worldwide basis (the "Primary License"). To the
extent necessary to ensure that Tirex R&D's operations were focused on pure
research and development activities, Tirex R&D was able to sublicense the
Primary License to TCCI or such other corporate entity as would be deemed
appropriate and beneficial. With the expiry of the license and the governments
dissolution of Tirex Canada R&D Inc., and TCCI, unrestricted ownership of the
intellectual property related to the TCS Technology reverted to The Tirex
Corporation.

Canadian Government and Government Sponsored Financial
Assistance

Our May 1995 transfer of our research
and development and manufacturing activities to Tirex R&D (then referred to as "Tirex
Canada") made us eligible for various Canadian and Quebec government programs
which provide loans, grants, and tax incentives, as well as government
guarantees for loans from private lending institutions, for eligible investment,
research and development, and employee-training activities.

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Tax Incentives

Canadian and Quebec scientific
research and experimental development (SR&ED) tax incentives take the form of
deductions and tax credits with respect to eligible research and development
expenditures previously incurred by Tirex R&D. Certain tax credits are called
"refundable" because, to the extent that the amount of the tax credit exceeds
the taxes otherwise payable, they are paid over or "refunded" to the taxpayer.
Thus, these credits function effectively as monetary grants. Our company has
received all of the tax credits to which we were entitled. The Company has not
produced any tax credit claims following its Fiscal 2002 year. In the event that
the Company would envision restarting its R&D efforts, it would either
reactivate Tirex Canada R&D Inc. or create a new Canadian subsidiary eligible
for such tax credits.

Canadian Government, and Government Sponsored Loans and
Grants

We have in the past also received
financial assistance by way of loans and grants from Canadian and Quebec
governmental agencies for the design and development of the TCS-1 Plant and for
export market development. All of the activities for which these loans were
approved have been completed and we received the funds approved. Approximately
80% of the loans previously received were repaid. Of the remaining approximately
CA$148,000 could be forgiven if the Company did not realize any sales in Spain
and Portugal prior to June 30, 2004 and a further approximately US$14,000 could
also be forgiven because there were no sales in Spain and / or Portugal prior to
June 30, 2007. The government contested one claim in the amount of CA$95,000 on
the assertion that the transaction was not at arms length. We are disputing
this assertion. Significantly prior to the contract in question, the person in
question had an indirect but nonexclusive relationship with the company but this
relationship was terminated long before the issuance of the contract in
question. We are vigorously contending the governments assertion but cannot
provide any guarantees that the government could be persuaded to accept our
position. With the de facto dissolution (by the government) of the Canadian
operations five years ago, this liability is uncertain. In the event that the
Canadian government would decide to attempt to enforce this liability against
the directors of Tirex Canada R&D Inc., the Corporation would indemnify the
directors in accordance with the provisions of their employment agreements.

Patent Protection

We were issued a United States patent
on our Cryogenic Tire Disintegration Process and Apparatus on April 7, 1998
(Patent No. 5,735,471). The duration of the patent is 20 years from the date the
original application was filed. In November 1998, we filed our patent, for
review, with the Canadian Patent Office. Canadian patent number 2193334 was
granted on August 17, 2004. Canadian patents have a duration of seventeen (17)
years. All patent maintenance fees have been paid. Prior to the issuance of our
US patent, we relied solely on trade secrets, proprietary know-how and
technological innovation to develop our technology and the designs and
specifications for the TCS Prototype. The Companys patents are free of liens.
We do not presently hold any patents for our products or systems outside of the
United States and Canada. We have lacked the financial resources to apply for a
process patent on an international basis, but the Company intends to file for
additional patent protection, in accordance with our Agreement with Simpro S.p.A.
of Turin, Italy, once sufficient financial resources will become available.

We have entered into confidentiality
and invention assignment agreements with certain employees and consultants,
which limit access to, and disclosure or use of, our technology. There can be no
assurance, however, that the steps we have taken to deter misappropriation of
our intellectual property or third party development of our technology and/or
processes will be adequate, that others will not independently develop similar
technologies and/or processes or that secrecy will not be breached. In addition,
although Management believes that our technology has been independently
developed and does not infringe on the proprietary rights of others, there can
be no assurance that our technology does not and will not so infringe or that
third parties will not assert infringement claims against us in the future.
Management believes that the steps they have taken to date will provide some
degree of protection, however, no assurance can be given that this will be the
case.

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Employees

As of October 2008, we have four
persons employed either directly or as consultants including its three executive
officers. Three of the foregoing persons devote their full time to our business
and affairs, as required. At times, we also utilize the services of part-time
consultants to assist us with market research and development and other matters.
We could hire additional personnel, as needed, and as financial resources
permit.

Potential Markets

We believe that the potential markets
for our TCS System will be directly affected by the level of demand for
economical, high quality rubber crumb derived from the recycling of scrap tires.
The following discussion of the potential markets for rubber crumb assumes that
the TCS System will actually be capable of economically producing high quality
recycled rubber crumb and in a variety of sizes, and capable of being used in
wide range of products. Our manufacturing partner, Simpro, is prepared to offer
tire throughput guarantees as a function of scrap tire weight. Simpro is also
prepared to offer limited performance guarantees, backed by insurance policies.

Sales of TCS systems have been
hampered by the devaluation of the US dollar versus the Euro. Our manufacturing
partner, Simpro, quotes system installations in Euros. When the manufacturing
agreement was signed with Simpro, the US dollar and the Euro were fairly close
to being at par with each other. As of October 2008, one Euro is worth
approximately US$1.38. This represents a large price increase for entrepreneurs.

|                                                                                         | 1 US
    dollar is worth in Euros | 1
    Euro is worth in US dollars
|---------------------------------------------------------------------------------------- | --------------------------------- | ---------------------------------
|January 2003                                                                             | 0.9413 Euros                      | US$1.0624                        
|January 2004                                                                             | 0.7908
    Euros                  | US$1.2645                        
|January 2005                                                                             | 0.7634 Euros                      | US$1.3099                        
|January 2006                                                                             | 0.8247
    Euros                  | US$1.2126                        
|January 2007                                                                             | 0.7699 Euros                      | US$1.2989                        
|January 2008                                                                             | 0.6796 Euros                      | US$1.4715                        
|October 10, 2008                                                                         | 0.7424 Euros                      | US$1.3469                        
|Source of exchange
    rates is Pacific Exchange Rate Service http.www.fx.sauder.ubc.ca.

The manufacturing agreement with
Simpro is essentially a Right of First Refusal agreement. In the event that
Simpro would decide to not accept a fabrication and installation contract, for
whatever reason, and if Tirex would believe that such a contract should be
undertaken, Tirex has the right to engage any other suppliers and
sub-contractors to undertake the contract.

Rubber is a valuable raw material and
we believe that recycling this valuable resource from scrap tires is an ideal
way to recover that value. Recycled scrap tire rubber is already used in a great
variety of products, promoting longevity by adding it to asphalt pavement,
adding bulk and providing drainage as a soil additive, providing durability as a
carpet under padding, increasing resiliency and enhancement in track and
athletic surfaces, absorbing shock and lessening the potential for injuries as a
ground cover for playgrounds and other recreational areas, and as a significant
component added to plastic resins for making extruded or molded products. We are
aware of significant recent developments in making finished products from crumb
rubber compounded with plastic resins, particularly polypropylene. We believe
that the potential for crumb rubber to substitute for either virgin or recycled
plastic resins is very significant, given the relative market price for crumb
rubber versus the commodity prices for such plastic resins Marketing Activities

Originally we concentrated our
efforts on completing the design, development, and construction of our TCS
Prototype and raising adequate financing to support such efforts. Our long-term
objective, however, is to market TCS Systems worldwide, through national and
international sales representatives, licensees or strategic partners. Pursuant
to an extensive technical audit, our TCS Prototype permitted our company to be
certified as an Accredited Tire Recycler by Recyc-Québec, a Quebec-governmental
agency. Users of the TCS technology in Quebec could have access to tipping fees
paid by Recyc-Québec, which currently work out to approximately US$0.85 per
passenger car tire, based on current exchange rates. Management believes that
this accreditation will be beneficial to our marketing efforts respecting our
technology, not only in Quebec but elsewhere, given its independent status.

---

We can make no assurances with
respect to the degree of success of our marketing and distribution strategy of
our TCS Systems. Furthermore, we have limited resources to achieve the
distribution of our TCS Systems and to date we have made no sales, leases or
licenses. We believe that we may need additional financing, which may not be
available, to achieve our long-term objectives.

Government Regulation

Insofar as the Company is not
actually a tire recycler, government regulations have little direct effect on
our activities. Of greater importance is the possible effect on our customers
for the TCS technology. The TCS-System is a "closed loop" system which does not
use any chemicals, solvents, gases or other substances which could result in
noxious emissions of any kind from the operation of the Plant. The operation of
a TCS-System will not result in the emission of any pollutants, the disposal of
combustion residues, the storage of hazardous substances, or the production of
any significant amounts of solid waste which would have to be landfilled. Simpro
has undertaken a formal environmental assessment of our technology using the
very stringent European standards, the results of which confirms our assertions.
However, the operation of a TCS System will involve, to varying degrees and for
varying periods of time, the storage of scrap tires or tire pieces representing
the feedstock to the System, and limited storage of crumb rubber prior to
shipment to customers. Rubber, regardless of its physical dimensions or form, is
widely defined as being a fire hazard by fire protection services in most
industrially-advanced countries.

As a result, many US states and
Canadian provinces have either passed or have pending legislation regarding
discarded tires including legislation limiting the storage of used tires to
specifically designated areas. The regulatory environment of the European Union
is already very stringent. Operators of TCS Systems will therefore be subject to
various local, state, and federal laws and regulations including, without
limitation, regulations promulgated by federal and state environmental, health,
and labor agencies. Establishing and operating a TCS System for tire recycling
will require numerous permits and compliance with environmental and other
government regulations, on the part of our customers, both in the United States
and Canada and in most other foreign countries. The process of obtaining
required regulatory approvals may be lengthy and expensive for some customers of
our TCS Systems. Moreover, regulatory approvals, if granted, may include
significant limitations on operations. The US-EPA and comparable US state and
local regulatory agencies, and similar government bodies in Canada and in other
jurisdictions where TCS Systems will be marketed actively enforce environmental
regulations and conduct periodic inspections to determine compliance with
government regulations. Failure to comply with applicable regulatory
requirements can result in, among other things, fines, suspension of approvals,
seizure or recall of products, operating restrictions, and criminal
prosecutions.

We believe that existing government
regulations, while extensive, will not result in the disenabling of its TCS
System customers to operate profitably and in compliance with such regulations.
In fact, we believe that restrictions on landfilling and on combustion-based
technologies will benefit our technology. While these regulations are usually
stringent, the huge scrap tire problem must also be dealt with on a daily basis
and the need for economic and environmentally friendly recycling operations is
critical. The burden of compliance with laws and regulations governing the
installation and/or operation of TCS Systems could, nonetheless, discourage
potential customers from purchasing a TCS System. This would adversely affect
our business, prospects, results, and financial condition. As a result, our
business could be directly and indirectly affected by government regulations.

ITEM 2. DESCRIPTION OF PROPERTY

Our corporate headquarters is located
at Stratford, Connecticut. We have occupied offices at this address since
September 2006. Prior to moving to these premises, during Fiscal 2006, the
Company occupied premises in a residential and office complex in west-end
Montreal. Prior to its west-end location, Tirex occupied an industrial building
on St. Patrick Street in Montreal, where the TCS Prototype was located. After
having accumulated very substantial arrearages in rent and property taxes for
which we were financially responsible, our former landlord instructed us to
vacate these premises such that he could rent the space out to another company.
As part of the settlement agreement with this former landlord, we agreed to pay
to this former landlord the sum of US$540,000 out of the proceeds of the first
four sales of TCS Systems, at the rate of US$140,000 per system sold.

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ITEM 3. LEGAL PROCEEDINGS

We are presently a party in the
following legal proceedings:

IM2 Merchandising and Manufacturing,
Inc and David B. Sinclair v. 
The Tirex Corporation, Tirex Corporation Canada, Inc., et al.

The Plaintiffs, a Canadian resident
and a Canadian corporation sued in the Delaware, U.S. Federal District Court
claiming fraud, breach of contract, unjust enrichment and other allegations,
that the alleged Defendants, which include Tirex Corporation Canada and The
Tirex Corporation, jointly conspired to profit from their failure to comply with
terms of a manufacturing agreement. The monetary demand of this complaint was
unspecified. We were prepared to move to dismiss Plaintiffs' Complaint, but
after consultations with the Plaintiffs' Attorneys, the Plaintiffs' withdrew
this complaint voluntarily. Plaintiffs later filed a second action in the
Chancery Court of Delaware alleging certain of the same allegations; fraud,
breach of contract, unjust enrichment, breach of fiduciary duty and
misrepresentation, but eliminated other counts including the securities fraud
allegations. The Defendants in the State Court action are the same named in the
Federal Court action, and again the monetary damages are unspecified. We moved
to dismiss the State Court Chancery case alleging defective service of process
and asserting that the Court had no jurisdiction over the Defendants in Delaware
and for removal of the case to Canada based on forum non convenience and other
considerations. Our motion was granted and the case dismissed.

Subsequently, on or about April 25,
2001, the Plaintiffs instituted a lawsuit in Superior Court, judicial district
of Montreal alleging breach of contract and claims damages of CA$794,690
representing expenses and an additional Canadian$5,411,158 in loss of profits
(court docket

There has been no activity relative
to this suit for the last seven years.

Lefebvre Freres Limited v. The Tirex
Corporation

Lefebvre Frères Limited instituted an
action against us on August 13, 2001 in the Superior Court, judicial district of
Montreal (court docket #

There has been no activity relative
to this suit for the last seven years.

Tri-Steel Industries Inc. v. The
Tirex Corporation

Our landlord Tri-Steel Industries
Inc. instituted an action against us, and our subsidiaries Tirex Canada and
Tirex Canada R & D Inc., on or about June 22, 2001 for arrears of rent in the
amount of Canadian $177,973.62. Subsequent to the Plaintiffs instituting this
action, we continued to accumulate very substantial arrearages for rent and
property taxes for which we were financially responsible. Subsequent to our
vacating the premises which had been the object of the lease, we settled with
our former landlord for a total amount of US$560,000, to be paid at the rate of
US$140,000 from each of our first four TCS System sales.

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No director, officer, or affiliate of
the Company, or any associate of any of them, is a party to or has a material
interest in any proceeding adverse to us.

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

During the fiscal year ended June 30,
2008, the Corporation applied to the State of Delaware to increase its common
share authorization from two hundred and fifty million shares to one billion
shares. Simultaneously, the Corporation established a class of Preferred Shares,
issuable in series on terms to be determined from time to time by the Board of
Directors with a maximum preferred class authorization of one hundred million
shares. See Report 8-K dated February 14, 2008. A Series A Preferred Shares in a
total of three million (3,000,000) shares was designated and subsequently issued
to directors and officers. See Reports 8-K, dated May 16, 2008 and June 23,
2008. These shares do not have a dividend attached, do have preference on
residual assets in case of bankruptcy, are convertible into common shares at the
rate of five common shares for each preferred share and have super-voting rights
of 100 votes per share. These modifications to the Corporations share structure
were ratified by shareholder vote during the fourth quarter of fiscal 2008.

PART II

ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

The Company's common stock, is traded
on a limited basis in the over-the-counter market and, since January 2003, has
been listed on the "Gray Sheets". In September 2008, over two months following
the period covered by this report, we applied to FINRA for upgrading our listing
to the Pink Sheets. Our intention is to thence apply for re-listing onto the
Bulletin Board. This requires audited financial statements such that our 10-KSB
Reports for the fiscal years ended June 30, 2004 through 2007 inclusive will be
in strict conformity with the SEC standards. For this reason, in May 2008, we
engaged the services of Moore & Associates (Las Vegas, Nevada) to undertake the
audit of our accounts for those years. Following 2007, Moore continued with the
audit of our accounts for fiscal 2008. With the completion of the audit and the
filing of amended 10-KSB reports, we applied for listing on to the Pink Sheets
in October, 2008. As
of the date of this report, we had not yet received approval for listing on the
Bulletin Board. During the period covered by this report, i.e. up to June 30,
2008, when we were quoted on the Gray Sheets, bid and ask prices were not
posted.

Shareholders

As of June 30, 2008, the number of
holders of record of the Company's common stock, $.001 par value, was
approximately 590, which does not include shares held by persons or companies in
street or nominee name.

Dividends

The Company has paid no cash
dividends and has no present plan to pay cash dividends, intending instead to
reinvest its earnings, if any. Payment of future cash dividends will be
determined from time to time by its Board of Directors, based upon its future
earnings (if any), financial condition, capital requirements and other factors,
the company is not presently subject to any contractual or similar restriction
on its present or future ability to pay such dividends.

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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS

Management's Discussion and
Analysis of Financial Condition and Results of Operations

The following discussion of our
financial condition and results of operations should be read in conjunction with
the financial statements and notes thereto included elsewhere in this Report.
This document contains certain forward-looking statements including, among
others, anticipated trends in our financial condition and results of operations
and our business strategy. These forward-looking statements are based largely on
our current expectations and are subject to a number of risks and uncertainties.
Actual results could differ materially from these forward-looking statements.
Important factors to consider in evaluating such forward-looking statements
include (i) changes in external competitive market factors or in our internal
budgeting process which might impact trends in the our results of operations;
(ii) unanticipated working capital or other cash requirements; (iii) changes in
the our business strategy or an inability to execute its strategy due to
unanticipated changes in the industries in which we operates; and (iv) various
competitive factors that may prevent the us from competing successfully in the
marketplace.

Tirex's primary objective is to sell
it's patented and proprietary tire recycling process, called the TCS System, to
tire recyclers throughout the world (www.tirex-tcs.com). In March 2000, we
announced that our TCS technology prototype was ready for replication and
commercialization. The intellectual property owned by Tirex comprises both the
patented "fracturing mill" (both US and Canadian patents) plus the proprietary
freezing process of using super-cooled air (rather than the competitions liquid
nitrogen process, which represents expensive "overkill" in terms of what is
required to freeze tire chips) to freeze the tire chips to the "glass point"
which permits the effective separation and disintegration of the tire components
by our patented "fracturing mill", producing a semi-cryogenic crumb rubber at a
significant cost saving. The intellectual property of our TCS System process is
recognized in the Manufacturing License Agreement (2003) we have with Simpro
S.p.A. of Torino, Italy www.simpro.it . Simpro has an semi-exclusive
manufacturing license to manufacture the TCS System, semi-exclusive to the
extent that they have a right of first refusal for the fabrication, installation
and commissioning of any TCS system anywhere in the world, but the exclusivity
is lost on a case-by-case basis in those circumstances where they would elect to
not accept an order, under which circumstances we have the right to contract the
same services to other companies. Our patent renewals and continuation for both
the USA and Canada were documented in 2005.

In 2001 Tirex's TCS tire recycling
prototype was accredited by Recyc-Québec, the provincial recycling agency in
Montreal, Quebec, Canada, as an economically viable and environmentally-friendly
process that produced quality recycled rubber. During the year 2000 and 2001, we
demonstrated our technology to numerous groups from Asia, Europe, North and
South America and the Caribbean, as well as to some shareholders and potential
strategic alliance partners. While numerous Letters of Intent were signed during
this stage, none materialized into firm purchase contracts. Management
attributed these failures to acquire sales contracts to the lack of a commercial
history for the TCS technology, or alternatively, to the Company's inability at
the time to provide performance guarantees. With the signing of the License
Agreement with Simpro we engaged a reputable, highly accredited manufacturer
that created the potential for performance guarantees to be offered. The TCS
prototype was disassembled and its "fracturing mill" was sent to Simpro's
facility in Italy. Simpro is prepared to build the first commercial TCS System.
As of June 30, 2008, no purchase/sale contracts have been written.

Tirex has continued with its
marketing structure consisting primarily of Tirex's President, John L. Threshie
Jr., assisted financially by CFO Michael Ash, combined with Simpro's significant
marketing and sales efforts, as well as independent representatives. Simpro also
has a non-exclusive marketing agreement applicable on a worldwide basis. Tirex
continues to entertain requests for marketing agreements on several continents,
but adheres to its policy of offering commissions out of sales proceeds only and
not providing exclusivities in the absence of prior-established results.

The lack of a commercial track record
relative to the operation and output of the TCS System has proven to be a
difficult hurdle to overcome in acquiring TCS System sales. The installed cost
of a TCS-2 System to a recycler, depending on the system configuration, the
condition of the feedstock and the output requirements and excluding building
and infrastructure costs, is in the vicinity of Euros 5,500,000 (approximately
US$7.92 million at prevailing exchange rates), depending on the extent of
automation requested by the customer. When one adds infrastructure costs,
pre-production expenses and a reasonable provision for working capital after
system commissioning, we are of the opinion that the entrepreneur has to
entrepreneur has to consider his gross investment cost (prior to debt financing
possibilities) to be in the vicinity of US$9 million to$10 million, depending on
the customs duties which could be imposed on US and Canadian customers
respecting the importing of products from non-NAFTA countries. US$9,000,000 or
more represents a substantial investment for a start-up company. Simpro has been
able to obtain insurance backing to support their offer of limited performance
guarantees, and such potential is expected to assist the marketing effort.
Simpro is now offering limited feedstock throughput guarantees on a case by case
basis.

---

Market and sales efforts of the TCS
System continues to evolve and has attracted qualified and capable companies
over the past year. During Fiscal 2007, the Company and Simpro have entertained
numerous potential TCS System customers. Out of these developments, several
opportunities have presented themselves that have merited and continue to merit
the expenditure of considerable effort to close a Purchase and Sales Agreement.
Tirex and Simpro continue to pursue sales efforts in the Middle East, Malaysia,
the USA and Canada. Simpro is also pursuing an opportunity in Brazil where the
production of crumb rubber would be linked to products for the railroad
industry. Our listing on the Internet Recycling Exchange and our web site
www.tirex-tcs.com continues to generate inquiries from all over the world. This
interest confirms the need for new technology in the industry. These
opportunities may not conclude, however, until there is a commercial system in
operation and regardless of Management's optimism there can be no assurance that
these opportunities will actually result in unconditional sales contracts.

The finalizing of the License
Agreement with Simpro means that the gross revenues from sales will be recorded
on Simpro's books, not in the books of Tirex. The amount remitted back to Tirex
will take the form of a royalty and will be accounted for as such. Regardless of
the contract structure and the accounting effects which result, generally
accepted accounting principles in effect in the USA have the effect that the
revenues to Tirex resulting from such transactions will not be recognizable
until the systems will have been accepted by the customers. Given the time line
required to manufacture, install and have accepted these systems, it is clearly
impossible that any revenues would become recognizable during our fiscal year
which will end June 30, 2007. While the Company will benefit from the periodic
cash inflows resulting from progress payments during the next approximately ten
months, the royalty will, in fact, not have been earned until the systems are
accepted by the customers.

In the third and fourth quarters of
fiscal 2008, management undertook a restructuring of the corporation. This was
engaged because management believed (and still does) that the structure of the
Corporation was creating an impediment to marketing efforts. We engaged the
services of the Otto Law Group (Seattle WA) to assist us in the restructuring of
our position. Their services are being remunerated in shares of the corporation.
We also engaged the services of Legacy Trading and their affiliate company,
Southern Capital Consulting, based in Oklahoma, to assist us in getting our
shares listed first back onto the Pink Sheets and with the goal of being
re-listed onto the Bulletin Board. These services are also being remunerated by
means of a share issuance. In order to be eligible for re-listing on the
Bulletin Board, the Corporation is required to file audited financial
statements. The statements of the Corporation had not been audited since the
fiscal year ended June 30, 2004. We engaged the services of Moore & Associates
(Las Vegas) to undertake the audit of our accounts for the years 2004 through
2007 with a continuation for the fiscal year 2008. In August 2008 (two months
following the reporting date of this filing) our application for listing on the
Pink Sheets was filed. In the course of this restructuring, debts to officers,
directors and consultants were converted in whole or in part to equity through
the issuance of shares. Part of this was accomplished through the auspices of
Sequoia International which accepted assignment of $100,000 of executive accrued
salaries in exchange for 100 million shares, a transaction approved by a Florida
court. This transaction also provided for the creation of funding for Tirex in
its restructuring efforts. Third party liabilities were examined and deleted as
permitted by US and Canadian law (the term in Canada is "prescription", in the
USA "Statute of Limitations"). Management is of the opinion that the measures
undertaken in the last half of fiscal 2008 and continuing into fiscal 2009 will
be beneficial to the development of the Corporation.

In February of 2001, we concluded a
private financing with an investor group. Under the terms of the Agreement, we
had the contractual right to require the Investor to purchase up to US$5,000,000
of put notes. We drew down US$750,000 of this amount and used the proceeds of
this financing toward legal and consulting fees due, normal operating expenses
such as payroll, rent and taxes and the acquisition of equipment for our
prototype TCS-1 Plant. In July of 2001, the Company entered into a technical
default with respect to the Agreement by not having an SB-2 Registration
Statement declared effective by the SEC. After several months of negotiations,
the Company entered into a Settlement Agreement with the Investor Group which
provided for a cash pay down of the amount owed, including interest and
penalties over a period of approximately two years starting with the date the
Settlement Agreement was signed, the right of the Investor Group to continue to
be able to sell up to 600,000 collateral and Rule 144 shares per month and the
issuance of three series of warrants, 500,000 each, exercisable at prices of one
cent, five cents and ten cents over a three year period. This Settlement
Agreement was announced in April of 2002, and details of the terms of the
Agreement are filed on Edgar. The Company, in the absence of having completed
its first sales of TCS Systems according to our expectations, was unable to
generate the cash flow necessary to pay down the Convertible Note in accordance
with the terms of the Settlement Agreement. Thus, the Company once again found
itself in a position of default. Numerous recourses are available to the holders
of the Convertible Notes, but to date, these recourses have not been exercised.
Such recourses can be exercised at any time and the fact that they have not been
exercised so far does not preclude their being exercised now or in the future.
The Company has kept the Convertible Note holders apprised of its efforts to
sell TCS Systems and thus restart the repayments on the Convertible Notes.

---

As a result of this period preceding
the commencement of commercial operations, we have had to cover our overhead
costs from sources other than from commercial revenues. Since October 2005, and
continuing into fiscal 2009, approximately US$200,000 was lent to Tirex
president, John L. Threshie Jr., to pay the various expenses of the Corporation
such as filing fees, annual return fees (State of Delaware) stock transfer agent
fees etc. These loans were made in return for agreements to convert these
amounts into common stock of the Corporation. Following the period covered by
this report, Tirex issued approximately 48,740,000 shares under the terms of
these agreements. We expect that some portion of our future overhead costs,
which may be significant, will continue to be covered from sources other than
commercial revenues. Since March of 2003, our monthly our-of-pocket cash costs
were reduced to minimal amounts.

Our greatest expense, from an
accounting standpoint, is for salaries. These salaries have not been paid for
over seven years, but rather set up as payables. A portion of these payables has
been converted to equity through the issuance of common stock. Our cash flow
deficit condition will continue until such time as the Company will start
generating revenues from the sale of TCS Systems. Until we can succeed in
securing an unconditional sales contract for the sale of one or more systems
employing our technology, the company will not be engaging any significant
financial commitments and will not be engaging in any significant research and
development activities nor increasing employment.

While we continue to market TCS
Systems and have in place a License Agreement, as of June 30, 2007, no
unconditional sales orders for TCS Systems had been received and manufacturing
of TCS Systems has not been initiated. We anticipate that we will begin selling
or licensing out the sale of TCS Systems and thus initiating the manufacturing
of these systems on a commercial basis inevitably as long as there is a demand
for new recycling technology. Until we successfully develop and commence TCS
System manufacturing and sales operations on a full-scale commercial level,
however, we will not generate significant revenues from operations. Accordingly,
we would be obligated to attempt to seek non-commercial sources of revenues to
support operations until TCS Systems sales and manufacturing operations would
become a reality. In the event of such a circumstance, there can further be no
assurance that such noncommercial revenue funding would be available at all or
on terms acceptable to management. Except for activities related to the recycled
crumb rubber industry, as noted above and in previous filings, we have never
engaged in any other significant business activities.

During the first quarter of Fiscal
2007, Tirex completed the negotiation of the employment agreements with respect
to Tirex CEO and President, John L. Threshie Jr., Tirex Vice President
Engineering and Research and Development, Louis V. Muro and Tirex
Secretary-Treasurer and Chief Financial Officer, Michael Ash. These versions
were ratified by all respective parties. Under the terms of these agreements,
Mr. Threshies salary was augmented to US$150,000 retroactive to July 1, 2002
while Mr. Muros salary was reduced retroactively to July 1, 2002 to US$75,000.
The salary of Mr. Ash remained unchanged at US$100,000. Also under the terms of
the agreements, Mr. Threshie received an option to acquire 3,000,000 shares of
the corporation at the beginning of each year of his three-year agreement, the
effective inception date being July 1 2007. Similarly, Mr. Muro received options
to purchase 1,000,000 shares per year. Mr. Muros employment was also effective
July 1, 2007. Other than for the number of shares involved, Mr. Muros options
proposed agreement are identical to that of Mr. Threshie. As for Mr. Ash, his
three-year employment agreement was be effective January 1, 2007 and provided
for him to acquire 2,000,000 shares of Tirex in each of the three years of his
contract. In all cases, the exercise window is three years. These options could
be exercised on a cashless basis and are described in more detail elsewhere in
this report

---

Liquidity and Capital Resources

As of June 30, 2008, the Company had
total assets of $25,001 as compared to $25,001 at June 30, 2007 reflecting a
change of Nil. There were no changes in the value of individual assets,
representing Property and Equipment and Patents from June 30, 2007 to June 30,
2008.

As of June 30, 2008, the Company had
total liabilities of $5,126,083 as compared to $4,712,098 at June 30, 2007,
reflecting an increase in liabilities of $413,985. Total liabilities at June 30,
2007 had reflected a previous increase of $500,023 over $4,212,075 in total
liabilities at June 30, 2006. The increase in total liabilities from June 30,
2007 to June 30, 2008 is primarily attributable to: (i) an increase in Long-Term
Deposits and Convertible Notes in the amount of $88,500 from $217,500 as of June
30, 2007 to $306,000 as of June 30, 2008, and (ii) an increase in Convertible
Loans in the amount of $334,774 from $2,421,442 as of June 30, 2007 to
$2,756,216 as of June 30, 2008.

Reflecting the foregoing, the
financial statements indicate that as at June 30, 2008, the Company had a
working capital deficit (current assets minus current liabilities) of $1,478,922
and that as at June 30, 2007, the Company had a working capital deficit of
$1,488,211, a working capital deficit decrease of $9,289. There were no changes
in current assets, as noted above, while there were reductions to current
liabilities due to third parties represented by Accounts Payable and Accrued
Liabilities.

The financial statements which are
included in this report reflect total operations and other expenses of $498,322
for the year ended June 30, 2008, which reflects an increase of $42,473 over the
year ended June 30, 2007 when total operations and other expenses were $455,849.
The Company has ceased Research and Development activities thereby resulting in
a significant decrease in personnel expenses and other Research and Development
expenses compared with prior periods.

The success of the tire recycling
manufacturing business and the ability to continue as a going concern will be
dependent upon the ability of the Company to obtain adequate financing to
commence profitable, commercial manufacturing and sales activities and the TCS
Systems ability to meet anticipated performance specifications on a continuous,
long term commercial basis.

The Company believes that the amounts
accrued to date in respect of the shares issued to compensate the executive
officers and consultants reflect the fair value of the services rendered, and
that the recipients of such shares received such shares at an appropriate and
reasonable discount from the then current public market price. The Company
believes that the discount is warranted due to the fact that there are often
restrictions on the transfer of said shares arising out of the absence of
registration, and the uncertainty respecting our ability to continue as a going
concern.

From inception (July 15, 1987)
through June 30, 2007, the Company has incurred a cumulative net loss of
$30,404,341. Approximately $1,057,356 of such cumulative net loss was incurred
prior to the inception of the Companys present business plan, in connection
with the Companys discontinued proposed health care business and was due
primarily to the expending of costs associated with the unsuccessful attempt to
establish such health care business. The Company never commenced the proposed
health care operations and therefore, generated no revenues therefrom.

---

ITEM 7. FINANCIAL STATEMENTS

Our financial statements required to
be included in this Report pursuant to Item 310(a) of Regulation S-B, are set
forth below.

ITEM 8. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

Following the end of Fiscal 2004, our
former independent certifying accountant informed us that he was abandoning all
SEC-oriented work. Thus, we had no choice but to attempt to change our
certifying accountant effective with the annual financial statements for the
year ended June 30, 2004. The resignation of our former certifying accountant
was not related in any way to any disputes respecting the Companys accounting
or its financial disclosures to shareholders or other interested parties. We
have engaged new certifying accountants. The new certifying accountant audited
our records back through fiscal 2004. Amended 10-KSB Reports for the fiscal
years ended June 30, 2004 through 2007 will be filed imminently.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS;

COMPLIANCE WITH SECTION 16(a) OF THE
EXCHANGE ACT.

Directors, Executive Officers and
Significant Employees

The following sets forth, as of June
30, 2005 the names and ages of all directors, executive officers, and other
significant employees of the Company; and all positions and offices in the
Company held by each, and the terms of said offices. Each director will hold
office until the next annual meeting of shareholders and until his or her
successor has been elected and qualified:

|Name                      | Age | Offices
    Held                 | Term of
    Office          
|------------------------- | --- | -------------------------------- | ----------------------------
|                          |     |                                  |                             
|John L.
    Threshie, Jr. | 54  | Chairman of
    the Board        | November
    1999 -         
|                          |     | of
    Directors, President, and | present                     
|                          |     | Chief
    Executive Officer      |                             
|                          |     | Director                         | June 1995 -                 
|                          |     |                                  | February
    1999           
|                          |     | Vice
    President               | June 1995-                  
|                          |     |                                  | November
    1999           
|                          |     |                                  | Secretary                   
|                          |     |                                  | December
    1996           
|                          |     |                                  | February
    1999           
|                          |     |                                  |                             
|Louis V. Muro             | 76  | Vice President                   | January 1996 -              
|                          |     | of Engineering                   | present                     
|                          |     | and Director                     |                             
|                          |     | President                        | March 1994 -                
|                          |     |                                  | January 1995                
|                          |     | Director                         | December 1992 -             
|                          |     |                                  | Present                     
|                          |     |                                  |                             
|Henry Meier               | 52  | Director                         | Feb. 11,
    1999 to present
|                          |     |                                  |                             
|Michael D.A. Ash          | 59  | Secretary, Treasurer,            | February 1999-              
|                          |     | and Chief Financial              | present                     
|                          |     | and Accounting Officer           |                             

The Board of Directors has no
standing committees.

---

Family Relationships

No family relationships exist between
any director or executive officer of Company or any person contemplated to
become such.

Business Experience

The following summarizes the
occupation and business experience during the past five years for each director,
executive officer and significant employee of the Company. A significant
employee is a person who is not an executive officer of the Company but who is
expected to make a significant contribution to the business of the Company.

JOHN L. THRESHIE, JR. Mr.
Threshie has served as President and Chief Executive Officer of the Company
since November of 1999. Prior to that time he served as a Vice President of the
Company since June 1995. He was appointed Assistant Secretary of the Company on
February 11, 1999. From December 1996 until February 11, 1999, Mr. Threshie held
the position of Secretary, and from June 1995 until February 11, 1999, as a
Director, of the Company. He also served as a Director for The Tirex Corporation
Canada Inc. and Tirex Canada R&D Inc. from June 1998 and June 1995,
respectively, until February 11, 1999. He has more than 30 years of experience
in the areas of management, marketing and sales including 11 years developing
and marketing a new technology in the recycling industry with Tirex.. Mr.
Threshie holds a Bachelors Degree in Political Science from the University of
North Carolina. He was employed as an insurance and financial broker by
Primerica Financial Services from 1991 through 1994. From 1988 to 1990, Mr.
Threshie was an advertising account supervisor for Ammirati & Puris Inc., an
advertising firm in New York. From 1983 to 1988 Mr. Threshie was employed as a
senior account executive at the advertising firm of Saatchi and Saatchi, Inc.
From 1979 to 1983 Mr. Threshie was employed by Milliken & Co. as a sales
representative.

LOUIS V. MURO. Mr. Muro acted as
an engineering consultant to the Company from January 18, 1995 until January 1,
1996 when he was appointed as a Director and as Vice President in charge of
engineering. Mr. Muro served as a Director of the Company from December 29, 1992
until January 18, 1995. He also served as the Company's Secretary from December
29, 1992 until March 1994 when he was appointed President of the Company, a
position he held until January 18, 1995. He has also served as the Vice
President in charge of engineering and as a director of The Tirex Corporation
Canada Inc. and Tirex Canada R&D Inc. since

June 1998 and May 1995 respectively.
Mr. Muro received a B.S. degree in Chemical Engineering from Newark College of
Engineering in 1954, since which time he has continually been employed as a
chemical engineer. From 1974 to 1993 Mr. Muro has been the sole proprietor of
Ace Refiners Corp. of New Jersey, a precious metals refinery. From 1971 to 1974,
he worked as an independent consultant and from 1964 until 1971, he was director
of research and development for Vulcan Materials Corporation in Pittsburgh, Pa.,
a public company engaged in the business of recovering useable tin and clean
steel from scrap tin plate. From 1960 to 1964, Mr. Muro was the sole proprietor
of Space Metals Refining Co. in Woodbridge, NJ, a company involved in the
purification of scrap germanium to transistor grade metal. From 1959 to 1960 he
was employed by Chemical Construction Co., of New Brunswick, NJ, where he
developed a process for the waste-free production of urea from ammonia, carbon
dioxide and water. From 1954 to 1959, Mr. Muro worked in the research and
development department at U.S. Metals Refining Co. in Carteret, NJ where he was
involved with the refinement of precious metals.

MICHAEL D.A. ASH. Mr. Ash joined
the Company on January 11, 1999. On February 11, 1999, Mr. Ash was appointed
Secretary, Treasurer, and Chief Financial and Accounting Officer of the Company.
Mr. Ash graduated with a Bachelor's Degree in Business Administration, Magna Cum
Laude, from Bishop's University in Quebec in 1970, and with an MBA, With
Distinction, from Harvard Business School in 1975. Mr. Ash received his
Chartered Accountant certification, (Canadian equivalent to a CPA) in 1972 while
employed by Coopers & Lybrand (now PriceWaterhouseCoopers). Mr. Ash voluntarily
abandoned his C.A. designation following the ENRON and WorldCom incidents, being
no longer willing to certify financial statements nor to incur the very
expensive professional insurance costs associated with professional private
practice as a sole practice as a sole practitioner. As such, the annual
professional fees were no longer justifiable. Since graduation from Harvard, Mr.
Ash spent a large portion of his career with the Government of Canada, until
early 1999 when he joined Tirex, first with the Office of the Comptroller
General in Ottawa and, for the subsequent eighteen years, with a federal
regional economic and industrial development agency in Montreal where he gained
exposure to a very large number of companies and industrial sectors, ranging
from developmental companies to major multi-national corporations. For ten years
during this time period, Mr. Ash was also a part-time lecturer in accountancy at
Concordia University in Montreal for students registered in the program leading
to the Chartered Accountancy designation.

---

Compliance With Section 16(a) of the Exchange Act.

None of the securities have been
registered pursuant to Section 12 of the Exchange Act of 1934, as amended (the
"Exchange Act"). Therefore, Section 16(a) of the Exchange Act is not applicable.

ITEM 10. EXECUTIVE COMPENSATION

Current Remuneration

The following table sets forth
information concerning the annual compensation received or accrued for services
provided in all capacities for the fiscal years ended June 30, 2005, 2006 and
2007 by our chief executive and all our executive officers serving as such as at
June 30, 2005 or at any time during the year ended June 30, 2007. Future
announcements concerning us, our competitors, results of testing, technological
innovations or new commercial products may have a significant impact on the
market price of our common stock. We believe that, as of the dates when such
shares were issued, the actual market value of such shares was, and as of the
date hereof remains, highly contingent upon, and subject to, extremely high
risks.

SUMMARY COMPENSATION TABLE:

|ANNUAL COMPENSATION (See note below)
|------------------------------------
|                                    
|Name and
    Principal Position     
|                                    
|John
    L. Threshie Jr.            
|President                           
|                                    
|                                    
|Louis V. Muro                       
|Vice President -
    Engineering    
|                                    
|                                    
|Michael D.A. Ash                    
|Secretary-Treasurer & CFO           
|                                    

The employment agreements of all of
the above persons were re-negotiated during the second quarter of Fiscal 2007.
The primary focus of the negotiations was on salary and options in all three
cases. In the case of Mr. Threshie, his salary was be increased from US$125,000
to US$150,000 retroactive to July 1, 2002. In the case of Mr. Muro, his salary
was reduced from US$150,000 to US$75,000 also effective July 1, 2002. Mr. Ashs
salary remained unchanged at US$100,000. Under the terms of these three
employment agreements, all three persons received options with three-year
exercise windows to acquire Tirex shares, with the possibility of a cashless
exercise. These annual options for Mr. Threshie, Mr. Ash and Mr. Muro imply
3,000,00 shares, 2,000,000 and 1,000,000 shares respectively. All exercises are
subject to share structure modifications such as stock splits and reverse splits
on a proportional basis.

---

(1)

No compensation
was paid either in cash or in shares to Messrs. Threshie, Muro and Ash during
Fiscal 2007 and 2008. The amounts due have been recorded as liabilities of the
Company. During fiscal 2008, Tirex assigned $50,000 of accrued salaries to each
of Messrs. Threshie and Ash to Sequoia International in exchange for a Florida
court approved issuance of 100 million shares. The Settlement Agreement was made
under Paragraph 10(a)3 of the Securities Act. During the first quarter of fiscal
2009, the fiscal year following the period covered by this report, Tirex issued
44,900,000 million shares to John L. Threshie Jr., 25,000,000 million shares
(plus 1,723,514 replacement collateral shares) to Louis V. Muro and 16,525,000
shares to Michael Ash plus 13,750,000 issued to his wife and adult children in
partial compensation for accrued and unpaid salaries since 2001. Mr. Sanzaro
(former director) and Mr. Muro were also issued replacement shares for the
collateral shares they provided to 2001 private placement investor referred to
elsewhere in this report and 1,500,000 shares were issued to Michael Ash in
respect to stock options exercised but unpaid three years ago.

Executive Stock Options

As discussed elsewhere in this
Report, the following is a summary of those options and warrants outstanding or
proposed to be outstanding, with respect to the purchase of the common stock of
the Company:

|Beneficiary              | Issuable                     | Exercise Window          | Price                     
|------------------------ | ---------------------------- | ------------------------ | --------------------------
|                         |                              |                          |                           
|John
    L. Threshie Jr. | 3,000,000 share options      | Three (3) years from     | Series 1: lesser of 20    
|                         | at
    the beginning of each | date
    of issue        | cents or 50% of market    
|                         | of
    Fiscal Years 2008,    |                          | Series 2: lesser of 40    
|                         | 2009 and 2010                |                          | cents or 50% of
    market
|                         |                              |                          | Series 3: lesser
    of 50
|                         |                              |                          | cents or 50% of
    market
|                         |                              |                          |                           
|Michael Ash              | 2,000,000 share options      | Three (3) years from     | Series 1: lesser of 20    
|                         | at the beginning of each     | date of issue            | cents or 50% of market    
|                         | of Calendar Years 2007,      |                          | Series 2: lesser of 40    
|                         | 2008 and 2009                |                          | cents or 50% of market    
|                         |                              |                          | Series 3: lesser of 50    
|                         |                              |                          | cents or 50% of market    
|                         |                              |                          |                           
|Louis V. Muro            | 1,000,000 share
    options  | Three (3) years
    from | Series 1: lesser
    of 20
|                         | at the beginning
    of each | date of issue            | cents or 50% of
    market
|                         | of Fiscal Years
    2008,    |                          | Series 2: lesser
    of 40
|                         | 2009 and 2010                |                          | cents or 50% of
    market
|                         |                              |                          | Series 3: lesser
    of 50
|                         |                              |                          | cents or 50% of
    market

In September 2008, the period
following the period covered by this report, Mr. Ash issued his notice of
exercise for options for 4,000,000 shares on a cashless basis. Under the
formula, Mr. Ash will receive 2,000,000 shares. In October 2008 Mr. Threshie
served notice of his exercise of 6 million options on a cashless basis, under
which he will receive 3 million shares. Also in October 2008, Mr. Muro served
notice of his exercise of 2 million options on a cashless basis, which will give
him 1 million shares. As of October 13, 2008, these shares had not yet been
issued.

Compensation of Directors

The Directors of the Company were not
compensated for their services as such in fiscal 2008.

---

Employment Agreements

We seek to maintain employment
agreements with all of our executive officers (the "Executive Agreements"). We
currently have an employment agreement with Mr. Threshie that provides for an
annual salary of $150,000 until June 30, 2010. Mr. Threshie also has options, as
noted above, to purchase shares of the Company. Mr. Threshie was granted options
to purchase 3,000,000 shares at each anniversary date of his Employment
Agreement for the three years following the effective date of his employment
contract, and, for each series of options, would have a three-year period to
exercise that option. The options are exercisable at the lesser of 50% of market
and 20(cent) for the first series, 40(cent) for the second series and 50(cent)
for the third series. We currently employ Mr. Muro on a month-to-month basis,
based on a revised annual salary of $75,000, retroactive to July 1, 2002. Mr.
Muro also has share options which, other than for the number of shares
implicated, are identical to the options of Mr. Threshie. In Mr. Muros case the
number of shares is 1,000,000 shares annually. Under the employment agreement
with Mr. Ash, he is paid an annual salary of $100,000 and he has been given
stock options to acquire 2,000,000 shares in each of the three calendar years of
his agreement, which ends December 31, 2009.

All of the above agreements provide
for the payment of bonuses at the sole discretion of the Board of Directors
based upon an evaluation of the executive's performance, with payment of any
such bonuses to be reviewed annually. The Executive Agreements also provide for
the participation by each of the foregoing persons in any pension plan,
profit-sharing plan, life insurance, hospitalization or surgical program, or
insurance program hereafter adopted by us, reimbursement of business related
expenses, the nondisclosure of information which we deem to be confidential to
it, non-competition by the executive with us for the one-year period following
termination of employment with us and for various other terms and conditions of
employment.

The Executive Agreements with Messrs.
Threshie, Muro and Ash also include severance provisions which provide, among
other things, for severance compensation in the event that the employment of the
executive is terminated by us other than for cause, or by the executive for
"good reason", as that term is defined in the Executive Agreements, or pursuant
to a change in control of the Company, for which the severance terms, under
certain circumstances, as described below, could be different. The various
Executive Agreements provide for severance compensation, as follows:

In the case of Messrs. Threshie, Muro
and Ash, 200% of the amount of the base salary for a period of twelve months,
except that in the event of a termination following a hostile takeover of the
Corporation, the termination is 300%. In addition, the amount of severance
compensation for termination other than for cause, or by the executive for "good
reason", as that term is defined in the Executive Agreements, or pursuant to a
change in control of the Company, amounts to the compensation as described above
plus two months of base salary for each year of service, either under an
employment agreement or under a consulting agreement.

Because of the early stage of our
development, our lack of operations and insignificant cash flow, since January
18, 1995, we have not had the resources to meet fully our financial obligations
under the Executive Agreements. As a result, a major portion of compensation
which has been available to our executive officers has consisted of shares of
our common stock, which such individuals accepted, in lieu of cash compensation,
for a substantial portion of salary and/or consulting fees due to them. For the
last four years, no significant numbers of shares were available for issuance to
the executives.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

The following table sets forth
information as of October 2, 2008, with respect to the persons known to the
Company to be the beneficial owners of more than 5% of the common stock, $.001
par value of the Company and of more than 5% of the Class A Common Stock of the
Company's subsidiary, Tirex R&D and of all Officers and Directors of the Company
as that term is defined in Item 402(a)(2) of Regulation S-B. Neither the Company
nor Tirex R&D have any shares of any other class issued or outstanding.

---

|                              | Name and                           | Amount and            |             
|----------------------------- | ---------------------------------- | --------------------- | ------------
|Title                         | Address of                         | Nature of             |             
|of                            | Beneficial                         | Percent               | Percent     
|Class                         | Owner                              | Ownership             | of Class (1)
|                              |                                    |                       |             
|Common                        | John L.
    Threshie, Jr.          | 47,528,721 (2)        | 7.8%        
|The Tirex                     | P.O. Box 1000                      |                       |             
|Corporation                   | Stratford CT
    06614-9991        |                       |             
|                              |                                    |                       |             
|Class A                       |                                    |                       |             
|Common                        |                                    | 34 (5)                | 34%         
|Tirex R&D                     |                                    |                       |             
|                              |                                    |                       |             
|Common                        | Louis V. Muro                      | 32,853,991
    (2)(3) | 5.4%        
|The Tirex                     | 2063 Desjardins
    Avenue, Apt #2 |                       |             
|Corporation                   | Montreal, Quebec                   |                       |             
|                              | Canada H1V 2H1                     |                       |             
|Class A                       |                                    |                       |             
|Common                        |                                    | 17(5)                 | 17%         
|Tirex                         |                                    |                       |             
|R&D                           |                                    |                       |             
|                              |                                    |                       |             
|Common                        | Henry P. Meier                     | 2,500,000 (6)         | 0.13%       
|The Tirex                     | P.O. Box 895                       |                       |             
|Corporation                   | Lakehurst NJ
    07755             |                       |             
|                              |                                    |                       |             
|Common                        | Joe Sanzaro                        |                       |             
|The Tirex                     | (Brother of deceased director      |                       |             
|Corporation                   | Louis A. Sanzaro)                  | 47,347,665 (2)        | 7.8%        
|                              | 1904 Waverly treet                 |                       |             
|                              | Oakhurst NJ 07756                  |                       |             
|                              |                                    |                       |             
|Common                        | Michael Ash                        | 30,805,000 (4)        | 5.1%        
|The Tirex                     | 310 Montée
    Sabourin            |                       |             
|Corporation                   | St. Bruno,
    Quebec              |                       |             
|                              | Canada, J3V 4P6                    |                       |             
|                              |                                    |                       |             
|Common                        | All directors and                  | 113,368,771           | 18.6%       
|The Tirex                     | officers as a group                |                       |             
|Corporation                   | (4 persons)                        |                       |             
|                              |                                    |                       |             
|Class A                       | All directors
    and              | 51                    | 51.0%       
|Common                        | officers as a
    group            |                       |             
|Tirex                         | (2 persons)                        |                       |             
|R&D                           |                                    |                       |             
|                              |                                    |                       |             
|                              |                                    |                       |             
|Series A Preferred
    Shares |                                    |                      
|                              |                                    |                       |             
|                              | John L. Threshie
    Jr.           | 1,500,000 (7)         | 50% of class
|                              | P.O. Box 1000                      |                       |             
|                              | Stratford CT
    06614-9991        |                       |             

| |                                    |             |                 
| | ---------------------------------- | ----------- | ----------------
| | Louis V. Muro                      | 750,000 (7) | 25% of class    
| | 2063 Desjardins
    Avenue, Apt #2 |             |                 
| | Montreal, Quebec                   |             |                 
| | Canada H1V 2H1                     |             |                 
| |                                    |             |                 
| | Michael Ash                        | 750,000 (7) | 25%
    of class
| | 310
    Montée Sabourin            |             |                 
| | St.
    Bruno, Quebec              |             |                 
| | Canada, J3V 4P6                    |             |                 

---

-------------------------

(1) The percentages listed in the table is calculated on the
basis of 607,920,803 common shares of the common stock, $.001 par value, of the
Company outstanding as at October 2, 2008.

(2) Our executive officers, directors (including deceased
director, Louis A. Sanzaro) and principal shareholders pledged an aggregate of
11,986,315 (approximately 6% of our then outstanding shares) of their personal
shareholdings in the Company as a security interest for our issuance of $750,000
of 8% convertible notes, pursuant to a Subscription Agreement and Security
Agreement dated February 26, 2001. Specifically, John L. Threshie, Jr. pledged
1,891,204 shares, Louis Muro pledged 1,723,514 shares and Louis Sanzaro pledged
8,371,597 shares of our common stock. The Company was unable to respect its
financial obligations under the terms of a Settlement Agreement and negotiations
with respect to a new settlement have not been started. Under the terms of the
first settlement agreement, the investors acquired a right to dispose of the
collateral shares in their possession and did so. According to a confirmation
received from the investors with respect to the convertible note, as of June 30,
2005, they were in possession of 4,000,000 conversion shares, issued in 2003,
but the collateral shares were sold. The collateral shares pledged by Muro and
Sanzaro were replaced subsequent to June 30, 2008. The shares pledged by Mr.
Threshie, still represent a liability of the Corporation. These 4 million
conversion shares represent approximately 0.6% of our current outstanding stock.

(3) Includes: (i) 32,119,991 shares held of record by Mr.
Muro as of October 2, 2008; and (ii) 734,000 shares held of record by Mr. Muro's
previous wife, recently deceased, Nina Aviles Muro. There have been no
subsequent changes.

(4) Includes: (i) 16,825,000 shares held of record by Mr. Ash
as of October 2, 20084; (ii) 5,230,000 shares held of record in the name of
Loryta Investments Limited an entity directly owned by Loryta Trust and thus
beneficially owned by the family of Mr. Ash. Mr. Ash is not himself a
beneficiary of this trust nor does he have decisional powers over its
activities. Also includes 5,250,000 shares owned by the wife of Mr. Ash and
1,750,000 shares held by each of his two adult age children.

(5) Messrs. Threshie and Muro hold all shares of Tirex R&D
Class A Common Stock pursuant to the terms of a Shareholders agreement among
them and the Company (the "Tirex R&D Shareholders Agreement"), pursuant to which
they will be obligated to transfer all such shares to the Company, for no
consideration, on May 2, 2001, unless the term of such Agreement would be
unilaterally extended by the Company. The Company does not intend to take any
actions of any kind with respect to such shares which would be in violation of
any Canadian government regulations governing tax and other financial incentives
which may be available. Tirex Canada R&D Inc. was dissolved by the Quebec
government for lack of filing of annual returns. The company can be
re-established through the filing of appropriate documentation and the payment
of required government fees. It is for this reason that we continue to list Mr.
Threshie and Mr. Muro as shareholders, but until such time as such action would
be undertaken, such share distribution has no effect.

(6) Includes 1,250,000 shares owned in the name of Mr.
Meiers two adult-age children.

(7) The Series A Preferred Shares are not dividend-bearing
but have preferential rights versus the common stock in terms of participation
in residual assets in the event of liquidation. The Series A Preferred Shares
have voting rights equal to 100 votes per share and are exercisable in all
circumstances. The Series A Preferred Shares are convertible into common shares
at the rate of five (5) common shares for each Preferred Share.

---

Changes in Control

On February 26, 2001 we issued
$750,000 worth of convertible notes at an annual rate of eight percent (8%) to
certain investors. Interest payable on these notes is payable quarterly
commencing June 30, 2001. In addition, all principal and unpaid interest due on
the outstanding notes is immediately due and payable on February 26, 2003, or
earlier in the event of a default. One of the conditions of this transaction was
that we would file with the Securities and Exchange Commission a Registration
Statement on Form SB-2 to register various securities issuable upon the
conversion of notes by a certain date and that the Registration Statement would
be effective by August 15, 2001. We failed to meet these deadlines and the
investors served a notice of default on us on July 19, 2001. Negotiations were
undertaken throughout the remainder of Calendar 2001 and into 2002 until a
Settlement Agreement was reached on April 26, 2002. Under the terms of the
Agreement, a copy of which was previously filed, the Company was obligated to
pay down the amount owed to the Investor Group, including interest and
penalties, over a period of approximately two years. During the time when an
amount continues to be owed to the Investor Group, the Investor Group had the
right to sell up to 600,000 collateral or Rule 144 shares per month and apply
the proceeds to interest due, fees and finally to reduction of the principle
amount outstanding. As of June 30, 2005, all of the collateral shares had been
sold. As of June 30, 2005, the Investor Group had 4,000,000 conversion shares,
issued in 2003, in their possession.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The following is a description of
transactions during the last two fiscal years or any presently proposed
transactions to which the Company was or is to be a party, in which the amount
involved in such transaction (or series of transactions) was $60,000 or more and
which any of the following persons had or is to have a direct or indirect
material interest: (i) any director or executive officer of the Company; (ii)
any person who owns or has the right to acquire 5% or more of the issued and
outstanding common stock of the Company; and (iii) any member of the immediate
family of any such persons.

Pursuant to a Subscription Agreement
dated February 26, 2001 we issued $750,000 of 8% convertible notes, due February
26, 2003 to three investors. Under the Subscription Agreement, we had the
option, subject to conditions, to require the investors to purchase additional
convertible put notes up to $4,250,000. Interest only payments were due
quarterly commencing June 30, 2001, and the principal was due in one lump sum on
February 26, 2003, or upon certain events of default. The number of shares of
common stock issuable upon conversion of the convertible notes is 15,000,000,
was based on a conversion price of $0.05 per share. The option exercise window
has expired. One of the conditions of this transaction was that we would file
with the Securities and Exchange Commission a Registration Statement on Form
SB-2 to register various securities issuable upon the conversion of the notes by
a date certain and that the Registration Statement would be effective by August
15, 2001. We failed to meet these deadlines and the investors served a notice of
default on us on July 19, 2001. The conversion price for the convertible notes
is the lesser of (i) 80% of the average of the three lowest closing bid prices
of the common stock for the twenty-two (22) trading days prior to the closing
date, or (ii) 80% of the average of the five lowest closing bid prices of the
common stock for the sixty (60) trading days prior to the conversion date, as
defined in the convertible note. The maximum number of shares of common stock
that any subscriber or group of affiliated subscribers may own after conversion
at any given time is 4.99%.

During the years ended June 30, 2001
through 2008, the Company's executive officers and certain consultants to the
Company necessarily waived cash payment of all of their salaries, fees and/or
unreimbursed expenses made by them on behalf of, and for the account of, the
Company. During fiscal 2009, the period following the fiscal period covered by
this report, shares were issued to such directors and officers in partial
payment of accrued and unpaid salaries, expenses and fees.

---

ITEM 13. EXHIBITS

FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

Financial Statements

The financial statements filed as a
part of this report are as follows:

Consolidated Balance Sheet - June 30,
2008

Consolidated Statements of Operations
for the years ended June 30, 2007 and 2008, and cumulative for the period from
inception (July 15, 1987) to June 30, 2008

Consolidated Statements of Owners'
Equity (Deficit) as at July 15, 1987 and June 30, 2001 - 2008

Consolidated Statements of Cash Flows
for the years ended June 30, 2007 and 2008 and cumulative for the period from
inception (July 15,1987) to June 30, 2008

Reports filed on Form 8-K

|February 14, 2008. | Increase common share authorization
    and creation of a Preferred Share authorization.                                                                                                    
|------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|May 16, 2008.      | Engagement of Moore & Associates to
    conduct the audit of our books for the years ended June 30, 2004 through
    2007 inclusive and the designation of a Series A Preferred Share class.
|June 23, 2008.     | Issuance of 3,000,000 Preferred Shares
    to directors and officers                                                                                                                        
|                   |                                                                                                                                                                                             

Financial Statement Schedules

Financial statements schedules have
been omitted for the reason that they are not required or are not applicable, or
the required information is shown in the financial statements or notes thereto.

Exhibits

The exhibits filed as a part of this
Report or incorporated herein by reference are as follows:

Exhibits Incorporated 
Herein By Reference, 
Exhibit No. As Filed 
With Document 
Indicated

|3. (a) Certificate of Incorporation filed
    August 19, 1987 | 3(a)
|------------------------------------------------------------- | ----
|(b) Certificate of
    Amendment filed June 20, 1989          | 3(b)
|(c) Certificate of Amendment filed March 10,
    1993         | 3   
|(d) Certificate of Amendment filedDecember 5, 1995            | 3(e)
|(e) By-Laws                                                   | 3(b)
|(f) Certificate of
    Amendment filed August 11, 1997        |     

|(g) Certificate of Amendment filed February
    3, 1998                                                                                | 3   
|-------------------------------------------------------------------------------------------------------------------------------------- | ----
|(h) Certificate of Incorporation of
    Tirex Acquisition Corp., filed with the Secretary of State of Delaware onDecember 15, 1997     | 3(h)
|(k) Certificate of
    Amendment to the Certificate ofIncorporation, filed with the
    Secretary of Stateof Delaware on July 10, 1998 |     
|(l)                                                                                                                                    |     

Reports on 8-K

None

---

SIGNATURES

In accordance with Section 15(d) of
the Exchange Act of 1934, the Company has caused this Report to be signed on its
behalf by the undersigned thereunto duly authorized.

THE TIREX CORPORATION

By /s/ JOHN L. THRESHIE, JR.

Date: October 14, 2008

John L.
Threshie, Jr. 
Chairman of the Board of Directors and Chief Executive Officer

In accordance with Section 15(d) of the Securities Exchange
Act of 1934, this Report has been signed below by the following persons on
behalf of the Company in the capacities and on the dates indicated.

|SIGNATURES                                  | DATE                    | TITLE           
|------------------------------------------- | ----------------------- | ----------------
|                                            |                         |                 
|Principal Executive Officer:                |                         |                 
|/s/ JOHN L. THRESHIE, JR                    | Chairman of the Board   | October 14, 2008
|                                            | of Directors and Chief  |                 
|John L. Threshie, Jr                        | Executive Officer       |                 
|                                            |                         |                 
|                                            |                         |                 
|Principal Financial and Accounting Officer: |                        
|                                            |                         |                 
|/s/ MICHAEL D.A. ASH                        | Secretary, Treasurer,   | October 14, 2008
|                                            | and Chief Financial and |                 
|Michael D.A. Ash                            | Accounting Officer      |                 
|                                            |                         |                 
|                                            |                         |                 
|A Majority of the Board of Directors:       |                        
|/s/ JOHN L. THRESHIE, JR.                   | Chairman of the Board   | October 14, 2008
|                                            | of Directors            |                 

|John L. Threshie, Jr. |          |                 
|--------------------- | -------- | ----------------
|                      |          |                 
|                      |          |                 
|                      |          |                 
|Henry Meier           | Director |                 
|                      |          |                 
|                      |          |                 
|/s/ LOUIS V. MURO     | Director | October 14, 2008
|                      |          |                 
|Louis V. Muro         |          |                 
|                      |          |                 

---

SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH 
REPORTS FILED PURSUANT TO SECTION 15(D) OF THE 
EXCHANGE ACT BY NON-REPORTING ISSUERS

No annual report or proxy materials
have been sent to security-holders during the fiscal year ended June 30, 2007 or
the subsequent interim period. As at the date hereof, the Company plans to
furnish proxy materials relating to its annual meeting, which is presently
contemplated to be held during the current fiscal year. All such materials will
be furnished to the Commission at the same time as they are sent to securities
holders.

---





THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2008





---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

CONSOLIDATED BALANCE SHEET

AS AT JUNE 30, 2008

---

|                                                                 |   | June 30,
|---------------------------------------------------------------- | - | --------
|                                                                 |   | 2008    
|                                                                 |   |         
|ASSETS                                                          
|                                                                 |   |         
|Current Assets                                                   |   |         
|Cash and cash equivalents                                        | $ | -       
|Accounts receivable                                              |   | -       
|Notes receivable                                                 |   | -       
|Inventory                                                        |   | -       
|Research and Experimental Development tax credits
    receivable |   | -       
|Total Current Assets                                             |   | -       
|                                                                 |   |         
|Property and equipment                                           |   | 25,000  
|                                                                 |   |         
|Other assets                                                     |   |         
|Patents                                                          |   | 1       
|Investment, at cost                                              |   | -       
|Total Other Assets                                               |   | 1       
|                                                                 |   |         
|                                                                 |   |         
|Total Assets                                                     | $ | 25,001  

|                                                            |  
|----------------------------------------------------------- | -
|LIABILITIES
    AND STOCKHOLDERS' EQUITY (DEFICIT)         
|                                                            |  
|Current Liabilities                                         |  
|Accounts payable and accrued liabilities                    | $
|Current portion of long-term debt                           |  
|Total Current Liabilities                                   |  
|                                                            |  
|Other liabilities                                           |  
|Long-term deposits and convertible notes                    |  
|Government loans (net of current)                           |  
|Capital lease obligations (net of current)                  |  
|Convertible notes                                           |  
|Convertible notes                                           |  
|Convertible loans                                           |  
|Total Other Liabilities                                     |  
|                                                            |  
|Total Liabilities                                           |  
|                                                            |  
|Stockholders' Equity (Deficit)                              |  
|Common stock, $.001 par value, authorized                   |  
|1,000,000,000 shares, issued and outstanding                |  
|291,995,892 shares (June 30, 2007 - 249,895,892
    shares) |  
|Preferred stock, $.005 par value, authorized                |  
|3,000,000 Series A shares, issued and outstanding           |  
|3,000,000 Series A shares (June 30, 2007 - 0
    shares)    |  
|Additional paid-in capital                                  |  
|Deficit accumulated during the development stage            |  
|Unrealized gain (loss) on foreign exchange                  |  
|                                                            |  
|                                                            |  
|                                                            |  
|Total Liabilities and Stockholders' Equity
    (Deficit)    |  

See Notes to Consolidated Financial Statements

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

---

|                                             | Twelve months
    ended |             | Cumulative from      
|-------------------------------------------- | ----------------------- | ----------- | ---------------------
|                                             | June 30                 |             | March 26, 1993
    to
|                                             | 2008                    |             | 2007                 
|                                             |                         |             |                      
|Revenues                                     | $                       | -           |                      
|                                             |                         |             |                      
|Cost of Sales                                |                         | -           |                      
|                                             |                         |             |                      
|                                             |                         |             |                      
|Gross profit                                 |                         | -           |                      
|                                             |                         |             |                      
|Operations                                   |                         |             |                      
|General and administrative                   |                         | 451,527     |                      
|Depreciation and amortization                |                         | -           |                      
|Research and development                     |                         | -           |                      
|                                             |                         |             |                      
|Total Expense                                |                         | 451,527     |                      
|                                             |                         |             |                      
|Income (loss) before other expenses          |                         | (451,527)   |                      
|                                             |                         |             |                      
|Other expenses (income)                      |                         |             |                      
|Interest expense                             |                         | 46,795      |                      
|Interest income                              |                         | -           |                      
|Income from stock options                    |                         | -           |                      
|Gain from extinguishment of debt             |                         | -           |                      
|Loss on disposal of equipment                |                         | -           |                      
|                                             |                         |             |                      
|Total Other expenses (income)                |                         | 46,795      |                      
|                                             |                         |             |                      
|Provision for income taxes                   |                         | -           |                      
|                                             |                         |             |                      
|Net income (loss)                            |                         | (498,322)   |                      
|                                             |                         |             |                      
|Other comprehensive loss                     |                         |             |                      
|Loss (gain) on foreign exchange              |                         | -           |                      
|                                             |                         |             |                      
|                                             |                         |             |                      
|Net income (loss) and comprehensive loss     | $                       | (498,322)   |                      
|                                             |                         |             |                      
|Basic and Diluted net loss and comprehensive |                         |             |                      
|loss per common share                        | $                       | (0.00)      |                      
|                                             |                         |             |                      
|Weighted average shares of common            |                         |             |                      
|stock outstanding                            |                         | 260,363,378 |                      

See Notes to Consolidated Financial Statements

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

---

|                                      |              |  |                 |  |         |  |               |  |            |  | Deficit     |  |             |  |              
|------------------------------------- | ------------ |  | --------------- |  | ------- |  | ------------- |  | ---------- |  | ----------- |  | ----------- |  | -------------
|                                      |              |  |                 |  |         |  |               |  |            |  | Accumulated |  | Unrealized  |  | Total        
|                                      |              |  |                 |  |         |  |               |  | Additional |  | During      |  | gain (loss) |  | Stockholders'
|                                      | Common Stock |  | Preferred Stock |  | Paid-in |  | Developmental |  | on foreign |  | Equity     
|                                      | Shares       |  | Amount          |  | Shares  |  | Amount        |  | Capital    |  | Stage       |  | exchange    |  | (Deficit)    
|Balance June 30, 1992                 | 3,383,050    |  | 3,383           |  | -       |  | -             |  | 194,980    |  | (1,057,356) |  | $ -         |  | (858,993)    
|Stock issued for reorganization       | 18,650,000   |  | 18,650          |  |         |  |               |  | 76,155     |  |             |  |             |  | 94,805       
|Stock issued for services             | 100,000      |  | 100             |  |         |  |               |  | (100)      |  |             |  |             |  |              
|                                      |              |  |                 |  |         |  |               |  |            |  |             |  |             |  |              
|Stock issued in exchange for Warrants | 363,656      |  | 364             |  |         |  |               |  | (364)      |  |             |  |             |  |              
|Forgiveness of debt                   |              |  |                 |  |         |  |               |  | 728,023    |  |             |  |             |  | 728,023      
|Net loss and comprehensive            |              |  |                 |  |         |  |               |  |            |  |             |  |             |  |              
|loss for the year                     |              |  |                 |  |         |  |               |  |            |  | (165,296)   |  |             |  | (165,296)    
|                                      |              |  |                 |  |         |  |               |  |            |  |             |  |             |  |              
|Balance June 30, 1993                 | 22,496,706   |  | 22,497          |  | -       |  | -             |  | 998,694    |  | (1,222,652) |  | -           |  | (201,461)    
|                                      |              |  |                 |  |         |  |               |  |            |  |             |  |             |  |              
|Stock issued for services             | 100,000      |  | 100             |  |         |  |               |  | (100)      |  |             |  |             |  | -            
|Exchange for Debt                     |              |  |                 |  |         |  |               |  | 149,170    |  |             |  |             |  | 149,170      
|Payments received for stock           |              |  |                 |  |         |  |               |  |            |  |             |  |             |  |              
|previously issued                     |              |  |                 |  |         |  |               |  | 237,430    |  |             |  |             |  | 237,430      
|Net loss and comprehensive            |              |  |                 |  |         |  |               |  |            |  |             |  |             |  | -            
|loss for the year                     |              |  |                 |  |         |  |               |  |            |  | (179,296)   |  |             |  | (179,296)    
|                                      |              |  |                 |  |         |  |               |  |            |  |             |  |             |  |              
|Balance June 30, 1994                 | 22,498,706   |  | 22,499          |  | -       |  | -             |  | 1,385,292  |  | (1,401,948) |  | -           |  | 5,843        
|                                      |              |  |                 |  |         |  |               |  |            |  |             |  |             |  |              
|Revision of common stock              | (11,900,000) |  | (11,900)        |  |         |  |               |  | 11,900     |  |             |  |             |  | -            
|Stock issued for services             | 5,592,857    |  | 5,592           |  |         |  |               |  | 513,908    |  |             |  |             |  | 519,500      
|Exchange for Debt                     | 200,000      |  | 200             |  |         |  |               |  | 24,300     |  |             |  |             |  | 24,500       
|Issuance of common stock              | 402,857      |  | 401             |  |         |  |               |  | 21,915     |  |             |  |             |  | 22,316       
|previously issued                     |              |  |                 |  |         |  |               |  |            |  |             |  |             |  |              
|Net loss and comprehensive            |              |  |                 |  |         |  |               |  |            |  |             |  |             |  | -            
|loss for the year                     |              |  |                 |  |         |  |               |  |            |  | (575,771)   |  |             |  | (575,771)    
|                                      |              |  |                 |  |         |  |               |  |            |  |             |  |             |  |              
|Balance June 30, 1995                 | 16,794,420   |  | 16,792          |  | -       |  | -             |  | 1,957,315  |  | (1,977,719) |  | -           |  | (3,612 )     
|                                      |              |  |                 |  |         |  |               |  |            |  |             |  |             |  |              

See Notes to Consolidated Financial Statements

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

---

|                                     |              |  |                 |  |         |  |               |  |            |  | Deficit      |  |             |  |              
|------------------------------------ | ------------ |  | --------------- |  | ------- |  | ------------- |  | ---------- |  | ------------ |  | ----------- |  | -------------
|                                     |              |  |                 |  |         |  |               |  |            |  | Accumulated  |  | Unrealized  |  | Total        
|                                     |              |  |                 |  |         |  |               |  | Additional |  | During       |  | gain (loss) |  | Stockholders'
|                                     | Common Stock |  | Preferred Stock |  | Paid-in |  | Developmental |  | on foreign |  | Equity      
|                                     | Shares       |  | Amount          |  | Shares  |  | Amount        |  | Capital    |  | Stage        |  | exchange    |  | (Deficit)    
|Balance June 30, 1995                | 16,794,420   |  | 16,792          |  | -       |  | -             |  | 1,957,315  |  | (1,977,719)  |  | -           |  | (3,612)      
|                                     |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Stock issued                         | 3,975,662    |  | 5,090           |  |         |  |               |  | 846,612    |  |              |  |             |  | 851,702      
|Exchange for Debt                    | 391,857      |  | 392             |  |         |  |               |  | 29,008     |  |              |  |             |  | 29,400       
|Issuance of common stock             | 710,833      |  | 710             |  |         |  |               |  | 80,161     |  |              |  |             |  | 80,871       
|Net loss and comprehensive           |              |  |                 |  |         |  |               |  |            |  |              |  |             |  | -            
|loss for the year                    |              |  |                 |  |         |  |               |  |            |  | (1,127,044)  |  |             |  | (1,127,044)  
|                                     |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Balance June 30, 1996                | 21,872,772   |  | 22,984          |  | -       |  | -             |  | 2,913,096  |  | (3,104,763)  |  | -           |  | (168,683)    
|                                     |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Stock issued for options             |              |  |                 |  |         |  |               |  | 912,838    |  |              |  |             |  | 912,838      
|Stock issued for services            | 5,067,912    |  | 3,955           |  |         |  |               |  | 690,234    |  |              |  |             |  | 694,189      
|Stock in Exchange for Debt           | 251,382      |  | 252             |  |         |  |               |  | 43,965     |  |              |  |             |  | 44,217       
|Issuance of common stock             | 10,257,936   |  | 10,259          |  |         |  |               |  | 335,132    |  |              |  |             |  | 345,391      
|Grants received                      |              |  |                 |  |         |  |               |  | 408,597    |  |              |  |             |  | 408,597      
|Net loss and comprehensive           |              |  |                 |  |         |  |               |  |            |  |              |  |             |  | -            
|loss for the year                    |              |  |                 |  |         |  |               |  |            |  | (2,376,279)  |  |             |  | (2,376,279)  
|                                     |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Balance June 30, 1997                | 37,450,002   |  | 37,450          |  | -       |  | -             |  | 5,303,862  |  | (5,481,042)  |  | -           |  | (139,730)    
|                                     |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Stock issued for options             |              |  |                 |  |         |  |               |  | 948,500    |  |              |  |             |  | 948,500      
|Stock issued for services            | 4,396,466    |  | 4,396           |  |         |  |               |  | 922,180    |  |              |  |             |  | 926,576      
|Issuance of common stock             | 21,795,000   |  | 21,796          |  |         |  |               |  | 1,176,755  |  |              |  |             |  | 1,198,551    
|Stock options issued and outstanding |              |  |                 |  |         |  |               |  | 1,236,913  |  |              |  |             |  | 1,236,913    
|Grants received                      |              |  |                 |  |         |  |               |  | 669,906    |  |              |  |             |  | 669,906      
|Unrealized foreign exchange          |              |  |                 |  |         |  |               |  |            |  |              |  | 183,785     |  | 183,785      
|Net loss and comprehensive           |              |  |                 |  |         |  |               |  |            |  |              |  |             |  | -            
|loss for the year                    |              |  |                 |  |         |  |               |  |            |  | (4,570,441)  |  |             |  | (4,570,441)  
|                                     |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Balance June 30, 1998                | 63,641,468   |  | 63,642          |  | -       |  | -             |  | 10,258,116 |  | (10,051,483) |  | 183,785     |  | 454,060      

See Notes to Consolidated Financial Statements

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

---

|                                     |              |  |                 |  |         |  |               |  |            |  | Deficit      |  |             |  |              
|------------------------------------ | ------------ |  | --------------- |  | ------- |  | ------------- |  | ---------- |  | ------------ |  | ----------- |  | -------------
|                                     |              |  |                 |  |         |  |               |  |            |  | Accumulated  |  | Unrealized  |  | Total        
|                                     |              |  |                 |  |         |  |               |  | Additional |  | During       |  | gain (loss) |  | Stockholders'
|                                     | Common Stock |  | Preferred Stock |  | Paid-in |  | Developmental |  | on foreign |  | Equity      
|                                     | Shares       |  | Amount          |  | Shares  |  | Amount        |  | Capital    |  | Stage        |  | exchange    |  | (Deficit)    
|Balance June 30, 1998                | 63,641,468   |  | 63,642          |  | -       |  | -             |  | 10,258,116 |  | (10,051,483) |  | 183,785     |  | 454,060      
|                                     |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Stock issued for options             | 2,234,567    |  | 2,235           |  |         |  |               |  | 38,765     |  |              |  |             |  | 41,000       
|Stock issued for services            | 24,200,439   |  | 24,200          |  |         |  |               |  | 2,735,544  |  |              |  |             |  | 2,759,744    
|Shares issued in exchange for debt   | 3,787,947    |  | 3,788           |  |         |  |               |  | 340,164    |  |              |  |             |  | 343,952      
|Conversion of debentures             | 2,816,966    |  | 2,817           |  |         |  |               |  | 290,102    |  |              |  |             |  | 292,919      
|Issuance of common stock             | 677,966      |  | 678             |  |         |  |               |  | 49,322     |  |              |  |             |  | 50,000       
|Stock options issued and outstanding |              |  |                 |  |         |  |               |  | 385,600    |  |              |  |             |  | 385,600      
|Grants received                      |              |  |                 |  |         |  |               |  | 1,057,742  |  |              |  |             |  | 1,057,742    
|Unrealized foreign exchange          |              |  |                 |  |         |  |               |  |            |  |              |  | (29,142)    |  | (29,142)     
|Net loss and comprehensive           |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|loss for the year                    |              |  |                 |  |         |  |               |  |            |  | (4,909,879)  |  |             |  | (4,909,879)  
|                                     |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Balance June 30, 1999                | 97,359,353   |  | 97,360          |  | -       |  | -             |  | 15,155,355 |  | (14,961,362) |  | 154,643     |  | 445,996      
|                                     |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Stock issued for options             | 5,327,486    |  | 5,327           |  |         |  |               |  | 381,600    |  |              |  |             |  | 386,927      
|Stock issued for services            | 28,873,210   |  | 28,873          |  |         |  |               |  | 2,217,758  |  |              |  |             |  | 2,246,631    
|Shares issued in exchange for debt   | 7,342,055    |  | 7,342           |  |         |  |               |  | 382,556    |  |              |  |             |  | 389,898      
|Conversion of debentures             | 12,010,073   |  | 12,010          |  |         |  |               |  | 815,796    |  |              |  |             |  | 827,806      
|Issuance of common stock             | 221,000      |  | 221             |  |         |  |               |  | 16,039     |  |              |  |             |  | 16,260       
|Grants received                      |              |  |                 |  |         |  |               |  | 395,683    |  |              |  |             |  | 395,683      
|Unrealized foreign exchange          |              |  |                 |  |         |  |               |  |            |  |              |  | 5,789       |  | 5,789        
|Net loss and comprehensive           |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|loss for the year                    |              |  |                 |  |         |  |               |  |            |  | (5,548,829)  |  |             |  | (5,548,829)  
|                                     |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Balance June 30, 2000                | 151,133,177  |  | 151,133         |  | -       |  | -             |  | 19,364,787 |  | (20,510,191) |  | 160,432     |  | (833,839)    

See Notes to Consolidated Financial Statements

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

---

|                                   |              |  |                 |  |         |  |               |  |            |  | Deficit      |  |             |  |              
|---------------------------------- | ------------ |  | --------------- |  | ------- |  | ------------- |  | ---------- |  | ------------ |  | ----------- |  | -------------
|                                   |              |  |                 |  |         |  |               |  |            |  | Accumulated  |  | Unrealized  |  | Total        
|                                   |              |  |                 |  |         |  |               |  | Additional |  | During       |  | gain (loss) |  | Stockholders'
|                                   | Common Stock |  | Preferred Stock |  | Paid-in |  | Developmental |  | on foreign |  | Equity      
|                                   | Shares       |  | Amount          |  | Shares  |  | Amount        |  | Capital    |  | Stage        |  | exchange    |  | (Deficit)    
|Balance June 30, 2000              | 151,133,177  |  | 151,133         |  | -       |  | -             |  | 19,364,787 |  | (20,510,191) |  | 160,432     |  | (833,839)    
|                                   |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Stock issued for services          | 7,375,483    |  | 7,375           |  |         |  |               |  | 864,840    |  |              |  |             |  | 872,215      
|Stock issued for options           | 5,378,507    |  | 5,379           |  |         |  |               |  | 506,998    |  |              |  |             |  | 512,377      
|Shares issued in exchange for debt | 11,646,312   |  | 11,646          |  |         |  |               |  | 1,547,455  |  |              |  |             |  | 1,559,101    
|Conversion of debentures           | 100,000      |  | 100             |  |         |  |               |  | 19,900     |  |              |  |             |  | 20,000       
|Issuance of common stock           | 732,929      |  | 733             |  |         |  |               |  | 39,427     |  |              |  |             |  | 40,160       
|Unrealized foreign exchange        |              |  |                 |  |         |  |               |  |            |  |              |  | (340,661)   |  | (340,661)    
|Grants issued                      |              |  |                 |  |         |  |               |  | 249,294    |  |              |  |             |  | 249,294      
|Net loss and comprehensive loss    |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|for the year                       |              |  |                 |  |         |  |               |  |            |  | (3,112,138)  |  |             |  | (3,112,138)  
|                                   |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Balance June 30, 2001              | 176,366,408  |  | 176,366         |  | -       |  | -             |  | 22,592,701 |  | (23,622,329) |  | (180,229)   |  | (1,033,491)  
|                                   |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Stock issued for services          | 18,466,162   |  | 18,466          |  |         |  |               |  | 314,859    |  |              |  |             |  | 333,325      
|Shares issued in exchange for debt | 24,075,502   |  | 24,076          |  |         |  |               |  | 1,649,442  |  |              |  |             |  | 1,673,518    
|Issuance of common stock           | 5,849,487    |  | 5,850           |  |         |  |               |  | 61,897     |  |              |  |             |  | 67,747       
|Unrealized foreign exchange        |              |  |                 |  |         |  |               |  |            |  |              |  | (19,940)    |  | (19,940)     
|Net loss and comprehensive loss    |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|for the year                       |              |  |                 |  |         |  |               |  |            |  | (3,421,460)  |  |             |  | (3,421,460)  
|                                   |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Balance June 30, 2002              | 224,757,559  |  | 224,758         |  | -       |  | -             |  | 24,618,899 |  | (27,043,789) |  | (200,169)   |  | (2,400,301)  

See Notes to Consolidated Financial Statements

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

---

|                                    |              |  |                 |  |         |  |               |  |            |  | Deficit      |  |             |  |              
|----------------------------------- | ------------ |  | --------------- |  | ------- |  | ------------- |  | ---------- |  | ------------ |  | ----------- |  | -------------
|                                    |              |  |                 |  |         |  |               |  |            |  | Accumulated  |  | Unrealized  |  | Total        
|                                    |              |  |                 |  |         |  |               |  | Additional |  | During       |  | gain (loss) |  | Stockholders'
|                                    | Common Stock |  | Preferred Stock |  | Paid-in |  | Developmental |  | on foreign |  | Equity      
|                                    | Shares       |  | Amount          |  | Shares  |  | Amount        |  | Capital    |  | Stage        |  | exchange    |  | (Deficit)    
|Balance June 30, 2002               | 224,757,559  |  | 224,758         |  | -       |  | -             |  | 24,618,899 |  | (27,043,789) |  | (200,169)   |  | (2,400,301)  
|                                    |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Stock issued for services           | 5,455,000    |  | 5,455           |  |         |  |               |  | 130,920    |  |              |  |             |  | 136,375      
|Shares issued in exchange for debt  | 15,400,000   |  | 15,400          |  |         |  |               |  | 441,183    |  |              |  |             |  | 456,583      
|Issuance of common stock            | 4,283,333    |  | 4,283           |  |         |  |               |  | 31,217     |  |              |  |             |  | 35,500       
|Unrealized foreign exchange         |              |  |                 |  |         |  |               |  |            |  |              |  | (182,365)   |  | (182,365)    
|Net loss and comprehensive loss     |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|for the year                        |              |  |                 |  |         |  |               |  |            |  | (1,561,375)  |  |             |  | (1,561,375)  
|                                    |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Balance June 30, 2003               | 249,895,892  |  | 249,896         |  | -       |  | -             |  | 25,222,219 |  | (28,605,164) |  | (382,534)   |  | (3,515,583)  
|                                    |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Unrealized foreign exchange         |              |  |                 |  |         |  |               |  |            |  |              |  | (30,325)    |  | (30,325)     
|Net profit (loss) and comprehensive |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|profit (loss) for the year          |              |  |                 |  |         |  |               |  |            |  | 298,216      |  |             |  | 298,216      
|                                    |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Balance June 30, 2004               | 249,895,892  |  | 249,896         |  | -       |  | -             |  | 25,222,219 |  | (28,306,948) |  | (412,859)   |  | (3,247,692)  
|                                    |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Unrealized foreign exchange         |              |  |                 |  |         |  |               |  |            |  |              |  | (63,448)    |  | (63,448)     
|Net loss and comprehensive loss     |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|for the year                        |              |  |                 |  |         |  |               |  |            |  | (576,766)    |  |             |  | (576,766)    
|                                    |              |  |                 |  |         |  |               |  |            |  |              |  |             |  |              
|Balance June 30, 2005               | 249,895,892  |  | 249,896         |  | -       |  | -             |  | 25,222,219 |  | (28,883,714) |  | (476,307)   |  | (3,887,906)  

See Notes to Consolidated Financial Statements

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

---

|                                 |              |  |                 |  |           |  |              |  |            |  | Deficit      |  |             |  |              
|-------------------------------- | ------------ |  | --------------- |  | --------- |  | ------------ |  | ---------- |  | ------------ |  | ----------- |  | -------------
|                                 |              |  |                 |  |           |  |              |  |            |  | Accumulated  |  | Unrealized  |  | Total        
|                                 |              |  |                 |  |           |  |              |  | Additional |  | During       |  | gain (loss) |  | Stockholders'
|                                 | Common Stock |  | Preferred Stock |  | Paid-in   |  | Developments |  | on foreign |  | Equity      
|                                 | Shares       |  | Amount          |  | Shares    |  | Amount       |  | Capital    |  | Stage        |  | exchange    |  | (Deficit)    
|Balance June 30, 2005            | 249,895,892  |  | 249,896         |  | -         |  | -            |  | 25,222,219 |  | (28,883,714) |  | (476,307)   |  | (3,887,906)  
|                                 |              |  |                 |  |           |  |              |  |            |  |              |  |             |  |              
|Unrealized foreign exchange      |              |  |                 |  |           |  |              |  |            |  |              |  | (78,596)    |  | (78,596)     
|Net loss and comprehensive loss  |              |  |                 |  |           |  |              |  |            |  |              |  |             |  |              
|for the year                     |              |  |                 |  |           |  |              |  |            |  | (220,572)    |  |             |  | (220,572)    
|                                 |              |  |                 |  |           |  |              |  |            |  |              |  |             |  |              
|Balance June 30, 2006            | 249,895,892  |  | 249,896         |  | -         |  | -            |  | 25,222,219 |  | (29,104,286) |  | (554,903)   |  | (4,187,074)  
|                                 |              |  |                 |  |           |  |              |  |            |  |              |  |             |  |              
|Unrealized foreign exchange      |              |  |                 |  |           |  |              |  |            |  |              |  | (44,174)    |  | (44,174)     
|Net loss and comprehensive loss  |              |  |                 |  |           |  |              |  |            |  |              |  |             |  |              
|for the year                     |              |  |                 |  |           |  |              |  |            |  | (455,849)    |  |             |  | (455,849)    
|                                 |              |  |                 |  |           |  |              |  |            |  |              |  |             |  |              
|Balance June 30, 2007            | 249,895,892  |  | 249,896         |  | -         |  | -            |  | 25,222,219 |  | (29,560,135) |  | (599,077)   |  | (4,687,097)  
|                                 |              |  |                 |  |           |  |              |  |            |  |              |  |             |  |              
|Common stock issued for services | 42,100,000   |  | 42,100          |  |           |  |              |  | 33,400     |  |              |  |             |  | 75,500       
|Preferred stock issued           |              |  |                 |  | 3,000,000 |  | 15,000       |  |            |  |              |  |             |  | 15,000       
|Unrealized foreign exchange      |              |  |                 |  |           |  |              |  |            |  |              |  | (6,163)     |  | (6,163)      
|Net loss and comprehensive loss  |              |  |                 |  |           |  |              |  |            |  |              |  |             |  |              
|for the year                     |              |  |                 |  |           |  |              |  |            |  | (498,322)    |  |             |  | (498,322)    
|                                 |              |  |                 |  |           |  |              |  |            |  |              |  |             |  |              
|Balance June 30, 2008            | 291,995,892  |  | 291,996         |  | 3,000,000 |  | 15,000       |  | 25,255,619 |  | (30,058,457) |  | (605,240)   |  | (5,101,082)  

See Notes to Consolidated Financial Statements

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS

---

|                                                                  | Twelve months
    ended |           | Cumulative from      
|----------------------------------------------------------------- | ----------------------- | --------- | ---------------------
|                                                                  | June 30                 |           | March 26, 1993
    to
|                                                                  | 2008                    |           | 2007                 
|                                                                  |                         |           |                      
|Cash flows from operating activities:                             |                         |           |                      
|                                                                  |                         |           |                      
|Net loss                                                          | $                       | (498,322) |                      
|                                                                  |                         |           |                      
|Adjustments to reconcile net loss to net cash                     |                         |           |                      
|used in operating activities:                                     |                         |           |                      
|Depreciation and amortization                                     |                         | -         |                      
|(Gain) loss on disposal and abandonment of assets                 |                         | -         |                      
|Stock issued in exchange for interest                             |                         | -         |                      
|Stock issued in exchange for services and
    expenses            |                         | -         |                      
|Stock options issued in exchange for services                     |                         | -         |                      
|Unrealized (loss) gain on foreign exchange                        |                         | (6,163)   |                      
|Other non-cash items                                              |                         | 495,196   |                      
|                                                                  |                         |           |                      
|Changes in assets and liabilities:                                |                         |           |                      
|(Increase) decrease in:                                           |                         |           |                      
|Account receivable                                                |                         | -         |                      
|Inventory                                                         |                         | -         |                      
|Sales tax receivable                                              |                         | -         |                      
|Research and experimental development tax credits
    receivable  |                         | -         |                      
|Other assets                                                      |                         | -         |                      
|(Decrease) increase in :                                          |                         |           |                      
|Accounts payables and accrued liabilities                         |                         | (115,711) |                      
|Accrued salaries                                                  |                         | 125,000   |                      
|Due to stockholders                                               |                         | -         |                      
|                                                                  |                         |           |                      
|Net cash used in operating activities                             |                         | -         |                      
|                                                                  |                         |           |                      
|Cash flow from investing activities:                              |                         |           |                      
|Increase in notes receivable                                      |                         | -         |                      
|Reduction in notes receivable                                     |                         | -         |                      
|Investment                                                        |                         | -         |                      
|Equipment                                                         |                         | -         |                      
|Equipment assembly costs                                          |                         | -         |                      
|Organization cost                                                 |                         | -         |                      
|Reduction in security deposit                                     |                         | -         |                      
|                                                                  |                         |           |                      
|Net cash used in investing activities                             |                         | -         |                      
|                                                                  |                         |           |                      
|Cash flow from financing activities:                              |                         |           |                      
|Loans from related parties                                        |                         |           |                      
|Deferred financing costs                                          |                         | -         |                      
|Proceeds from deposits                                            |                         | -         |                      
|Payments on notes payable                                         |                         | -         |                      
|Proceeds from convertible notes                                   |                         | -         |                      
|Proceeds from notes payable                                       |                         | -         |                      
|Payments on lease obligations                                     |                         | -         |                      
|Proceeds from issuance of convertible
    subordinated debentures |                         | -         |                      
|Proceeds from loan payable                                        |                         | -         |                      
|Payments on loan payable                                          |                         | -         |                      
|Proceeds from issuance of stock options                           |                         | -         |                      
|Proceeds from grants                                              |                         | -         |                      
|Proceeds from issuance of common stock                            |                         | -         |                      
|Proceeds from additional paid-in capital                          |                         | -         |                      
|                                                                  |                         |           |                      
|Net cash provided by financing activities                         |                         | -         |                      
|                                                                  |                         |           |                      
|Net (decrease) increase in cash and cash
    equivalents          |                         | -         |                      
|                                                                  |                         |           |                      
|Cash and cash equivalents - beginning of
    period               |                         | -         |                      
|                                                                  |                         |           |                      
|Cash and cash equivalents - end of period                         | $                       | -         |                      

See Notes to Consolidated Financial Statements

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS

---

|                                                                                     | Twelve months
    ended |   | Cumulative from      
|------------------------------------------------------------------------------------ | ----------------------- | - | ---------------------
|                                                                                     | June 30                 |   | March 26, 1993
    to
|                                                                                     | 2008                    |   | 2007                 
|                                                                                     |                         |   |                      
|Supplemental Disclosure of Non-Cash
    Activities:                                  |                         |   |                      
|During the year ended June 30, 2008, the Company
    did not issue common stock      |                         |   |                      
|in recognition of the payment of debt. During the
    year ended June 30, 2007, the  |                         |   |                      
|Company did not issue common stock in recognition
    of the payment of debt.        |                         |   |                      
|                                                                                     |                         |   |                      
|During the year ended June 30, 2008, the Company
    issued 42,100,000 common shares |                         |   |                      
|in exchange for services performed. During the
    year ended June 30, 2007, the     |                         |   |                      
|Company did not issue common stock in exchange
    for services performed.           |                         |   |                      
|                                                                                     |                         |   |                      
|                                                                                     |                         |   |                      
|Supplemental Disclosure of Cash Flow
    Information:                                |                         |   |                      
|                                                                                     |                         |   |                      
|Interest paid                                                                        | $                       | - |                      
|                                                                                     |                         |   |                      
|Income taxes paid                                                                    | $                       | - |                      

See Notes to Consolidated Financial Statements

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
JUNE 30, 2008

Note 1     SUMMARY OF ACCOUNTING POLICIES

NATURE OF BUSINESS

The Tirex Corporation (the "Company") was incorporated under
the laws of the State of Delaware on August 19, 1987 as Tirex America, Inc. The
Company was originally organized to provide comprehensive health care services,
but due to its inability to raise sufficient capital, was unable to implement
its business plan. The Company became inactive in November 1990.

REORGANIZATION

On March 26, 1993, the Company entered into an acquisition
agreement (the "Acquisition Agreement") with Louis V. Muro, currently an officer
and a director of the Company, and former Officers and Directors of the Company
(collectively the "Seller"), for the purchase of certain technology owned and
developed by the Seller (the "Technology") to be used to design, develop and
construct a prototype machine and thereafter a production quality machine for
the cryogenic disintegration of used tires. The Technology was conceptually
developed by the Seller prior to their affiliation or association with the
Company.

CHANGE OF NAME

On July 11, 1997, the Company changed its name from Tirex
America, Inc. to The Tirex Corporation.

DEVELOPMENTAL STAGE

At June 30, 2008, the Company is still in the development
stage. The operations consist mainly of raising capital, obtaining financing,
developing equipment, obtaining customers and supplies, installing and testing
equipment and administrative activities.

BASIS OF CONSOLIDATION

The consolidated financial statements include the
consolidated accounts of The Tirex Corporation, Tirex Canada R&D Inc., The Tirex
Corporation Canada Inc., Tirex Advanced Products Quebec Inc. and Tirex
Acquisition Corp., all of these subsidiaries currently being dormant. Certain of
these companies have actually been de-registered by government authorities but
could easily be revived if circumstances would warrant such action. Tirex Canada
R&D Inc. is held 51% by two shareholders of the Company. The shares owned by
these shareholders are held in escrow by the Company's attorney and are
restricted from transfer thereby, substantively for recording purposes, allowing
for a full consolidation of this Company. The Tirex Corporation Canada Inc.,
Tirex Advanced Products Quebec Inc. and Tirex Acquisition Corp. are 100% held by
the Company. All subsidiary companies are dormant. All inter-company
transactions and accounts have been eliminated in consolidation.

CASH AND CASH EQUIVALENTS

For purposes of the statement of cash flows, all highly
liquid debt instruments purchased with a maturity of three months or less, were
deemed to be cash equivalents.

INVENTORY

The Company policy is to value inventory, which could consist
of finished goods and equipment held for resale, at the lower of cost (first-in,
first-out method) or market. At present, the Company has no inventory.

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
JUNE 30, 2008

PROPERTY AND EQUIPMENT

The Company policy is to record Property and equipment at
cost less accumulated depreciation and provisions for write-downs. Depreciation
is computed using the straight-line method over the estimated useful lives of
five years. No depreciation is recorded for equipment written down to salvage
value. The Company has written off its equipment.

The Company policy is that repairs and maintenance costs are
expensed as incurred while additions and betterments are capitalized. The cost
and related accumulated depreciation of assets sold or retired are eliminated
from the accounts and any gains or losses are reflected in earnings.

ESTIMATES

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 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.

ADOPTION OF STATEMENT OF ACCOUNTING STANDARD NO. 123

In 1997, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 123, Accounting for Stock-Based Compensation.
SFAS 123 encourages, but does not require, companies to record stock-based
Compensation and other costs paid by the issuance of stock at fair value. The
Company has chosen to account for stock-based compensation, stock issued for
non-employee services and stock issued to obtain assets or in exchange for
liabilities using the fair value method prescribed in SFAS 123. Accordingly,
compensation cost for stock options is measured as the excess, if any, of the
quoted market price of the Company's stock at the date of the grant over the
amount an employee must pay to acquire the stock.

ADOPTION OF STATEMENT OF ACCOUNTING STANDARD NO. 128

In 1997, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 128, Earnings per Share. SFAS 128 changes the
standards for computing and presenting earnings per share (EPS) and supersedes
Accounting Principles Board Opinion No. 15, Earnings per Share. SFAS 128
replaces the presentation of Primary EPS with a presentation of Basic EPS and
replaces the presentation of Fully Diluted EPS with a presentation of Diluted
EPS. It also requires dual presentation of Basic and Diluted EPS on the face of
the income statement for all entities with complex capital structures and
requires a reconciliation of the numerator and denominator of the Basic EPS
computation to the numerator and denominator of the Diluted EPS computation.
SFAS 128 is effective for financial statements issued for periods ending after
December 15, 1997, including interim periods. SFAS 128 also requires restatement
of all prior-period EPS data presented.

As it relates to the Company, the principal differences
between the provisions of SFAS 128 and previous authoritative pronouncements are
the exclusion of common stock equivalents in the determination of Basic Earnings
per Share and the market price at which common stock equivalents are calculated
in the Determination of Diluted Earnings Per Share.

A Basic Earnings per Share is computed using the weighted
average number of shares of common stock outstanding for the period. Diluted
Earnings per Share is computed using the weighted average number of shares of
common stock and dilutive common equivalent shares related to stock options and
warrants outstanding during the period.

The adoption of SFAS 128 had no effect on previously reported
loss per share amounts for the year ended June 30, 1997. For the years ended
June 30, 2006 and June 30, 2005, Primary Loss per Share was the same as Basic
Loss per Share and Fully Diluted Loss per Share was the same as Diluted Loss per
Share. A net loss was reported in 2006 and 2005, and accordingly, in those
years, the denominator for the Basic EPS calculation was equal to the weighted
average of outstanding shares with no consideration for outstanding options and
warrants to purchase shares of the Company's common stock because to do so would
have been anti-dilutive.

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
JUNE 30, 2008

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of the Company's financial instruments,
which principally include cash, note receivable, accounts payable and accrued
expenses, approximates fair value due to the relatively short maturity of such
instruments.

The fair values of the Company's debt instruments are based
on the amount of future cash flows associated with each instrument discounted
using the Company's borrowing rate. At June 30, 2008 and June 30, 2007,
respectively, the carrying value of all financial instruments was not materially
different from fair value.

INCOME TAXES

The Company has net operating loss carryovers of
approximately $30.2 million as of June 30, 2008, expiring through 2028. However,
based upon present Internal Revenue Service regulations governing the
utilization of net operating loss carryovers where the corporation has issued
substantial additional stock and there has been a change in control as defined
by the Internal Revenue Service regulations, a substantial portion of this loss
carryover may not be available to the Company.

The Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 109, Accounting for Income Taxes, effective July 1993.
SFAS No. 109 requires the establishment of a deferred tax asset for all
deductible temporary differences and operating loss carryforwards. Because of
the uncertainties discussed in Note 2, however, any deferred tax asset
established for utilization of the Company's tax loss carryforwards would
correspondingly require a valuation allowance of the same amount pursuant to
SFAS No. 109. Accordingly, no deferred tax asset is reflected in these financial
statements.

The Company does not currently have research and experimental
development tax credits receivable from the Canadian Federal government and the
Quebec Provincial government as at June 30, 2008.

FOREIGN CURRENCY TRANSLATION

Assets and liabilities of non-U.S. subsidiaries that operate
in a local currency environment are translated to U.S. dollars at exchange rates
in effect at the balance sheet date for monetary items and historical rates of
exchange for non-monetary items with the resulting translation adjustment
recorded directly to a separate component of shareholders' equity. Income and
expense accounts are translated at average exchange rates during the year.
Currency transaction gains or losses are recognized in current operations.

REVENUE RECOGNITION

Revenue from the sale of TCS Systems will be recognized when
the installed product is accepted by the Customer. All other revenue from other
products will be recognized when shipped to the customer.

Note 2     GOING CONCERN

As reported in the accompanying financial statements, the
Company incurred a net loss of $498,322 for the year ended June 30, 2008 and a
net loss of $455,849 for the year ended June 30, 2007.

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
JUNE 30, 2008

In March 1993, the Company had begun its developmental stage
with a new business plan. As of March 2000, the Company had developed a
production quality prototype of its patented system for the disintegration of
scrap tires, but nonetheless continued its research and development efforts to
improve the machine's performance and to permit greater flexibility in design
for specific customer applications. Due to the Companys lack of working capital
during the year ended June 30, 2002, all rubber crumb production was suspended
and research and development efforts have been hampered. Pending receipt of
funding from operations, government assistance, loans or equity financing, crumb
rubber production and previous research and development efforts will not be
resumed. While the Company has engaged the process of marketing the TCS System
to numerous potential clients since the beginning of the fiscal year commencing
July 1, 2000, as of June 30, 2008, the Company had not yet consummated an
unconditional purchase order for a TCS System.

The Company is dependent on the success of its marketing of
its TCS Systems, and/or raising funds through equity sales, bank or investor
loans, governmental grants or a combination of these, to continue as a going
concern. The Company's uncertainty as to its ability to generate revenue and its
ability to raise sufficient capital, raise substantial doubt about the entity's
ability to continue as a going concern. The financial statements do not include
any adjustments that might be necessary if the Company is unable to continue as
a going concern.

Note 3     PROPERTY AND EQUIPMENT

As at June 30, 2008, plant and equipment consisted of the following:

|Furniture,
    fixtures and equipment               | $149,516
|--------------------------------------------------- | --------
|Manufacturing equipment                             | 62,400  
|Subtotal                                            | 211,916 
|                                                    |         
|Less: Accumulated depreciation
    and amortization | 186,916 
|                                                    |         
|Total                                               | $ 25,000

A valuation write-down charged to operations for the year
ended June 30, 2008 was zero. Depreciation and amortization expense charged to
operations for the year ended June 30, 2007 was zero.

Note 4     PATENTS

The Companys technology is patent protected in both the
United States and Canada. Patent maintenance fees are current in both countries.
The valuation on the Balance Sheet reflects recognition of valid patents and
does not attempt to establish true commercial value.

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
JUNE 30, 2008

Note 5     CAPITAL LEASE OBLIGATIONS

The Company leased certain manufacturing equipment under
agreements classified as capital leases. The cost and the accumulated
amortization for such equipment as of June 30, 2008 and June 30, 2007 was
$62,400 and $62,400, respectively. The Company is in arrears on payment of these
leases but default has not been declared. The lease expired on June 30, 2004.

Note 6     CONVERTIBLE SUBORDINATED DEBENTURES

The Company issued Type B Convertible Subordinated Debentures
between December 1997 and February 1998. These debentures bore interest at 10%
and were convertible into common shares of the Company at $0.20 per share. The
conversion privilege on the remaining $55,000 of these debentures expired and
the amount is now included on the Balance Sheet in Long term deposits and notes.

Note 7     CONVERTIBLE NOTES

The Convertible Notes appearing on the balance sheet
consisted of an investment arrangement with a group of institutional investors
involving a multi-stage financing under which the Company had access to, at its
option, up to $5,000,000. A first tranche of $750,000 was completed but no
further draw downs were made. The terms of the convertible note were:

|Balance at
    June 30, 2008 | $399,389                                                                                                                                                                                                                                                                                      
|---------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                             |                                                                                                                                                                                                                                                                                               
|Interest rate                | 8%, payable quarterly,
    commencing                                                                                                                                                                                                                                                         
|                             | June 30, 2001                                                                                                                                                                                                                                                                                 
|                             |                                                                                                                                                                                                                                                                                               
|Issue date                   | February 26,
    2001                                                                                                                                                                                                                                                                         
|                             |                                                                                                                                                                                                                                                                                               
|Maturity date                | February 26, 2003                                                                                                                                                                                                                                                                             
|                             |                                                                                                                                                                                                                                                                                               
|Redemption
    rights        | If not
    converted, the holder may require the Company to redeem at any time after
    maturity for the principal amount plus interest.                                                                                                                                                     
|                             |                                                                                                                                                                                                                                                                                               
|Conversion ratio             | Lower of (i)  80% of the
    average of the three lowest closing bid prices for the thirty trading days
    prior to the issue date, which equals $.073, or (ii)  80% of the average of
    the three lowest closing bid prices for the sixty trading days prior to the
    conversion date.
|                             |                                                                                                                                                                                                                                                                                               
|Common stock
    warrants    | The
    Convertible Notes carried an option to purchase Common stock warrants at the
    rate of one Warrant for each $1.25 of purchase price. The exercise price on
    the first tranche of $ 750,000 is $ .077 per share.                                                                  

Certain current and previous Directors and Officers of the
Company have pledged approximately 12,000,000 of their personal shares of Common
Stock of the Company as security for the Convertible Notes until such time as
the Company files with the Securities and Exchange Commission a Registration
Statement on Form SB-2, to register common stock and warrants issuable upon the
conversion of the notes, no later than 150 days after the issue date of the
Convertible Notes. This deadline was not met and, as such, the investors served
a notice of default to the Company on July 19, 2001. The Registration Statement
was never declared effective by the Securities and Exchange Commission and was
eventually withdrawn. Thus, the Convertible Notes cannot be converted to Common
Stock nor may the Common Stock warrants be exercised. On April 24, 2002 the
Company entered into a Settlement Agreement with the Note holders. The Company
was forced to default on this Settlement Agreement. Accordingly, the terms of
the Convertible Notes have become effective once again. 8,371,597 collateral
shares provided to the investors were the property of former Tirex Director,
Louis A, Sanzaro, now deceased. The shares due to Louis A. Sanzaro have been
issued subsequent June 30, 2008 to a family member. The collateral shares
provided by Louis V. Muro, 1,723,514 shares, were replaced subsequent to June
30, 2008. The collateral shares provided by John L. Threshie Jr., 1,891,204
shares, had not been replaced as of October 2, 2008.

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
JUNE 30, 2008

Note 8     CONVERTIBLE NOTES

A convertible note, under a private arrangement, consists of the following:

|Balance at June 30, 2008 | $ 185,556                                                                                                                                                                                                              
|------------------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                         |                                                                                                                                                                                                                        
|Interest rate            | 8%                                                                                                                                                                                                                     
|                         |                                                                                                                                                                                                                        
|Issue date               | July 19th, 2000                                                                                                                                                                                                        
|                         |                                                                                                                                                                                                                        
|Maturity date            | January 19th, 2002                                                                                                                                                                                                     
|                         |                                                                                                                                                                                                                        
|Redemption rights        | If not converted, the
    holder may require the Company to redeem at any time after maturity for the
    principal amount plus interest.                                                                              
|                         |                                                                                                                                                                                                                        
|Conversion ratio         | Not convertible prior to July 19th,
    2001, at 20% discount to market between July 19th, 2001 and
    January 19th, 2002 or at 25% to market if held to maturity, to a
    maximum of not more than 2,500,000 shares.

Since Fiscal year 2006, the expenses of the Company have been
funded by a series of non-interest bearing convertible loans with no specific
terms of repayment made by a significant number of individuals investing modest
amounts for a grand total of U.S.$203,800. These investors, fully cognizant of
the Companys situation and so documented in writing, accepted that their
investments were being made and represented by a convertible debt, the
conversion of which could occur only once the Company would have shares
available for issuance. These debts are convertible at fixed prices rather than
as a discount to market.

|                 | Fiscal year | Fiscal year | Fiscal year | Fiscal year | Fiscal year | Fiscal year
|---------------- | ----------- | ----------- | ----------- | ----------- | ----------- | -----------
|                 | 2006&2007   | 2008 Q-1    | 2008 Q-2    | 2008 Q-3    | 2008 Q-4    | 2009 Q-1   
|Dollars received | $114,700    | $10,700     | $19,400     | $22,000     | $25,000     | $12,000    
|Shares           | 26,040,000  | 3,840,000   | 5,460,000   | 5,400,000   | 7,000,000   | 2,400,000  

Of the above shares, 28,680,000 were issued, unrestricted, subsequent to June
30, 2008. The remaining 21,460,000 shares will be issued progressively during
Fiscal year 2009.

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
JUNE 30, 2008

Note 9     RELATED PARTY TRANSACTIONS

Convertible loans include amounts primarily due to Directors,
Officers and employees. Historically, such amounts due have been repaid through
the issuance of stock. At June 30, 2008 and June 30, 2007, the balances owing to
Directors and Officers was $2,609,429 and $2,284,429, respectively. These
amounts are without interest or terms of repayment.

Long-term deposits and notes included an amount of $118,500
at June 30, 2008, which is payable to Ocean Tire Recycling & Processing Co.,
Inc., a company previously owned by a former Director of the Company, Louis A.
Sanzaro, deceased approximately 30 months ago. The Company negotiated a
Settlement Agreement with the family of Louis A. Sanzaro with respect to lease
obligations and other expenses paid by Mr. Sanzaro, under which the Company
would issue a total of 50 million shares. 20 million shares were issued during
the fourth quarter of Fiscal year 2008 and a further 15 million shares were
issued in the first quarter of Fiscal year 2009. There thus remains 15 million
shares to be issued.

Note 10     COMMON STOCK

During the year ended June 30, 2008, the Company issued
42,100,000 common shares for services performed and in partial payment of a
Settlement Agreement under Securities Act Regulation 10(a)3. During the year
ended June 30, 2007, the Company did not issue any common stock in exchange for
services performed.

During the year ended June 30, 2004, an Officer of the
Company exercised stock options pursuant to a services agreement. These shares
were issued during the first quarter of Fiscal year 2009. The exercise of these
stock options entitled the Officer to 1,500,000 common shares of the Company on
a cash-less basis.

On January 31, 2001, the Company's stockholders approved an
amendment to the Articles of Incorporation of the Company to increase the number
of authorized shares of Common stock, par value $0.001, from 165,000,000 shares
to 250,000,000 shares.

On February 11, 2008, the Company's Board of Directors
approved an amendment to the Articles of Incorporation of the Company to
increase the number of authorized shares of Common stock, par value $0.001, from
250,000,000 shares to 1,000,000,000 shares.

As at June 30, 2008, the Company had 291,995,892 Common shares issued and
outstanding, versus its authorization of 1,000,000,000 shares.

Note 11     PREFERRED STOCK

On May 12, 2008, the Companys Board of Directors approved an
amended Certificate of Designation with respect to the authorization and
issuance of up to 3,000,000 Series A Preferred shares, an increase from the
1,000,000 shares of Series A Preferred stock that were authorized to be issued
in the Certificate of Designation of Series A Preferred stock passed by the
Board of Directors on February 12, 2008. No cash dividends shall be paid with
respect to the shares of Series A Preferred stock. The Series A Preferred stock
shall give its holders the right to 100 votes per share on any matter properly
before the shareholders for a vote. The voting rights of the Series A Preferred
stock shall be subject to all splits and each share will be convertible into 5
shares of Common stock upon the earlier of: (i) the holders election or (ii)
January 8, 2009. The holders of all shares of Series A Preferred stock shall not
be subject to any non-cash distributions to holders of shares of Common stock,
including without limitation, stock dividends, stock splits and securities
issued in a recapitalization. In the event of liquidation or winding up of the
Corporation, the holders of the Series A Preferred stock will be entitled to
receive, prior and in preference to the holders of the Common stock, an amount
up to but not greater than the original purchase price per share of Series A
Preferred stock, notwithstanding the par value of the Series

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
JUNE 30, 2008

A Preferred stock. These three million Series A Preferred Shares were issued
to three Directors and Officers in June 2008.

Note 12 GOVERNMENT ASSISTANCE

The Company was eligible for and made claims for tax credits
related to scientific research and experimental development expenditures made in
Canada in previous years. These amounts, under Canadian Federal and Provincial
tax law in conjunction with its annual tax return filings, need not be offset
against taxes otherwise payable to become refundable to the Company at the end
of its fiscal year. As such, during the year ended June 30, 2003, the Company
received approximately $246,970, which was recorded as an increase in
stockholders equity paid-in capital. During the years ended June 30, 2004 and
June 30, 2005 and the three month period ended September 30, 2005, the Company
did not make any additional claims for tax credits as it was not eligible to do
so and, as such, the Company did not record any additional tax credits
receivable. The previous receivable balance in respect of tax credits from these
governments went from $246,970 as of June 30, 2002 to zero as of June 30, 2003
and remained as such as of June 30, 2004, June 30, 2005, June 30, 2006, June 30,
2007 and June 30, 2008.

Note 13     COMMITMENTS

Rental expense for the year ended June 30, 2008 amounted to
zero. Rental expense for the year ended June 30, 2007 amounted to zero.

At June 30, 2008, the Company was in arrears of rent,
including interest and related charges, in the approximate amount of $560,000
related to its former occupation of premises in Montreal up to the end of Fiscal
year 2003. A settlement agreement with the former landlord is in place under the
terms of which the Company would pay to the former landlord the sum of $140,000
from the proceeds to the Company of revenues from each of the first four sales
of TCS Systems.

Note 14     LITIGATION

An action was instituted by Plaintiffs, an individual and a
corporation, in a Canadian court alleging a breach of contract and claims
damages of approximately $508,600 representing expenses and an additional
approximate amount of $1,874,000 in loss of profits. The current action follows
two similar actions taken in United States courts, the first of which was
withdrawn and the second of which was dismissed based on forum non convenience
and other considerations. A detailed answer has been filed by the Company
denying all liability, stating further that Plaintiffs failed to comply with
their obligations. Counsel for the Company believes that the Company has
meritorious defenses to all of the Plaintiff's claims. The action is still
pending.

A Plaintiff instituted an action, a corporation, in August
2001 in a Canadian court claiming approximately $63,000 is due and owing for the
manufacture and delivery of tire disintegrators. The Company has prepared its
defense and a cross claim against the Plaintiff as the product delivered was
defective and the Company believes it is entitled to a reimbursement of sums
paid. The action is still pending.

An action was instituted by a Plaintiff, the Companys
landlord, against the Company in June 2001 for arrears of rent in the amount of
approximately $113,900. Subsequent additions to arrearages with respect to rent
and property taxes raised the amount due to approximately $560,000. A settlement
agreement with the former landlord is in place, under the terms of which the
Company would pay to the former landlord the sum of $140,000 from the proceeds
to the Company of revenues from the first four sales of TCS Systems.

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THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
JUNE 30, 2008

Note 15     ACCUMULATED OTHER COMPREHENSIVE INCOME

The deficit accumulated during the development stage included accumulated
comprehensive other income totaling $103,396.

Note 16     SUBSEQUENT EVENTS

Following June 30, 2008, the Fiscal year-end of the Company,
the Company proceeded with several share issuances to reduce debt, reduce
accrued salaries payable, compensate private placement investors who had lent
cash to Tirex via Tirex President, John L. Threshie Jr., to sustain Tirex at a
time when shares were not available for issuance and to compensate various
consultants and legal professionals.

|Description                                                                    | Shares     
|------------------------------------------------------------------------------ | -----------
|Common Shares outstanding
    as of June 30, 2008                              | 291,995,892
|                                                                               |            
|Shares issued pursuant to Securities Act
    Regulation 10 (a) 3               | 20,000,000 
|Shares issued pursuant to
    negotiated debt settlement with Sanzaro estate   | 15,000,000 
|Shares issued to investors having provided
    loans                           | 28,680,000 
|Shares issued to
    executives, consultants and their donees                  | 231,969,800
|Shares issued to legal counsel                                                 | 10,000,000 
|Shares issued to replace
    collateral shares sold                            | 10,095,111 
|                                                                               |            
|Total shares issued from July 1, 2008 to
    October 2, 2008                   | 315,924,911
|                                                                               |            
|Shares outstanding as of
    October 2, 2008                                   | 607,920,803
|                                                                               |            
|Commitments to issue additional shares                                         |            
|Shares issuable pursuant to
    Securities Act Regulation 10 (a) 3             | 68,000,000 
|Shares issuable pursuant to negotiated debt
    settlement with Sanzaro estate | 15,000,000 
|Shares issuable to replace
    collateral shares sold                          | 1,891,204  
|Shares issuable to consultants                                                 | 42,000,000 
|Shares issuable pursuant to
    exercised executive option  cashless basis    | 2,000,000  
|Shares issuable to persons having provided
    loans                           | 20,260,000 
|Shares issuable against
    assigned convertible notes                         | 6,500,000  
|Shares issuable to legal counsel                                               | 40,000,000 
|                                                                               |            
|TOTAL SHARES ISSUABLE AFTER
    OCTOBER 2, 2008                                | 195,651,204
|                                                                               |            
|Common shares outstanding as of October 2,
    2008 plus committed             | 803,572,007
|                                                                               |            
|Reserve for conversion of
    Preferred shares                                 | 15,000,000 
|Reserve for exercise of Executive options
    still outstanding                | 14,000,000 
|                                                                               |            
|Potential common shares
    outstanding                                        | 832,572,007

|                                                        |            |             
|------------------------------------------------------- | ---------- | ------------
|                                                        |            |             
|                                                        | Restricted | Unrestricted
|Shares issued during the 4th
    quarter of fiscal 2008 |            | 42,100,000  
|Shares issued from July 1
    to October 2, 2008        | 95,648,514 | 222,276,397 
|Shares issuable after October 2, 2008 - known           | 3,891,204  | 183,760,000 

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