U.S. SECURITIES AND EXCHANGE COMMISSION

FORM 10-QSB

(Mark One)

[X] Quarterly report under Section 13 or 15(d) of the
Securities Exchange Act of 1934 For the quarterly period ended March 31, 2007.

[    ] 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

|Delaware                            | 22-2824362         
|----------------------------------- | -------------------
|(State or other jurisdiction
    of | (I.R.S. Employer   
|Incorporation or Organization)      | Identification No.)



(203) 522-3247 
(Issuers telephone number, including area code)

PO Box 1000, Stratford Postal Office 
411 Barnum Ave. Cutoff 
Stratford CT USA 06614-9991(Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report)

Check whether the issuer: (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the issuer was required to file such reports)
and (2) has been subject to such filing requirements for the past 90 days. Yes
X     No ___

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding for each of the
issuers classes of common equity, as of March 31, 2007 :249,895,892shares

Transitional Small Business Disclosure Format (check one):
Yes ___     No X

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The Tirex Corporation 
(A Development Stage Company)

TABLE OF CONTENTS
PART I  FINANCIAL
    INFORMATIONItem 1  
    Financial Statements (Unaudited)
    PageThe Tirex Corporation and
    SubsidiariesConsolidated
    Balance Sheet as of March 31, 2007
    2Consolidated Statements of
    Operationsfor the three and
    nine month periods ended March 31, 2007 and 2006
    3Consolidated Statements of Cash
    Flowsfor the three and nine month
    periods ended March 31, 2007 and 2006
    4Notes to Financial Statements (Unaudited)
    6Item 2 
    Managements Discussion and Analysis of Financial Condition and Results of
    Operations
    15Item 3  Controls
    and Procedures
    21PART II B OTHER
    INFORMATION
    21Item 1 
    Legal Proceedings
    21Item 2 
    Changes in Securities and Use of Proceeds
    22Item 3 
    Defaults Upon Senior Securities
    22Item 4 
    Submission of Matters to a Vote of Security Holders
    22Item 5 
    Other Information
    22Item 6 
    Exhibits and Reports on Form 8-K
    22The financial statements are unaudited. However, Management
of registrant believes that all necessary adjustments, including normal
recurring adjustments, have been reflected to present fairly the financial
position of registrant at March 31, 2007 and the results of its operations and
changes in its cash position for the three and nine month periods ended March
31, 2007 and 2006 and for the period from inception (July 15, 1987). This
quarterly statement has not been reviewed by an independent accountant.

---

THE TIREX CORPORATION A DEVELOPMENT STAGE COMPANY
CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2007





1

---



THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

CONSOLIDATED BALANCE SHEET
AS AT MARCH 31, 2007

|                                                                 |   | March 31,   
|---------------------------------------------------------------- | - | ------------
|                                                                 |   | 2007        
|                                                                 |   |             
|ASSETS                                                          
|                                                                 |   |             
|Current Assets                                                   |   |             
|Cash and cash equivalents                                        | $ | -           
|Accounts receivable                                              |   | -           
|Notes receivable                                                 |   | 20,475      
|Inventory                                                        |   | 73,322      
|Research and Experimental
    Development tax credits receivable |   | -           
|                                                                 |   | 93,797      
|                                                                 |   |             
|Property and equipment,                                          |   |             
|salvage value                                                    |   | 50,000      
|                                                                 |   |             
|Other assets                                                     |   |             
|Investment, at cost                                              |   | 89,500      
|                                                                 |   | 89,500      
|                                                                 |   |             
|                                                                 |   |             
|                                                                 | $ | 233,297     
|                                                                 |   |             
|                                                                 |   |             
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                  
|                                                                 |   |             
|Current Liabilities                                              |   |             
|Accounts payable and accrued
    liabilties                      | $ | 2,704,581   
|Current portion of long-term
    debt                            |   | 78,091      
|                                                                 |   | 2,782,671   
|                                                                 |   |             
|Other liabilities                                                |   |             
|Long-term deposits and
    notes                                 |   | 217,500     
|Government loans (net of
    current)                            |   | -           
|Capital lease obligations (net
    of current)                   |   | -           
|Convertible notes                                                |   | 399,389     
|Convertible notes                                                |   | 195,556     
|Convertible loans                                                |   | 2,110,385   
|                                                                 |   | 2,922,830   
|                                                                 |   |             
|                                                                 |   | 5,705,502   
|Stockholders Equity
    (Deficit)                               |   |             
|Common stock, $.001 par value,
    authorized                    |   |             
|250,000,000 shares, issued and
    outstanding                   |   |             
|249,895,892 shares (June 30,
    2005 - 249,895,892 shares)      |   | 249,896     
|Additional paid-in capital                                       |   | 25,222,219  
|Deficit accumulated during the
    development stage             |   | (30,312,763)
|Unrealized gain (loss) on
    foreign exchange                   |   | (631,556)   
|                                                                 |   | (5,472,205) 
|                                                                 |   |             
|                                                                 |   |             
|                                                                 | $ | 233,297     

2

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Three months ended
    
    Nine months ended
    
    Cumulative fromMarch 31
    
    March 31
    
    March 26, 1993 to2007
    
    2006
    
    2007
    
    2006
    
    March 31, 2007Revenues
    $
    -
    $
    -
    $
    -
    $
    -
    $
    1,354,088Cost of Sales
    
    -
    
    -
    
    -
    
    -
    
    1,031,075Gross profit
    
    -
    
    -
    
    -
    
    -
    
    323,013OperationsGeneral and administrative
    
    93,724
    
    117,564
    
    314,931
    
    383,340
    
    13,126,726Depreciation and amortization
    
    -
    
    -
    
    -
    
    -
    
    365,545Research and development
    
    -
    
    -
    
    -
    
    -
    
    15,396,966Total Expense
    
    93,724
    
    117,564
    
    314,931
    
    383,340
    
    28,889,237Income (loss) before other
    expenses
    
    (93,724)
    
    (117,564)
    
    (314,931)
    
    (383,340)
    
    (28,566,224)Other expenses (income)Interest expense
    
    11,699
    
    11,699
    
    35,096
    
    35,096
    
    980,679Interest income
    
    -
    
    -
    
    -
    
    -
    
    (45,443)Income from stock options
    
    -
    
    -
    
    -
    
    -
    
    (10,855)Loss on disposal of equipment
    
    -
    
    -
    
    -
    
    -
    
    4,54911,699
    
    11,699
    
    35,096
    
    35,096
    
    928,930Net income (loss)
    
    (105,423)
    
    (129,263)
    
    (350,027)
    
    (418,436)
    
    (29,495,154)Other comprehensive lossLoss (gain) on foreign exchange
    
    -
    
    -
    
    -
    
    -
    
    106,137Net income (loss) and
    comprehensive loss
    $
    (105,423)
    $
    (129,263)
    $
    (350,027)
    $
    (418,436)
    $
    (29,601,291)Basic and Diluted net loss and
    comprehensive loss per common share
    $
    (0.00)
    $
    (0.00)
    $
    (0.00)
    $
    (0.00)
    $
    (0.31)Weighted average shares of
    common stock outstanding
    
    249,895,892
    
    249,895,892
    
    249,895,892
    
    249,895,892
    
    95,134,231

3

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THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS

|                                                                                |   | Three months ended |   | Nine months ended |   | Cumulative from  
|------------------------------------------------------------------------------- | - | ------------------ | - | ----------------- | - | -----------------
|                                                                                |   | March 31           |   | March 31          |   | March 26, 1993 to
|                                                                                |   | 2007               |   | 2006              |   | 2007             
|                                                                                |   |                    |   |                   |   |                  
|Cash flows from operating
    activities:                                       |   |                    |   |                   |   |                  
|                                                                                |   |                    |   |                   |   |                  
|Net income (loss)                                                               | $ | (105,423)          | $ | (129,263)         | $ | (350,027)        
|                                                                                |   |                    |   |                   |   |                  
|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                                  |   | (16,698)           |   | 7,586             |   | 61,239           
|Other non-cash items                                                            |   | 81,250             |   | 55,000            |   | 277,250          
|                                                                                |   |                    |   |                   |   |                  
|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                                   |   | 9,621              |   | 16,677            |   | (82,212)         
|Accrued salaries                                                                |   | 31,250             |   | 50,000            |   | 93,750           
|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                                   | $ | -                  | $ | -                 | $ | -                

4

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THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS

|                                                                                                                                                                                                                                                                                                     |   | Three months ended |   | Nine months ended |   | Cumulative from  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------------ | - | ----------------- | - | -----------------
|                                                                                                                                                                                                                                                                                                     |   | December 31        |   | March 31          |   | March 26, 1993 to
|                                                                                                                                                                                                                                                                                                     |   | 2007               |   | 2006              |   | 2007             
|                                                                                                                                                                                                                                                                                                     |   |                    |   |                   |   |                  
|Supplemental Disclosure
    of Non-Cash Activities:                                                                                                                                                                                                                                                  |   |                    |   |                   |   |                  
|                                                                                                                                                                                                                                                                                                     |   |                    |   |                   |   |                  
|During the nine months ended March 31, 2007 and
    March 31, 2006, the Company did not issue common stock in recognition of the
    payment of debt. During the year ended June 30, 2006, the Company did not
    issue common stock in recognition of the payment of debt.                         |   |                    |   |                   |   |                  
|                                                                                                                                                                                                                                                                                                     |   |                    |   |                   |   |                  
|During the nine months ended March 31, 2007 and
    March 31, 2006, the Company did not issue common stock in exchange for
    services performed and expenses. During the year ended June 30, 2006, the
    Company did not issue common stock in exchange for services performed and
    expenses. |   |                    |   |                   |   |                  
|                                                                                                                                                                                                                                                                                                     |   |                    |   |                   |   |                  
|Supplemental Disclosure
    of Cash Flow Information:                                                                                                                                                                                                                                                |   |                    |   |                   |   |                  
|                                                                                                                                                                                                                                                                                                     |   |                    |   |                   |   |                  
|Interest paid                                                                                                                                                                                                                                                                                        | $ | -                  | $ | -                 | $ | -                
|                                                                                                                                                                                                                                                                                                     |   |                    |   |                   |   |                  
|Income taxes paid                                                                                                                                                                                                                                                                                    | $ | -                  | $ | -                 | $ | -                

5

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THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2007

Note 1            
SUMMARY OF ACCOUNTING POLICIES

CHANGE OF NAME

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

NATURE OF BUSINESS

The Tirex Corporation (the "Company") was incorporated under
the laws of the State of Delaware on August 19, 1987. 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.

DEVELOPMENTAL STAGE

At March 31, 2007, 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 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 values inventory, which consists of finished
goods and equipment held for resale, at the lower of cost (first-in, first-out
method) or market.

6

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THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2007

PROPERTY AND EQUIPMENT

Property and equipment are recorded 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.

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.

INVESTMENT

An investment made by the Company, in which the Company owns
less than a 20% interest, is stated at cost value. The cost value approximates
the fair market value of the investment.

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.

7

---



THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2007

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.

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 March 31, 2007 and June 30, 2006,
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 $30.6 million as of March 31, 2007, expiring through 2027.
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 March 31, 2007.

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.

8

---



THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2007

Note 2            
GOING CONCERN

As reported in the accompanying financial statements, the
Company incurred a net loss of $220,572 for the year ended June 30, 2006 and a
net loss of $350,027 for the nine months ended March 31, 2007.

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 March 31, 2007, 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

|Furniture, fixtures and equipment                   | $149,516 | 
|--------------------------------------------------- | -------- | 
|Manufacturing equipment                             | 62,400   | 
|Subtotal                                            | 211,916  | 
|                                                    |          | 
|Less: Accumulated depreciation and
    amortization | 161,916  | 
|                                                    |          | 
|Total                                               | $ 50,000 | 

Depreciation and amortization expense charged to operations
for the year ended June 30, 2006 was zero. Depreciation and amortization expense
charged to operations for the nine months ended March 31, 2007 and March 31,
2006 was zero.

Note 4            
GOVERNMENT LOANS

Canada Economic Development

Loans payable under the Program for the Development of Quebec
SMEs based on 50% of approved eligible costs for the preparation of market
development studies in certain regions. Loans are unsecured and non-interest
bearing. (If the Company defaults, the loans become interest bearing at the rate
of 8%).

9

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THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2007Loan repayable over
    five years commencing June 30, 2000 and ending June 30, 2004
    $ 34,300Loan repayable over
    five years commencing June 30, 2001 and ending June 30, 2005
    43,79178,091Less: Current portion
    78,091Long-term portion
    $ NILPrincipal repayments
    are as follows:June 30
    Amount2007
    $78,091

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 March 31, 2007 and June 30, 2006 was
$62,400 and $62,400, respectively. The equipment under capital leases has been
included in property and equipment on the balance sheet. The Company is in
arrears on payment of these leases but default has not been declared. The lease
expired on June 30, 2004. The leased equipment is not part of the Companys TCS
System prototype.

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 March 31,
    2007 | $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 pus 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.                   

10

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THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2007

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. Approximately two-thirds
of the collateral shares provided to the investors were the property of former
Tirex Director, Louis A, Sanzaro, now deceased. While we have not confirmed the
disposition of the liabilities of our company toward the estate of Mr. Sanzaro,
the company intends to act in accordance with the testament of Mr. Sanzaro.

Note 8            
CONVERTIBLE NOTES

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

|                              |                                                     
|----------------------------- | ----------------------------------------------------
|Balance at March 31,
    2007 | $
    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.                                   

11

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THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2007

During the first quarter of Fiscal 2006, the Company
completed a private placement with two investors having a total aggregate value
of US$10,000, one for $2,500 and the other for $7,500. Insofar as the Company
does not have enough common shares available for issuance, the investors agreed
to accept that the investment would be in the form of non-interest-bearing
convertible debt with no fixed terms of repayment. When an adequate number of
common shares become available, these investors will be able to convert their
loans at a price of US$0.005 per share. Any conversion would be proportionally
adjusted in the event of stock splits or reverse splits. In consideration of the
agreed upon conversion price, prior to any possible adjustments, the company
would issue 2,000,000 common shares. Until such time of any conversion, the
US$10,000 is recorded as a liability on the Companys Balance Sheet. Over the
twelve months ended June 30, 2006, the expenses of our company have been funded
by a series of loans made by a significant number of individuals investing
modest amounts each totaling approximately US$60,700 through Tirex President,
John L. Threshie Jr. During the six months ended March 31, 2007 a further amount
of US$36,000 was secured by Mr. Threshie under substantially the same terms.
Insofar as the funds were lent to Mr. Threshie rather than to Tirex directly,
with Mr. Threshie then paying personally the expenses of Tirex, which expenses
have been duly recorded in our accounts offset by a liability to Mr. Threshie,
the liability on our books is still listed as being toward Mr. Threshie. Thus no
direct liability toward these investors is on our books. Insofar as Tirex does
not have shares to issue at this time, these investors, fully cognizant of our
situation and so documented in writing, have accepted that their investment is
being made via Mr. Threshie and represents a convertible debt, the conversion of
which can occur once Tirex will have shares available for issuance. This debt is
convertible at fixed prices rather than as a discount to market. To June 30,
2006, approximately 13,140,000 shares were involved, and a further 8,200,000
shares would be required as a result of the borrowings during the nine months
ended March 31, 2007, these numbers being before any adjustments to our share
authorization structure which would cause a proportionate adjustment to the
number of shares actually issuable.

In addition to the above liability for shares, Tirex is
liable for the replacement of 11,986,315 shares which were delivered as
collateral by Tirex Directors, Threshie, Muro and Sanzaro (recently deceased)
for the $750,000 of convertible debt contracted for in 2001, which shares were
sold by the debt holders.

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 March 31, 2007 and June 30, 2006, the balances owing
to Directors and Officers was $2,203,179 and $1,959,429, respectively. These
amounts are without interest or terms of repayment.

Long-term deposits and notes included an amount of $118,500
at March 31, 2007, which is payable to Ocean Tire Recycling & Processing Co.,
Inc., a company previously owned by a former Director of the Company, Louis A.
Sanzaro, recently deceased. We expect that the Executor of the estate of Mr.
Sanzaro will contact us with respect to the disposition of our liabilities
toward the estate of Mr. Sanzaro.

Note 10            
COMMON STOCK

During the nine months ended March 31, 2007 and March 31,
2006 and the year ended June 30, 2006, 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. The exercise
of these stock options entitled the Officer to 1,500,000 common shares of the
Company on a cash-less basis. The Company does not have sufficient authorized
and unissued shares available at March 31, 2007 for issuance of this stock and
as such, the amount attributable to these shares has been recorded as part of
the balances owing to Directors and Officers included in Convertible loans.

12

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THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2007

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.

As at March 31, 2007, the Company had 249,895,892 Common
shares issued and outstanding, versus its authorization of 250,000,000 shares.

Note 11            
CONVERTIBLE DEBT

In the event that holders of convertible rights of option
exercise such rights of conversion, the Company does not have sufficient number
of authorized shares conversion stock to fulfill such obligations and a
shareholder meeting would be required to approve the additional authorized
number of shares. There is no assurance that the shareholders would approve the
increase to the number of authorized shares of stock to meet the conversion
obligations under the various conversion agreements or options or agree to a
reverse split of the stock.

Note 12            
GOVERNMENT ASSISTANCE

The Company is eligible for and has made claims for tax
credits related to scientific research and experimental development expenditures
made in Canada. 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 and March 31, 2007.

Note 13            
COMMITMENTS

Rental expense for the year ended June 30, 2006 amounted to
$6,392. Rental expense for the nine months ended March 31, 2007 and March 31,
2006 amounted to zero and $6,392, respectively.

At March 31, 2007, the Company was in arrears of rent,
including interest and related charges, in the approximate amount of $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 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.

13

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THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2007

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

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.

Note 15            
ACCUMULATED OTHER COMPREHENSIVE INCOME

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

14

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ITEM 2 
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF
OPERATIONS

The following is managements discussion and analysis of
significant factors which have affected the Companys financial position and
operations during the three and six month periods ended March 31, 2007. This
discussion also includes events which occurred subsequent to the end of the last
quarter and contains both historical and forward-looking statements. When used
in this discussion, the words "expect(s)", "feel(s)","believe(s)", "will",
"may", "anticipate(s)" "intend(s)" and similar expressions are intended to
identify forward-looking statements. Such statements are subject to certain
risks and uncertainties, which could cause actual results to differ materially
from those projected.

In March 2000, we announced that our tire recycling
technology prototype was ready for replication and commercialization. The
intellectual property owned by Tirex comprises the patented fracturing mill
(both US and Canadian patents) which permits the effective separation of the
materials components of the tires, and this at a significant cost saving. The
intellectual property of our process is recognized in the Manufacturing License
Agreement we have with Simpro www.simpro.it.
Our patent renewals for both the USA and Canada have both been completed.

Since the March 2000 announcement respecting the commercial
availability of its TCS-1 model, Tirex worked to complete the design of the
TCS-2, the version of the technology which processes two million tires per year,
and has worked with its manufacturing partner, Simpro S.p.A. of Turin, Italy, to
refine the technology and to create the possibility of auxiliary crumb rubber
processing to permit the production of much finer mesh crumb rubber than the
initial technology delivers. These refinements, at no significant additional
cost to customers, allow for access to higher-value crumb rubber markets which
some customers desire. The TCS-2 is now the primary model being offered to
customers for reasons of capital and operating cost efficiencies per unit volume
of output of finished product.

Concurrent with the continued technological refinement of our
technology, our primary objective has been to conclude a first purchase and
sales agreement of a TCS System. In this regard, Tirex has responded to requests
for information and has engaged in negotiations with potential customers
throughout the world. Simultaneously, our manufacturing partner, Simpro, which
also has a non-exclusive marketing aggreement, has been actively negotiating
with numerous potential customers, most recently with customers based in the
Middle East, the Far East, Russia and with British interests who would install
one or more systems in the Middle East. With respect to this latter contact, the
process has been slower than what Management would have preferred, but
Management recognizes that the TCS element of this industrial development
initiative represents but a fraction of the total and thus the timing of the
conclusion of the agreement is constrained by other negotiations where which we
have no interest. It has been represented to us by Simpro that numerous meetings
in Italy with these potential customers have been agreed to for the month of May
2007. Insofar as none of the above opportunities have reached the point
of being actual agreements, we cannot offer any guarantees that
any of the above will actually result in formal contracts.

15

---



Over the last seven months we have developed a relationship
with New York based individuals who have expressed their belief in our
technology and have represented to us that they would be able to put together
US-based TCS projects. These individuals have devoted substantial time to the
understanding of our technology and to the structure and key successful factors
of the tire recycling industry. While Tirex has no reason to doubt the abilities
of these individuals, neither can we assure that they will, in fact, be
successful with their efforts to sell TCS systems.

In the context of the information being provided to potential
customers, we point out to these persons or entities that the original TCS-1
prototype located in Montreal has been disassembled and that the patented
fracturing mill is currently physically located in Italy for reference in
research and development purposes. These customers are also provided copies of
videotapes which include, among other things, a visual demonstration of the
prototype actually in use. In addition, these customers are provided with
documentation as to the various accreditations and attestations as to the
effectiveness of the TCS technology, this documentation coming entirely from
independent sources, including private sector engineering firms, public sector
government agencies and internationally-accredited technical universities.
Customers are also offered the free-of-charge possibility to obtain tailor-made
pro-forma financial forecasts for their specific region, based on an adjustable
financial model created by our Chief Financial Officer, which allows for the
input of local economic costing of goods and services, local taxation
conditions, and various loan and depreciation scenarios.

Despite this important quantity of substantiation of the
effectiveness of the TCS technology and the substantial offers of assistance in
the development of the business plans for these customers, the conclusion of the
first purchase and sales agreement has proven elusive. Our manufacturing
partner, Simpro, has succeeded in putting into place a limited performance
guarantee with respect to the installations which it would accomplish, and this
performance guarantee, backed by a major international insurance company, is
offered to potential customers. Even with performance guarantees, conclusion of
an agreement has been difficult. At issue is that Tirex is not in a position to
simply sell new technology systems into an established industry. Most potential
customers are confronted with the reality of becoming involved in a recycling
industry which has complexities not found in other industrial sectors. To screen
inquiries from potential customers and to assist them in their own
decision-making process as to whether or not they want to really participate in
this industrial sector, Tirex routinely sends out a questionnaire to such
persons pertaining to the key success factors of their proposed initiative to
ascertain their readiness and capability to become involved in such activities.

While negotiations on several fronts have progressed to an
advanced stage, as of March 31, 2007, no unconditional contracts had been
concluded.

Management attributes the difficulty in concluding a sale
primarily to the lack of a long-term track record of the system and to the lack
of a demonstration unit to establish the visual confirmation for customers that
the technology actually works as represented. While the video of the prototype
creates interest, it would appear that, by itself, it cannot replace the visual
impact of a functioning fracturing mill. The approximate installed cost of a
TCS-2 is 5,500,000 Euros (currently approximately US$7.48 million using the
exchange rate of May 1, 2007) which is a lot of money for most entrepreneurs or
their financial backers for unproven long-term technology. The project cost is
not limited to the acquisition cost of the

16

---



TCS. There also infrastructure costs, set-up period losses
and an opening working capital requirement. Depending somewhat on the location,
we consider that the entrepreneur is facing a total investment cost of
approximately US$9 million.

During the second quarter, the Tirex head office and more
specifically Mr. Threshie, relocated to Connecticut. Tirex engaged several new
commissioned representatives from New York and Connecticut, each with extensive
marketing and business development backgrounds. The most active opportunities on
which Tirex and Simpro have worked during the first nine months of Fiscal 2007,
and on which efforts continue, include projects for the Middle East, the United
Kingdom, Malaysia, Russia, Italy and New York State. It has been represented to
either Tirex or Simpro that these projects have done their due diligence and
either all or a major part of their funding requirement is feasible. Management
has not been able to verify the accuracy of such representations and is thus not
in a position to assert that TCS System sales contracts will be concluded.

As noted, these opportunities may not conclude in definitive
agreements. 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.

Tirex continues to be listed on the Internet Recycling
Exchange, combined with our web site, www.tirex.tcs.com,
and Mr. Threshies network, it continues to generate interest on a global basis.
What appears to be quite clear is the desire to acquire new technologies to
replace existing technologies which are either being phased out by evolving
government regulations or which are not economically viable in the absence of
tire recycling subsidies. Furthermore, government subsidies and focus, as is the
case in New York, are towards technologies that can produce higher value added
recycled products.

The 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 impossible that any revenues would become recognizable, from the point of
view of US Generally Accepted Accounting Principles, 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.

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. 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 have been reduced to inconsequential amounts, and thus
our requirement to find financial resources to fund operations is minimal. Our
greatest expense, from an accounting standpoint, is for salaries. These salaries
have not been paid for over five years, but rather set up as payables and
represent by far the greatest proportion of our current liabilities. 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.

17

---



Over the twelve months ended June 30, 2006 and the ensuing
nine months ended March 31, 2007, the expenses of our company have been funded
by a series of loans made by a significant number of individuals investing
modest amounts totaling approximately US$60,000 each through Tirex President,
John L. Threshie Jr. During Fiscal 2006, the amount was US$60,700 and implied a
future transfer of shares by Mr. Threshie totaling 13,140,000 shares (assuming
no reverse splits which would cause a proportional adjustment). To the extent
that the cash borrowed was utilized for legitimate and documentable corporate
expenses such as filing fees, we will have to reimburse Mr. Threshie for these
shares. During the three months ended September 30, 2006 a further amount of
US$3,500 was secured by Mr. Threshie under substantially the same terms and
would involve 700,000 shares. During the second quarter, a further $32,500 was
obtained by Mr. Threshie under substantially the same terms and would involve
7,500,000 shares. In January 2007, the month following the period covered by
this report, Mr.Threshie obtained a further $5,500 which would involve 2,200,000
shares. These share implications represent maximum amounts. To the extent that
part of the cash borrowed by Mr. Threshie would be considered for personal
expenses, the share issuances would nonetheless be attributable to company
expenses insofar as Mr. Threshie has not been paid any salary for approximately
five years. Some shares could be issued to Mr. Threshie to cover his position,
but such shares would be accounted for as a reduction of the salary currently
payable to Mr. Threshie. Insofar as the funds were lent to Mr. Threshie rather
than to Tirex directly, with Mr. Threshie then paying personally the expenses of
Tirex, which expenses have been duly recorded in our accounts offset by a
liability to Mr. Threshie, the liability on our books is still listed as being
toward Mr. Threshie. Thus no direct liability toward these investors is on our
books. Insofar as Tirex does not have shares to issue at this time, these
investors, fully cognizant of our situation and so documented in writing, have
accepted that their investment is being made via Mr. Threshie and represents a
convertible debt, the conversion of which can occur once Tirex will have shares
available for issuance. This debt is convertible at fixed prices rather than as
a discount to market. To June 30, 2006, approximately 13,140,000 million shares
were involved, and a further 8,200,000 shares would be required as a result of
the first two quarter borrowings, these numbers being before any adjustments to
our share authorization structure which would cause a proportionate adjustment
to the number of shares actually issuable.

In addition to the above liability for shares, Tirex is
liable for the replacement of 11,986,315 shares which were delivered as
collateral by Tirex Directors, Threshie, Muro and Sanzaro (deceased
approximately a year ago, and thus the shares due to his estate) for the
$750,000 of convertible debt contracted for in 2001, which shares were sold by
the debt holders.

We will require a modification to our share authorization in
order to be able to satisfy the obligation to issue new shares. Once shares will
become available for issuance, the amounts due to Mr. Threshie, Mr. Muro and the
estate of Mr. Sanzaro will be will be satisfied. With respect to a portion of
the shares issuable to Mr. Threshie, these shares will be transferred by him to
and thence to the indirect investors noted above..

Since August 2005, the office rent of Tirex has been assumed
by Mr. Threshie. Until mid August 2006, this amount was CA$1,500 per month. This
amount was accrued as a liability to Mr. Threshie on our books since last
August. For a period of three weeks from mid-August to early September 2006, Mr.
Threshie and the Tirex office was lodged personally by Tirex CFO, Michael Ash,
who has provided these premises at a discounted rate of CA$1,000 for the
three-week period in question. Effective the week following Labor Day 2006, the
Tirex Head Office was relocated to Stratford, Connecticut where office and
operational expenses are relatively nominal.

18

---

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 as an Exhibit to this Report.
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 finds 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. The collateral shares provided
by the directors, totaling approximately 11,986,000 shares, have been sold by
the investors.
Because of the lengthy delay preceding the commencement of
commercial operations, we have historically had to cover our overhead costs from
sources other than from commercial revenues. 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 have been reduced to relatively inconsequential
amounts, and thus our requirement to find financial resources to fund operations
has been minimal. Our greatest expense, from an accounting standpoint, is for
salaries. These salaries have not actually been paid for over four years, but
rather set up as payables. 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.
Liquidity and Capital Resources

As of March 31, 2007, the Company had total assets of
$233,297 as compared to $233,297 at March 31, 2006 reflecting no change, and
also no change versus total assets at June 30, 2006. There were no changes in
the value of individual assets, representing Notes Receivable, Inventory,
Property and Equipment and an Investment, from March 31, 2006 to March 31, 2007
and from June 30, 2006 to March 31, 2007.
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As of March 31, 2007, the Company had total liabilities of
$5,705,502 as compared to $5,533,152 at March 31, 2006, reflecting an increase
of $172,350, and reflecting an increase of $288,789 versus total liabilities as
at June 30, 2006, which total amounted to $5,416,713. The increase in total
liabilities from March 31, 2006 to March 31, 2007 is primarily attributable to
an increase of $177,599 in Accounts Payable and Accrued Liabilities and by a
decrease of $5,250 in Convertible Loans. The increase in total liabilities from
June 30, 2006 to March 31, 2007 is primarily attributable to an increase of
$11,538 in Accounts Payable and Accrued Liabilities and to an increase of
$277,250 in Convertible Loans.
Reflecting the foregoing, the financial statements indicate
that as at March 31, 2007, the Company had a working capital deficit (current
assets minus current liabilities) of $2,688,874 compared to a working capital
deficit of $2,511,275 as at March 31, 2006, reflecting an increase of $177,599.
The working capital deficit of $2,648,003 as at March 31, 2007 compares to a
working capital deficit of $2,677,336 as at June 30, 2006, reflecting an
increase of $11,538.
The financial statements which are included in this report
reflect total operations and other expenses of $350,027 for the nine month
period ended March 31, 2007 versus $418,436 for the comparative nine month
period ended March 31, 2006, reflecting a decrease of $68,409. 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 March 31, 2007, the
Company has incurred a cumulative net loss of $30,658,647. 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.
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ITEM 3  CONTROLS AND PROCEDURES

The Companys management, with the participation of its Chief
Executive Officer, who is the Companys principal executive officer, and its
Chief Financial Officer, who is the Companys principal financial officer, has
evaluated the effectiveness of the Companys disclosure controls and procedures
as of March 31, 2007. Based upon that evaluation, the Chief Executive Officer
and the Chief Financial Officer have concluded that the Companys disclosure
controls and procedures are effective in alerting them in a timely manner to
material information relating to The Tirex Corporation, including its
consolidated subsidiaries, required to be included in this report and the other
reports that the Company files or submits under the Securities Exchange Act of
1934. During the third quarter of fiscal 2007, there have been no changes in the
Companys internal control over financial reporting that have materially
affected, or that are reasonably likely to materially affect, its internal
control over financial reporting.
PART II: OTHER INFORMATION
Item 1:
Item 1 - Legal Proceedings

We are presently a party in the following legal proceedings,
the status of which has not changed since the Company filed its Annual Report on
Form 10-KSB for Fiscal 2006.

21
IM(2) Merchandising and Manufacturing, Inc and David B. Sinclair v. The Tirex
Corporation, Tirex Corporation Canada, Inc., et al.
Lefebvre Frères Limited v. The Tirex Corporation
Tri-Steel Industries Inc. v. The Tirex CorporationNo 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 2: - Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3 - Defaults Upon Senior Securities

Other than defaults previously reported on in prior periods, there were no
other defaults upon senior securities.

Item 4 - Submission of Matters to a Vote of Security Holders

During the nine-month period ended March 31, 2007, there were no submissions
of matters to a vote of Security Holders.

Item 5  Other Information

There have been no material changes in the way in which shareholders may
nominate directors.

Item 6 - Exhibits and Reports on Form 8-K

Exhibits

Exhibit 31.1 Certification of Form 10-Q filing by the Chief Executive Officer
Exhibit 31.2 Certification of Form 10-Q filing by the Chief Financial Officer
Exhibit 32.1 Certification Pursuant to the Sarbanes-Oxley Act by the Chief
Executive Officer Exhibit 32.2 Certification Pursuant to the Sarbanes-Oxley Act by the Chief
Financial Officer

No Reports on Form 8-K were filed during the period covered by this report

SIGNATURES

In accordance with the requirements of the
Exchange Act, the registrant has caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.

|                   | THE TIREX CORPORATION                                                
|------------------ | ---------------------------------------------------------------------
|                   |                                                                      
|                   |                                                                      
|                   |                                                                      
|Date: May 14, 2007 | By /s/ John L.
    Threshie,jr.                                      
|                   | John L. Threshie,
    Jr. President                                  
|                   |                                                                      
|                   |                                                                      
|Date: May 14, 2007 | By /s/ Michael Ash                                                   
|                   | Michael Ash,
    Treasurer and Chief Accounting and Financial Officer



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