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U.S. SECURITIES AND EXCHANGE COMMISSION**Washington, D.C. 20549**

FORM 10-QSB

> (Mark One)   [X] Quarterly report        under Section 13 or 15(d) of the Securities Exchange Act of 1934For the quarterly period        ended September 30, 2004  [ ] Transition report        under Section 13 or 15(d) of the Securities Exchange Act of 1934For the transition period        from __________to ___________

Commission File Number 33-17598-NY

| **THE TIREX CORPORATION**                                              |
|------------------------------------------------------------------------|
| (Exact Name of Small Business Issuer as Specified in Its      Charter) |

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

|                                                                              |
|-----------------------------------------------------------------------------------|
| **4055 Ste-Catherine Street West,      Suite 151, Montreal (Westmount), Quebec,** |
| **Canada, H3Z 3J8**                                                               |
| (Address of Principal executive      offices)                                     |
|                                                                              |
| **(514) 935-2525**                                                                |
| (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 bySection 13 or 15(d) of the Exchange Act during the past 12 months (or for suchshorter period that the issuer was required to file such reports) and (2) hasbeen subject to such filing requirements for the past 90 days. Yes ** X **     No  ___

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding for each of the issuer's classes ofcommon equity, as of November 15, 2004 :249,895,892****shares 

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

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**The Tirex Corporation (A Development Stage Company) **TABLE OF CONTENTS**   **PART I -      FINANCIAL INFORMATION**     **Item 1 -      Financial Statements**(Unaudited)
Page 
The Tirex Corporation and Subsidiaries   Consolidated Balance Sheets as of   September 30, 2004

Consolidated Statements of Operations   for the three month periods   ended September 30, 2004 and 2003

Consolidated Statements of Cash Flows   for the three month periods   ended September 30, 2004 and 2003

Notes to Financial Statements (Unaudited)
**Item 2 - Management's Discussion and Analysis of               Financial Condition and Results of Operations

Item 3 - Controls and Procedures

PART II B OTHER INFORMATION

Item 1 - Legal Proceedings

Item 2 - Changes in Securities and Use of Proceeds

Item 3 - Defaults Upon Senior Securities

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

Item 5 -Other Information

Item 6 - Exhibits and Reports on Form 8-K

The financial statements are unaudited. However, Management of registrantbelieves that all necessary adjustments, including normal recurring adjustments,have been reflected to present fairly the financial position of registrant atSeptember 30, 2004 and the results of its operations and changes in its cashposition for the three month periods ended September 30, 2004 and 2003 and forthe period from inception (July 15, 1987).****
** 

THE TIREX CORPORATION A DEVELOPMENT STAGE COMPANY

CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2004

 

**THE TIREX CORPORATION A DEVELOPMENT STAGE COMPANY

CONSOLIDATED BALANCE SHEETAS AT SEPTEMBER 30, 2004__________________________________**   **September 30,**   **2004**     
ASSETS      Current Assets              Cash and cash equivalents $-           Accounts receivable  -           Notes receivable  20,475           Inventory  73,322           Research and Experimental Development tax credits receivable -   93,797    Property and      equipment,             salvage value  50,000    Other assets              Investment, at cost  89,500   89,500          $233,297         LIABILITIES AND STOCKHOLDERS' EQUITY      (DEFICIT)    Current Liabilities             Accounts payable and accrued liabilties$      2,207,940          Current portion of long-term debt 78,091   2,286,031    Other liabilities              Long-term deposits and notes        217,500           Government loans (net of current) -           Capital lease obligations (net of current) -           Convertible notes        586,356           Convertible note        185,556           Convertible loans  1,264,918   2,254,330       4,540,361Stockholders' Equity      (Deficit)              Common stock, $.001 par value, authorized             250,000,000 shares, issued and outstanding             249,895,892 shares (June 30, 2003 - 249,895,892 shares)       249,896           Additional paid-in capital        25,222,219           Deficit accumulated during the development stage       (29,294,514)           Unrealized gain (loss) on foreign exchange (484,665)   (4,307,064)          $233,297
**THE TIREX CORPORATION A DEVELOPMENT STAGE COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS__________________________________** **Three months ended****Cumulative from** **September 30****March 26, 1993 to**  **2004** **2003****September 30, 2004**       Revenues$-$-$      1,354,088       Cost of Sales - -       1,031,075              Gross profit - - 323,013       Operations                 General and administrative       120,405       146,071       12,234,276           Depreciation and amortization - -       365,545           Research and development - - 15,396,966       Total Expense 120,405 146,071 27,996,787       Loss before other      expenses (income) (120,405) (146,071) (27,673,774)       Other expenses      (income)                 Interest expense 8,711 22,681       854,880           Interest income - -       (45,443)           Income from stock options - -       (10,855)           Loss on disposal of equipment - - 4,549         8,711 22,681 803,131       Net loss (129,116) (168,752) (28,476,905)       Other comprehensive      loss                 Loss (gain) on foreign exchange - - 106,137              Net loss and      comprehensive loss$(129,116)$(168,752)$(28,583,042)       Basic and Diluted      net loss and comprehensive                  loss per common share$(0.00)$(0.00)$(0.39)       Weighted average      shares of common                   stock outstanding249,895,892249,895,892 73,018,863
**THE TIREX CORPORATION A DEVELOPMENT STAGE COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS__________________________________**  **Three months ended****Cumulative from**  **September 30****March 26, 1993 to**  **2004** **2003****September 30, 2004**       Cash flows from      operating activities:                         Net loss$(129,116)$(168,752)$(28,583,042)                   Adjustments to reconcile net loss to net cash                      used in operating activities:                  Depreciation and amortization - - 364,304            (Gain) loss on disposal and abandonment of assets - -       2,005,498            Stock issued in exchange for interest - - 169,142            Stock issued in exchange for services and expenses - -       10,574,972            Stock options issued in exchange for services - -       3,083,390            Unrealized (loss) gain on foreign exchange       (83,534) 1,370       (484,685)            Other non-cash items 93,750 - 375,938       Changes in assets      and liabilities:                  (Increase) decrease in:                  Account receivable - - -            Inventory - -       (73,323)            Sales tax receivable - - (36)            Research and experimental development tax credits receivable - - -            Other assets - -       (10,120)           (Decrease) increase in :                 Accounts payables and accrued liabilities 75,150 33,435       2,092,894           Accrued salaries 43,750 43,750 541,902           Due to stockholders - - 5,000       Net cash used in      operating activities - (90,197) (9,938,166)       Cash flow from      investing activities:                  Increase in notes receivable - -       (259,358)            Reduction in notes receivable - - 237,652            Investment - -       (89,500)            Equipment - -       (321,567)            Equipment assembly costs - -       (1,999,801)            Organization cost - - 6,700           Reduction in security deposit - - (1,542)       Net cash used in      investing activities - - (2,427,416)       Cash flow from      financing activities:                  Loans from related parties   90,197       4,354,835            Deferred financing costs - - 180,557            Proceeds from deposits - - 143,500            Payments on notes payable - -       (409,939)            Proceeds from convertible notes - - 754,999            Proceeds from notes payable - - 409,939            Payments on lease obligations - -       (86,380)            Proceeds from issuance of convertible subordinated debentures - -       1,035,000            Proceeds from loan payable - - 591,619            Payments on loan payable - -       (488,439)            Proceeds from issuance of stock options - - 20,000            Proceeds from grants - -       3,628,277            Proceeds from issuance of common stock - - 85,582            Proceeds from additional paid-in capital - - 2,145,775       Net cash provided by      financing activities - 90,197 12,365,325       Net (decrease)      increase in cash and cash equivalents - - (257)       Cash and cash      equivalents - beginning of period - - 257       Cash and cash      equivalents - end of period$-$-$-
**THE TIREX CORPORATION A DEVELOPMENT STAGE COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS__________________________________  **Three months ended****Cumulative from**  **September 30****March 26, 1993 to**  **2004** **2003****September 30, 2004**       Supplemental      Disclosure of Non-Cash Activities:                 During the year ended June 30, 2004, the Company did not issue common      stock in recognotion of the           payment of debt. During the three month periods ended September 30, 2004      and September 30, 2003,           the Company did not issue common stock in recognition of the payment of      debt.           During the year ended June 30, 2004, the Company did not issue common      stock in exchange           for services performed and expenses. During the three month periods ended      September 30, 2004 and           September 30, 2003, the Company did not issue common stock in exchange for      services performed           and expenses.             Supplemental      Disclosure of Cash Flow Information:             Interest paid$-$-$232,748       Income taxes paid$-$-$-
 

**THE TIREX CORPORATION**A DEVELOPMENT STAGE COMPANY 
**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**SEPTEMBER 30, 2004 **Note 1         SUMMARY OF ACCOUNTINGPOLICIES**
CHANGE OF NAME On July 11, 1997, the Company changed its name from Tirex America, Inc. to TheTirex Corporation. 

NATURE OF BUSINESS The Tirex Corporation (the "Company") was incorporated under the laws of theState of Delaware on August 19, 1987. The Company was originally organized toprovide comprehensive health care services, but due to its inability to raisesufficient capital, was unable to implement its business plan. The Companybecame 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 directorof the Company, and former Officers and Directors of the Company (collectivelythe "Seller"), for the purchase of certain technology owned and developed by theSeller (the "Technology") to be used to design, develop and construct aprototype machine and thereafter a production quality machine for the cryogenicdisintegration of used tires. The Technology was conceptually developed by theSeller prior to their affiliation or association with the Company. 

DEVELOPMENTAL STAGE At September 30, 2004, the Company is still in the development stage. Theoperations consist mainly of raising capital, obtaining financing, developingequipment, obtaining customers and supplies, installing and testing equipmentand administrative activities. 

BASIS OF CONSOLIDATION The consolidated financial statements include the consolidated accounts of TheTirex Corporation, Tirex Canada R&D Inc., The Tirex Corporation Canada Inc.,Tirex Advanced Products Quebec Inc. and Tirex Acquisition Corp. Tirex Canada R&DInc. is held 51% by certain shareholders of the Company. The shares owned bythese shareholders are held in escrow by the Company's attorney and arerestricted from transfer thereby allowing for a full consolidation of thisCompany. The Tirex Corporation Canada Inc., Tirex Advanced Products Quebec Inc.and Tirex Acquisition Corp. are 100% held by the Company. All subsidiarycompanies except Tirex Canada R&D Inc. are dormant. All inter-companytransactions and accounts have been eliminated in consolidation. 

CASH AND CASH EQUIVALENTS For purposes of the statement of cash flows, all highly liquid debt instrumentspurchased with a maturity of three months or less, were deemed to be cashequivalents. 

INVENTORY The Company values inventory, which consists of finished goods and equipmentheld for resale, at the lower of cost (first-in, first-out method) or market.

**THE TIREX CORPORATION**A DEVELOPMENT STAGE COMPANY 
**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**SEPTEMBER 30, 2004 
PROPERTY AND EQUIPMENT Property and equipment are recorded at cost less accumulated depreciation andprovisions for write-downs. Depreciation is computed using the straight-linemethod over the estimated useful lives of five years. No depreciation isrecorded for equipment written down to salvage value. 

Repairs and maintenance costs are expensed as incurred whileadditions and betterments are capitalized. The cost and related accumulateddepreciation of assets sold or retired are eliminated from the accounts and anygains 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 marketvalue of the investment. 

ESTIMATES Preparation of financial statements in conformity with generally acceptedaccounting principles requires management to make estimates and assumptions thataffect the reported amounts of assets and liabilities at the date of thefinancial statements and the reported amounts of revenues and expenses duringthe 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 doesnot require, companies to record stock-based Compensation and other costs paidby the issuance of stock at fair value. The Company has chosen to account forstock-based compensation, stock issued for non-employee services and stockissued to obtain assets or in exchange for liabilities using the fair valuemethod prescribed in SFAS 123. Accordingly, compensation cost for stock optionsis measured as the excess, if any, of the quoted market price of the Company'sstock at the date of the grant over the amount an employee must pay to acquirethe 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 andpresenting earnings per share (EPS) and supersedes Accounting Principles BoardOpinion No. 15, Earnings per Share. SFAS 128 replaces the presentation ofPrimary EPS with a presentation of Basic EPS and replaces the presentation ofFully Diluted EPS with a presentation of Diluted EPS. It also requires dualpresentation of Basic and Diluted EPS on the face of the income statement forall entities with complex capital structures and requires a reconciliation ofthe numerator and denominator of the Basic EPS computation to the numerator anddenominator of the Diluted EPS computation. SFAS 128 is effective for financialstatements issued for periods ending after December 15, 1997, including interimperiods. SFAS 128 also requires restatement of all prior-period EPS datapresented. 

**THE TIREX CORPORATION**A DEVELOPMENT STAGE COMPANY 
**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**SEPTEMBER 30, 2004 
As it relates to the Company, the principal differencesbetween the provisions of SFAS 128 and previous authoritative pronouncements arethe exclusion of common stock equivalents in the determination of Basic EarningsPer Share and the market price at which common stock equivalents are calculatedin the Determination of Diluted Earnings Per Share. 

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

The adoption of SFAS 128 had no effect on previously reportedloss per share amounts for the year ended June 30, 1997. For the years endedJune 30, 2004 and June 30, 2003, Primary Loss per Share was the same as BasicLoss per Share and Fully Diluted Loss per Share was the same as Diluted Loss perShare. A net loss was reported in 2004 and 2003, and accordingly, in thoseyears, the denominator for the Basic EPS calculation was equal to the weightedaverage of outstanding shares with no consideration for outstanding options andwarrants to purchase shares of the Company's common stock because to do so wouldhave been anti-dilutive. 

FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amount of the Company's financial instruments, which principallyinclude cash, note receivable, accounts payable and accrued expenses,approximates fair value due to the relatively short maturity of suchinstruments. 

The fair values of the Company's debt instruments are basedon the amount of future cash flows associated with each instrument discountedusing the Company's borrowing rate. At September 30, 2004 and June 30, 2004,respectively, the carrying value of all financial instruments was not materiallydifferent from fair value. 

INCOME TAXES The Company has net operating loss carryovers of approximately $29.6 million asof September 30, 2004, expiring through 2025. However, based upon presentInternal Revenue Service regulations governing the utilization of net operatingloss carryovers where the corporation has issued substantial additional stockand there has been a change in control as defined by the Internal RevenueService regulations, a substantial portion of this loss carryover may not beavailable to the Company. 

The Company adopted Statement of Financial AccountingStandards ("SFAS") No. 109, Accounting for Income Taxes, effective July 1993.SFAS No. 109 requires the establishment of a deferred tax asset for alldeductible temporary differences and operating loss carryforwards. Because ofthe uncertainties discussed in Note 2, however, any deferred tax assetestablished for utilization of the Company's tax loss carryforwards wouldcorrespondingly require a valuation allowance of the same amount pursuant toSFAS No. 109. Accordingly, no deferred tax asset is reflected in these financialstatements. 

The Company does not currently have research and experimentaldevelopment tax credits receivable from the Canadian Federal government and theQuebec Provincial government as at September 30, 2004. 

FOREIGN CURRENCY TRANSLATION Assets and liabilities of non-U.S. subsidiaries that operate in a local currencyenvironment are translated to U.S. dollars at exchange rates in effect at thebalance sheet date for monetary items and historical rates of exchange fornon-monetary items with the resulting translation adjustment recorded directlyto a separate component of shareholders' equity. Income and expense accounts 

**THE TIREX CORPORATION**A DEVELOPMENT STAGE COMPANY 
**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**SEPTEMBER 30, 2004 
are translated at average exchange rates during the year. Currencytransaction gains or losses are recognized in current operations. 

REVENUE RECOGNITION Revenue from the sale of TCS Systems will be recognized when the installedproduct is accepted by the Customer. All other revenue from other products willbe recognized when shipped to the customer. 
**Note 2         GOING CONCERN**
As reported in the accompanying financial statements, theCompany incurred a net loss of $560,234 for the year ended June 30, 2004 and anadditional net loss for the three month period ended September 30, 2004 in theamount of $129,116. 

In March 1993, the Company had begun its developmental stagewith a new business plan. As of March 2000, the Company had developed aproduction quality prototype of its patented system for the disintegration ofscrap tires, but nonetheless continued its research and development efforts toimprove the machine's performance and to permit greater flexibility in designfor specific customer applications. Due to the Company's lack of working capitalduring the year ended June 30, 2002, all rubber crumb production was suspendedand research and development efforts have been hampered. Pending receipt offunding from operations, government assistance, loans or equity financing, crumbrubber production and previous research and development efforts will not beresumed. While the Company has engaged the process of marketing the TCS Systemto numerous potential clients since the beginning of the fiscal year commencingJuly 1, 2000, as of September 30, 2004, the Company had not yet consummated anunconditional purchase order for a TCS System. 

The Company is dependent on the success of its marketing ofits TCS Systems, and/or raising funds through equity sales, bank or investorloans, governmental grants or a combination of these, to continue as a goingconcern. The Company's uncertainty as to its ability to generate revenue and itsability to raise sufficient capital, raise substantial doubt about the entity'sability to continue as a going concern. The financial statements do not includeany adjustments that might be necessary if the Company is unable to continue asa going concern. 
**Note 3         PROPERTY AND EQUIPMENT**
As at September 30, 2004, plant and equipment consisted of the following: 
Furniture, fixtures    and equipment$149,516Manufacturing    equipment62,400Subtotal211,916  Less: Accumulated    depreciation and amortization161,916  Total$ 50,000
Depreciation and amortization expense charged to operationsfor the year ended June 30, 2004 was zero. Depreciation and amortization expensecharged to operations for the three month period ended September 30, 2004 waszero. 

**THE TIREX CORPORATION**A DEVELOPMENT STAGE COMPANY 
**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**SEPTEMBER 30, 2004 **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 incertain regions. Loans are unsecured and non-interest bearing. (If the Companydefaults, the loans become interest bearing at the rate of 8%). 
Loan repayable over five    years commencing June 30, 2000 and ending June 30, 2004$ 34,300Loan repayable over five    years commencing June 30, 2001 and ending June 30, 200543,791 78,091Less: Current portion78,091Long-term portion$ NIL  Principal repayments are as    follows: June 30Amount  2005$78,091**Note 5         CAPITAL LEASEOBLIGATIONS**
The Company leases certain manufacturing equipment underagreements classified as capital leases. The cost and the accumulatedamortization for such equipment as of September 30, 2004 and June 30, 2004 was$62,400 and $62,400, respectively. The equipment under capital leases has beenincluded in property and equipment on the balance sheet. The Company is inarrears on payment of these leases but default has not been declared. The leaseexpired on June 30, 2004. The leased equipment is not part of the Company's TCSSystem prototype. 
**Note 6         CONVERTIBLESUBORDINATED DEBENTURES**
The Company issued Type B Convertible Subordinated Debenturesbetween 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. Theconversion privilege on the remaining $55,000 of these debentures expired andthe 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 sheetconsisted of an investment arrangement with a group of institutional investorsinvolving a multi-stage financing under which the Company had access to, at itsoption, up to $5,000,000. A first tranche of $750,000 was completed but nofurther draw downs were made. The terms of the convertible note were: 
Balance at September 30, 2004$586,356  Interest rate8%, payable quarterly,    commencing June 30, 2001  Issue dateFebruary 26, 2001  Maturity dateFebruary 26, 2003

**THE TIREX CORPORATION**A DEVELOPMENT STAGE COMPANY 
**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**SEPTEMBER 30, 2004   Redemption rightsIf not converted, the    holder may require the Company to redeem at    any time after maturity for the principal    amount pus interest.  Conversion ratioLower 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 warrantsThe 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 Directors and Officers of the Company have pledgedapproximately 12,000,000 of their personal shares of Common Stock of the Companyas security for the Convertible Notes until such time as the Company files withthe Securities and Exchange Commission a Registration Statement on Form SB-2, toregister common stock and warrants issuable upon the conversion of the notes, nolater than 150 days after the issue date of the Convertible Notes. This deadlinewas not met and, as such, the investors served a notice of default to theCompany on July 19, 2001. The Registration Statement was never declaredeffective by the Securities and Exchange Commission as of this date, and untilsuch occurs, the Convertible Notes cannot be converted to Common Stock nor maythe Common Stock warrants be exercised. On April 24, 2002 the Company enteredinto a Settlement Agreement with the Note holders. In the event of a defaultunder the Settlement Agreement, the term of the Convertible Notes would becomeeffective once again. The Company defaulted on the terms of the SettlementAgreement. 
**Note 8         CONVERTIBLE NOTE**
A convertible note, under a private arrangement, consists of the following:
Balance at September    30, 2004$ 185,556  Interest rate8%  Issue dateJuly 19th,    2000  Maturity dateJanuary 19th,    2002  Redemption rightsIf not converted, the    holder may require the Company to redeem at    any time after maturity for the principal    amount plus interest.  Conversion ratioNot 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.

**THE TIREX CORPORATION**A DEVELOPMENT STAGE COMPANY 
**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**SEPTEMBER 30, 2004 **Note 9         RELATED PARTYTRANSACTIONS**
Convertible loans include amounts primarily due to Directors,Officers and employees. Historically, such amounts due have been repaid throughthe issuance of stock. At September 30, 2004 and June 30, 2004, the balancesowing to Directors and Officers was $1,391,212 and $1,297,462, respectively.These amounts are without interest or terms of repayment. 

Long-term deposits and notes included an amount of $118,500at September 30, 2004, which is payable to Ocean Tire Recycling & ProcessingCo., Inc., a company owned by a Director of the Company. 
**Note 10        COMMON STOCK**
During the year ended June 30, 2004 and the three monthperiod ended September 30, 2004, the Company did not issue any common stock inexchange for services performed. The dollar amounts assigned to suchtransactions have historically been recorded at the fair value of the servicesreceived. 

During the year ended June 30, 2004, an Officer of theCompany exercised stock options pursuant to a services agreement. The exerciseof these stock options entitled the Officer to 1,500,000 common shares of theCompany on a cash-less basis. The Company does not have sufficient authorizedand unissued shares available at September 30, 2004 for issuance of this stockand as such, the amount attributable to these shares has been recorded as partof the balances owing to Directors and Officers included in Convertible loans.****
On January 31, 2001, the Company's stockholders approved anamendment to the Articles of Incorporation of the Company to increase the numberof authorized shares of common stock, par value $0.001, from 165,000,000 sharesto 250,000,000 shares.****
As at September 30, 2004, the Company had 249,895,892 Common shares issuedand outstanding, versus its authorization of 250,000,000 shares.**Note 11        CONVERTIBLE DEBT**
In the event that holders of convertible rights of optionexercise such rights of conversion, the Company does not have sufficient numberof authorized shares conversion stock to fulfill such obligations and ashareholder meeting would be required to approve the additional authorizednumber of shares. There is no assurance that the shareholders would approve theincrease to the number of authorized shares of stock to meet the conversionobligations under the various conversion agreements or options. 
**Note 12        GOVERNMENT ASSISTANCE**
The Company is eligible for and has made claims for taxcredits related to scientific research and experimental development expendituresmade in Canada. These amounts, under Canadian Federal and Provincial tax law inconjunction with its annual tax return filings, need not be offset against taxesotherwise payable to become refundable to the Company at the end of its fiscalyear. As such, during the year ended June 30, 2003, the Company receivedapproximately $246,970, which was recorded as an increase in stockholders'equity paid-in capital. During the year ended June 30, 2004 and the three monthperiod ended September 30, 2004, the Company did not make any additional claimsfor tax credits as it was not eligible to do so and, as such, the Company didnot record any additional tax credits receivable. The previous receivablebalance in respect of tax credits from these governments went from $246,970 asof June 30, 2002 to zero as of June 30, 2003 and remained as such as of June 30,2004 and September 30, 2004. 

**THE TIREX CORPORATION**A DEVELOPMENT STAGE COMPANY 
**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**SEPTEMBER 30, 2004 **Note 13        COMMITMENTS**
Rental expense for the year ended June 30, 2004 amounted to zero. Rentalexpense for the three month period ended September 30, 2004 amounted to zero.

At September 30, 2004, the Company was in arrears of rent,including interest and related charges, in the approximate amount of $560,000. Asettlement agreement with the former landlord is in place under the terms ofwhich the Company would pay to the former landlord the sum of $140,000 from theproceeds to the Company of revenues from each of the first four sales of TCSSystems.**Note 14        LITIGATION**
An action was instituted by Plaintiffs, an individual and acorporation, in a Canadian court alleging a breach of contract and claimsdamages of approximately $508,600 representing expenses and an additionalapproximate amount of $1,874,000 in loss of profits. The current action followstwo similar actions taken in United States courts, the first of which waswithdrawn and the second of which was dismissed based on forum non convenienceand other considerations. A detailed answer has been filed by the Companydenying all liability, stating further that Plaintiffs failed to comply withtheir obligations. Counsel for the Company believes that the Company hasmeritorious defenses to all of the Plaintiff's claims. The action is stillpending.****
A Plaintiff instituted an action, a corporation, in August2001 in a Canadian court claiming approximately $63,000 is due and owing for themanufacture and delivery of tire disintegrators. The Company has prepared itsdefense and a cross claim against the Plaintiff as the product delivered wasdefective and the Company believes it is entitled to a reimbursement of sumspaid. The action is still pending.****
An action was instituted by a Plaintiff, the Company'slandlord, against the Company in June 2001 for arrears of rent in the amount ofapproximately $113,900. Subsequent additions to arrearages with respect to rentand property taxes raised the amount due to approximately $560,000. A settlementagreement with the former landlord is in place, under the terms of which theCompany would pay to the former landlord the sum of $140,000 from the proceedsto the Company of revenues from the first four sales of TCS Systems. 
**Note 15        ACCUMULATED OTHERCOMPREHENSIVE INCOME**
The deficit accumulated during the development stage included accumulatedcomprehensive other income totaling $103,396.****
**Item 3 - Controls and Procedures**
The Company's management, with the participation of its Chief ExecutiveOfficer, who is the Company's principal executive officer, and its ChiefFinancial Officer, who is the Company's principal financial officer, hasevaluated the effectiveness of the Company's disclosure controls and proceduresas of September 30, 2004. Based upon that evaluation, the Chief ExecutiveOfficer and the Chief Financial Officer have concluded that the Company'sdisclosure controls and procedures are effective in alerting them in a timelymanner to material information relating to The Tirex Corporation, including itsconsolidated subsidiaries, required to be included in this report and the otherreports that the Company files or submits under the Securities Exchange Act of1934. During the first fiscal quarter of 2005, there have been no changes in theCompany's internal control over financial reporting that have materiallyaffected, or that are reasonably likely to materially affect, its internalcontrol over financial reporting. 

**ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLANOF OPERATIONS

The following is management's discussion and analysis of significant factorswhich have affected the Company's financial position and operations during thethree month period ended September 30, 2004. This discussion also includesevents which occurred subsequent to the end of the last quarter and containsboth 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 couldcause actual results to differ materially from those projected. 

In March 2000, we announced that our tire recycling technology was ready forreplication and commercialization. Since Fiscal 2001, we have demonstrated ourtechnology to numerous groups from Asia, Europe, North and South and America andthe Caribbean, as well as to some shareholders and potential strategic alliancepartners. While numerous Letters of Intent were signed during the earlymarketing stage, none materialized into firm purchase contracts. Managementattributed these failures to proceed to firm contracts to the lack of a trackrecord for the TCS technology, or alternatively, to the Company's inability toprovide performance guarantees. The Company signed its License Agreement withSimpro S.p.A. of Italy in January of 2003, and thus created the potential thatperformance guarantees could be offered. As of September 30, 2004, nopurchase/sale contracts had been written. 

Tirex has continued with its marketing structure consisting primarily ofindependent representatives who have the possibility of gainingsemi-exclusivities in certain territories based on sales results. Ourmanufacturing partner, Simpro, has a non-exclusive marketing agreementapplicable on a worldwide basis. The previous marketing agreement with Mr. LouisSanzaro, through one of his companies, respecting the US market is no longereffective. The Company continues to entertain requests for marketing agreementson several continents, but steadfastly adheres to its policy of not providingexclusivities in the absence of prior-established results. 

In January 2003, the Company entered into a License Agreement with SimproS.p.A. for exclusive manufacturing rights and for non-exclusive marketing rightswith respect to TCS Systems. Simpro is actually negotiating with the Italiangovernment respecting the financing of the construction of a new demonstrationmodel in Italy, which it plans to use to support their marketing efforts. Todate, Simpro has not sold any systems. 

The lack of a significant track record relative to the operation and outputof the TCS System has proven to be difficult hurdle to overcome in making TCSSystem sales. The installed cost of a TCS-1 System to an entrepreneur, dependingon the system configuration, the condition of the feedstock and the outputrequirements and excluding building and infrastructure costs, is in the vicinityof Euros4,300,000 (approximately US$5.55 million at prevailing exchange rates).For a TCS-2, the comparable cost to the entrepreneur is in the vicinity of Euros5,500,000 (approximately US$6.985 million at prevailing exchange rates). Thisrepresents a substantial investment for an entrepreneur and, without performanceguarantees to substitute for the lack of a significant operating history,entrepreneurs or their financial backers have heretofore been unwilling toaccept the risk of purchasing a new technology. Simpro has been able to obtaininsurance backing to support their offer of limited performance guarantees, andsuch potential is expected to assist the marketing effort. Simpro is nowoffering limited Performance Guarantees. 

During Fiscal 2004 and in the first quarter of Fiscal 2005, the Company andSimpro have responded to numerous requests for information. Out of theserequests, several opportunities have presented themselves which merited theexpenditure of considerable effort to close a Purchase and Sales Agreement. Inaddition to the Puerto Rican project, for which recent correspondence indicatesthat the Puerto Rican project continues to develop, Tirex and Simpro areactively pursuing opportunities in Mexico, Europe, Australia, Brazil, Malaysia,the Middle East and Botswana. All of these opportunities are 

well advanced. Simpro is also pursuing interesting opportunities in the UK,France and Italy, while Tirex is also pursuing an opportunity in Eastern Canada.However, regardless of Management's optimism as the various opportunitiesenunciated above, there can be no assurance that these opportunities willactually result in unconditional sales contracts. 

The finalizing of the License Agreement with Simpro means that the grossrevenues from these sales will be recorded on Simpro's books, not in the booksof Tirex. The amount remitted back to Tirex will take the form of a royalty andwill be accounted for as such. Even if these sales would have been set up insuch a way as to be recordable on the books of Tirex, generally acceptedaccounting principles in effect in the USA would have prevented the Company fromrecognizing the revenue as such until the systems would have been accepted bythe customers. Given the time line required to manufacture, install and haveaccepted these systems, it is quite unlikely that these revenues would becomerecognizable during our fiscal year which will end June 30, 2005. By extension,the same principles would apply to the royalty to be received by Tirex. Whilethe Company will benefit from the periodic cash inflows resulting from progresspayments during the next approximately ten months, the royalty will, in fact,not have been earned until the systems are accepted by the customers. 

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 theInvestor to purchase up to US$5,000,000 of put notes. We drew down US$750,000 ofthis amount and used the proceeds of this financing toward legal and consultingfees due, normal operating expenses such as payroll, rent and taxes and theacquisition of equipment for our prototype TCS-1 Plant. In July of 2001, theCompany entered into a technical default with respect to the Agreement by nothaving an SB-2 Registration Statement declared effective by the SEC. Afterseveral months of negotiations, the Company entered into a Settlement Agreementwith the Investor Group which provided for a cash paydown of the amount owed,including interest and penalties over a period of approximately two yearsstarting with the date the Settlement Agreement was signed, the right of theInvestor Group to continue to be able to sell up to 600,000 collateral and Rule144 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 yearperiod. This Settlement Agreement was announced in April of 2002, and details ofthe 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 toour expectations, was unable to generate the cash flow necessary to pay down theConvertible Note in accordance with the terms of the Settlement Agreement. Thus,the Company once again finds itself in a position of default. Numerous recoursesare available to the holders of the Convertible Notes, but to date, theserecourses have not been exercised. Such recourses can be exercised at any timeand the fact that they have not been exercised so far does not preclude theirbeing exercised now or in the future. The Company has kept the Convertible Noteholders apprised of its efforts to sell TCS Systems and thus restart therepayments on the Convertible Notes. 

Because of the lengthy delay preceding the commencement of commercialoperations, we have historically had to cover our overhead costs from sourcesother than from commercial revenues. We expect that some portion of our futureoverhead costs, which may be quite significant, will continue to be covered fromsources other than commercial revenues. Until December of 2001, our monthlyoperating costs were about US$100,000 per month. With the cessation ofproduction activities and the scaling back of research and developmentexpenditures starting in January of 2002, our monthly costs were reduced toapproximately US$35,000 per month. Since March of 2003, our monthlyour-of-pocket cash costs have been reduced to negligeable amounts, and thus ourrequirement to find financial resources to fund 

operations is minimal. Our cash flow deficit condition will continue untilsuch time as the Company will start generating revenues from the sale of TCSSystems. Until we can succeed in securing an unconditional sales contract forthe sale of one or more systems employing our technology, the company will notbe engaging any significant financial commitments and will not be engaging inany significant research and development activities nor increasing employment.

While we have initiated marketing of TCS Systems and have in place a LicenseAgreement, as of September 30, 2004, no unconditional sales orders for TCSSystems had been received and manufacturing of TCS Systems has not beeninitiated. We do anticipate that we will begin selling or licensing out the saleof TCS Systems and thus initiating the manufacturing of these systems on acommercial basis in the near future. Unless and until we successfully developand commence TCS System manufacturing and sales operations on a full-scalecommercial level, we will not generate significant revenues from operations.Accordingly, we would be obligated to attempt to seek noncommercial sources ofrevenues to support operations until TCS Systems sales and manufacturingoperations would become a reality. In the event of such a circumstance, therecan further be no assurance that such non-commercial revenue funding would beavailable at all or on terms acceptable to management. Except for activitiesrelated to the recycled crumb rubber industry, as noted above and in previousfilings, we have never engaged in any other significant business activities. 

Liquidity and Capital Resources 

As of September 30, 2004, the Company had total assets of $233,297 ascompared to $233,333 at September 30, 2003 reflecting a decrease of $36, and nochange versus total assets as of the last fiscal year end, June 30, 2004. 

As of September 30, 2004, the Company had total liabilities of $4,540,362 ascompared to $3,916,298 at September 30, 2003, reflecting an increase of$624,064, and reflecting an increase of $212,651 versus total liabilities as ofthe last fiscal year end, June 30, 2004, which total amounted to $4,327,711. Theincrease in total liabilities from September 30, 2003 to September 30, 2004 isprimarily attributable to an increase of $338,323 in Accounts Payable andAccrued Liabilities, by a decrease of $87,080 in Government Loans, by anincrease of $376,245 in Convertible Loans and by a decrease of $3,425 in theCurrent Portion of Long-Term Debt. The increase in total liabilities from June30, 2004 to September 30, 2004 is primarily attributable to an increase of$118,900 in Accounts Payable and Accrued Liabilities and to an increase of$93,750 in Convertible Loans. 

Reflecting the foregoing, the financial statements indicate that as atSeptember 30, 2004, the Company had a working capital deficit (current assetsminus current liabilities) of $2,192,235 compared to a working capital deficitof $1,857,301 as at September 30, 2003, reflecting an increase of $334,934. Theworking capital deficit of $2,192,235 as at September 30, 2004 compares to aworking capital deficit of $2,073,334 as at June 30, 2004, reflecting anincrease of $118,901. 

The financial statements which are included in this report reflect totaloperations and other expenses of $129,116 for the three month period endedSeptember 30, 2004 versus $168,752 for the comparative three month period endedSeptember 30, 2003, reflecting a decrease of $39,636. The Company has ceasedResearch and Development activities thereby resulting in a decrease in personnelexpenses and other Research and Development expenses. 

The success of the tire recycling manufacturing business and the ability tocontinue as a going concern will be dependent upon the ability of the Company toobtain adequate financing to commence profitable, commercial manufacturing andsales activities and the TCS Systems' ability to meet anticipated performancespecifications on a continuous, long term commercial basis. 
**PART II: OTHER INFORMATION
**Item 1:

Item 1 - Legal Proceedings 

    We are presently a party in the following legalproceedings, the status of which has not changed since the Company filed itsQuarterly Report on Form 10-QSB for the second quarter of Fiscal 2003.. 
**IM(2) Merchandising and Manufacturing, Inc and David B. Sinclair v. The TirexCorporation, Tirex Corporation Canada, Inc., et al. 

Lefebvre Freres Limited v. The Tirex Corporation 

Tri-Steel Industries Inc. v. The Tirex Corporation**
    No director, officer, or affiliate of the Company, or anyassociate of any of them, is a party to or has a material interest in anyproceeding adverse to us. 
**Item 2: - Changes in Securities and Use of Proceeds

None 
**Item 3 - Defaults Upon Senior Securities**
Other than defaults previously reported on in prior periods, there were noother defaults upon senior securities. 
**Item 4 - Submission of Matters to a Vote of Security Holders**
During the three-month period ended September 30, 2004, there were nosubmissions of matters to a vote of Security Holders. 
**Item 5 - Other Information**
There have been no material changes in the way in which shareholders maynominate directors. 
**Item 6 - Exhibits and Reports on Form 8-K**
Exhibits 

No exhibits or Reports on Form 8-K are filed with this report 

**SIGNATURES 

In accordance with the requirementsof the Exchange Act, the registrant has caused this report to be signed on itsbehalf by the undersigned thereunto duly authorized.  THE TIREX    CORPORATION      Date: November 15,    2004         By/s/ John L. Threshie, jr. John L.    Threshie, Jr. President      Date: November 15,    2004         By/s/ Michael Ash Michael    Ash,  Treasurer and Chief    Accounting and Financial Officer
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