U.S. SECURITIES AND EXCHANGE COMMISSION

FORM 10-QSB

(Mark One)

QQuarterly report under Section 13 or 15(d) of the Securities Exchange Act of
1934 
For the quarterly period ended March 31, 2008.

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

Commission File Number 33-17598-NY

THE TIREX CORPORATION

|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)

(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 QNo£

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, 2008: 249,895,892 shares

Transitional Small Business
Disclosure Format (check one):

Yes £NoQ

---

The Tirex Corporation 
(A Development Stage Company)
TABLE OF CONTENTS

|PART I - FINANCIAL
    INFORMATION                                                                           | Page
|------------------------------------------------------------------------------------------------------------ | ----
|                                                                                                             |     
|Item 1 - Financial
    Statements(Unaudited)                                                                 | 1   
|                                                                                                             |     
|The Tirex Corporation and Subsidiaries
    Consolidated Balance Sheet as of March 31, 2008                   | 2   
|                                                                                                             |     
|Consolidated Statements of Operations for the
    three and nine month periods ended March 31, 2008 and 2007 | 3   
|                                                                                                             |     
|Consolidated Statements of Cash Flows for the
    three and nine month periods ended March 31, 2008 and 2007 | 4   
|                                                                                                             |     
|Notes to Financial Statements (Unaudited)                                                                    | 6   
|                                                                                                             |     
|Item 2 -
    Managements Discussion and Analysis of Financial Condition and Results of
    Operations       | 16  
|                                                                                                             |     
|Item 3 - Controls
    and Procedures                                                                         | 22  
|                                                                                                             |     
|PART II B OTHER
    INFORMATION                                                                              | 22  
|                                                                                                             |     
|Item 1 - Legal
    Proceedings                                                                               | 22  
|Item 2 - Changes in
    Securities and Use of Proceeds                                                       | 22  
|Item 3 - Defaults Upon
    Senior Securities                                                                 | 22  
|Item 4 - Submission of
    Matters to a Vote of Security Holders                                             | 23  
|Item 5 - Other
    Information                                                                               | 23  
|Item 6 - Exhibits and
    Reports on Form 8-K                                                                | 23  

The 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, 2008 and the results of its operations and
changes in its cash position for the three and nine month periods ended March
31, 2008 and 2007 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, 2008



1
THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY
CONSOLIDATED BALANCE SHEET
AS AT MARCH 31, 2008

|                                                                 |  |   | March 31,
|---------------------------------------------------------------- |  | - | ---------
|                                                                 |  |   | 2008     
|                                                                 |  |   |          
|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                                                    |  |   | 25,000   
|                                                                 |  |   |          
|Other assets                                                     |  |   |          
|Investment, at cost                                              |  |   | 89,500   
|                                                                 |  |   | 89,500   
|                                                                 |  |   |          
|                                                                 |  | $ | 208,297  

|                                                              |  
|------------------------------------------------------------- | -
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)               
|                                                              |  
|Current Liabilities                                           |  
|Accounts payable and accrued liabilties                       | $
|Current portion of long-term debt                             |  
|                                                              |  
|                                                              |  
|Other liabilities                                             |  
|Long-term deposits and notes                                  |  
|Government loans (net of current)                             |  
|Capital lease obligations (net of current)                    |  
|Convertible notes                                             |  
|Convertible notes                                             |  
|Convertible loans                                             |  
|                                                              |  
|                                                              |  
|                                                              |  
|Stockholders Equity
    (Deficit)                            |  
|Preferred Shares, $.001 par value, issuable in
    series     |  
|Authorized 100,000,000 shares, of which 1,000,000
    Class A |  
|Issued and outstanding, none of any class                     |  
|Common stock, $.001 par value, authorized                     |  
|1,000,000,000 shares, issued and outstanding                  |  
|249,895,892 shares (June 30, 2005 - 249,895,892
    shares)   |  
|Additional paid-in capital                                    |  
|Deficit accumulated during the development stage              |  
|Unrealized gain (loss) on foreign exchange                    |  
|                                                              |  
|                                                              |  
|                                                              | $

2

---

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

|                                             | Three months
    ended |             | Nine months
    ended |   | Cumulative from      
|-------------------------------------------- | ---------------------- | ----------- | --------------------- | - | ---------------------
|                                             | March 31               |             | March 31              |   | March 26, 1993
    to
|                                             | 2008                   |             | 2007                  |   | 2008                 
|                                             |                        |             |                       |   |                      
|Revenues                                     | $                      |            |                       | $ |                     
|                                             |                        |             |                       |   |                      
|Cost of Sales                                |                        |            |                       |   |                     
|                                             |                        |             |                       |   |                      
|Gross profit                                 |                        |            |                       |   |                     
|                                             |                        |             |                       |   |                      
|Operations                                   |                        |             |                       |   |                      
|General and administrative                   |                        | 97,219      |                       |   | 93,724               
|Depreciation and amortization                |                        |            |                       |   |                     
|Research and development                     |                        |            |                       |   |                     
|                                             |                        |             |                       |   |                      
|Total Expense                                |                        | 97,219      |                       |   | 93,724               
|                                             |                        |             |                       |   |                      
|Income (loss) before other expenses          |                        | (97,219)    |                       |   | (93,724)             
|                                             |                        |             |                       |   |                      
|Other expenses (income)                      |                        |             |                       |   |                      
|Interest expense                             |                        | 11,699      |                       |   | 11,699               
|Interest income                              |                        |            |                       |   |                     
|Income from stock options                    |                        |            |                       |   |                     
|Loss on disposal of equipment                |                        |            |                       |   |                     
|                                             |                        |             |                       |   |                      
|                                             |                        | 11,699      |                       |   | 11,699               
|                                             |                        |             |                       |   |                      
|Net income (loss)                            |                        | (108,918)   |                       |   | (105,423)            
|                                             |                        |             |                       |   |                      
|Other comprehensive loss                     |                        |             |                       |   |                      
|Loss (gain) on foreign exchange              |                        |            |                       |   |                     
|                                             |                        |             |                       |   |                      
|Net income (loss) and comprehensive loss     | $                      | (108,918)   |                       | $ | (105,423)            
|                                             |                        |             |                       |   |                      
|Basic and Diluted net loss and comprehensive |                        |             |                       |   |                      
|loss per common share                        | $                      | (0.00)      |                       | $ | (0.00)               
|                                             |                        |             |                       |   |                      
|Weighted average shares of common            |                        |             |                       |   |                      
|stock outstanding                            |                        | 249,895,892 |                       |   | 249,895,892          

3

---

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
|                                                                  | 2008                   |           | 2007                  |   | 2008                 
|                                                                  |                        |           |                       |   |                      
|Cash flows from operating activities:                             |                        |           |                       |   |                      
|                                                                  |                        |           |                       |   |                      
|Net income (loss)                                                 | $                      | (108,918) |                       | $ | (105,423)            
|                                                                  |                        |           |                       |   |                      
|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                        |                        | 76,293    |                       |   | (16,698)             
|Other non-cash items                                              |                        | 83,750    |                       |   | 81,250               
|                                                                  |                        |           |                       |   |                      
|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                         |                        | (82,375)  |                       |   | 9,621                
|Accrued salaries                                                  |                        | 31,250    |                       |   | 31,250               
|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      
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------- | - | --------------------- | - | ---------------------
|                                                                                                                                                                                                                                                                              | March 31               |   | March 31              |   | March 26, 1993
    to
|                                                                                                                                                                                                                                                                              | 2008                   |   | 2007                  |   | 2008                 
|                                                                                                                                                                                                                                                                              |                        |   |                       |   |                      
|Supplemental Disclosure of Non-Cash
    Activities:                                                                                                                                                                                                                           |                        |   |                       |   |                      
|During the year ended June 30, 2007, the Company did not
    issue common stock in recognition of the payment of debt. During the nine
    months ended March 31, 2008, the Company did not issue common stock in
    recognition of the payment of debt.                     |                        |   |                       |   |                      
|                                                                                                                                                                                                                                                                              |                        |   |                       |   |                      
|                                                                                                                                                                                                                                                                              |                        |   |                       |   |                      
|                                                                                                                                                                                                                                                                              |                        |   |                       |   |                      
|During the year ended June 30, 2007, the Company did not
    issue common stock in exchange for services performed and expenses. During
    the nine months ended March 31, 2008, 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

---



THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2008

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

BASIS OF CONSOLIDATION

The consolidated financial statements include the
consolidated accounts of The Tirex Corporation, Tirex Canada R&D Inc., The Tirex
Corporation Canada Inc., Tirex Advanced Products Quebec Inc. and Tirex
Acquisition Corp., all of these subsidiaries currently being dormant. Certain of
these companies have actually been de-registered by government authorities but
could easily be revived if circumstances would warrant such action. Tirex Canada
R&D Inc. is held 51% by two shareholders of the Company. The shares owned by
these shareholders are held in escrow by the Companys attorney and are
restricted from transfer thereby 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

---



THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2008

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, 2008

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, 2008 and June 30, 2007,
respectively, the carrying value of all financial instruments was not materially
different from fair value.

INCOME TAXES

The Company has net operating loss carryovers of
approximately $31.1 million as of March 31, 2008, expiring through 2028.
However, based upon present Internal Revenue Service regulations governing the
utilization of net operating loss carryovers where the corporation has issued
substantial additional stock and there has been a change in control as defined
by the Internal Revenue Service regulations, a substantial portion of this loss
carryover may not be available to the Company.

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

The Company does not currently have research and experimental
development tax credits receivable from the Canadian Federal government and the
Quebec Provincial government as at March 31, 2008.

FOREIGN CURRENCY TRANSLATION

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

REVENUE RECOGNITION

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

8

---



THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2008

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, 2008 and June 30, 2007,
respectively, the carrying value of all financial instruments was not materially
different from fair value.

INCOME TAXES

The Company has net operating loss carryovers of
approximately $31.1 million as of March 31, 2008, expiring through 2028.
However, based upon present Internal Revenue Service regulations governing the
utilization of net operating loss carryovers where the corporation has issued
substantial additional stock and there has been a change in control as defined
by the Internal Revenue Service regulations, a substantial portion of this loss
carryover may not be available to the Company.

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

The Company does not currently have research and experimental
development tax credits receivable from the Canadian Federal government and the
Quebec Provincial government as at March 31, 2008.

FOREIGN CURRENCY TRANSLATION

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

REVENUE RECOGNITION

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

9

---



THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2008

Note 2         GOING CONCERN

As reported in the accompanying financial statements, the
Company incurred a net loss of $480,849 for the year ended June 30, 2007 and a
net loss of $326,643 for the nine months ended March 31, 2008.

In March 1993, the Company had begun its developmental stage
with a new business plan. As of March 2000, the Company had developed a
production quality prototype of its patented system for the disintegration of
scrap tires, but nonetheless continued its research and development efforts to
improve the machines performance and to permit greater flexibility in design
for specific customer applications. Due to the Companys lack of working capital
during the year ended June 30, 2002, all rubber crumb production was suspended
and research and development efforts have been hampered. Pending receipt of
funding from operations, government assistance, loans or equity financing, crumb
rubber production and previous research and development efforts will not be
resumed. While the Company has engaged the process of marketing the TCS System
to numerous potential clients since the beginning of the fiscal year commencing
July 1, 2000, as of March 31, 2008, the Company had not yet consummated an
unconditional purchase order for a TCS System.

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

Note 3         PROPERTY AND EQUIPMENT

As at March 31, 2008, plant and equipment consisted of the
following:

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

Depreciation and amortization expense charged to operations
for the nine months ended March 31, 2008 was zero. Depreciation and amortization
expense charged to operations for the year ended June 30, 2007 was $25,000.

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. At March 31, 2008, the balance of these
loans was $112,141 (June 30, 2007 - $104,710). The loans are unsecured and bear
interest at 8%.

10

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THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2008

Note 5         CAPITAL LEASE OBLIGATIONS

The Company leased certain manufacturing equipment under
agreements classified as capital leases. The cost and the accumulated
amortization for such equipment as of March 31, 2008 and June 30, 2007 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, 2008 | $399,389                                                                                                                                                                                                                                                                                  
|------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                          |                                                                                                                                                                                                                                                                                           
|Interest rate             | 8%, payable quarterly, commencing June 30, 2001                                                                                                                                                                                                                                           
|                          |                                                                                                                                                                                                                                                                                           
|Issue date                | February 26, 2001                                                                                                                                                                                                                                                                         
|                          |                                                                                                                                                                                                                                                                                           
|Maturity date             | February 26, 2003                                                                                                                                                                                                                                                                         
|                          |                                                                                                                                                                                                                                                                                           
|Redemption rights         | If not converted, the holder may require the Company to
    redeem at any time after maturity for the principal amount 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.                                                              

Certain current and previous Directors and Officers of the
Company pledged 11,986,315 of their personal shares of Common Stock of the
Company as security for the Convertible Notes until such time as the Company
would have declared effective by 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. The Collateral Shares were sold by
the Investors. These shares are in the process of being replaced by an issuance
of a like number of new shares.

11

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THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2008

Note 8         CONVERTIBLE NOTES

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

|Balance at March 31, 2008 | $ 185,556                                                                                                                                                                                                              
|------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                          |                                                                                                                                                                                                                        
|Interest rate             | 8%                                                                                                                                                                                                                     
|                          |                                                                                                                                                                                                                        
|Issue date                | July 19th, 2000                                                                                                                                                                                                        
|                          |                                                                                                                                                                                                                        
|Maturity date             | January 19th, 2002                                                                                                                                                                                                     
|                          |                                                                                                                                                                                                                        
|Redemption rights         | If not converted, the holder may require the Company to
    redeem at any time after maturity for the principal amount plus interest.                                                                                  
|                          |                                                                                                                                                                                                                        
|Conversion ratio          | Not convertible prior to July 19th, 2001, at
    20% discount to market between July 19th, 2001 and January 19th,
    2002 or at 25% to market if held to maturity, to a maximum of not more than
    2,500,000 shares.

Since Calendar 2005, the expenses of our company have been
funded by a series of non-interest bearing convertible loans with no specific
terms of repayment made by a significant number of individuals investing modest
amounts for a grand total of approximately US$187,800, these loans being made
through Tirex President, John L. Threshie Jr. These investors, fully cognizant
of the Companys situation and so documented in writing, accepted that their
investments were being made via Mr. Threshie and represented a convertible debt,
the conversion of which can occur once Tirex would have shares available for
issuance. This debts are convertible at fixed prices rather than as a discount
to market.

|              | Fiscal     | Fiscal
    2008 | Fiscal
    2008 | Fiscal
    2008 | Fiscal
    2008
|------------- | ---------- | --------------- | --------------- | --------------- | ---------------
|              | 2005-2007  | Q-1             | Q-2             | Q-3             | Q-4            
|Dollars recd | $114,700   | $10,700         | $10,400         | $22,000         | $21,000        
|Shares        | 26,040,000 | 3,840,000       | 5,460,000       | 5,400,000       | 6,200,000      

12

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THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2008

The total dollars received and shares issuable respecting the
fourth quarter of Fiscal 2008 are for a period subsequent to the date of these
financial statements. The above numbers for the fourth quarter are as of April
30, 2008.

The total dollars received and shares issuable, including
fourth quarter receptions, is $187,800 and involving 46,940,000 shares issuable.

Until February 2008, the Company did not have an adequate
share authorization to issue the shares underlying these loans. The company is
currently preparing the required documentation, including legal opinions, to
proceed with the issuance. Until such time of such issuance, the amount of the
convertible debt is recorded as a liability to Mr. Threshie on the Companys
Balance Sheet.

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 were duly recorded in the Companys accounts offset by a
liability to Mr. Threshie, the liability on our books has been listed as being
toward Mr. Threshie. Thus no direct liability toward these investors was on the
Companys books.

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 two years
ago) 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, 2008 and June 30, 2007, the balances owing
to Directors and Officers was $2,528,179 and $2,284,429, respectively. These
amounts are without interest or terms of repayment. The Company is currently
engaged in the process of converting a portion of these liabilities to common
shares through a combination of debt assignment by a director and an officer
plus the direct issuance of shares in partial payment of past due remuneration
and unpaid company-related expenses.

Long-term deposits and notes included an amount of $118,500
at March 31, 2008, which is payable to Ocean Tire Recycling & Processing Co.,
Inc., a company previously owned by a former Director of the Company, Louis A.
Sanzaro, deceased two years ago. 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 year ended June 30, 2007 and the nine months ended
March 31, 2008, 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 did not have sufficient authorized and
unissued shares available for issuance of this stock prior to February 11, 2008
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.
These shares will be issued during the fourth quarter of Fiscal 2008.

13

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THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2008

On February 11, 2008, the Companys directors, with the
approval of the State of Delaware, approved an amendment to the Articles of
Incorporation of the Company to increase the number of authorized shares of
common stock, par value $0.001, from 250,000,000 shares to 1,000,000,000 shares.
On this same date, a new class of Preferred Shares, par value $0.001 and
issuable in series with terms to be determined by the Board of Directors from
time to time was created and a total 100,000,000 shares of said shares was
authorized. Of this number of preferred shares, the Board of Directors approved
the creation of a Class A series with an authorization of one million
(1,000,000) shares. To date, no preferred shares have been issued.

As at March 31, 2008, the Company had 249,895,892 Common
shares issued and outstanding, versus its authorization of 1,000,000,000 shares.

Note 11         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 in previous years. These amounts, under Canadian Federal and
Provincial tax law in conjunction with its annual tax return filings, need not
be offset against taxes otherwise payable to become refundable to the Company at
the end of its fiscal year. As such, during the year ended June 30, 2003, the
Company received approximately $246,970, which was recorded as an increase in
stockholders equity paid-in capital. During the years ended June 30, 2004 and
June 30, 2005 and the three month period ended September 30, 2005, the Company
did not make any additional claims for tax credits as it was not eligible to do
so and, as such, the Company did not record any additional tax credits
receivable. The previous receivable balance in respect of tax credits from these
governments went from $246,970 as of June 30, 2002 to zero as of June 30, 2003
and remained as such as of June 30, 2004, June 30, 2005, June 30, 2006, June 30,
2007 and March 31, 2008.

Note 12         COMMITMENTS

Rental expense for the nine months ended March 31, 2008
amounted to zero. Rental expense for the year ended June 30, 2007 amounted to
zero.

At March 31, 2008, 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 13         LITIGATION

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

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

14

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THE TIREX CORPORATION 
A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
MARCH 31, 2008

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 14         ACCUMULATED OTHER COMPREHENSIVE INCOME

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

Note 15        
SUBSEQUENT EVENT

In February 2008 a director and an officer assigned
convertible promissory notes issued to them in September 2006 as partial
compensation for unpaid salaries to a third party under Paragraph 3(a) 10 of the
Securities Act. The total value of these notes was $100,000. On April 16, 2008,
the Company, being unable to pay these notes, reached a Settlement Agreement
with the assignee. This Settlement Agreement was approved in a fairness hearing
on April 25, 2008 by the 12th Judicial Circuit in and for Sarasota
County, Florida, Civil Division. Under the terms of this agreement, the
corporation will issue 100 million common shares to the assignee



15

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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, 2008. 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. Since the
March 2000 announcement respecting the commercial availability of its TCS-1
model, Tirex completed 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
although inquiries for TCS-3 and TCS-4 models have been entertained.
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 on a worldwide basis. Under the
Agreement, any improvements to the technology accrue to the benefit of Tirex.
Our patent renewals for both the USA and Canada have both been completed.
As we continued with the technological refinement of our
technology, we also initiated the first substantial marketing efforts in an
effort to conclude a first purchase and sales agreement of a TCS System. In this
regard, Tirex responded to requests for information and has engaged in
negotiations with potential customers throughout the world. Since the conclusion
of our development efforts respecting the TCS-2 system, Tirex accelerated its
efforts to make our technology known and to attempt to secure that first
unconditional sales agreement. Simultaneously, our manufacturing partner, Simpro,
which also has a non-exclusive marketing agreement, has been actively
negotiating with numerous potential customers. The process has been much slower
than what Management would have preferred. 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.

16

---

During Calendar 2007, Tirex 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. Necessary marketing and business plans were completed to pursue the
opportunities presented to us. These New York individuals have devoted
substantial time to the understanding of our technology and to the structure and
key successful factors of the tire recycling industry. We are awaiting further
developments with respect to the New York initiative. 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.
During the third quarter of Fiscal 2008, a Quebec resident
has been actively assembling a project package involving the installation of a
TCS-2 in western Quebec. This project package would require North American
manufacturing and installation of the system in question. It has been
represented to us that this project will enter the negotiations stage during the
fourth quarter of Fiscal 2008.
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 as to 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 throughput
performance guarantee with respect to the installations which it would
accomplish. This performance guarantee is backed by a major international
insurance company, is offered to potential customers. Even with performance
guarantees, conclusion of an agreement has been very difficult. At issue is that
Tirex is not in a position to simply sell new technology systems into an
established industry. Also with Simpro selling its systems in Euros, and
considering the appreciation of the Euro versus US Dollar, North American sales
have proven very difficult. With the Euro now trading against the US Dollar at
approximately $1.5633 per Euro, a TCS-2 costing 5.5 million translates to
almost US$8.6 million, which price excludes in-transit freight and insurance,
local installation labor, infrastructure costs and ancillary equipment to
support the TCS operation. In this context, Tirex has to compete with
traditional technologies, including ambient grinding, which, while more
expensive to operate, have a capital cost of half that of a Simpro-produced
unit. Management is evaluating possibilities of having TCS Systems for the North
American market produced in North America in order to substantially reduce the
currency impact of the Euro-priced unit.
Most potential customers are also 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.

17

---

While negotiations on several fronts have progressed to an
advanced stage, as of March 31, 2008, 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 cant 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$8.6 million using the
exchange rate of April 28, 2008 i.e. 1 Euro = US$1.5633, 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 TCS.
Depending somewhat on the location, we consider that the entrepreneur is facing
a total investment cost of approximately US$10 million, taking into account
pre-production and early production losses, local infrastructure costs, freight
an in-transit insurance, local labor, permits and a reasonable allocation for
working capital to support early operations. There could also be import duties
on equipment imported from Europe.
During the second quarter of Fiscal 2007, Tirex engaged
several new commissioned representatives from New York and Connecticut, each
with extensive marketing and business development backgrounds. These
commission-based representatives are still committed to our technology. Other
than the possibilities for system installations outside of North America, where
Simpro has been undertaking the primary development activities, the most active
opportunities in North America on which Tirex has been working during the last
two years, and on which efforts continue, include projects New York State,
California very recently and a significant possibility for a Quebec-based
project. All three of these projects are still very active, but are likely to
require North American manufacturing of the TCS-2 for their projects.
In all cases, 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, however, is 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, unless
Simpro refuses the contract at which time the gross revenues would be recorded
by Tirex. The amount remitted back to Tirex by Simpro would take the form of a
royalty and would 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,
2008. 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.

18

---

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 six 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.
On February 11, 2008, the Company filed a report on Form 8-K,
the substance of which was to inform shareholders of modifications in the
Companys capital structure, pursuant to approval by the State of Delaware.
These modifications included the increasing of the common share authorization
from 250 million shares to one billion shares and the creation of a new class of
Preferred Shares, having an authorization of 100 million shares, issuable in
series. The terms of each series of Preferred Shares which might be issued will
be determined by the Board of Directors on a case-by-case basis. On February 12,
2008, by Unanimous Consent, the Board designated a Series A preferred stock
having an authorization of one million (1,000,000) shares available for
issuance. As of May 5, 2008, no preferred shares had been issued.
During the third quarter of Fiscal 2008, the corporation
entered into negotiations with respect to obtaining financing under Paragraph
3(a)10 of the Securities Act. A deal was agreed to, under which certain debts
due to a director and an officer were assigned. These debts took the form of
convertible promissory notes. Unable to pay these notes, a Settlement Agreement
was reached on April 16, 2008, approximately two weeks following the period
covered by this report. This Settlement Agreement was approved in a fairness
hearing on April 25, 2008 by the 12th Judicial Circuit in and for
Sarasota County, Florida, Civil Division. Under the terms of this agreement, the
corporation will issue 100 million common shares to the assignee.
Since 2005, 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$166,800 to March 31, 2008 ($187,800 to April
30, 2008). To date, including investments received following the date of this
report, a total of approximately 46,940,000 shares would become issuable,
including shares attributable to the loans made in April 2008. The dollar
amounts received have permitted the continued existence of the company since
2005. Each investment was made through Tirex President, John L. Threshie Jr.
Insofar as Tirex did not have shares to issue at the time, these investors,
fully cognizant of our situation and so documented in writing, accepted that
their investment was being made via Mr. Threshie and represented a convertible
debt, the conversion of which could occur once Tirex would have shares available
for issuance. Such shares now being available, the Company anticipates issuance
of these shares imminently. This convertible debt has been priced at fixed
prices rather than as a discount to market.
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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 twenty-one months 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. The replacement of these collateral shares is expected to
be made shortly.
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. 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.
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 11,986,315 shares, have been sold by
the investors.

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The previously unsigned Executive Agreements respecting
Messrs. Threshie, Muro and Ash were signed. New Agreements covering the period
from 2007 to 2010 have been negotiated and signed by the Corporation and the
Executives. No significant changes from the previous agreements were agreed
upon.
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 periods ranging from
four to six 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, 2008, the Company had total assets of
$208,297 as compared to $233,297 at March 31, 2007 reflecting a decrease of
$25,000, and no change versus total assets at June 30, 2006. Except for a
$25,000 decrease in Property and Equipment, there were no changes in the value
of individual assets, representing Notes Receivable, Inventory and an
Investment, from March 31, 2007 to March 31, 2008 and from June 30, 2007 to
March 31, 2008.
As of March 31, 2008, the Company had total liabilities of
$6,393,094 as compared to $5,705,502 at March 31, 2007, reflecting an increase
of $687,592, and reflecting an increase of $404,381 versus total liabilities as
at June 30, 2007, which total amounted to $5,988,713. The increase in total
liabilities from March 31, 2007 to March 31, 2008 is primarily attributable to
an increase of $324,504 in Accounts Payable and Accrued Liabilities and by a
decrease of $332,500 in Convertible Loans. The increase in total liabilities
from June 30, 2007 to March 31, 2008 is primarily attributable to an increase of
$149,162 in Accounts Payable and Accrued Liabilities and to an increase of
$251,250 in Convertible Loans.
Reflecting the foregoing, the financial statements indicate
that as at March 31, 2008, the Company had a working capital deficit (current
assets minus current liabilities) of $3,043,966 compared to a working capital
deficit of $2,688,874 as at March 31, 2007, reflecting an increase of $177,599.
The working capital deficit of $3,043,966 as at March 31, 2008 compares to a
working capital deficit of $2,890,836 as at June 30, 2007, reflecting an
increase of $153,130.
The financial statements which are included in this report
reflect total operations and other expenses of $326,643 for the nine month
period ended March 31, 2008 versus $350,027 for the comparative nine month
period ended March 31, 2007, reflecting a decrease of $23,384. 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.

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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, 2008, the
Company has incurred a cumulative net loss of $31,116,112. Approximately
$1,057,356 of such cumulative net loss was incurred prior to the inception of
the Companys present business plan, in connection with the Companys
discontinued proposed health care business and was due primarily to the
expending of costs associated with the unsuccessful attempt to establish such
health care business. The Company never commenced the proposed health care
operations and therefore, generated no revenues therefrom.
Item 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, 2008. 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 2007-08, 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 - 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 2007.
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 Corporation

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: - 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.

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

During the three-month period ended
March 31, 2008, there were no submissions of matters to a vote of Security
Holders. The company intends to undertake a ratification vote with respect to
the modifications of the Companys capital structure, as described on Form 8-K,
filed in February 2008, shortly.
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
Form 8-K, filed February 11,
2008, pertains to modifications of the Companys capital structure, increasing
the authorization of common shares from 250 million to one billion and creating
a class of Preferred Shares, issuable in series, having an authorization of 100
million shares.
ExhibitsExhibit 31.1    
Certification of Form 10-Q filing by the Chief Executive OfficerExhibit 31.2    
Certification of Form 10-Q filing by the Chief Financial OfficerExhibit 32.1    
Certification Pursuant to the Sarbanes-Oxley Act by the Chief Executive OfficerExhibit 32.2    
Certification Pursuant to the Sarbanes-Oxley Act by the Chief Financial Officer



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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
    6, 2008 | By                       
|                      |                          
|                      |                          
|                      |                          
|Date: May
    6, 2008 | By                       
|                      |                          
|                      |                          



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