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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 December 31, 2003

[ ] 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. EmployerIncorporation or
      Organization)
      Identification No.)


4055 Ste-Catherine Street West, Suite 151, Montreal (Westmount),
Quebec, 
Canada, H3Z 3J8

(514) 935-2525

(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 April 30, 2004:249,895,892shares

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
    INFORMATION                    |     
|----------------------------------------------------- | ----
|                                                      |     
|Item 1 - Financial
    Statements(Unaudited)          | Page
|                                                      |     
|The Tirex Corporation and Subsidiaries                |     
|Consolidated Balance Sheets as of                     |     
|March 31, 2004                                        |     
|                                                      |     
|Consolidated Statements of Operations                 |     
|for the three and nine month periods                  |     
|ended March 31, 2004 and 2003                         |     
|                                                      |     
|Consolidated Statements of Cash Flows                 |     
|for the three and nine month periods                  |     
|ended March 31, 2004 and 2003                         |     
|                                                      |     
|Notes to Financial Statements (Unaudited)             |     
|                                                      |     
|Item 2 -
    Management's Discussion and Analysis     |     
|                                                      |     
|Item 3 - Controls
    and Procedures                  |     
|                                                      |     
|PART II OTHER
    INFORMATION                         |     
|                                                      |     
|Item 1 - Legal
    Proceedings                        |     
|Item 2 - Changes in
    Securities and Small Business |     
|Issuer Purchases of Equity Securities                 |     
|Item 3 - Defaults Upon
    Senior Securities          |     
|Item 4 - Submission of
    Matters                    |     
|to a Vote of Security Holders                         |     
|Item 5 - Other
    Information                        |     
|Item 6 - Exhibits and
    Reports on Form 8-K         |     

The financial statements are unaudited. However, pursuant to SEC
requirements, the consolidated financial statements have been reviewed by the
Company's independent auditor. Readers are cautioned that a review engagement
does not constitute an audit. 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,
2004 and the results of its operations and changes in its cash position for the
three month and nine periods ended March 31, 2004 and 2003 and for the period
from March 26, 1993.

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THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004

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THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
CONSOLIDATED BALANCE SHEETAS AT MARCH 31, 2004

|                                                             |                                                |              | (Unaudited)  
|------------------------------------------------------------ | ---------------------------------------------- | ------------ | -------------
|                                                             |                                                |              |              
|                                                             |                                                |              | March
    31,
|                                                             |                                                |              | 2004         
|                                                             |                                                |              |              
|                                                             | 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                      | $                                              | 2,005,898   
|Current portion of long-term debt                            |                                                | 126,625     
|                                                             |                                                |              | 2,132,523    
|                                                             |                                                |              |              
|Other liabilities                                            |                                                |              |              
|Long-term
    deposits and notes                             |                                                |              | 217,500      
|Government loans (net of current)                            |                                                | 34,580      
|Capital lease obligations (net of current)                   |                                                | -           
|Convertible
    notes                                        |                                                |              | 586,356      
|Convertible
    note                                         |                                                |              | 185,556      
|Loans from
    related parties                               |                                                |              | 1,076,173    
|                                                             |                                                |              | 2,100,165    
|                                                             |                                                |              |              
|                                                             |                                                |              | 4,232,688    
|Stockholders' Equity
    (Deficit)                           |                                                |              |              
|Common stock, $.001 par value, authorized                    |                                                |             
|250,000,000 shares, issued and outstanding                   |                                                |             
|249,895,892 shares (June 30, 2003 - 249,895,892 shares)      |                                                | 249,896     
|Additional
    paid-in capital                               |                                                |              | 25,222,219   
|Deficit accumulated during the development stage             |                                                | (29,051,311)
|Unrealized gain (loss) on foreign exchange                   |                                                | (420,195)   
|                                                             |                                                |              | 3,999,391    
|                                                             |                                                |              |              
|                                                             |                                                |              |              
|                                                             |                                                | $            | 233,297      

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THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS

|                                                 |             | (Unaudited)        |             |                   | (Unaudited)       |                 |  
|------------------------------------------------ | ----------- | ------------------ | ----------- | ----------------- | ----------------- | --------------- | -
|                                                 |             |                    |             |                   |                   |                 |  
|                                                 |             | Three months ended |             | Nine months ended |                   | Cumulative from
|                                                 |             | March 31           |             | March 31          | March 26, 1993 to
|                                                 |             | 2004               |             | 2003              |                   | 2004            |  
|                                                 |             |                    |             |                   |                   |                 |  
|Revenues                                         | $           | -                  | $           | -                 | $                 | -               | $
|                                                 |             |                    |             |                   |                   |                 |  
|Cost of Sales                                    |             | -                  |             | -                 |                   | -               |  
|                                                 |             |                    |             |                   |                   |                 |  
|                                                 |             |                    |             |                   |                   |                 |  
|Gross profit                                     |             | -                  |             | -                 |                   | -               |  
|                                                 |             |                    |             |                   |                   |                 |  
|Operations                                       |             |                    |             |                   |                   |                 |  
|General and
    administrative                   |             | 124,033            |             | 185,730           |                   | 393,679         |  
|Depreciation
    and amortization                |             | -                  |             | -                 |                   | -               |  
|Research and
    development                     |             | -                  |             | -                 |                   | -               |  
|                                                 |             |                    |             |                   |                   |                 |  
|Total Expense                                    |             | 124,033            |             | 185,730           |                   | 393,679         |  
|                                                 |             |                    |             |                   |                   |                 |  
|Loss before other
    expenses (income)          |             | (124,033)          |             | (185,730)         |                   | (393,679)       |  
|                                                 |             |                    |             |                   |                   |                 |  
|Other expenses
    (income)                      |             |                    |             |                   |                   |                 |  
|Interest
    expense                             |             | 14,845             |             | 22,838            |                   | 52,468          |  
|Interest income                                  |             | -                  |             | -                 |                   | -               |  
|Income from
    stock options                    |             | -                  |             | -                 |                   | -               |  
|Loss on
    disposal of equipment                |             | -                  |             | -                 |                   | -               |  
|                                                 |             |                    |             |                   |                   |                 |  
|                                                 |             | 14,845             |             | 22,838            |                   | 52,468          |  
|                                                 |             |                    |             |                   |                   |                 |  
|Net loss                                         |             | (138,878)          |             | (208,568)         |                   | (446,147)       |  
|                                                 |             |                    |             |                   |                   |                 |  
|Other comprehensive
    loss                     |             |                    |             |                   |                   |                 |  
|Loss (gain) on
    foreign exchange              |             | -                  |             | -                 |                   | -               |  
|                                                 |             |                    |             |                   |                   |                 |  
|                                                 |             |                    |             |                   |                   |                 |  
|Net loss and
    comprehensive loss              | $           | (138,878)          | $           | (208,568)         | $                 | (446,147)       | $
|                                                 |             |                    |             |                   |                   |                 |  
|Basic and Diluted net
    loss and comprehensive |             |                    |             |                   |                   |                 |  
|loss per common
    share                        | $           | (0.00)             | $           | (0.00)            | $                 | (0.00)          | $
|                                                 |             |                    |             |                   |                   |                 |  
|Weighted average
    shares of common            |             |                    |             |                   |                   |                 |  
|stock
    outstanding                            | 249,895,892 | 231,042,142        | 249,895,892 | 231,042,142       |                   | 67,798,981     

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

|                                                              |   | (Unaudited)        |         |                   | (Unaudited)       |           |                          |          
|------------------------------------------------------------- | - | ------------------ | ------- | ----------------- | ----------------- | --------- | ------------------------ | ---------
|                                                              |   |                    |         |                   |                   |           |                          |          
|                                                              |   | Three months ended |         | Nine months ended | Cumulative from  
|                                                              |   | March 31           |         | March 31          | March 26, 1993 to
|                                                              |   | 2004               |         | 2003              |                   | 2004      |                          | 2003     
|                                                              |   |                    |         |                   |                   |           |                          |          
|Cash flows from
    operating activities:                     |   |                    |         |                   |                   |           |                          |          
|                                                              |   |                    |         |                   |                   |           |                          |          
|Net loss                                                      | $ | (138,878)          | $       | (208,568)         | $                 | (446,147) | $       
    (1,159,645) | $        
|                                                              |   |                    |         |                   |                   |           |                          |          
|Adjustments to reconcile net loss to net cash                 |   |                    |         |                   |                   |           |                          |          
|used in
    operating activities:                             |   |                    |         |                   |                   |           |                          |          
|Depreciation and amortization                                 |   | -                  |         | -                 |                   | -         |                          | 5,914    
|(Gain)
    loss on disposal and abandonment of assets         |   | -                  |         | -                 |                   | -         |                          | 530,651  
|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                    |   | 15,660             |         | (117,870)         |                   | (37,661)  |                          | (90,532) 
|                                                              |   |                    |         |                   |                   |           |                          |          
|Changes in assets and
    liabilities:                        |   |                    |         |                   |                   |           |                          |          
|(Increase) decrease in:                                       |   |                    |         |                   |                   |           |                          |          
|Account
    receivable                                        |   | -                  |         | (2,151)           |                   | -         |                          | 2,311    
|Inventory                                                     |   | -                  |         | (4,685)           |                   | -         |                          | (2,149)  
|Sales tax
    receivable                                      |   | 36                 |         | (2,773)           |                   | 36        |                          | (17,787) 
|Research and experimental development tax credits receivable  | - |                    | 126,428 |                   | -                 |           | 246,970                  |          
|Other
    assets                                              |   | -                  |         | (5,317)           |                   | -         |                          | (2,438)  
|(Decrease) increase in :                                      |   |                    |         |                   |                   |           |                          |          
|Accounts
    payables and accrued liabilities                 |   | 33,176             |         | 168,772           |                   | 126,001   |                          | 307,812  
|Accrued
    salaries                                          |   | -                  |         | 11,598            |                   | 87,500    |                          | 27,716   
|Due to
    stockholders                                       |   | -                  |         | -                 |                   | -         |                          | -        
|                                                              |   |                    |         |                   |                   |           |                          |          
|Net cash used in
    operating activities                     |   | (90,006)           |         | (34,566)          |                   | (270,271) |                          | (151,177)
|                                                              |   |                    |         |                   |                   |           |                          |          
|Cash flow from
    investing activities:                      |   |                    |         |                   |                   |           |                          |          
|Increase
    in notes receivable                              |   | -                  |         | (1,387)           |                   | -         |                          | (636)    
|Reduction
    in notes receivable                             |   | -                  |         | -                 |                   | -         |                          | -        
|Investment                                                    |   | -                  |         | -                 |                   | -         |                          | -        
|Equipment                                                     |   | -                  |         | -                 |                   | -         |                          | -        
|Equipment
    assembly costs                                  |   | -                  |         | -                 |                   | -         |                          | -        
|Organization cost                                             |   | -                  |         | -                 |                   | -         |                          | -        
|Reduction
    in security deposit                             |   | -                  |         | -                 |                   | -         |                          | -        
|                                                              |   |                    |         |                   |                   |           |                          |          
|Net cash used in
    investing activities                     |   | -                  |         | (1,387)           |                   | -         |                          | (636)    
|                                                              |   |                    |         |                   |                   |           |                          |          
|Cash flow from
    financing activities:                      |   |                    |         |                   |                   |           |                          |          
|Loans
    from related parties                                |   | 90,006             |         | (74,897)          |                   | 270,271   |                          | (31,139) 
|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                                  |   | -                  |         | -                 |                   | -         |                          | (4,170)  
|Proceeds
    from issuance of stock options                   |   | -                  |         | -                 |                   | -         |                          | -        
|Proceeds
    from grants                                      |   | -                  |         | 75,350            |                   | -         |                          | 187,122  
|Proceeds
    from issuance of common stock                    |   | -                  |         | 4,283             |                   | -         |                          | -        
|Proceeds
    from additional paid-in capital                  |   | -                  |         | 31,217            |                   | -         |                          | -        
|                                                              |   |                    |         |                   |                   |           |                          |          
|Net cash provided by
    financing activities                 |   | 90,006             |         | 35,953            |                   | 270,271   |                          | 151,813  
|                                                              |   |                    |         |                   |                   |           |                          |          
|Net (decrease)
    increase in cash and cash equivalents      |   | -                  |         | -                 |                   | -         |                          | -        
|                                                              |   |                    |         |                   |                   |           |                          |          
|Cash and cash
    equivalents - beginning of period           |   | -                  |         | -                 |                   | -         |                          | -        
|                                                              |   |                    |         |                   |                   |           |                          |          
|Cash and cash
    equivalents - end of period                 | $ | -                  | $       | -                 | $                 | -         | $                        | -        

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

|                                                                                                                 |   |                    | (Unaudited) |                   |                   | (Unaudited)     |   |       
|---------------------------------------------------------------------------------------------------------------- | - | ------------------ | ----------- | ----------------- | ----------------- | --------------- | - | ------
|                                                                                                                 |   |                    |             |                   |                   |                 |   |       
|                                                                                                                 |   | Three months ended |             | Nine months ended |                   | Cumulative from
|                                                                                                                 |   | March 31           |             | March 31          | March 26, 1993 to
|                                                                                                                 |   | 2004               |             | 2003              |                   | 2004            |   | 2003  
|                                                                                                                 |   |                    |             |                   |                   |                 |   |       
|Supplemental
    Disclosure of Non-Cash Activities:                                                              |   |                    |             |                   |                   |                 |   |       
|During the year ended June 30, 2003, the Company recorded an increase in
    common stock and in additional      |   |                    |             |                  
|paid-in capital of $456,583 which was in recognition of the payment of debt.
    During the nine month period    |   |                    |             |                  
|ended March 31, 2004, the Company did not issue common stock in recognition
    of the payment of debt.          |   |                    |             |                  
|During the year ended June 30, 2003, stock was issued in exchange for
    services performed and expenses in the |   |                    |             |                  
|amount of $136,375. During the nine month period ended March 31, 2004, the
    Company did not issue             |   |                    |             |                  
|common stock in exchange for services performed and expenses.                                                    |   |                    |             |                  
|                                                                                                                 |   |                    |             |                   |                   |                 |   |       
|Supplemental
    Disclosure of Cash Flow Information:                                                            |   |                    |             |                   |                   |                 |   |       
|                                                                                                                 |   |                    |             |                   |                   |                 |   |       
|Interest paid                                                                                                    | $ | -                  | $           | 20,162            | $                 | -               | $ | 21,024
|                                                                                                                 |   |                    |             |                   |                   |                 |   |       
|Income taxes paid                                                                                                | $ | -                  | $           | -                 | $                 | -               | $ | -     

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THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2004 
(UNAUDITED)
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, 2004, 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. Tirex Canada R&D Inc. is held 51% by certain shareholders of
the Company. The shares owned by the certain 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 except Tirex Canada R&D Inc. 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.

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2004 
(UNAUDITED)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.

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2004 
(UNAUDITED)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, 2003 and June 30, 2002, 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 2003 and 2002, 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, 2004 and June 30, 2003,
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 $29.1 million as of March 31, 2004, expiring in the years 2004
through 2019. 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, 2004.
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

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2004 
(UNAUDITED)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 Company's audited financial statements for
the year ended June 30, 2003, the Company incurred a net loss of $1,561,375, and
as shown in the accompanying financial statements, incurred an additional net
loss for the nine months ended March 31, 2004 in the amount of $446,147.
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 six month period ended June 30, 2002, all rubber crumb production
were 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, 2004, 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 Plants, 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 March 31, 2004, 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 | 161,916 
|                                                    |         
|Total                                               | $ 50,000

Depreciation and amortization expense charged to operations
for the year ended June 30, 2003 was $24,960. Depreciation and amortization
expense charged to operations for the nine month period ended March 31, 2004 was
zero.

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2004 
(UNAUDITED)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).

|Loan repayable over
    five years commencing June 30, 2000 and ending          |         
|------------------------------------------------------------------------------- | --------
|June 30, 2004                                                                   | $ 34,300
|Loan repayable over
    five years commencing June 30, 2001 and ending          |         
|June 30, 2005                                                                   | 43,791  
|Loan repayable in
    amounts equal to 1% of annual sales in Spain and / or     |         
|Portugal throughout
    June 30, 2007, to a maximum of the balance of the       |         
|loan outstanding. If
    no sales occur on or before this date in Spain and     |         
|Portugal, the loan
    will become non-repayable.                               | 14,000  
|Loan repayable in
    amounts equal to 11⁄2% of annual sales in Spain and /       |         
|or Portugal through
    June 30, 2004 to a maximum of the balance of the        |         
|loan outstanding. If
    no sales occur before this date in Spain and Portugal, |         
|the loan will become
    non-repayable.                                         |         
|                                                                                | 66,500  
|                                                                                | 158,591 
|Less: Current portion                                                           | 124,011 
|Long-term portion                                                               | $ 34,580
|                                                                                |         
|Principal repayments
    are as follows:                                        |         
|June 30                                                                         | Amount  
|                                                                                |         
|                                                                                |         
|2004                                                                            | $124,011
|2005                                                                            | 20,580  
|2006                                                                            | -       
|2007                                                                            | 14,000  
|                                                                                | $158,591

Note 5 CAPITAL LEASE OBLIGATIONS

The Company leases certain manufacturing equipment under
agreements classified as capital leases. The cost and the accumulated
amortization for such equipment as of June 30, 2002 was $62,400 and $37,440,
respectively. The accumulated amortization for such equipment as of June 30,
2003 and 2002 was $62,400 and $37,440, 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 leased equipment is not part of the Company's TCS System
prototype.

The following is a schedule by years of future minimum lease
payments under capital leases of equipment together with the obligations under
capital leases (present value of future minimum rentals) as at March 31, 2004:

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2004 
(UNAUDITED)

|Years ended June 30                                                                 | Amount
|----------------------------------------------------------------------------------- | ------
|                                                                                    |       
|2004                                                                                | $     
|                                                                                    |       
|Total minimum lease
    payments                                                    |       
|Less: Amount
    representing interest                                              |       
|Total obligations
    under capital lease                                           |       
|Less: Current portion
    of obligations under capital leases                       |       
|                                                                                    |       
|Long-term obligation
    portion of under capital leases, with interest rate of 10% |       

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, 2004 | $586,356                                             
|------------------------- | -----------------------------------------------------
|                          |                                                      
|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.                       

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2004 
(UNAUDITED)Certain 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 as of this date, and until
such occurs, 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. In the event of a default
under the Settlement Agreement, the term of the Convertible Notes would become
effective once again. The Company defaulted on the terms of the Settlement
Agreement.
Note 8 CONVERTIBLE NOTE

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

|Balance at March 31, 2004 | $ 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.                                   

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, 2004 and June 30, 2003, the balances owing
to Directors and Officers was $1,200,712 and $919,462, respectively. These
amounts are without interest or terms of repayment.

Long-term deposits and notes included an amount of $118,500
at March 31, 2004, which is payable to Ocean Tire Recycling & Processing Co.,
Inc., a company owned by a Director of the Company.

Note 10 COMMON STOCK

During the year ended June 30, 2003, the Company issued
common stock in exchange for services performed totaling $136,375. The amount
for the year ended June 30, 2003 did not include any payments to Officers of the
Company in exchange for salary and expenses. During the nine month period ended
March 31, 2004, the Company issued no common stock in exchange for services
performed. The dollar amounts assigned to such transactions have been recorded
at the fair value of the services received.

---

THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2004 
(UNAUDITED)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, 2004, 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.

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 nine month period ended March 31, 2004, the
Company did not receive any tax credits. Also, during the nine month period
ended March 31, 2004, the Company did not record any additional tax credits
receivable during Fiscal 2004. 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 March 31, 2004.

Note 13 COMMITMENTS

The Company leased office and warehouse space at an annual
minimum rent of $80,000 for the first year, $160,000 for the second year and
$200,000 per year for the third through the fifth years. The lease expired in
2003. The Company was responsible for its proportionate share of any increase in
real estate taxed and utilities. Also, under the terms of the lease, the Company
was required to obtain adequate public liability and property damage insurance.

The lease contained a second ranking moveable hypothec in the amount of
$300,000 on the universality of the Company's moveable property.

Rental expense for the year ended June 30, 2003 amounted to $124,442. Rental
expense for the nine month period ended March 31, 2004 amounted to zero.

At March 31, 2004, 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 the first four sales of TCS Systems.

Note 14 LITIGATION

An action was instituted by Plaintiffs, a Canadian resident
and a Canadian 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 TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2004 
(UNAUDITED)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 Canadian 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.
Unbeknownst to the Company, it was indirectly the object of a judgment in
December 2002, against its subsidiary, Tirex Canada R&D Inc., and also against
John L. Threshie Jr., Louis V. Muro and Michael Ash as loan guarantors, all of
these being either directors or officers of The Tirex Corporation, for an amount
of approximately CA$42,000 regarding a loan made to Tirex Canada R&D Inc. More
than a year after the judgment, Rapid Finance initiated proceedings against
Louis V. Muro and Michael Ash to effect a seizure of their personal assets to
satisfy the judgment. These seizures are currently being contested. In the event
that the seizures are upheld, the company will indemnify Messrs. Muro and Ash
for the values of personal assets lost.
Note 15 ACCUMULATED OTHER COMPREHENSIVE INCOME

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

---

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
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 nine month periods ended March 31, 2004. 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.
As reported in the Company's Annual Report for the year ended June 30, 2003,
filed in October 2003 on Form 10-KSB, the Company's TCS Tire Recycling System
has been ready for market since March of 2000, although further refinements were
made to the technology during the remainder of Fiscal 2001 and throughout
Calendar 2002. Throughout that period, the availability of funds necessary to
permit developmental stage companies, such as ours, to make the transition to
the commercial stage has been very restricted. The Company was late in filing
its September 2002 Form 10-QSB on a timely basis, which resulted in our stock
being removed from the Bulletin Board to be shown as OTC-Other, in which
category the "Bid" and "Ask" are not shown. The Company intends to attempt to
rectify this situation and apply for re-listing on the OTC Bulletin Board as
soon as practicable and desirable.
On the business development side, we have continued to encounter substantial
difficulties in realizing our first system sale, as has our licensee, Simpro.
The substantial cost of a TCS-2, at approximately 5.5 million Euros
(approximately US$6.6 million), combined with its lack of a substantial
production track record represent significant obstacles to the sales efforts.
Those entrepreneurs wishing to acquire a system have consistently had difficulty
in finding equity backing for their projects, and persuading those with the
necessary capital to invest in such projects has proven to be quite difficult.
The increase in value of the Euro versus the US dollar over the last year and a
half has also been detrimental to the sales efforts in that it has made the
securing of an adequate equity base to support a project even more difficult.
Since the TCS-2 is being manufactured in Europe by Simpro, their costs are
primarily Euro-based. Fifteen months ago, one Euro cost approximately US$0.97;
today, one Euro costs approximately US$1.20. This foreign exchange differential
on the price of the installed system thus represents a close to 24% increase in
cost, for those potential customers who would normally be purchasing systems in
US dollars, without any commensurate increase in capacity or functionality of
the system. We are discussing with Simpro different ways to attenuate this
increase. Euro currency customers and those other potential customers whose
currencies have also appreciated against the US dollar are unaffected.
For the past nearly two years, the Company has been working with a Puerto
Rican entrepreneur interested in purchasing a TCS-2, but having difficulty in
finding an investor partner, necessary to complete his project financing
package. While the Puerto Rican entrepreneur continues to show very significant
interest in acquiring a TCS-2, he has not, as of the date of this Report,
succeeded in finding adequate equity backing for his project.
We and Simpro have also been working on several potential sales in Mexico,
South America, Australia, southeast Asia, the U.K., and elsewhere, either
directly or through intermediaries. It has been represented to us that
discussions in some cases have reached an advanced stage, but, as of the date of
this Report, no unconditional sales contracts had been signed.
Nearly two years ago, we initiated negotiations with a Canadian entrepreneur
for the installation of a TCS-2 in Quebec. The entrepreneur in question decided
to install a different technology, reportedly with considerable quantities of
used equipment. However, the project initially conceived using the TCS
technology remains viable, and we are working with a Montreal-based consulting
firm to bring in investors to support such a Quebec-based facility. The business
plan for such a facility has been completed and the consultants are presenting
the plan to potential investors from both the public and private sectors. To

---

date, while we have a combination of verbal and written commitments for
nearly 80% of the project cost , there remains the securing of private sector
equity investors to complete the investment package. We remain hopeful that such
investors will be found, but we cannot guarantee that this will occur.
We continue to respond to information requests with respect to our TCS
systems from numerous sources. While the volume of such requests would indicate
continued significant interest in our technology, there can be no assurances
that any of these requests will proceed to actual negotiations for a system
sale, nor that any sales contracts would actually be concluded.
With the suspension of rubber crumb production operations in January of 2002
and the concurrent reduction of R&D activity, we have devoted all of our efforts
to being able to conclude a sale of a TCS System and to the raising of necessary
funds to keep the Company operational until revenue from sales can be realized.
In February of 2001, we concluded a private financing with an investor group
managed by a New York-based company. Under the terms of the Agreement, we drew
down $750,000 of the available $5,000,000 amount. The initial $750,000 was
provided in the form of a Convertible Note. We defaulted by not having an SB-2
Registration Statement declared effective within 150 days of the date of the
Note. Following lengthy negotiations, we reached a Settlement Agreement with the
investors on April 26, 2002 under which the Company agreed to a reimbursement
schedule and provided three series of warrants, 500,000 each, exercisable at
different prices to the investors. The lack of financial resources prevented us
from being able to honor the reimbursement schedule, and thus we are currently
in default with respect the Settlement Agreement. On March 5, 2003, the
Investors sent to us by FAX, demand letters of payment due for each of the three
investor funds involved in the initial transaction, these letters being dated
February 25 and February 26, 2003, being the two-year anniversary date of their
investment. The amount currently due, including accrued interest included in
accrued liabilities, penalties and fees, and after realization on collateral
shares and conversion of debt into 4,000,000 common shares, is approximately
$600,000. The Company is not in a position to pay this sum. As of September 30,
2003, the Investors continued to hold 3,190,977 collateral shares plus the
4,000,000 conversion shares. The Company is working with the Investors to
establish those conditions, related to the development of the business, such
that remaining cash sums can be paid over time.
Because of the lengthy delay preceding the commencement of commercial
operations, particularly insofar as regards the sale and manufacturing of TCS
Systems is concerned, we have had to, and in the foreseeable near future, will
be forced to continue to cover a substantial part of our overhead costs from
sources other than revenues from operations. At present, we have no cash and no
cash flow from operations. Management has taken all reasonable steps to reduce
the monthly cash flow requirements to negligible amounts. All management
salaries and reimbursement of expenses have been deferred until such times as
the company will have adequate resources to resume such expenditures. Since
relocating to our current premises, our monthly cash requirements in respect of
rent, heat, air conditioning and local telephone service have been reduced to
zero. Most of the expenses listed on our Income Statement relate to salary
accruals.
Liquidity and Capital Resources
The activities of the Company, since its formation in 1987, and the inception
of its current business in 1993 have been financed by sources other than
operations. Such financing was principally provided by

---

the sale of securities in private transactions and by additional capital
investments by directors, officers and employees. During the three and nine
month periods ended March 31, 2004, directors, officers, employees and
consultants did not make any direct cash investments into the Company.
As of March 31, 2004, the Company had total assets of $233,297 as compared to
$542,914 at March 31, 2003 reflecting a decrease of $309,617, and a decrease of
$1 versus total assets as of the last fiscal year end, June 30, 2003, which
amounted to $233,298. Management attributes the decrease from March 31, 2003 to
March 31, 2004 primarily to the following factors: (i) a decrease of $30,902 in
Accounts Receivable from the balance as of March 31, 2003 in the amount of
$30,902 to the balance as of March 31, 2004 in the amount of $0, and (ii) a
decrease of $245,394 in Prepaid Expenses and Deposits from the balance as of
March 31, 2003 in the amount of $245,394 to the balance as of March 31, 2004 in
the amount of $0, and (iii) a decrease of $39,876 in Sales Tax Receivable from
the balance as of March 31, 2003 in the amount of $39,876 to the balance as of
March 31, 2004 in the amount of $0. There were no significant differences
attributable to asset balances from June 30, 2003 to March 31, 2004.
As of March 31, 2003, the Company had total liabilities of $3,910,818 as
compared to $4,232,688 at March 31, 2004, reflecting an increase of $321,870,
and reflecting an increase of $137,923 versus total liabilities as of the last
fiscal year end, June 30, 2003, which total amounted to $4,094,765. The increase
in total liabilities from March 31, 2003 to March 31, 2004 is primarily
attributable to a decrease of $345,884 in Convertible Notes, by an increase of
$517,750 in Loans from Related Parties, by a decrease of $97,078 in Government
Loans and by an increase in Accounts payable and Accrued Liabilities in the
amount of $166,256. The increase in total liabilities from June 30, 2003 to
March 31, 2004 is primarily attributable to an increase of $213,501 in Accounts
Payable and Accrued Liabilities, to an increase of $281,251 in Loans from
Related Parties and to a decrease of $345,884 in Convertible Notes.
Reflecting the foregoing, the financial statements indicate that as at March
31, 2004, the Company had a working capital deficit (current assets minus
current liabilities) of $1,986,226 compared to a working capital deficit of
$1,688,913 as at March 31, 2003, reflecting an increase of $297,313. The working
capital deficit of $1,986,226 as at March 31, 2004 compares to a working capital
deficit of $1,783,667 as at June 30, 2003, reflecting an increase of $202,559.
Results of Operations

The financial statements which are included in this report reflect total
operations and other expenses of $446,147 for the nine month period ended March
31, 2004 versus $1,159,645 for the comparative nine month period ended March 31,
2003, reflecting a decrease of $713,498. The Company has ceased Research and
Development activities thereby resulting in a decrease in personnel expenses and
other Research and Development expenses and for the nine month period ended
March 31, 2003, incurred a charge of $530,651 to write down Property and
Equipment to its salvage value.
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, 2004. 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 first fiscal quarter of 2004, 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 last Quarterly Report on Form
10-QSB for the second quarter of Fiscal 2004.

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

Lefebvre Freres Limited v. The Tirex Corporation

Tri-Steel Industries Inc. v. The Tirex Corporation

Legal proceeding not known to the company as of the last quarterly filing.

Rapid Finance

Unbeknownst to us, our company was indirectly the object of a judgment in
December 2002, against our subsidiary, Tirex Canada R&D Inc., and also against
John l. Threshie Jr., Louis V. Muro and Michael Ash as loan guarantors, all of
these being officers of The Tirex Corporation, for an amount of approximately
CA$42,000 regarding a loan made to Tirex Canada R&D Inc. More than a year after
the judgment, Rapid Finance initiated proceedings against Louis V. Muro and
Michael Ash to effect a seizure of their personal assets to satisfy the
judgment. These seizures are currently being contested. In the event that the
seizures are upheld, the company will indemnify Messrs. Muro and Ash for the
values of personal assets lost.

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 2: - Changes in Securities and Small Business Issuer Purchases of
Equity Securities

No changes

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Item 3 - Defaults Upon Senior Securities
During 1998, we issued an aggregate of $535,000 of two (2) year convertible,
subordinated debentures bearing interest at the rate of 10%. Interest thereon
was due and payable semi-annually commencing six months from the date of
issuance. All debentures have either been converted or repaid, except for
debentures in the principal amount of US$55,000, which remain outstanding and on
which principal and interest, which has accrued since the issuance of the
debentures, are now due. On debentures converted subsequent to December 1999,
interest was capitalized and converted to equity. Although the conversion option
on the outstanding debentures has lapsed, we intend to extend the conversion
dates of these debentures upon the request of the holders.
As indicated above, in February of 2001, we concluded a private financing
with an investor group managed by a New York-based company. 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 and we drew down US$750,000, which was provided
in the form of a Convertible Note. Under the terms of the Agreement, we were
required to file and have declared effective a Registration Statement on Form
SB-2 within 150 days of the Closing Date of the Agreement. As of June 25, 2001,
we were in technical default for failing to have an effective Registration
Statement on record with the Securities and Exchange Commission. We were advised
of the default in mid-July 2001. The SB-2 Registration Statement which we had
submitted to the SEC was subsequently withdrawn.
Following lengthy negotiations, we reached a Settlement Agreement with the
investors on April 26, 2002 under which we agreed to a reimbursement schedule
and provided three series of warrants, 500,000 each, exercisable at different
prices to the investors. The lack of financial resources prevented us from being
able to honor the reimbursement schedule, and thus we are currently in default
with respect the Settlement Agreement.
On March 5, 2003, the Investors sent to us by FAX, demand letters of payments
due for each of the three investor funds involved in the initial transaction,
these letters being dated February 25 and February 26, 2003, being the two-year
anniversary date of their investment. After taking into consideration the
proceeds of sales of collateral shares, share conversions and accumulating
interest, the sum total due, including interest, penalties and fees, as of
September 30, 2003 was $586,356. Accrued interest of approximately $12,000 is
included in accrued liabilities. As of September 30, 2003, the investors had in
their possession 3,190,977 collateral shares plus 4,000,000 shares converted
from the debt. The Company is not in a position to pay this sum of cash due. The
Company is working with the Investors to establish those conditions, related to
the development of the business, such that these sums can be paid over time. The
Investors also sent a request to convert the debt. As of the date of this
Report, we do not have a significant number of issuable shares in treasury, with
the effect that we cannot satisfy the investors' conversion request to any
meaningful extent. There can be no guarantee that the investors will continue to
not take legal recourse against the Company and that the anticipated cash
availability to support a re-negotiated Settlement Agreement will actually be
available
Item 4- Submission of Matters to a Vote of Security Holders

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During the three-month period ended March 31, 2004, there were no submissions
of matters to a vote of Security Holders.
Item 5.Other Information

None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits

Exhibit 31.1 - Certification required by Rule 13a-14(a) or Rule 15d-14(a)
Exhibit 31.2 - Certification required by Rule 13a-14(a) or Rule 15d-14(a)

Exhibit 32.1 - Certification Required by Rule 13d-14(b) or Rule 15d-14(b) and
section 906 of the Sarbanes-Oxley Act of 2002, 18 US.C. Section 1350 Exhibit
32.2 - Certification Required by Rule 13d-14(b) or Rule 15d-14(b) and section
906 of the Sarbanes-Oxley Act of 2002, 18 US.C. Section 1350

(b) Reports of Form 8-K

During the three month period ended March 31, 2004, there were no Reports on
Form 8-K filed by the Company.

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SIGNATURESIn 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, 2004 | By                                        
|                   | John L.
    Threshie, Jr. President       
|                   | Chief
    Executive Officer               
|                   |                                           
|                   |                                           
|Date: May 14, 2004 | By                                        
|                   | Michael
    Ash, Secretary, Treasurer and 
|                   | Chief
    Accounting and Financial Officer



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