Exhibit 99.7

THE TIREX CORPORATION

A DEVELOPMENT STAGE COMPANY

CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

THE TIREX CORPORATION

A DEVELOPMENT STAGE COMPANY

CONSOLIDATED BALANCE SHEET

SEPTEMBER 30, 2015

	September 30,			June 30,
	2015			2015

ASSETS

Other assets
Patents	$	1		$	1
Total Other Assets		1			1

Total Assets	$	1		$	1

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities
Accounts payable and accrued liabilties	$	2,343,684		$	2,339,973
Accrued liabilties - related parties		525,605			525,605
Convertible notes - non-related parties		448,146			429,086
Derivative liability		—			—
Total Current Liabilities		3,317,435			3,294,664

Total Liabilities		3,317,435			3,294,664

Stockholders' Equity (Deficit)
Preferred stock, $.005 par value, authorized
25,000,000 Series A shares, issued and outstanding
25,000,000 Series A shares (June 30, 2014 - 25,000,000 shares)		125,000			125,000
Common stock, $.001 par value, authorized
3,000,000,000 shares, issued and outstanding
2,885,755,714 shares (June 30, 2014 - 2,885,755,714 shares)		2,885,756			2,885,756
Common stock payable		29,691			29,691
Additional paid-in capital		28,082,681			28,082,681
Deficit accumulated prior to entering development stage		(1,057,356	)		(1,057,356	)
Deficit accumulated during the development stage		(32,866,825	)		(32,844,054	)
Unrealized loss on foreign exchange		(516,381	)		(516,381	)
		(3,317,434	)		(3,294,663	)

Total Liabilities and Stockholders' Equity (Deficit)	$	1		$	1

THE TIREX CORPORATION

A DEVELOPMENT STAGE COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	Three months ended						Cumulative from
	Sept. 30						March 26, 1993 to
	2015			2014			Sept. 30, 2015

Revenues	$	—		$	—		$	1,354,088

Cost of Sales		—			—			1,031,075

Gross profit		—			—			323,013

Operations
General and administrative		19,060			20,240			17,881,918
Depreciation and amortization		—			—			340,545
Research and development		—			—			15,396,966

Total Expense		19,060			20,240			33,619,429

Income (loss) before other expenses		(19,060	)		(20,240	)		(33,296,416	)

Other expenses (income)
Interest expense		3,711			21,684			1,601,019
Accretion expense		—			—			750,000
Interest income		—			—			(45,443	)
Income from stock options		—			—			(10,855	)
Impairment of fixed assets		—						50,000
Loss (gain) on change in derivative liability		—						(750,000	)
Loss (gain) on settlement of debt		—			—			(2,134,998	)
Loss on disposal of equipment		—			—			4,549

Total Other expenses (income)		3,711			21,684			(535,728	)

Provision for income taxes		—			—			—

Net income (loss)		(22,771	)		(41,924	)		(32,760,688	)

Other comprehensive loss
Loss (gain) on foreign exchange		—			—			106,137

Net income (loss) and comprehensive income (loss)	$	(22,771	)	$	(41,924	)	$	(32,866,825	)

Basic net income (loss) and comprehensive
income (loss) per share - basic	$	(0.00	)	$	(0.00	)

Basic net income (loss) and comprehensive
income (loss) per share - diluted	$	(0.00	)	$	(0.00	)

Weighted average number of shares - basic		2,885,755,714			2,885,755,714

Weighted average number of shares - diluted		2,885,755,714			2,885,755,714

THE TIREX CORPORATION

A DEVELOPMENT STAGE COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

																	Deficit			Deficit
																	Accumulated			Accumulated			Unrealized			Total
											Common			Additional			Prior to Entering			During			gain (loss)			Stockholders'
	Common Stock						Preferred Stock				Stock			Paid-in			Developmental			Developmental			on foreign			Equity
	Shares			Amount			Shares		Amount		Payable			Capital			Stage			Stage			exchange			(Deficit)
Balance June 30, 1992		3,383,050			3,383			—		—		—			194,980			(1,057,356	)		—		$	—			(858,993	)
Stock issued for reorganization		18,650,000			18,650										76,155												94,805
Stock issued for services		100,000			100										(100	)
Stock issued in exchange for Warrants		363,656			364										(364	)
Forgiveness of debt															728,023												728,023
Net loss and comprehensive loss																					(165,296	)					(165,296	)

Balance June 30, 1993		22,496,706			22,497			—		—		—			998,694			(1,057,356	)		(165,296	)		—			(201,461	)

Stock issued		2,000			2										(2	)											—
Stock issued for services																											—
Exchange for Debt															149,170												149,170
Payments received for stock previously issued															237,430												237,430
Net loss and comprehensive loss																					(179,296	)					(179,296	)

Balance June 30, 1994		22,498,706			22,499			—		—		—			1,385,292			(1,057,356	)		(344,592	)		—			5,843

Revision of common stock		(11,900,000	)		(11,900	)									11,900												—
Stock issued for services		5,592,857			5,592										513,908												519,500
Exchange for Debt		200,000			200										24,300												24,500
Issuance of common stock previously issued		402,857			401										21,915												22,316
Net loss and comprehensive loss																					(575,771	)					(575,771	)

Balance June 30, 1995		16,794,420			16,792			—		—		—			1,957,315			(1,057,356	)		(920,363	)		—			(3,612	)

Stock issued		3,975,662			5,090										846,612												851,702
Exchange for Debt		391,857			392										29,008												29,400
Issuance of common stock		710,833			710										80,161												80,871
Net loss and comprehensive loss																					(1,127,044	)					(1,127,044	)

Balance June 30, 1996		21,872,772			22,984			—		—		—			2,913,096			(1,057,356	)		(2,047,407	)		—			(168,683	)

Stock issued for options															912,838												912,838
Stock issued for services		5,067,912			3,955										690,234												694,189
Stock in Exchange for Debt		251,382			252										43,965												44,217
Issuance of common stock		10,257,936			10,259										335,132												345,391
Grants received															408,597												408,597
Net loss and comprehensive loss																					(2,376,279	)					(2,376,279	)

Balance June 30, 1997		37,450,002			37,450			—		—		—			5,303,862			(1,057,356	)		(4,423,686	)		—			(139,730	)

Stock issued for options															948,500												948,500
Stock issued for services		4,396,466			4,396										922,180												926,576
Issuance of common stock		21,795,000			21,796										1,176,755												1,198,551
Stock options issued and outstanding															1,236,913												1,236,913
Grants received															669,906												669,906
Unrealized foreign exchange																								183,785			183,785
Net loss and comprehensive loss																					(4,570,441	)					(4,570,441	)

Balance June 30, 1998		63,641,468			63,642			—		—		—			10,258,116			(1,057,356	)		(8,994,127	)		183,785			454,060

Stock issued for options		2,234,567			2,235										38,765												41,000
Stock issued for services		24,200,439			24,200										2,735,544												2,759,744
Shares issued in exchange for debt		3,787,947			3,788										340,164												343,952
Conversion of debentures		2,816,966			2,817										290,102												292,919
Issuance of common stock		677,966			678										49,322												50,000
Stock options issued and outstanding															385,600												385,600
Grants received															1,057,742												1,057,742
Unrealized foreign exchange																								(29,142	)		(29,142	)
Net loss and comprehensive loss																					(4,909,879	)					(4,909,879	)

Balance June 30, 1999		97,359,353			97,360			—		—		—			15,155,355			(1,057,356	)		(13,904,006	)		154,643			445,996

Stock issued for options		5,327,486			5,327										381,600												386,927
Stock issued for services		28,873,210			28,873										2,217,758												2,246,631
Shares issued in exchange for debt		7,342,055			7,342										382,556												389,898
Conversion of debentures		12,010,073			12,010										815,796												827,806
Issuance of common stock		221,000			221										16,039												16,260
Grants received															395,683												395,683
Unrealized foreign exchange																								5,789			5,789
Net loss and comprehensive loss																					(5,548,829	)					(5,548,829	)

Balance June 30, 2000		151,133,177			151,133			—		—		—			19,364,787			(1,057,356	)		(19,452,835	)		160,432			(833,839	)

Stock issued for services		7,375,483			7,375										864,840												872,215
Stock issued for options		5,378,507			5,379										506,998												512,377
Shares issued in exchange for debt		11,646,312			11,646										1,547,455												1,559,101
Conversion of debentures		100,000			100										19,900												20,000
Issuance of common stock		732,929			733										39,427												40,160
Unrealized foreign exchange																								(340,661	)		(340,661	)
Grants issued															249,294												249,294
Net loss and comprehensive loss																					(3,242,572	)					(3,242,572	)

Balance June 30, 2001 (Restated)		176,366,408			176,366			—		—		—			22,592,701			(1,057,356	)		(22,695,407	)		(180,229	)		(1,163,925	)

Stock issued for services		18,466,162			18,466										314,859												333,325
Shares issued in exchange for debt		24,075,502			24,076										1,649,442												1,673,518
Issuance of common stock		5,849,487			5,850										61,897												67,747
Interest expense on convertible note discount															3,403												3,403
Unrealized foreign exchange																								(19,940	)		(19,940	)
Net loss and comprehensive loss																					(4,089,933	)					(4,089,933	)

Balance June 30, 2002 (Restated)		224,757,559			224,758			—		—		—			24,622,302			(1,057,356	)		(26,785,340	)		(200,169	)		(3,195,805	)

Stock issued for services		5,455,000			5,455										130,920												136,375
Shares issued in exchange for debt		15,400,000			15,400										441,183												456,583
Issuance of common stock		4,283,333			4,283										31,217												35,500
Interest expense on convertible note discount															999												999
Unrealized foreign exchange																								(182,365	)		(182,365	)
Net loss and comprehensive loss																					(2,417,261	)					(2,417,261	)

Balance June 30, 2003 (Restated)		249,895,892			249,896			—		—		—			25,226,621			(1,057,356	)		(29,202,601	)		(382,534	)		(5,165,974	)

Interest expense on convertible note discount															1,000												1,000
Unrealized foreign exchange																								(30,325	)		(30,325	)
Net loss and comprehensive loss																					(427,966	)					(427,966	)

Balance June 30, 2004 (Restated)		249,895,892			249,896			—		—		—			25,227,621			(1,057,356	)		(29,630,567	)		(412,859	)		(5,623,265	)

Unrealized foreign exchange																								(63,448	)		(63,448	)
Net loss and comprehensive loss																					(7,717,592	)					(7,717,592	)

Balance June 30, 2005 (Restated)		249,895,892			249,896			—		—		—			25,227,621			(1,057,356	)		(37,348,159	)		(476,307	)		(13,404,305	)

Unrealized foreign exchange																								(78,596	)		(78,596	)
Net income and comprehensive income																					2,624,041						2,624,041

Balance June 30, 2006 (Restated)		249,895,892			249,896			—		—		—			25,227,621			(1,057,356	)		(34,724,118	)		(554,903	)		(10,858,860	)

Unrealized foreign exchange																								(44,174	)		(44,174	)
Net loss and comprehensive loss																					(115,963	)					(115,963	)

Balance June 30, 2007 (Restated)		249,895,892			249,896			—		—		—			25,227,621			(1,057,356	)		(34,840,081	)		(599,077	)		(11,018,997	)

Common stock issued for settlement		20,000,000			20,000										124,000												144,000
Common stock issued for services		22,100,000			22,100										130,500												152,600
Preferred stock issued								3,000,000		15,000					271,000												286,000
Stock options granted															24,000												24,000
Imputed interest															28,344												28,344
Unrealized foreign exchange																								(5,895	)		(5,895	)
Net income and comprehensive income																					2,882,338						2,882,338

Balance June 30, 2008 (Restated)		291,995,892			291,996			3,000,000		15,000		—			25,805,465			(1,057,356	)		(31,957,743	)		(604,972	)		(7,507,610	)

Common stock issued for liability settlements		191,750,000			191,750										96,340												288,090
Common stock issued for services		64,900,000			64,900										83,589												148,489
Common stock issued for debt conversion		50,140,000			50,140										171,310												221,450
Common stock issued to related parties		513,206,324			513,206							43,500			503,089												1,059,795
Stock options exercised on a cashless basis		7,500,000			7,500										(7,500	)											—
Preferred stock issued								12,000,000		60,000					115,000												175,000
Stock options granted															30,000												30,000
Derivative financial instruments																											—
Unrealized foreign exchange																								145,332			145,332
Net income and comprehensive income																					458,013						458,013

Balance June 30, 2009		1,119,492,216			1,119,492			15,000,000		75,000		43,500			26,797,293			(1,057,356	)		(31,499,730	)		(459,640	)		(4,981,441	)

Common stock issued for liability settlements		95,000,000			95,000										134,098												229,098
Common stock issued for services		93,500,000			193,500										311,950												505,450
Common stock issued for debt conversion		76,291,429			76,292										(192	)											76,100
Common stock issued to related parties		489,716,111			389,716							(13,809	)		536,950												912,857
Stock options exercised on a cashless basis		3,000,000			3,000										(3,000	)											—
Preferred stock issued																											—
Stock options granted															7,200												7,200
Derivative financial instruments																											—
Unrealized foreign exchange																								(87,519	)		(87,519	)
Net income and comprehensive income																					(1,353,596	)					(1,353,596	)

Balance June 30, 2010		1,876,999,756			1,877,000			15,000,000		75,000		29,691			27,784,299			(1,057,356	)		(32,853,326	)		(547,159	)		(4,691,851	)

Common stock issued for liability settlements		424,833,575			424,833										(170,258	)											254,575
Common stock issued for services		50,000,000			50,000										(30,000	)											20,000
Common stock issued for debt conversion		106,666,669			106,667										(54,033	)											52,634
Common stock issued to related parties		35,000,000			35,000										(20,500	)											14,500
Stock options exercised on a cashless basis		—			—										—												—
Preferred stock issued								10,000,000		50,000					102,000												152,000
Stock options granted															2,374												2,374
Derivative financial instruments																											—
Unrealized foreign exchange																								(77,013	)		(77,013	)
Net loss and comprehensive loss																					(775,087	)					(775,087	)

Balance June 30, 2011		2,493,500,000			2,493,500			25,000,000		125,000		29,691			27,613,882			(1,057,356	)		(33,628,413	)		(624,172	)		(5,047,868	)

Common stock issued for liability settlements		—			—										—												—
Common stock issued for services		101,000,000			101,000										303,600												404,600
Common stock issued for debt conversion		211,255,714			211,256										126,754												338,010
Common stock issued to related parties		15,000,000			15,000										9,000												24,000
Stock options exercised on a cashless basis		—			—										—												—
Preferred stock issued								—		—					2,374												2,374
Stock options granted															32,693												32,693
Derivative financial instruments																											—
Unrealized foreign exchange																								66,302			66,302
Net income and comprehensive income																					(409,071	)					(409,071	)

Balance June 30, 2012		2,820,755,714			2,820,756			25,000,000		125,000		29,691			28,088,303			(1,057,356	)		(34,037,484	)		(557,870	)		(4,588,961	)

Common stock issued for liability settlements		—			—										—												—
Common stock issued for services		25,000,000			25,000										—												25,000
Common stock issued for debt conversion		—			—										—												(0	)
Common stock issued to related parties		40,000,000			40,000										(8,000	)											32,000
Stock options exercised on a cashless basis		—			—										—												—
Preferred stock issued								—		—					—												—
Stock options granted															2,378												2,378
Derivative financial instruments																											—
Unrealized foreign exchange																								41,489			41,489
Net loss and comprehensive loss																					(1,527,476	)					(1,527,476	)

Balance June 30, 2013		2,885,755,714			2,885,756			25,000,000		125,000		29,691			28,082,681			(1,057,356	)		(35,564,960	)		(516,381	)		(6,015,569	)

Common stock issued for liability settlements		—			—										—												—
Common stock issued for services		—			—										—												—
Common stock issued for debt conversion		—			—										—												—
Common stock issued to related parties		—			—										—												—
Stock options exercised on a cashless basis		—			—										—												—
Preferred stock issued								—		—					—												—
Stock options granted															—												—
Derivative financial instruments																											—
Unrealized foreign exchange																								—			—
Net income and comprehensive income																					2,852,181						2,852,181

Balance June 30, 2014		2,885,755,714			2,885,756			25,000,000		125,000		29,691			28,082,681			(1,057,356	)		(32,712,779	)		(516,381	)		(3,163,388	)

Common stock issued for liability settlements		—			—										—												—
Common stock issued for services		—			—										—												—
Common stock issued for debt conversion		—			—										—												—
Common stock issued to related parties		—			—										—												—
Stock options exercised on a cashless basis		—			—										—												—
Preferred stock issued								—		—					—												—
Stock options granted															—												—
Derivative financial instruments																											—
Unrealized foreign exchange																								—			—
Net loss and comprehensive loss																					(131,275	)					(131,275	)

Balance June 30, 2015		2,885,755,714			2,885,756			25,000,000		125,000		29,691			28,082,681			(1,057,356	)		(32,844,054	)		(516,381	)		(3,294,663	)

Common stock issued for liability settlements		—			—										—												—
Common stock issued for services		—			—										—												—
Common stock issued for debt conversion		—			—										—												—
Common stock issued to related parties		—			—										—												—
Stock options exercised on a cashless basis		—			—										—												—
Preferred stock issued								—		—					—												—
Stock options granted															—												—
Derivative financial instruments																											—
Unrealized foreign exchange																								—			—
Net loss and comprehensive loss																					(22,771	)					(22,771	)

Balance September 30, 2015		2,885,755,714			2,885,756			25,000,000		125,000		29,691			28,082,681			(1,057,356	)		(32,866,825	)		(516,381	)		(3,317,434	)

See Notes to Consolidated Financial Statements

THE TIREX CORPORATION

A DEVELOPMENT STAGE COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS

	Three months ended						Cumulative from
	Sept. 30						March 26, 1993 to
	2015			2014			Sept. 30, 2015

Cash flows from operating activities:

Net income (loss)	$	(22,771	)	$	(41,924	)	$	(32,866,825	)

Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation and amortization		—			—			340,545
Imputed interest		—			—			28,344
Accretion expense		—			—			750,000
Impairment of fixed assets		—			—			50,000
(Gain) loss on disposal and abandonment of assets		—			—			2,005,498
(Gain) loss on settlement of debt		—			—			(2,134,998	)
Loss on issuance of preferred stock		—			—			386,000
Common stock issued in exchange for services and expenses		—			—			11,895,699
Stock options issued in exchange for services		—			—			3,184,409
Change in derivative liability		—			—			(750,000	)
								—
Changes in assets and liabilities:								—
(Increase) decrease in:								—
Inventory		—			—			(73,323	)
Sales tax receivable		—			—			(36	)
Other assets		—			—			(10,120	)
(Decrease) increase in :								—
Accounts payable and accrued liabilities		3,711			21,684			4,305,475
Accrued liabilities - related parties		—			—			2,751,580

Net cash used in operating activities		(19,060	)		(20,240	)		(10,137,752	)

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								4,354,835
Deferred financing costs		—			—			180,557
Due to stockholders		—			—			5,000
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 private investors		19,060			20,240			600,825
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		19,060			20,240			12,971,150

Effect of Exchange rate changes on cash and cash equivalents		—			—			(406,239	)

Net (decrease) increase in cash and cash equivalents		—			—			405,982

Cash and cash equivalents - beginning of period		—			—			257

Cash and cash equivalents - end of period	$	—		$	—		$	—

	Three months ended
	Sept. 30
	2015		2014

Non-Cash Financing and Investing Activities:

Issuance of common stock for exercise of stock options		—		—
Issuance of common stock for the settlement of accounts
payable and accrued liabilities		—		—
Issuance of common stock for the settlement of accrued
liabilities - related parties		—		—
Common stock to be issued to related parties for
accrued expenses		29,691		29,691
Issuance of common stock for the settlement of convertible
notes - related parties		—		—
Issuance of common stock for the settlement of convertible
notes - non-related parties		—		—

Supplemental Disclosures - Cash paid for:

Interest		—		—
Income taxes		—		—

THE TIREX CORPORATION

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

NOTE 1 BACKGROUND

NATURE OF BUSINESS

The Incorporation began August 19, 1987 as Concord Industries, Inc. It was originally organized to provide comprehensive health care services, but due to its inability to raise sufficient capital, was unable to implement its business plan. Then it merged with Stopwatch, Inc. in 1989.

REORGANIZATION

On March 26, 1993, it entered into an acquisition agreement (the "Acquisition Agreement") and became Tirex America, Inc. (the Company) with Louis V. Muro as its principle, currently an officer and a director of the Company, and former Officers and Directors (collectively the "Seller"), for the purchase of a certain technology owned and developed by the Seller (the "Technology") to be used to design, develop and construct a prototype machine and thereafter a production quality machine for the cryogenic disintegration of used tires. The Technology was conceptually developed by the Seller prior to their affiliation or association with the Company. On March 26, 1993, the Company entered the development stage.

CHANGE OF NAME

On July 11, 1997, the Company changed its name from Tirex America, Inc. to The Tirex Corporation.

DEVELOPMENT STAGE

At September 30, 2015, the Company is still in the development stage. The operations consist mainly of raising capital, obtaining financing, developing equipment, obtaining customers and supplies, installing and testing equipment and administrative activities.

NOTE 2 GOING CONCERN

The Company’s consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

In March 1993, the Company had begun its developmental stage with a new business plan. As of March 2000, the Company had developed a production quality prototype of its patented system for the disintegration of scrap tires, but nonetheless continued its research and development efforts to improve the machine's performance and to permit greater flexibility in design for specific customer applications. Due to the Company’s lack of working capital during the year ended June 30, 2002, all rubber crumb production was suspended and research and development efforts have been hampered. Pending receipt of funding from operations, government assistance, loans or equity financing, crumb rubber production and previous research and development efforts will not be resumed. While the Company has engaged the process of marketing the TCS System to numerous potential clients since the beginning of the fiscal year commencing July 1, 2000, as of September 30, 2015, the Company had not yet consummated an unconditional purchase order for a TCS System. As a result, the Company expects to continue to incur operating losses and may not have enough capital to grow its business in the future or continue as a going concern. The Company can give no assurance that it will achieve profitability or be capable of sustaining profitable operations. As a result, operations in the near future are expected to continue to use working capital. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result if the Company is unable to continue as a going concern.

THE TIREX CORPORATION

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

To successfully grow the business, the Company must decrease its cash outflows, improve its cash position and succeed in its ability to raise additional capital through a combination of primarily public or private equity offerings or strategic alliances. The Company is also dependent on the success of its marketing of its TCS Systems. The Company's uncertainty as to its ability to generate revenue and its ability to raise sufficient capital, raise substantial doubt about the entity's ability to continue as a going concern.

The Company is currently in the process of trying to obtain additional financing for its current operations and consummate an initial sale of its TCS Systems.

As reported in the accompanying financial statements, the Company incurred a net loss of $22,771 for the three months ended September 30, 2015 and incurred a net loss of $131,275 for the year ended June 30, 2015 and a net gain of $2,852,181 for the year ended June 30, 2014.

NOTE 3 SUMMARY OF ACCOUNTING POLICIES

This summary of significant accounting policies is provided to assist the reader in understanding the Company’s financial statements. The financial statements and notes thereto are the representations of the Company’s management. The Company’s management is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States and have been consistently applied in the preparation of the financial statements.

BASIS OF PRESENTATION

These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. Dollars. The Company’s fiscal year-end is June 30.

BASIS OF CONSOLIDATION

The consolidated financial statements include the consolidated accounts of The Tirex Corporation, Tirex Canada R&D Inc., The Tirex Corporation Canada Inc., Tirex Advanced Products Quebec Inc. and Tirex Acquisition Corp., all of these subsidiaries currently being dormant. Certain of these companies have actually been de-registered by government authorities but could easily be revived if circumstances would warrant such action. Tirex Canada R&D Inc. is held 51% by two shareholders of the Company. The shares owned by these shareholders are held in escrow by the Company's attorney and are restricted from transfer thereby, substantively for recording purposes, allowing for a full consolidation of this Company. The Tirex Corporation Canada Inc., Tirex Advanced Products Quebec Inc. and Tirex Acquisition Corp. are 100% held by the Company. All subsidiary companies are dormant. All material inter-company transactions and accounts have been eliminated in consolidation.

CASH AND CASH EQUIVALENTS

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments, with a maturity of three months or less, to be cash equivalents. There were no cash equivalents as of September 30, 2015 and June 30, 2015.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost less accumulated depreciation and provisions for write-downs. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets which is generally five years for machinery and equipment.

THE TIREX CORPORATION

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

Maintenance and repair costs are expensed as incurred while additions and betterments are capitalized. The cost and related accumulated depreciation of assets sold or retired are eliminated from the accounts and any gains or losses are reflected in earnings.

The Company has taken depreciation and impairment charges over the years on its machinery and equipment bringing its carrying value to $0.

INTANGIBLE ASSETS

Intangible assets are carried at the purchased cost less accumulated amortization. Amortization is computed over the estimated useful lives of the respective assets, generally from fifteen to twenty years.

ESTIMATES

The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure 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 could differ from those estimates.

BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE

Basic net income (loss) per share includes no dilution and is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares outstanding and, when dilutive, potential shares from stock options, stock warrants to purchase common stock using the treasury method and conversions of outstanding debt using the “if converted” method. A net loss was reported for the three months ended September 30, 2015 and for the year ended June 30, 2015, and accordingly, for those periods, the denominator for the Basic EPS calculation was equal to the weighted average of outstanding shares with no consideration for outstanding stock options, share awards and warrants to purchase shares of the Company's common stock because to do so would have been anti-dilutive. A net gain was reported for the year ended June 30, 2014 but Diluted EPS was not materially different from Basic EPS.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company accounts for its financial instruments in accordance with ASC Topic 825, which requires the disclosure of fair value information about financial instruments when it is practicable to estimate that value. The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, inventory, accounts payable, accrued liabilities and convertible notes. The estimated fair value of cash, cash equivalents, accounts receivable, accounts payable and accrued liabilities and other short-term liabilities approximate their carrying amounts due to the short-term nature of these instruments. The fair value of related party transactions is not determinable due to their related party nature. The carrying value of the convertible notes also approximates fair value since their terms are similar to those in the lending market for comparable loans with comparable risks. None of these instruments are held for trading purposes.

FAIR VALUE MEASUREMENTS

In accordance with the authoritative guidance on fair value measurements and disclosure under U.S. GAAP, the Company determines fair value using a fair value hierarchy that distinguishes between market participant assumptions developed based on market data (observable inputs) obtained from sources independent of the reporting entity, and a reporting entity’s own assumptions (unobservable inputs) about market participant assumptions developed based on the best information available in the circumstances and expands disclosure about fair value measurements.

THE TIREX CORPORATION

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

Fair value is the price that would be received to sell an asset or paid to transfer a liability in the Company’s principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date, essentially the exit price.

The levels of fair value hierarchy are as follows:

Level one – Quoted market prices in active markets for identical assets or liabilities;

Level two – Inputs other than level one inputs that are either directly or indirectly observable; and

Level three – Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.

Level 1 investments are valued based on quoted market prices in active markets. Level 2 investments are valued based on quoted prices in markets that are not active, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency.

A financial instrument’s level within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Company. The Company evaluates its hierarchy disclosures each quarter.

INCOME TAXES

The Company uses the liability method of accounting for income taxes under which deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as part of the provision for income taxes in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized in the future.

The Company has net operating loss carryforwards of approximately $32.7 million as of June 30, 2015, expiring through 2035, that may be offset against future taxable income. Because of the uncertainties discussed in Note 2, however, any deferred tax asset established for utilization of the Company's tax-loss carryforwards correspondingly requires a valuation allowance of the same amount. The Company had no uncertain tax positions at September 30, 2015 or June 30, 2015.

Utilization of net operating loss carryforwards may be subject to a substantial annual limitation due to ownership change limitations provided by the Internal Revenue Code of 1986, as well as state and foreign provisions. These ownership changes may limit the amount of net operating loss carryforwards that can be utilized annually to offset future taxable income and tax, respectively. Subsequent ownership changes could further affect the limitation in future years. These annual limitation provisions may result in the expiration of certain net operating losses and credits before utilization.

DERIVATIVE INSTRUMENTS

The Company does not enter into derivative contracts for purposes of risk management or speculation. However, from time to time, the Company enters into contracts, namely convertible notes, that are not considered derivative financial instruments in their entirety, but that include embedded derivative features.

THE TIREX CORPORATION

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

In accordance with FASB ASC Topic 815-15, Embedded Derivatives, and guidance provided by the SEC Staff, the Company accounts for these embedded features as a derivative liability at fair value, and the unrealized changes in the values of these derivatives are recorded in the statement of operations as gain or loss on derivatives.

FOREIGN CURRENCY TRANSLATION

a) Reporting Currency

The Company's functional and reporting currency is the United States dollar. Accordingly, the consolidated financial statements are converted into the reporting currency (the U.S. dollar) using the current rate method. Under this method, the consolidated financial statements are converted into U.S. dollars as follows: assets and liabilities are converted at the exchange rate in effect at the date of the balance sheet, and revenue and expenses are converted using the average exchange rate for the period. All gains and losses resulting from the conversion of the consolidated financial statements into the reporting currency are included in other comprehensive income or loss for the period and accumulated in a separate component of stockholders’ equity as accumulated other comprehensive income or loss.

b) Foreign Currency Transactions

Transactions denominated in currencies other than the functional currency are converted into U.S. dollars using the exchange rate in effect at the date of the transaction or the average rate for the period in the case of recurring revenue and expense transactions. Monetary assets and liabilities are revalued into the functional currency at each balance sheet date using the exchange rate in effect at that date, with any resulting exchange gains or losses being credited or charged to the statement of operations. Non-monetary assets and liabilities are recorded in the functional currency using the exchange rate in effect at the date of the transaction and are not revalued for subsequent changes in exchange rates.

STOCK BASED COMPENSATION

The Company estimates the fair value of share-based payment awards made to employees and directors, including stock options, restricted stock and employee stock purchases related to employee stock purchase plans, on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense ratably over the requisite service periods. The Company uses the Black-Scholes option pricing model to determine the fair value of the stock-based compensation that it grants to employees and non-employees. The Company is required to make certain assumptions in connection with this determination, the most important of which involves the calculation of volatility with respect to the price of its common stock. The computation of volatility is intended to produce a volatility value that is representative of the Company’s expectations about the future volatility of the price of its common stock over an expected term. The Company used its share price history to determine volatility and cannot predict how the price of its common shares of common stock will react on the open market in the future. As a result, the volatility value that the Company calculated may differ from the future volatility of the price of its shares of common stock.

CASHLESS EXERCISE OF STOCK OPTIONS

The Company issued stock options to directors to purchase common stock where the holder is entitled to exercise the stock options on a cashless basis. The Company accounts for the issuance of common stock on the cashless exercise of stock options on a net basis.

REVENUE RECOGNITION

The Company will generally recognize revenue from the sale of TCS Systems using the percentage-of-completion method when persuasive evidence of an arrangement exists, the fee is fixed or determinable and collectability is probable. The percentage-of-completion method will also require management to make certain estimates and assumptions that will affect the reported amounts of revenues and expenses.

THE TIREX CORPORATION

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

All other revenue from other products will be recognized when shipped to the customer. The Company has recognized a small amount of revenue since entering the development stage.

Note 4 PROPERTY AND EQUIPMENT

As at September 30, 2015 and June 30, 2015, plant and equipment consisted of the following:

Furniture, fixtures and equipment	$	149,516
Manufacturing equipment		87,400
Subtotal		236,916

Less: Accumulated depreciation and amortization		236,916

Total	$	0

Depreciation and amortization expense charged to operations for the three months ended September 30, 2015 and 2014 was $0 and $0, respectively, and for the years ended June 30, 2015 and 2014 was $0 and $0, respectively.

NOTE 5 PATENTS

The Company’s technology is patent protected in the United States. Patent maintenance fees are current. The valuation on the Balance Sheet reflects recognition of valid patents and does not attempt to establish the true commercial value.

NOTE 6 CONVERTIBLE SUBORDINATED DEBENTURES

The Company issued Type B Convertible Subordinated Debentures between December 1997 and February 1998. These debentures bore interest at 10% and were convertible into common shares of the Company at $0.20 per share. The conversion privilege on the remaining $55,000 of these debentures expired.

NOTE 7 CONVERTIBLE NOTES

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

Balance at September 30, 2015 and June 30, 2015	$ 185,556

Interest rate	8%

Issue date	July 19^th, 2000

Maturity date	January 19^th, 2002

Redemption rights	If not converted, the holder may require the Company to redeem at any time after maturity for the principal amount plus interest.

Conversion ratio	As stated in the note agreement, it is not convertible prior to July 19^th, 2001, at 20% discount to market between July 19^th, 2001 and January 19^th, 2002 or at 25% to market if held to maturity, to a maximum of not more than 2,500,000 shares. The note holder subsequently amended the agreement to provide for a conversion price of $0.33 per share.

THE TIREX CORPORATION

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

NOTE 8 CONVERTIBLE NOTES - PRIVATE INVESTORS

Commencing in Fiscal year 2006, certain expenses of the Company have been funded by a series of non-interest bearing convertible notes with no specific terms of repayment made by a significant number of private individuals investing modest amounts. The total dollars received from these private investors up to September 30, 2015 is U.S.$590,825. These private investors, fully cognizant of the Company’s situation, accepted that their investments were being made and represented by a convertible debt, the conversion of which could occur only once the Company would have shares available for issuance. These debts are convertible at fixed prices rather than as a discount to market and range from $.0002 to $.005 per share.

	Dollars		Shares to
	received		be issued

Year ended June 30, 2006		60,700		13,140,000

Year ended June 30, 2007		54,000		12,900,000

Year ended June 30, 2008		77,100		21,700,000

Year ended June 30, 2009		47,300		38,371,429

Year ended June 30, 2010		64,300		87,520,000

Year ended June 30, 2011		103,335		412,569,048

Year ended June 30, 2012		14,250		142,500,000

Year ended June 30, 2013		41,220		103,888,745

Year ended June 30, 2014		65,020		137,290,000

Year ended June 30, 2015		44,540		181,466,665

Three months ended September 30, 2015		19,060		75,799,999

		590,825

The balance owing to private investors awaiting conversion to common shares at September 30, 2015 and June 30, 2015 was $197,090 and $178,030, respectively, and the amount of shares remaining to be issued was 730,945,409 and 655,145,410, respectively.

THE TIREX CORPORATION

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

NOTE 9 RELATED PARTY TRANSACTIONS

Accrued liabilities include amounts primarily due to Directors, Officers and employees. Historically, such amounts due have been repaid through the issuance of stock. At September 30, 2015 and June 30, 2015, the balances owing to Directors and Officers was $525,605 and $525,605, respectively. These amounts are without interest or terms of repayment. On August 1, 2011, the Company authorized the issuance of 100,066,256 stock options in exchange for $1,000,663 of accrued unpaid salaries and consulting fees owed to Directors and Officers of the Company.

Notes payable at June 30, 2008 included an amount of $162,500 which was payable to Ocean Tire Recycling & Processing Co., Inc., a company previously owned by a former Director of the Company, Louis A. Sanzaro, and now deceased. The Company negotiated a Settlement Agreement with the family of Louis A. Sanzaro with respect to this note, lease obligations and other expenses paid by Mr. Sanzaro, under which the Company would issue a total of 50,000,000 shares. 34,249,800 million shares were issued during the quarter ended September 30, 2008 and the remaining 15,750,200 shares will be issued in the future. A common stock payable of $43,500 was recorded for the remaining 15,750,200 shares to be issued in the future. During the year ended June 30, 2010, an additional 5,000,000 shares were issued reducing the common stock payable by $13,810.

Note 10 COMMON STOCK

On January 31, 2001, the Company's stockholders approved an amendment to the Articles of Incorporation of the Company to increase the number of authorized shares of Common stock, par value $0.001, from 165,000,000 shares to 250,000,000 shares. On February 11, 2008, the Company's Board of Directors approved an amendment to the Articles of Incorporation of the Company to increase the number of authorized shares of Common stock, par value $0.001, from 250,000,000 shares to 1,000,000,000 shares. On May 7, 2009, the Company's Board of Directors approved an amendment to the Articles of Incorporation of the Company to increase the number of authorized shares of Common stock, par value $0.001, from 1,000,000,000 shares to 1,500,000,000 shares. On February 17, 2010, the Company's Board of Directors approved an amendment to the Articles of Incorporation of the Company to increase the number of authorized shares of Common stock, par value $0.001, from 1,500,000,000 shares to 2,000,000,000 shares. On December 6, 2010, the Company's Board of Directors approved an amendment to the Articles of Incorporation of the Company to increase the number of authorized shares of Common stock, par value $0.001, from 2,000,000,000 shares to 2,500,000,000 shares.

As at September 30, 2015, the Company had 2,885,755,714 Common shares issued and outstanding.

During the three months ended September 30, 2015, the Company did not issue any common shares.

During the year ended June 30, 2015, the Company did not issue any common shares.

During the year ended June 30, 2014, the Company did not issue any common shares.

THE TIREX CORPORATION

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

Note 11 PREFERRED STOCK

On June 19, 2008, the Company’s Board of Directors approved an amended Certificate of Designation with respect to the authorization and issuance of up to 3,000,000 Series A Preferred shares, an increase from the 1,000,000 shares of Series A Preferred stock that were authorized to be issued in the Certificate of Designation of Series A Preferred stock passed by the Board of Directors on May 12, 2008. No cash dividends shall be paid with respect to the shares of Series A Preferred stock. The Series A Preferred stock shall give its holders the right to 100 votes per share on any matter properly before the shareholders for a vote. The voting rights of the Series A Preferred stock shall be subject to all splits and each share will be convertible into 5 shares of Common stock upon the earlier of: (i) the holders’ election or (ii) January 8, 2009. The holders of all shares of Series A Preferred stock shall not be subject to any non-cash distributions to holders of shares of Common stock, including without limitation, stock dividends, stock splits and securities issued in a recapitalization. In the event of liquidation or winding up of the Corporation, the holders of the Series A Preferred stock will be entitled to receive, prior and in preference to the holders of the Common stock, an amount up to but not greater than the original purchase price per share of Series A Preferred stock, notwithstanding the par value of the Series A Preferred stock. These three million Series A Preferred Shares were issued to three Directors and Officers in June 2008. The value assigned to this issuance is $286,000, based on an estimate of the fair market value on the issuance date. The fair market value is calculated as the greater of (i) the converted value to common stock at a ratio of 1:5 and, (ii) the value of the voting rights. These shares as a group represent a controlling voting interest. The fair market value also takes into account this control premium. The control premium is based on publicly traded companies or comparable entities which have been recently acquired in arm’s-length transactions. The preferred shares were issued to settle accrued liabilities to the Directors and Officers in the amount of $15,000. A loss on issuance of these preferred shares was recognized in the income statement in the amount of $271,000.

On March 31, 2009, the Company’s Board of Directors approved an amended Certificate of Designation with respect to the authorization and issuance of up to 15,000,000 Series A Preferred shares, an increase from the 3,000,000 shares of Series A Preferred stock that were authorized to be issued in the Certificate of Designation of Series A Preferred stock passed by the Board of Directors on May 12, 2008. No cash dividends shall be paid with respect to the shares of Series A Preferred stock. The Series A Preferred stock shall give its holders the right to 100 votes per share on any matter properly before the shareholders for a vote. The voting rights of the Series A Preferred stock shall be subject to all splits and each share will be convertible into 5 shares of Common stock upon the earlier of: (i) the holders’ election or (ii) January 8, 2009. The holders of all shares of Series A Preferred stock shall not be subject to any non-cash distributions to holders of shares of Common stock, including without limitation, stock dividends, stock splits and securities issued in a recapitalization. In the event of liquidation or winding up of the Corporation, the holders of the Series A Preferred stock will be entitled to receive, prior and in preference to the holders of the Common stock, an amount up to but not greater than the original purchase price per share of Series A Preferred stock, notwithstanding the par value of the Series A Preferred stock. These twelve million Series A Preferred Shares were issued to three Officers of the Company. The value assigned to this issuance is $175,000, based on an estimate of the fair market value on the issuance date. The fair market value is calculated as the greater of (i) the converted value to common stock at a ratio of 1:5 and, (ii) the value of the voting rights. These shares as a group represent a controlling voting interest. The fair market value also takes into account this control premium. The control premium is based on publicly traded companies or comparable entities which have been recently acquired in arm’s-length transactions. The preferred shares were issued to settle accrued liabilities to the Directors and Officers in the amount of $60,000. A loss on issuance of these preferred shares was recognized in the income statement in the amount of $115,000.

THE TIREX CORPORATION

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

On February 16, 2010, the Company’s Board of Directors approved an amended Certificate of Designation with respect to the authorization and issuance of up to 25,000,000 Series A Preferred shares, an increase from the 15,000,000 shares of Series A Preferred stock that were authorized to be issued in the Certificate of Designation of Series A Preferred stock passed by the Board of Directors on March 31, 2009. No cash dividends shall be paid with respect to the shares of Series A Preferred stock. The Series A Preferred stock shall give its holders the right to 100 votes per share on any matter properly before the shareholders for a vote. The voting rights of the Series A Preferred stock shall be subject to all splits and each share will be convertible into 5 shares of Common stock upon the earlier of: (i) the holders’ election or (ii) January 8, 2009. The holders of all shares of Series A Preferred stock shall not be subject to any non-cash distributions to holders of shares of Common stock, including without limitation, stock dividends, stock splits and securities issued in a recapitalization. In the event of liquidation or winding up of the Corporation, the holders of the Series A Preferred stock will be entitled to receive, prior and in preference to the holders of the Common stock, an amount up to but not greater than the original purchase price per share of Series A Preferred stock, notwithstanding the par value of the Series A Preferred stock. On December 6, 2010, the Company’s Board of Directors approved an amended Certificate of Designation with respect to the issuance of 10,000,000 Series A Preferred shares. These ten million Series A Preferred Shares were issued to two Officers of the Company. The value assigned to this issuance is $152,000, based on an estimate of the fair market value on the issuance date. The fair market value is calculated as the greater of (i) the converted value to common stock at a ratio of 1:5 and, (ii) the value of the voting rights. These shares as a group represent a controlling voting interest. The fair market value also takes into account this control premium. The control premium is based on publicly traded companies or comparable entities which have been recently acquired in arm’s-length transactions. The preferred shares were issued to settle accrued liabilities to the Directors and Officers in the amount of $50,000. A loss on issuance of these preferred shares was recognized in the income statement in the amount of $102,000.

As at September 30, 2015, the Company had 25,000,000 Series A preferred shares issued and outstanding.

Note 12 STOCK OPTIONS

a) Stock Options

Under executive employment agreements with Tirex, its three officers, John Threshie, Lou Muro and Michael Ash have been granted stock options for each of the fiscal years June 30, 2011, 2012 and 2013.

1) John L. Threshie Jr., President

3,000,000 stock options at the beginning of the fiscal years 2011, 2012 and 2013. The stock options are exercisable within three years of the date of issue of the stock options. The exercise price of the stock options are as follows:

Year 1 – Lesser of $.20 or 50% of market

Year 2 – Lesser of $.40 or 50% of market

Year 3 – Lesser of $.50 or 50% of market

THE TIREX CORPORATION

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

2) Michael D.A. Ash, Secretary-Treasurer & Chief Financial Officer

2,000,000 stock options at the beginning of the fiscal years 2011, 2012 and 2013. The stock options are exercisable within three years of the date of issue of the stock options. The exercise price of the stock options are as follows:

Year 1 – Lesser of $.20 or 50% of market.

Year 2 – Lesser of $.40 or 50% of market.

Year 3 – Lesser of $.50 or 50% of market.

3) Louis V. Muro, Vice President - Engineering

Year 1 – Lesser of $.20 or 50% of market.

Year 2 – Lesser of $.40 or 50% of market.

Year 3 – Lesser of $.50 or 50% of market.

Also, on August 1, 2011, the Company authorized the issuance of 100,066,256 stock options in exchange for $1,000,663 of accrued unpaid salaries and consulting fees owed to Directors and Officers of the Company. The stock options (i) fully vest upon issuance, (ii) have an exercise price of $0.01, (iii) expire within 5 years of the date of issuance, (iv) are exercisable for cash or on a cashless basis, at the option of the holder, and (v) are subject to any and all future recapitalizations of the issued and outstanding capital stock of the Company on a pro forma basis.

THE TIREX CORPORATION

A DEVELOPMENT STAGE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

A summary of the changes in the Company’s common share stock options is presented below:

	September 30, 2015				June 30, 2015

	Number		Weighted		Number		Weighted
	of Stock		Average Exercise		of Stock		Average Exercise
	Options		Price ($)		Options		Price ($)

Balance at beginning of the year		127,066,256		0.001		127,066,256		0.001

Granted		—		—		—		0.001
Exercised		—		—		—		—
Forfeited		—		—		—		—

Balance at end of the year		127,066,256		0.001		127,066,256		0.001

The fair value of the options issued during the year was measured at the date of grant using the Black-Scholes option pricing model with the following weigthed-average assumptions:

	Year ended
	June 30,
	2012		2011
Risk - free interest rate		1.32%		1.80%
Expected volatility		251		261.5
Expected life of stocks options (in years)		2.5		2.5
Assumed dividends		None		None

The Company recognized compensation expense related to stock options for the three months ended September 30, 2015 and 2014 of $0 and $0, respectively, and for the years ended June 30, 2015 and 2014 of $0 and $0, respectively.

Note 13 RENTAL EXPENSE AND COMMITMENTS

Rental expense for the three months ended September 30, 2015 and 2014 was $0 and $0, respectively, and for the years ended June 30, 2015 and 2014 amounted to $0 and $0, respectively.

As at September 30, 2015, the Company does not have any outstanding lease commitments or minimum annual rental payments and sub-lease income.

Note 14 LITIGATION

An action was instituted by Plaintiffs, an individual and a corporation, in March 2001, in a Canadian court alleging a breach of contract and claims damages of approximately $795,000 representing expenses and an additional approximate amount of $5,411,000 in loss of profits. The current action follows two similar actions taken in United States courts, the first of which was withdrawn and the second of which was dismissed based on forum non convenience and other considerations. A detailed answer has been filed by the Company denying all liability, stating further that Plaintiffs failed to comply with their obligations. Counsel for the Company believes that the Company has meritorious defenses to all of the Plaintiff's claims. The action is still pending.

A Plaintiff instituted an action, a corporation, in August 2001 in a Canadian court claiming approximately $99,000 is due and owing for the manufacture and delivery of tire disintegrators. The Company has prepared its defense and a cross claim of $100,000 against the Plaintiff as the product delivered was defective and the Company believes it is entitled to a reimbursement of sums paid. The action is still pending.

Tirex CORP 8-K