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
1934 For the quarterly period ended March 31, 2000
[ ] 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
(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.)
3828 ST. PATRICK, MONTREAL, QUEBEC H4E 1A4
(Address of Principal executive offices)
(514) 933-2518
(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 [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of MAY 15, 2000: 149,370,958 shares
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
THE TIREX CORPORATION
(A DEVELOPMENT STAGE COMPANY)
TABLE OF CONTENTS
PART I PAGE
ITEM 1 - FINANCIAL INFORMATION (unaudited)
The Tirex Corporation and Subsidiaries
Consolidated Balance Sheets as of
March 31, 2000 and 1999...................................... 4
Consolidated Statements of Operations
for the three and nine-month periods
ended March 31, 2000 and 1999................................ 5
Consolidated Statements of Cash Flows
for the three and nine-month periods
ended March 31, 2000 and 1999................................ 6
Notes to Financial Statements (unaudited)........................ 7
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS..................17
PART II
Item 1 - Legal Proceedings................................................21
Item 2 - Changes in Securities and Use of Proceeds........................21
Item 3 - Defaults Upon Senior Securities..................................22
Item 4 - Submission of Matters
to a Vote of Security Holders.................................22
Item 6 - Exhibits and Reports on Form 8-K.................................22
2
<PAGE>
The financial statements are unaudited. However, the financial
statements have been reviewed by the Company's independent auditor. Readers are
cautioned that a review engagement does not constitute an audit. Management of
registrant believes that all necessary adjustments, including normal recurring
adjustments, have been reflected to present fairly the financial position of
registrant at March 31, 2000 and the results of its operations and changes in
its financial position for the three and nine-month periods ended March 31, 2000
and 1999 and for the period from inception (July 15, 1987).
3
<PAGE>
<TABLE>
<CAPTION>
The Tirex Corporation
A Development Stage Company
Consolidated Balance Sheet
as at March 31
(UNAUDITED) (AUDITED)
2000 JUNE 30 1999
------------ ------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 2,317 $ 177,256
Account receivables & notes receivable 198,606 155,840
Sales taxes receivable 37,045 81,244
Inventory 186,584 25,698
R&D tax credit receivable 445,598 952,704
Prepaid expenses and deposits 563,035 413,766
------------ ------------
1,433,185 1,806,508
Property and equipment, at cost, net of
accumulated depreciation of $98,574 2,271,658 2,282,295
Other assets
License - -
Prepaids - 183,920
Deferred financing fees 21,123 125,281
------------ ------------
21,123 309,201
------------ ------------
3,725,966 4,398,004
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable 234,420 409,939
Accrued liabilities 1,675,101 1,825,913
Current portion of long-term debt 100,880 131,532
------------ ------------
2,010,401 2,367,384
Other liabilities
Long term deposits 143,500 143,500
Long-term debt (net of current portion) 534,592 525,118
Convertible subordinated debentures
long-term portion 468,600 766,600
Loan from investor 205,680 149,406
------------ ------------
1,352,372 1,584,624
------------ ------------
3,362,773 3,952,008
------------ ------------
Stockholders' equity
Common stock, $.001 par value, authorized
120,000,000 shares, issued and outstanding
143,926,199 shares 143,926 97,360
Class A stock; .001 par value, authorized 5,000,000
shares; issued and outstanding, 0 shares
Additional paid-in capital 17,959,218 15,155,355
Deficit accumulated during the development stage (17,920,577) (14,961,362)
Unrealized gain on foreign exchange 180,626 154,643
------------ ------------
363,193 445,996
3,725,966 4,398,004
============ ============
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
The Tirex Corporation
A Development Stage Company
Consolidated Statement of Operations
(unaudited)
-------------------------------- -------------------------------------------------
Three months Nine months Three months Nine months
ending ending ending ending
March 31, 2000 March 31, 2000 March 31, 1999 March 31, 1999 Cumulative from
-------------- -------------- -------------- -------------- March 26, 1993
to March 31,
2000 2000 1999 1999 2000
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Revenues $ 0 $ 0 $ 0 $ 300,000 $ 1,325,573
Cost of Sales $ 0 $ 0 $ 0 $ 130,676 $ 1,015,830
------------- ------------- ------------- ------------- -------------
Gross profit $ 0 $ 0 $ 0 $ 169,324 $ 309,743
------------- ------------- ------------- ------------- -------------
Operations
General and administrative 1,519,541 2,556,147 590,150 2,484,964 8,741,819
Depreciation and amortization 13,102 39,307 190,719 508,006 110,557
Research and development (87,224) 338,133 0 13,590 8,061,301
------------- ------------- ------------- ------------- -------------
Total Expense 1,445,419 2,933,587 780,869 3,006,560 16,913,677
------------- ------------- ------------- ------------- -------------
Loss before other income and expenses (1,445,419) (2,933,587) (780,869) (2,837,236) (16,603,934)
------------- ------------- ------------- ------------- -------------
Other income (expenses)
Interest expense (28,028) (71,172) (24,835) (78,932) (255,101)
Interest income 0 0 0 0 17,962
Income from stock options 0 0 0 0 10,855
Loss on disposal of equipment 0 0 0 0 (2,240)
Loss on foreign exchange (23,985) 45,544 103,777 (17,895) (30,763)
------------- ------------- ------------- ------------- -------------
(52,013) (25,628) 78,942 (96,827) (259,287)
------------- ------------- ------------- ------------- -------------
Net Loss (1,497,432) (2,959,215) (701,927) (2,934,063) (16,863,221)
============= ============= ============= ============= =============
Net loss per common share (0.01) (0.02) (0.01) (0.03) (0.78)
============= ============= ============= ============= =============
Weighted average shares of common
stock outstanding 120,654,193 120,654,193 77,098,084 77,098,084 21,529,375
------------- ------------- ------------- ------------- -------------
</TABLE>
5
<PAGE>
The Tirex Corporation
A Development Stage Company
Consolidated statement of cash flow (UNAUDITED)
As of March 31,
Nine months ended
March 31,
--------------------------
2000 1999
----------- -----------
Operating activities
Net loss $ 2,959,205 $ 2,934,063
----------- -----------
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 362,915 508,006
Proceeds from grants 252,262 698,438
Stock issued in exchange for services 1,764,588 1,115,125
Stock issued in conversion and pmts 838,178 1,348,502
Unrealized gain on foreign exchange 25,983 98,484
Change in assets & Liabilities
increase in Notes receivable (42,766) (297,149)
decrease in Sales tax receivables 44,199 93,074
increase in Tax credit receivable (507,106) (216,081)
increase in Prepaid & inventory 252,934 86,595
increase in Accrued expenses 150,812 365,560
increase in Loan payable 0 64,685
increase in Deposit payable 0 19,000
increase in Accounts receivables 0 0
increase in Loan director 56,274 93,516
----------- -----------
Total Adjustments 3,198,273 3,977,755
Net cash operating Activities 239,068 1,043,692
----------- -----------
Investing Activities
Property & equipment (1,006,018)
license 0 (37,105)
----------- -----------
Net cash investing activities 0 (1,043,123)
Financing activities
Proceeds from notes payables (175,519) 71,070
Repayment of notes payables 0 (478,996)
Proceeds from loan payable 0 48,131
Repayment of long term debt (319,178) (89,745)
Proceeds from issuance stocks & debentures 80,690 50,000
----------- -----------
Net cash financing activities (414,007) (399,540)
----------- -----------
Net Decrease in cash (174,939) (398,971)
Cash beginning of period 177,256 398,971
----------- -----------
Cash end of period 2,317 0
=========== ===========
6
<PAGE>
The Tirex Corporation and Subsidiaries
(A Developmental Stage Company)
Notes to Consolidated Financial Statements
Note 1 - SUMMARY OF ACCOUNTING POLICIES
CHANGE OF NAME
In June 1998 the Company changed its name from Tirex America, Inc. to
The Tirex Corporation and Subsidiaries.
NATURE OF BUSINESS
The Tirex Corporation and Subsidiaries (the "Company") was
incorporated under the laws of the State of Delaware on August 19,
1987. The Company originally planned to provide comprehensive health
care services to persons with Acquired Immune Deficiency Syndrome,
however due to its inability to raise sufficient capital it was
unable to implement its business plan. The Company had been inactive
since it ceased operations in November 1990. Since the beginning of
1993, the Company has pursued a business plan relating to completing
the design and development, and commencing the manufacture, of the
TCS-1 Cryogenic Tire Recycling Plant and securing the financing
required for such project.
DEVELOPMENTAL STAGE
As at March 31, 2000 the Company is still in the development stage.
The operations to date have consisted 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 and its subsidiaries and Tirex
Canada R&D, Inc.. Tirex Canada R&D, Inc. is held 49% by the Company
and 51% by the shareholders of the Company. The shares owned by the
shareholders are held in escrow by the Company's transfer agent and
are restricted from transfer. All inter-company transactions and
accounts have been eliminated in consolidation.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows all certificates of
deposits with maturities of 90 days or less, were deemed to be cash
equivalents.
ACCOUNTS RECEIVABLE
In view of the litigation between the Company and IM2 Merchandising
and Manufacturing Inc., the entire balance due from that company has
been put into an allowance for doubtful accounts. As of the nine
month period ended March 31, 2000, there were no other trade
receivables.
INVENTORY
The Company values inventory at the lower cost (first-in, first-out
method) or market.
PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost less accumulated
depreciation. Depreciation is computed using the straight-line method
over an estimated useful life of five years.
Repairs and maintenance costs are recorded as expenses when incurred,
while additions and improvements are capitalized. The cost and
related accumulated depreciation of assets sold or retired are
eliminated from the accounts and any gain or losses realized are
reflected in earnings.
7
<PAGE>
The Tirex Corporation and Subsidiaries
(A Developmental Stage Company)
Notes to Consolidated Financial Statements
Note 1 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
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 and disclosures of contingent 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 No. 123, "Accounting for Stock-Based Compensation" ("SFAS
123"). SFAS 123 encourages, but does not require companies to record
at fair value compensation cost for stock-based compensation plans.
The Company has chosen to account for stock-based compensation using
the intrinsic value method prescribed in Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" and
related interpretations. 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. The difference between the
fair value method of SFAS-123 and APB 25 is immaterial.
ADOPTION OF STATEMENT OF ACCOUNTING STANDARD NO. 128
In February 1997, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 128, "Earnings
per Share" (SFAS 128). 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. 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. This Statement requires restatement
of all prior-period EPS data presented.
ADOPTION OF STATEMENT OF ACCOUNTING STANDARD NO. 128
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.
Basic earnings per common share is computed using the weighted
average number of shares of common stock outstanding for the period.
Diluted earnings per common 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. For the years ended June 30, 1999 and 1998, and
for the nine-month period ended March 31, 2000, 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 1998, and accordingly, in that year the denominator was equal to
the weighted average 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. Stock
options for the purchase of 13,212,673 and 9,212,673 shares at June
30, 1999 and 1998, respectively, and warrants for the purchase of
1,000,000 and 2,000,000 shares at June 30, 1999 and 1998
respectively, were not included in loss per share calculations,
because to do so would have been anti-dilutive.
8
<PAGE>
The Tirex Corporation and Subsidiaries
(A Developmental Stage Company)
Notes to Consolidated Financial Statements
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
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 value 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, 2000 and
June 30, 1999 respectively, the carrying value of all financial
instruments was not materially different from fair value.
INCOME TAXES
The Company has net operating loss carry-overs of approximately $17.9
million as of March 31, 2000, expiring in the years 2004 through
2011. However, based upon current Internal Revenue regulations
governing the utilization of net operating loss carry-overs where the
corporation has issued substantial additional stock, 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
carry-forwards. Because of the uncertainties discussed in Note 2,
however, any deferred tax asset established for utilization of the
Company's tax loss carry-forwards 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 has research and development investment tax credits
receivable from the governments of Canada and Quebec amounting to
$445,598 at March 31, 2000.
FOREIGN EXCHANGE
Assets and liabilities of the Company which are denominated in
foreign currencies are translated at exchange rates prevailing at the
balance sheet date. Revenues and expenses are translated at average
rates throughout the year.
REVENUE RECOGNITION
With respect to sales of TCS-1 Systems, revenue is recognized when
the product is shipped, installed and accepted by the customer. With
respect to other sales, such as rubber crumb, revenue is recognized
when the product is shipped.
Note 2 - GOING CONCERN
As shown in the accompanying financial statements, the Company
incurred a net loss of $4,910,000 during the year ended June 30,
1999, and incurred an additional loss of $2,959,205 for the
nine-month period ended March 31, 2000. . As at March 31, 2000 the
Company, which in management's estimation remains in the development
stage, was in the process of finalizing the construction of a
production quality machine for the cryogenic disintegration of used
tires. As of April 30, 2000, the Company had tested the first
production model under operating conditions. Additional development
and testing will be done with respect to the magnetic separation of
steel and screening of fiber during the fourth quarter of Fiscal
2000. As of March 31, 2000 no firm delivery dates have been
negotiated for delivery of TCS-1 Systems.
9
<PAGE>
The Tirex Corporation and Subsidiaries
(A Developmental Stage Company)
Notes to Consolidated Financial Statements
Note 3 - FINANCING COSTS
During the year ended June 30, 1998 the Company incurred expenses of
$158,255 in connection with debt financing. These costs have been
capitalized in other assets and are being amortized over the terms of
the financing. Amortization of financing costs for the year ended
June 30, 1999 was $32,964, and for the nine-month period ended March
31, 2000 amortization of deferred financing costs was $104,158.
Note 4 - PROPERTY AND EQUIPMENT
FINANCING COSTS
As of March 31, 2000 plant and equipment consisted of the following:
Furniture, fixtures and equipment $ 189,825
Leasehold improvements 180,657
Construction in progress - equipment 2,000,000
------------
$ 2,370,482
Less accumulated depreciation and amortization 98,824
------------
$ 2,271,658
============
For the three and nine month periods ended March 31, 2000,
depreciation and amortization charged against furniture, fixtures and
equipment, Leasehold Improvements and Construction in Progress was
$5,581 and $30,723 respectively. Other amortization of prepaid
expenses and deferred financing costs for the three and nine-month
periods ending March 31, 2000 amounted to $45,034 and $312,050
respectively.
Note 5 - NOTES PAYABLE
As of June 30, 1999, the Company had available a $510,000 line of
credit with Scotia Bank which bears interest at the Canadian prime
rate plus 1.25% to finance 75% of its research and development
investment tax credits incurred for the fiscal year ended June 30,
1999. At June 30, 1999, $408,302 was outstanding against this line of
credit. As of March 31, 2000, the outstanding balance was Cdn$175,000
(approximately US$119,000). The line of credit is collateralized by
the personal guarantees of certain officers, certain equipment of
Tirex Canada and is further guaranteed by The Tirex Corporation and
Subsidiaries. The line of credit is guaranteed at a rate of 80% by
the Garantie-Quebec (Guarantee-Quebec), a subsidiary of a Quebec
Government-owned corporation, Investissements-Quebec
(Investments-Quebec) and is repayable from the research and
developmental investment tax credits received. The Canadian prime
rate of interest at June 30, 1999 was 6 1/4%, and as of March 31,
2000 it was 7%.
Under the terms of the line of credit, the Company is required to
maintain a current debt ratio of 1:1 by June 30, 1999 and 1.2:1 by
June 30, 2000, a tangible net worth of $750,000, and the furnishing
of periodic financial statements. In the nine-month period ended
March 31, 2000, the company had not complied with certain covenants
of the line of credit agreement. As of March 31, 2000 Scotia Bank had
not exercised its rights under the default provisions of the line of
credit, although going forward there can be no assurance that the
Scotia Bank will continue to forego its rights under the line of
credit agreement if the Company remains in non-compliance with the
covenants thereunder.
10
<PAGE>
<TABLE>
<CAPTION>
The Tirex Corporation and Subsidiaries
(A Developmental Stage Company)
Notes to Consolidated Financial Statements
Note 6 - LONG-TERM DEBT
1999
-----------
<S> <C> <C>
Federal Office of Regional Development (Ford-Q) Loan
payable under the Industrial Recovery Program amounting
to 20% of certain eligible costs incurred (maximum loan
Cdn$500,000 or approximately US$340,000) repayable in
annual installments over a forty-eight month period following
completion of the project, unsecured and non-interest bearing.
(If the Company defaults the loans become interest bearing). $ 309,595
Loans payable under the Program for the Development of
Quebec SME's based on 50% of approved eligible costs for the
preparation of market development studies in certain regions.
Loans are unsecured and non-interest bearing. (If the Company
defaults the loans become interest bearing).
Loan payable over five years commencing
June 2000 due June 2004 65,359
Loan payable over five years, commencing
June 2001, due 2005 67,423
Loan payable in amounts equal to 1% of annual
sales in Spain through June 30, 2007 13,610
Loan payable in amounts equal to 11/2% of annual
sales in Spain and Portugal through June 30, 2004 65,359
-----------
521,346
Less: current portion 100,880
$ 420,466
===========
Minimum principal repayments of each of the next five years as
follows:
1999 $ 106,385
2000 114,697
2001 157,033
2002 29,243
2003 37,555
Thereafter 98,082
-----------
$ 542,995
===========
</TABLE>
11
<PAGE>
The Tirex Corporation and Subsidiaries
(A Developmental Stage Company)
Notes to Consolidated Financial Statements
Note 7 - CAPITALIZED LEASE OBLIGATIONS
The Company leases certain equipment under agreements classified as
capital leases. The net amortized value as of March 31, 2000 was
$21,478.
The following is a schedule by years of future minimum lease payments
under capital leases of equipment together with the obligations under
capital leases (present value of future minimum rentals) as of June
30, 1999.
Years Ended
June 30,
-----------
2000 $ 34,605
2001 28,075
2002 28,075
2003 28,075
2004 20,955
-----------
Total minimum lease payments 139,785
Less amount representing interest 26,130
-----------
Total obligations under capital lease 113,655
Less current installments of obligations
under capital leases 25,147
-----------
Long-term obligation under capital leases,
with interest rate of 9.3% $ 88,508
===========
12
<PAGE>
The Tirex Corporation and Subsidiaries
(A Developmental Stage Company)
Notes to Consolidated Financial Statements
Note 8 - CONVERTIBLE SUBORDINATED DEBENTURES
Convertible subordinated debentures consist of the following:
<TABLE>
<CAPTION>
Type A Type B
--------------------------------- ------------------------------
<S> <C> <C>
Balance Mar 31, 2000 $0 $75,000
Interest rate 10% 10%
Maturity All of the Type A debentures have Earlier of (i) two years from
been converted to common equity. the issue date or (ii) the
completion of a public
offering of its securities by
the Maker. These debentures
are subordinated to all
current and future bank debt.
Redemption rights All of the Type A debentures have If not converted the holder
been converted to common equity. may require the Company to
redeem at any time after
maturity for the principal
amount plus interest
Conversion ratio 61.5% of the average closing bid $0.20 per share. During the
price of the common stock as year ended June 30, 1999,
reported by NASDAQ during the $155,000 of convertible
five-day period preceding the debentures were converted to
Company's receipt of a notice of common stock.
conversion by a debenture holder.
During the year ended June 30,
1999, debentures totaling $113,400
were converted to common stock.
The balance was converted
subsequent to June 30, 1999.
Warrants As part of the debenture package,
the Company issued 2,000,000
warrants to purchase a like number
of shares of common stock at $.001
per share. During the year ended
June 30, 1999, 1,000,000 warrants
were exercised. Up to March 31,
2000, the remaining 1,000,000
warrants had not been exercised.
</TABLE>
13
<PAGE>
The Tirex Corporation and Subsidiaries
(A Developmental Stage Company)
Notes to Consolidated Financial Statements
Note 9 - RELATED PARTY TRANSACTIONS
Included in accrued salaries at March 31, 2000 is $45,334 of salary
to officers and employees which the Company will issue common stock
for. Various loans due to the officers totaling $149,406 will be paid
in stock during the year ended June 30, 2000.
At June 30, 1999 and 1998, the Company had notes receivable from
various officers in the amount of $74,406 and $195,969, respectively.
One note in the amount of $70,405 bears interest at an annual rate of
8% above prime through September 1998 and 2% above prime since that
date and is collateralized by 400,000 shares of Tirex Corporation
which is held by the officer. The remaining notes are non-interest
bearing and are payable on demand.
As of March 31, 2000 the Company had a note receivable for $30,000
from a Company in which a director has a financial interest. The note
bears interest at prime plus 2% and is due on demand.
Deposits payable included an amount of $118,500 which are payable to
companies which are owned by a director of the Company.
Note 10 - EXCHANGE OF DEBT FOR COMMON STOCK
During the year ended June 30, 1999, the Company recorded increases
in common stock and paid-in capital of $343,952, which was in
recognition for the exchange of common stock for debt owed. Debt
totaling $164,000 was payable to certain related parties to the
Company.
Note 11 - COMMON STOCK
During the nine-month period ended March 31, 2000, the Company issued
common shares to officers, employees and corporate counsel in
exchange for services rendered in the amount of $1,764,588. The
dollar amounts assigned to such transactions have been recorded at
the fair value of the services received, because the fair value of
the services received was more evident than the fair value of the
stock surrendered.
14
<PAGE>
The Tirex Corporation and Subsidiaries
(A Developmental Stage Company)
Notes to Consolidated Financial Statements
Note 12 - STOCK OPTION
COMPENSATORY COMMON STOCK OPTIONS
<TABLE>
<CAPTION>
Compensation Cost
-------------------------------------
For the Year Ended
Number of Shares June 30, 1999
---------------- ------------------
<S> <C>
Balance at July 1, 1998 9,212,673 -
Stock options granted during the year
ended June 30, 1999 4,000,000 381,600
Stock options exercised during the year
ended June 30, 1999 - -
---------- ---------
Balance at June 30, 1999 13,212,673 $ 381,600
</TABLE>
The options expire at various dates through April 2000. The exercise
price ranges from $.001 to $.50 with the weighted average exercise
price equal to $.14.
Note 13 - ACQUISITION BY MERGER OF RPM INCORPORATED
During November 1997, the Company entered into a merger agreement
with RPM Incorporated ("RPM"). The Company acquired all of the assets
and liabilities of RPM by acquiring all of the outstanding common
stock of RPM in exchange for common stock in the Company on a unit
for unit basis. RPM ceased to exist following the exchange.
The assets and liabilities acquired by the Company from RPM consist
of the proceeds from the sale of debentures as well as the debentures
of $535,000. The financing fees on the issuance of the debentures
totaling $61,755 is included in the statement of operations for the
year ended June 30, 1998. A total of 535,000 shares were issued as a
result of the merger valued at $16,050. A total of $16,050 was
received for this stock.
The Company entered into an additional agreement with the former
shareholders of RPM for a consulting agreement for a period of 5
years expiring in June 2002. In exchange for this consulting
agreement, 3,000,000 shares of common stock were issued valued at
$240,000. Other than the consulting agreement and the issuance of the
debentures, RPM was inactive.
For accounting purposes the Company recorded the merger as a purchase
and not as a pooling of interests.
Note 14 - GOVERNMENT ASSISTANCE
The Company receives financial assistance from Revenue Canada and
Revenue Quebec in the form of scientific research tax credit. During
the year ended June 30, 1999 the company received approximately
$1,058,000 which has been recorded as paid in capital.
15
<PAGE>
The Tirex Corporation and Subsidiaries
(A Developmental Stage Company)
Notes to Consolidated Financial Statements
Note 15 - COMMITMENTS
The Company leases office and warehouse space at an annual minimum
rent of $82,000 for the first year, $169,000 for the second year and
$211,000 per year for the third through the fifth year. The lease
expires 2003. The Company is also responsible for its proportionate
share of any increase in real estate taxes and utilities. Under the
terms of the lease, the Company is required to obtain adequate public
liability and property damage insurance. The minimum future rental
payments under this lease are as follows:
June 30, Amount
-------- ----------
2000 $ 176,900
2001 204,100
2002 204,100
2003 170,100
---------
$ 755,200
=========
Rental expense for the year ended June 30, 1999 and 1998 amounted to
$111,930 and $55,532, respectively. One of these leases contains a
second ranking moveable hypothec in the amount of $300,000 on the
universality of the corporation's moveable property.
Note 16 - RESTATED FINANCIAL STATEMENTS
The financial statements for June 30, 1999 and for the cumulative
period from March 26, 1993 to March 31, 2000 have been restated to
break out other comprehensive income.
Note 17 - CONTINGENCY
The Company is involved with a lawsuit with a prior consultant. The
complaint alleges that the Company breached its consulting agreement
by failing to pay compensation due there under and sought damages in
the amount of $221,202 including interest and legal costs. The
Company has filed a counter claim for fraud, breach of contact and
unjust enrichment on the part of the consultant. The Company seeks
relief consisting of compensatory damages in the amount of $28,800
and cancellation of the stock certificate issued to the plaintiff for
263,529 shares; a declaratory judgment that the consulting agreement
is of no force and effect; punitive damages; and interest and legal
costs. The Company's position is that this case is completely without
merit.
Note 18 - ACCUMULATED OTHER COMPREHENSIVE INCOME
The deficit accumulated during the development stage included other
accumulated comprehensive income totaling $76,307.
16
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
The following is management's discussion and analysis of significant
factors which have affected the Company's financial position and operations
during the three and nine month periods ended March 31, 2000. This discussion
also includes events which occurred subsequent to the end of the period 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.
The Company remains in the very early stages of the business of
manufacturing its patented cryogenic scrap tire recycling equipment (the "TCS-1
Plant"). Management presently estimates that commencement of full-scale
commercial manufacture of TCS-1 Plants operations will occur in the near future.
Since the beginning of 1993, the Company has devoted the bulk of its
efforts to completing the design and development, and commencing the manufacture
of, the TCS-1 Plant and securing the financing required for such project. In
December 1998, the Company began successfully operating the first fully
integrated TCS-1 Plant on a continuous-running basis for scheduled periods of up
to four hours, at 50% of capacity with one of its two freezing towers and
fracturing mills. In the fourth quarter of fiscal 1999 the Company started the
construction of the second freezing tower and the second disintegrator unit.
Starting late in the fourth quarter of calendar 1999 and continuing into the
first quarter of calendar 2000, the Company commenced testing the system. On
March 2, 2000, the Company announced that its test of the new system was
successful. The Company successfully added features to enhance the proportions
of fine crumb produced which was announced on April 18, 2000. Although the
Company is of the opinion that the rubber crumb now being produced by the TCS-1
Plant is the cleanest (absence of steel and fiber) available in the marketplace,
additional research is being done on the magnetic and fiber separation systems
to further enhance performance. The Company will also soon experiment with
temperatures slightly colder in the freezing tower, with a view to further
enhancing components separation in the fracturing mill. The Company believes
that its ongoing and future research and development will keep it at the
forefront of technology in this industry.
The Company views the primary function of the TCS-1 Plant installed on
St-Patrick Street in Montreal as being a combination of a system demonstration
and a research and development platform. On December 9, 1999, the Company
negotiated and signed a Memorandum of Understanding with Shandong Hongli Group
Company, Ltd. ("Hongli") from the city of Dezhou in Shandong Province in The
Peoples' Republic of China respecting the sale of the principal components of a
TCS-1 Plant. This sale is expected to be consummated during the fiscal year
2000. The Memorandum of Understanding signed with the Hongli Group provided that
the Company and Hongli will work toward the completion of a licensing agreement
under which Hongli would acquire the exclusive right to manufacture and
distribute the TCS-1 Plant in the Peoples' Republic of China. The Company
anticipates that this licensing agreement will include a performance clause
which would permit the Company to withdraw any element of exclusivity in the
event that sales targets are not met.
During the quarter ended March 31, 2000, and in conformity with the
intent of the Sanzaro licensing agreement, announced in the second quarter of
Fiscal 2000, under which Mr. Sanzaro acquired manufacturing and distribution
rights respecting the TCS-1 Plant for the US market, the Company transferred all
US-based contracts included in the backlog to Mr. Sanzaro. This transfer
eliminates most of the Company's reported backlog in orders. In doing so, future
gross revenues will be reduced. The net income originally anticipated from
manufacturing and selling machines, will be replaced by royalties from Mr.
Sanzaro in accordance with the terms of the Sanzaro licensing agreement.
Management considers that this transfer reduces the risk inherent to a
manufacturing operation and also provides the Company with additional capacity
to accept and fill orders from non-US customers.
LIQUIDITY AND CAPITAL RESOURCES
The activities of the Company since its formation in 1987 and the
inception of its current business in 1993 have been financed by sources other
than operations. During the nine-month period which ended March 31, 2000,
directors, officers, employees and consultants made direct cash investments into
the Company for an amount of $80,690.
During the fiscal years ended June 30, 1998 and June 30, 1999 and the
interim nine-month period ended March 31, 2000, the Company received additional
funding from Quebec and Canadian government grants, loans, loan guarantees and
refundable tax credits for purposes of completing the development of the TCS-1
Plant and for the international marketing of such plants. During the last three
17
<PAGE>
fiscal years, virtually all of the activities connected with the development and
construction of the First Production Model of the TCS-1 Plant have qualified as
expenses eligible for refundable tax credits.
As a further measure to stimulate research and development, the Quebec
Government, through "Garantie-Quebec" ("GQ"), has continued a loan guarantee
program, which provides G-Q's guarantee of repayment of 75% of the amount of
bank loans made to companies in anticipation of such companies receiving
refundable tax credits. Borrowings drawn down by the Company under a ScotiaBank
Tax Credit Loan bear interest, from the date the funds are drawn down until the
outstanding principal and all accrued and unpaid interest thereon are repaid, at
an annual rate equal to the ScotiaBank Prime Rate (which, for reasons of
inter-bank competition, is usually equivalent to Canadian Prime Rate) plus
1.25%. Interest on the outstanding balance of the ScotiaBank Tax Credit Loan is
due and payable monthly. During the nine month period ended March 31, 2000, the
Company has borrowed Cdn $150,000 against estimated tax credits, received Cdn
$1,056,948 in tax credits (excluding Cdn$112,586, approximately US$76,000,
received in January 2000 respecting an appeal of the actual tax credit granted
by Revenue Canada for the fiscal year ended June 30, 1998) and has a cumulative
outstanding loan balance of Cdn $175,000 (approximately US$119,000) due
ScotiaBank; as compared to Cdn $108, 770against estimated tax credits, Cdn $1,
363, 568 received for the nine month period ended March 31, 1999. Tax credits
received by the Company during fiscal 1999, are attributable to research and
development expenditures made by the Company during the fiscal year ended June
30, 1997 and 1998, whereas amounts received in the current fiscal year (Fiscal
2000) are in respect of tax credits for the fiscal year which ended June 30,
1999.
During the nine month interim period ended March 31, 2000, the Company
also received additional financial assistance by way of loans and grants from
Quebec governmental agencies, for the design and development of the TCS-1 Plant
and for export market development.
As at March 31, 2000, the Company had total assets of $3,725,966 as
compared to $4,177,977 at March 31, 1999 reflecting a decrease of $579,078, and
a decrease of $672,038 versus total assets as of the last fiscal year-end, June
30, 1999, which total amounted to $4,398,004. Management attributes the decrease
from June 30, 1999 to March 31, 2000 primarily to the following factors: (i) a
decrease of $507,106 in Tax Credits Receivable from the balance as of June 30,
1999 in the amount of $952,704 to the March 31, 2000 balance of $445,598. While
counter-balanced by increases in estimated tax credit receivables based on
research and development actually undertaken in the first nine months of Fiscal
2000, the receipt from the governments of Quebec and of Canada of approximately
US$770,000 was the single most cause of this decrease, and (ii) a reduction of
cash and cash equivalents from the balance as of June 30, 1999 in the amount of
$177,256 to $2,317 as of March 31, 2000, a decrease of $174,939. The reduction
in total assets of $291,711 from March 31, 1999 to March 31, 2000 is primarily
attributable to the elimination of prepaid expenses for an amount of $144,000, a
reduction in tax credit receivables in the amount of $194,139 and a reduction in
the balance of accounts and notes receivable in the amount of $324,512. These
reductions were offset by an increase in the balance of Property, Plant and
Equipment in the amount of $308,352 which, as of March 31, 2000 showed a balance
of $2,271,658. Fiscal year-end total assets at June 30, 1999 had reflected a
previous increase of $583,356 over $3,814,648 at June 30, 1998. Management
attributes the increase in total assets at June 30, 1999 versus June 30, 1998
principally to (i) an increase of $1,305,007 in Property, Plant and Equipment
from $977,288 as of June 30, 1998 to $2,282,295 as of June 30, 1999, and (ii) an
increase of $96,886 in Research and development tax credits receivable from
$855,818 as of June 30, 1998 to $952,704 as of June 30, 1999. These increases
were partially offset by (i) decreases in cash and cash equivalents which went
from $398,971 as of June 30, 1998 to $177,256 as of June 30, 1999, a decease of
$221,715, (ii) a decrease of $204,500 in current prepaid expenses and deposits
from $618,226 as of June 30, 1998 to $413,766 as of June 30, 1999, resulting
from amortization of such prepaid expenses, and similarly in long-term prepaid
expenses and deposits which decreased by $261,757 from $445,677 as of June 30,
1998 to $183,920 as of June 30, 1999.
As of March 31, 2000, the Company had total liabilities of $3,362,773
as compared to $3,137,007 at March 31, 1999, reflecting an increase in
liabilities of $225,766. Total liabilities as of the end of June 30, 1999
(Fiscal 1999) were $3,952,008 which is actually $815,001 higher than the March
31, 2000 balance. The June 30, 1999 had reflected a previous increase of
$591,420 over $3,360,588 in total liabilities at June 30, 1998. The difference
in total liabilities from December 31, 1999 to March 31, 2000, amounted to a
reduction of $350,985, the March 31, 2000 balance being $3,362, 773 versus the
December 31, 1999 balance of $3,713,758. The vast majority of this decrease is
attributable to the decrease in loans from directors, officers and investors
which were converted into share capital. As of December 31, 1999, the balance of
such debt was $1,116,968 whereas the balance as of March 31, 2000 was $205,680,
reflecting a decrease of $911,288 which was added to Shareholders' Equity. This
was compensated by an increase in accounts payable and accruals in the amount of
$546,681.
18
<PAGE>
Reflecting the foregoing, the financial statements indicate that at
March 31, 2000, the Company had a working capital deficit (current assets minus
current liabilities) of $566,613 and at March 31, 1999, the Company had a
working capital surplus of $310,468. The primary cause of this net decrease in
net working capital was (i) a decrease in prepaid expenditures in the amount of
$144,000; (ii) a decrease in deferred financing fees in the amount of $96,308;
(iii) a decrease in R&D tax credits receivable in the amount of $194,139 and
(iv) a decrease in accounts and notes receivable in the amount of $324,512.
The Company currently has limited material assets. The success of the
Company's tire recycling equipment manufacturing business, and its ability to
continue as a going concern will be dependent upon the Company's ability to
obtain adequate financing to commence profitable, commercial manufacturing and
sales activities and the TCS-1 Plant's ability to meet anticipated performance
specifications on a continuous, long term, commercial basis.
The Company believes it will be able to cover the balance of the
capital investments and expenditures which it will be required to make in
connection with: (i) modifications which were and will be made to the TCS-1
Plant; (ii) commencement of full scale, commercial manufacture of TCS-1 Plants;
and (iii) meeting its overhead on a level sufficient to sustain the Company for
at least the next twelve months, from a combination of some or all of the
following sources: (i) proceeds either of the private placements or from the
exercise of certain outstanding options; (ii) expected cash flow from royalties
under the Sanzaro Licensing Agreement; (iii) down payments and progress payments
from TCS-1 contracts outside of the USA; (iv) Canadian and Quebec government and
governmental agency grants, loans, and refundable tax credits; (v) conventional
asset based debt financing against receivables and inventory; (vi) refunds of
all of the 15% sales taxes paid by the Company on all goods and services
purchased in connection with the Company's manufacturing activities, which the
Company, as a manufacturer and exporter of goods is entitled to (vii)
subcontractor financing; (viii) vendor financed equipment purchases and/or (ix)
a research and development tax credit facility from either ScotiaBank or another
Canadian bank. The Company is presently actively pursuing all of the foregoing
avenues of financing. In addition, management believes that the Company will be
able to obtain sufficient production financing to cover the costs of
constructing subsequent TCS-1 Plants, using the constituent components of the
Plant to be financed, as collateral for debt financing to cover its construction
costs.
Whether the funds, which the Company obtains, from any of the above
proposed sources, will be sufficient to enable the Company to reach a profitable
operating stage, will be entirely dependent upon: (i) the amount of such
financing which the Company is actually able to raise; and (ii) the as yet
unproven ability of the TCS-1 Plant to operate continuously on a long-term
commercial basis in accordance with its anticipated performance specifications.
Any failure or delay in the Company's receipt of the required financing
would be directly reflected in a commensurate delay or failure in the
commencement of full scale manufacturing of TCS-1 Plants. The requirement of
additional funds to correct unanticipated flaws or defects in the design or
construction of the First Production Model which may become apparent when it is
subjected to continuous operation on a long term, commercial basis will also
result in a delay in full scale manufacturing and marketing of the TCS-1 Plants.
Moreover, given the early stage of development of the Company, it is impossible
at this time to estimate with any certainty the amount of income to be derived
from operations, if any, during the next twelve months.
In the event the Company is unsuccessful in raising the capital
required for its operations from currently anticipated sources, there can be no
assurance that the Company will be able to obtain outside financing on a debt or
equity basis on terms favorable to it, if at all. In the event that there is a
failure in any of the finance-related contingencies described above, the funds
available to the Company may not be sufficient to cover the costs of its
operations, capital expenditures and anticipated growth during the next twelve
months. In such case, it would be necessary for the Company to raise additional
equity capital. At this time, the Company is not able to give any assurances
that, in such event, it will be successful in locating an underwriter or that
its efforts will ultimately result in a public offering. If the proceeds from
the above described potential sources of funding should be insufficient for the
Company's requirements and it is not able to effect a public offering of its
securities within the next twelve months, or find other sources of outside
funding, the Company's financial position and its prospects for beginning and
developing profitable business operations could be materially adversely
affected.
19
<PAGE>
RESULTS OF OPERATIONS
The Company is presently in the very early stages of the business of
manufacturing and selling TCS-1 Plants. The Company intends to begin
manufacturing TCS-1 Plants on commercial basis in the calendar year 2000. The
Company had $390,848 of gross sales during Fiscal 1999, but, with the halting of
operations in the rubber mat molding, the Company has not generated any gross
sales during the first nine months of Fiscal 2000. Unless and until the Company
successfully develops and commences TCS-1 Plant manufacturing and sales
operations on a full-scale commercial level, it will continue to generate no or
only limited revenues from operations. Except for the foregoing, the Company has
never engaged in any significant business activities.
The financial statements which are included in this Report reflect
total general and administrative expenses of $1,482,028 for the three-month
period ended March 31, 2000 versus $590,150 for the analogous three-month period
ended March 31, 1999, reflecting an increase of $891,878. The most important
reason for this increase relates to one-time charges recorded in the three-month
period ended March 31, 2000. Included in this category are bonuses to Mr.
Threshie for agreeing to become the president and a director of the Company
($80,000 paid in shares), settlements with respect to former directors and
employees for past unpaid salary and termination indemnification ($154,417 paid
in shares), settlements with third party consultants for financial consulting
and tax credit expertise ($542,045 paid in shares), settlement of an office
leasing contract respecting space in New York where the Company had previously
intended to establish a marketing office ($38,000 paid in shares) and
settlements of claims submitted by previous government relations consultants and
by suppliers of goods and services ($127,876 paid in shares) to avoid late
payment charges and possible legal actions. For the nine-month periods ending
March 31, 2000 and March 31, 1999, General and Administrative expenses were
$2,252,671 and $2,484,964 respectively.
Management believes that the amounts accrued with respect to the shares
issued to compensate the executive officers, corporate counsel, pay debts or
settle disputes reflect the fair value of the services rendered or benefit
received by the Company. Management placed a value on the shares based on the
fair market value of free trading shares of the Company's common stock at the
time of issuance taking into consideration certain risks including but not
limited to the following factors: (i) the minimal or absence of a market value
for any substantial block of common stock; (ii) the very high intrinsic risks
associated with early development stage businesses, such as the Company's; (iii)
the Company's lack of sufficient funds, as at such issuance dates, to implement
its business plan and the absence of any commitments, at such times, from
potential investors to provide such funds; (iv) the restrictions on transfer
arising out of the absence of registration of such shares; and (v) the
uncertainty respecting the Company's ability to continue as a going concern.
From inception (July 15, 1987) through March 31, 2000, the Company has
incurred a cumulative net loss of $17,920,577. 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 its proposed health care operations and therefore,
generated no revenues there from.
20
<PAGE>
PART II
OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
On March 19, 2000, IM2 filed a complaint against the Company and former
president, Terence Byrne, alleging fraud, a charge vigorously denied by The
Tirex Corporation and which will be responded to by both the Company and Mr.
Byrne via countersuits. The Company is confident that the IM2 suit will either
be dismissed or defeated.
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS
During the three-month period ended March 31, 2000, the Company issued
a total of 24,390,271 shares, of which approximately 14,972,502 were issued with
restrictive legend. The remaining shares were issued pursuant to the filing of a
Registration Statement on Form S-8 and thus bore no restrictive legends as set
forth below:
<TABLE>
<CAPTION>
NUMBER OF WITH RESTRICTIVE WITHOUT RESTRICTIVE
PERSONS REASON FOR ISSUANCE LEGEND LEGEND
<S> <C> <C> <C>
8 In lieu of salaries and consulting fees 3,439,731 2,257,486
5 In lieu of independent consultant fees 658,000 3,900,000
6 For goods and services received 3,041,106 530,281
7 Debenture conversions 507,000
1 Deposits for future services 500,000
4 In lieu of loan repayments 5,784,667
3 Bonuses and termination indemnifications 920,000 1,430,000
4 To avoid penalties and legal actions 622,000 800,000
38 TOTAL 14,972,504 9,417,767
</TABLE>
21
<PAGE>
Subsequent to March 31, 2000, following the period covered by this
Report, the Company issued a total of 5,441,759 shares as follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
NUMBER OF WITH RESTRICTIVE WITHOUT RESTRICTIVE
PERSONS REASON FOR ISSUANCE LEGEND LEGEND
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
8 In lieu of salaries and consulting fees 762,635 1,752,932
--------------------------------------------------------------------------------------------------------------------
5 Cash investment 21,000 3,900,000
--------------------------------------------------------------------------------------------------------------------
6 For goods and services received 172,171
--------------------------------------------------------------------------------------------------------------------
7 Debenture conversions 1,980,361
--------------------------------------------------------------------------------------------------------------------
4 In lieu of loan repayments 752,660
--------------------------------------------------------------------------------------------------------------------
38 TOTAL 3,688,827 1,752,932
--------------------------------------------------------------------------------------------------------------------
</TABLE>
The total number of shares issued and outstanding as of May 15, 2000 is
149,370,958
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
During the period January 7, 1998 through May 11, 1998, the Company
issued an aggregate of $535,000 of convertible, subordinated debentures bearing
interest at the rate of 10% which are due two (2) years from their respective
dates of issuance. Interest thereon was due and payable semi-annually commencing
six months from the issuance date of such debentures. As of May 15, 2000, the
Company was in arrears on interest payments accrued on outstanding debentures
having a principal amount of US$75,000, since their issuances. On debentures
converted since December 1999, interest was capitalized and thence converted
into equity.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
In January 2000, following acceptance in December 1999 by more than 50%
of the shareholders, and in accordance with the Delaware General Corporation
Law, the Company's charter was amended to increase the authorized number of
shares for issuance to 165,000,000, par value $0.001.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
The Company filed a Current Report on Form 8-K dated February 9, 2000 filed with
the Commission on February 9, 2000.
22
<PAGE>
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: June 5, 2000 By /s/ JOHN L. THRESHIE,JR.
-----------------------------------------
John L. Threshie, Jr. President
Date: June 5, 2000 By /s/ MICHAEL ASH
-----------------------------------------
Michael Ash, Treasurer and
Chief Accounting and Financial Officer
23
