The Tirex Corporation is the developer and manufacturer of the patented TCS-1 Plant, an environmentally safe, turn-key cryogenic scrap tire recycling system which breaks down used tires into cleanly separated and saleable rubber crumb, steel wire and fiber. Unlike other tire disintegration systems in use today, the TCS-1 recycling process does not involve any chopping, shredding, or hammer-milling. Therefore, the steel wires embedded in the tires will not be cut or broken, the fiber threads will retain their basic shapes and characteristics, and no steel powder or rubber-catching unusable fiber fluff will be produced. Based on its own research and tests, Tirex believes that its TCS-1 Plants produce the highest quality rubber crumb available today at a lower cost than any other tire recycling system. From the beginning of 1993 until March 2000, Tirex devoted the bulk of its efforts to completing the design and development of the TCS-1 Plant and raising the financing that it needed to do so. This was successfully accomplished in March 2000, and while certain operational adjustments will continue to be made in order to maximize and enhance capabilities, commercial operation of the first Plant was initiated this March. Tirex is developing thermoplastic vulcanite (TPV’s) using its rubber crumb to make higher value added Thermoplastic Compounds. Tirex’s development of RuCr Therm ™ proprietary composite materials are a result of combining high percentages of Rutex™ (recycled crumb rubber produced by Tirex’s patented TCS-1 Plants and various polymers). RuCr Therm™, based on extensive tests conducted at Tirex’s Montreal facility, is a Thermoplastic Compound and is expected to have impact on high growth potential applications such as extrusion and materials compounding, custom design rubber composite mix applications and other higher engineered applications in various industries, including the automotive and industrial sectors. Tirex is ready to begin manufacturing TCS-1 Plants for sale and lease as soon as one of its customers obtains financing and makes its initial construction payment on the Plant. Tirex will use the proceeds from all construction payments to cover the costs of manufacturing the TCS-1 Plants.

The TIREX Corporation signed a Memorandum of Understanding with the Shandong Hongli Group from the City of Dezhou in the Shandong Province in the Peoples’ Republic of China to purchase the major proprietary portion of one (1) cryogenic tire recycling system (the TCS-1) for $2,250,000 US. This Memorandum also includes an understanding that the parties will negotiate a long term agreement with the Hongli Group for the exclusive right to market and manufacture the TCS-1 System in the Peoples’ Republic of China, the terms of which have not been agreed upon, but which would include an up-front license fee, minimum purchase requirements and a commitment by Tirex to support the license. While there is no assurance that a license agreement will be entered into, the Company’s management remains confident that a mutually satisfactory license agreement will be entered into in the near future.

The Tirex Corporation has granted a license to Ocean Equipment Manufacturing and Sales Co. (OEMSC) of Toms River, N.J. to manufacture Tirex's patented tire recycling system, the TCS-1, in the United States. The license to OEMSC includes the sale of products produced by the TCS-1 and the sale and/or lease of the TCS-1 System within the United States. Under the agreement, Tirex has been paid $250,000 US for the license. Tirex also receives 16.7% of the total gross amount for each TCS-1 sale.

The Tirex Corporation entered into an offer to purchase agreement with Recycletron Inc. of Montreal in May 1997 for a TCS-1 Cyrogenic Scrap Tire Disintegration System at a purchase price of US $2,500,000. Tirex has already received a deposit of US $ 25,000 for the system.

While the sale of TCS-1 plants will continue to be a primary focus of this Company, Tirex also plans to pursue a business plan which encompasses Tirex’s owning its own TCS-1 Plants on a world-wide basis, exclusively or in joint ventures, operating such plants to produce recycled rubber crumb. Tirex believes that this multifaceted business plan will produce even higher returns than would be obtained if it were to limit the scope of its business exclusively to the manufacture and sale of TCS-1 Plants because it will enable significant competitive value insofar as it is a "closed loop" system which does not use any chemicals, solvents, gases or other substances which could result in emissions of any kind from the operation of the Plant. Operation of the TCS-1 Plant does not result in the emission of air pollutants, the disposal of combustion residues, the storage of hazardous substances (as is the case with other tire recycling processes such as pyrolysis), or the production of any significant amounts of solid waste which would have to be land filled. Tirex believes that such environmental benefits will give it a competitive advantage in most advanced economy countries where environmental protection concerns are strong. In Europe, in particular, where environmental protection philosophy is beginning to be a priority of the European Union, tire manufacturers may in the future be required to be responsible for the ultimate, post use-life disposal of their tires. Tirex anticipates that such manufacturers will be interested in supporting the proliferation of environmentally friendly tire recycling systems.

Tirex believes it will be able to compete successfully on the basis of economy of cost and operation of the TCS-1 Plant, the high quality of the crumb which it produces, and the production economies which can be realized from vertical integration whereby Tirex will produce the raw material (rubber crumb) which will be used in finished products. Tirex will also rely on geographic and market diversification as protection against any eventual competition in tire recycling technology.

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