As filed with the Securities and Exchange Commission on March 24, 1999
                                                      Registration No. 333-62197
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   ----------

                                    FORM S-8
                          POST EFFECTIVE AMENDMENT NO.1

                             REGISTRATION STATEMENT
                        UNDER THE SECURITIES ACT OF 1933

                              THE TIREX CORPORATION
             (Exact name of registrant as specified in its charter)

          Delaware                                                3282985
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

       740 St. Maurice, Suite 201
          Montreal, Quebec                                        H3C 1L5
(Address of Principal Executive Offices)                         (Zip Code)

                              EMPLOYMENT AGREEMENT
                             BETWEEN REGISTRANT AND:
                                 SCOTT RAPFOGEL
                            (Full title of the Plan)

                               Frances Katz Levine
                                 621 Clove Road

                             Staten Island, NY 10310
           (Name and address, including zip code of agent for service)

                                 (718) 981-8485
          (Telephone number, including area code, of agent for service)

                         CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================
                                            Proposed Maximum   Proposed Maximum     Amount of
Title of Securities           Amount to be   Offering Price   Aggregate Offering   Registration
 to be Registered              Registered      per Share*           Price*              Fee
-----------------------------------------------------------------------------------------------
<S>                              <C>            <C>                <C>                <C>  
Common Stock, Par Value,
$.001 Per Share, of The
Tirex Corporation Issued
Pursuant to Employment
Agreement with
Scott Rapfogel                   181,353        $.1525             $27,656            $8.38
-----------------------------------------------------------------------------------------------
    TOTAL                        181,353        $.1525             $27,656            $100
===============================================================================================
</TABLE>

* Estimated solely for the purpose of calculating the amount of the registration
fee  pursuant  to Rule 457(c) on the basis of the average of the closing bid and
ask  prices  of  the  Common   Stock  of  the   Registrant   as  traded  in  the
over-the-counter  market and reported in the  Electronic  Bulletin  Board of the
National Association of Securities Dealers on March 19, 1999.

<PAGE>

         Cross Reference Sheet Showing Location in Reoffer Prospectus of
       Information Required by Items of Part I of Form S-3 Included Herein
                Under Cover of Form S-8, Pursuant to Rule 404(a)

     Form S-3 Item No. and Heading                      Heading in Prospectus
     -----------------------------                      ---------------------

1.  Forepart of the Registration Statement 
      and Outside Front Cover Page of 
      Prospectus ..................................   Outside Front Cover Page

2.  Inside Front and Outside Back Cover
      Pages of Prospectus .........................   AVAILABLE INFORMATION;
                                                        REPORTS TO SHAREHOLDERS;
                                                        INCORPORATION OF CERTAIN
                                                        DOCUMENTS BY REFERENCE;
                                                        TABLE OF CONTENTS

3.  Summary Information, Risk Factors and
      Ratio of Earnings to Fixed Charges ..........   Outside Front Cover Page;
                                                        THE COMPANY; RISK 
                                                        FACTORS

4.  Use of Proceeds ...............................   Not Applicable

5.  Determination of Offering Price ...............   Outside Front Cover Page;
                                                        PLAN OF DISTRIBUTION

6.  Dilution ......................................   Not Applicable

7.  Selling Security Holders ......................   SELLING SHAREHOLDER

8.  Plan of Distribution ..........................   Outside Front Cover Page;
                                                        PLAN OF DISTRIBUTION

9.  Description of Securities to be 
      Registered ..................................   DESCRIPTION OF SECURITIES

10. Interests of Named Experts and 
      Counsel .....................................   EXPERTS; LEGAL OPINIONS

11. Material Changes ..............................   Not Applicable

12. Incorporation of Certain Information
      by Reference ................................   INCORPORATION OF CERTAIN
                                                      DOCUMENTS BY REFERENCE

13. Disclosure of Commission Position
      on Indemnification For Securities
      Act Liabilities .............................    INDEMNIFICATION


                                       2
<PAGE>

         INCORPORATION OF EFFECTIVE REGISTRATION STATEMENT ON FORM S-8

      A registration statement on Form S-8 respecting the registration of shares
of the common stock of the  Registrant,  issued under the employee  benefit plan
named  on the  front  cover  page of this  registration  statement  (the  "Prior
Registration Statement"),  was filed with the Securities and Exchange Commission
on August 25, 1998, and is currently  effective.  The contents of the said Prior
Registration  Statement  (SEC File No.  333-62197)  are  incorporated  herein by
reference.


                                       3
<PAGE>

R E O F F E R
P R O S P E C T U S

--------------------------------------------------------------------------------

                                 181,353 Shares

                                   ----------

                              THE TIREX CORPORATION

                                   ----------

                                  Common Stock
                                 $.001 Par Value


      The shares of common stock offered hereby (the "Shares") are being sold by
Scott Rapfogel,  a shareholder of The Tirex  Corporation  (the  "Company");  Mr.
Rapfogel is hereinafter  referred to as the "Selling  Shareholder".  The Company
will not  receive any of the  proceeds  from the sale of the common  stock.  The
common  stock is traded  in the  over-the-counter  market,  as  reported  in the
Over-The-Counter  Electronic  Bulletin  Board  of the  National  Association  of
Securities Dealers ("Bulletin  Board").  On March 19, 1999, the high ask and low
bid prices of the Company's common stock, as quoted on the Bulletin Board,  were
$ .18 and $ .125 per share,  respectively.  The Selling Shareholder  proposes to
offer his  Shares  for sale in the  over-the-counter  market  through  customary
brokerage channels at the then-current market price. See "Plan of Distribution".

                                   ----------

            THIS OFFERING INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"

                                   ----------

          THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
            SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
          PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
              REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

                                   ----------

                  The date of this Prospectus is March 24, 1999


                                       1
<PAGE>

                              AVAILABLE INFORMATION

      The Company is subject to the information requirements of Section 15(d) of
the  Securities  Exchange Act of 1934 (the  "Exchange  Act"),  and in accordance
therewith files reports and other  information  with the Securities and Exchange
Commission  (the  "Commission").  Reports  and  other  information  filed by the
Company  can  be  inspected  and  copied  at  the  public  reference  facilities
maintained by the Commission at 1100 L Street, N.W. Room 6101, Washington,  D.C.
20005;  26 Federal Plaza,  Room 1100,  New York, New York 10007;  10960 Wilshire
Boulevard,  Suite 1710, Los Angeles,  California  90024;  and 219 South Dearborn
Street, Room 1228,  Chicago,  Illinois 60604; and copies of such material can be
obtained  from the  Public  Reference  Section  of the  Commission  at 500 North
Capital Street, N.W., Washington, D.C. 20549 at prescribed rates.

                             REPORTS TO SHAREHOLDERS

      The  Company  intends  to  furnish  to  its  shareholders  annual  reports
containing  audited financial  statements  together with an opinion with respect
thereto by its independent certified public accountants.

                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

      The Company  hereby  incorporates  by  reference  in this  Prospectus  the
Company's  annual report on Form 10-KSB for its fiscal year ended June 30, 1998,
filed  pursuant to Section 15(d) of the Exchange  Act, the  Company's  quarterly
reports on Forms 10-QSB for the fiscal  quarters  ended  September  30, 1998 and
December  31, 1998 filed  pursuant to Section  15(d) of the  Exchange  Act,  the
Company's Current Reports on Form 8-K, dated May 27, 1998 and September 14, 1998
filed on August 3,  1998 and  September  18,  1998  respectively,  and all other
reports, if any, filed by the Company pursuant to Section 13(a) for 15(d) of the
Exchange Act since the end of the fiscal year ended June 30, 1998.  In addition,
a  registration  statement  on Form S-8 (the  "Prior  Registration  Statement"),
respecting the  registration of shares of the common stock of the Company issued
under  the  employee  benefit  plan  named  on  the  front  cover  page  of  the
registration  statement of which this  Prospectus is a part,  was filed with the
Securities and Exchange  Commission ("SEC") )on August 25, 1998 and is currently
effective.  The contents of the said Prior Registration  Statement (SEC File No.
333-62197) are incorporated herein by reference.

      All reports and definitive proxy or information  statements filed pursuant
to Section 13(a),  13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this  Prospectus  and prior to the  termination of the offering of the Shares
shall be deemed to be incorporated by reference into this Prospectus and to be a
part hereof from the date of filing of such documents.  Any statement  contained
in a document  incorporated  or deemed to be  incorporated  by reference  herein
shall be deemed to be modified or superseded for purposes of this  Prospectus to
the extent that a statement  contained herein or in any other subsequently filed
document which also is  incorporated  or deemed to be  incorporated by reference
herein modified or supersedes such statement.  Any such statement so modified or
superseded  shall  not be  deemed,  except  as so  modified  or  superseded,  to
constitute a part of this Prospectus.


                                       2
<PAGE>

      Any person  receiving a copy of this Prospectus may obtain without charge,
upon request,  a copy of any of the documents  incorporated by reference herein,
except for the  exhibits  to such  documents.  Requests  should be  directed  to
Terence C. Byrne, The Tirex Corporation,  740 St. Maurice,  Suite 201, Montreal,
Quebec Canada, H3C 1L5.


                                       3
<PAGE>

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

Available Information..........................................................2

Reports to Shareholders........................................................2

Incorporation of Certain Documents
   by Reference................................................................2

The Company....................................................................6

Risk Factors

   1.  Development Stage Company - No Assurance
         as to Future Profitable Operations...................................13

   2.  Need for Substantial Additional
         Capital..............................................................13

   3.  History of Losses and Accumulated Deficit..............................16

   4.  Going Concern Assumption...............................................16

   5.  No Guarantee of Product
         Acceptance in Market.................................................17

   6.  Dilutive and Other Adverse Effects
         of Presently Outstanding Debentures, 
         Warrants and Options.................................................17

   7.  Additional Dilution from Issuance of 
         Shares for Services..................................................19

   8.  Possible Depressive Effect on Price of Securities
         of Future Sales of Common Stock......................................20

   9.  Possible Voting Control by Management and 
         Corporate Counsel; Possible Depressive Effect 
         on Market Prices.....................................................20

  10.  Reverse Split; Possible Negative Effect on 
         Values of Securities.................................................21

  11.  Dependence on Major Customer...........................................22

  12.  Uncertainty of Product and
         Technology Development:
         Technological Factors................................................23


                                       4
<PAGE>

  13.  International Sales and Operations.....................................23

  14.  Protection of Tirex Proprietary
         Technology and Potential Infringement................................23

  15.  Limited Public Market..................................................24

  16.  Applicability of "Penny Stock Rules"
         to Broker-Dealer Sales of
         Company Common Stock.................................................25

  17.  Management's Lack of Industry Experience...............................26

  18.  Dependence on Key Personnel............................................26

  19.  Regulatory and Environmental Considerations............................26

  20.  Production and Supply..................................................28

  21.  Technological Changes..................................................28

  22.  Competition............................................................29

  23.  Lack of Liability Insurance............................................29

  24.  No Dividends and None Anticipated......................................29

  25.  Possible Adverse Effects of Authorization and
         Issuance of Preferred Stock..........................................29

  26.  Prior Notice Required for Shareholder Actions..........................30

  27.  Adverse Effects of Proposals to be Presented at
         Annual Shareholders Meetings; Anti-Takeover Provisions,
         Limitations on Shareholders Voting Rights and Stock
         Bonuses to Management................................................30

Selling Shareholder...........................................................33

Plan of Distribution..........................................................35

Description of Securities.....................................................35

Experts.......................................................................36

Legal Opinions................................................................36

Indemnification...............................................................37


                                       5
<PAGE>

                                  THE COMPANY

      The Tirex Corporation  (hereinafter,  the "Company" or "Tirex") is engaged
in the early stages of the  business of  manufacturing,  selling,  and leasing a
patented "turn key" cryogenic tire recycling system (the "TCS-1 Plant") designed
and developed by Tirex,  which breaks down used tires into cleanly separated and
re-saleable rubber crumb, steel wire, and fiber. The Company was incorporated in
Delaware on August 19, 1987 under the name "Concord Enterprises,  Inc." Its name
was changed to "Stopwatch  Inc." on June 20, 1989(1) and to "Tirex America Inc."
on March 10,  1993.  On July 11,  1997,  in order to  encompass  the current and
projected international scope of its operations,  the Company's name was changed
to "The Tirex Corporation".  The Company, does business directly, and indirectly
through its Canadian  subsidiaries,  The Tirex Corporation Canada Inc. and Tirex
Canada R&D, Inc.  (formerly,  3143619  Canada Inc., and formerly known as "Tirex
Canada Inc.").

      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 raising the  financing  required  for such
project.  All major components of the TCS-1 Plant were  successfully  tested and
were  operational  on  a   non-continuous   running  basis  by  May  1998,  with
approximately  85%  of  the  TCS-1  Plant  components  meeting  all  of  Tirex's
specifications.  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.  This allows the TCS-1 Plant to process  only the
tread  portion of the tires.  The  addition  of the  second  freezing  tower and
fracturing  mill, which is expected to be completed in April of 1999, will allow
for the processing also of the sidewall portion of the tire.

      The  Company  is  also  in the  process  of  establishing  and  initiating
operations in a second business segment which will involve owning and operating,
directly  or  indirectly,   on  exclusive  or  joint  venture   bases,   product
manufacturing  plants (the "Tirex Advanced  Products Plants") which will utilize
TCS-1  Plants to  produce  recycled  rubber  crumb and  which  will  manufacture
finished  products  out  of  such  recycled  material.   The  Company's  initial
operations  in this  segment will be  conducted  pursuant to an  agreement  (the
"IM2/Tirex  Agreement") with IM2 Merchandising and Manufacturing,  Inc. ("IM2"),
in Quebec.  Pursuant to the IM2/Tirex  Agreement,  the Company will act as IM2's
exclusive  supplier of rubber  welcome mats and related  products  molded out of
rubber crumb ("IM2 Products").  The Company intends to use rubber crumb produced
by the TCS-1 Plant which has been installed,  and which will be operated, at the
Company's Montreal facility

      The Company's wholly-owned  subsidiary,  The Tirex Corporation Canada Inc.
("TCCI") was formed on June 1, 1998, and on June 3, 1998,  3143619 Canada Inc.'s
name was changed

----------

      (1) For a discussion of the merger with Stopwatch, the healthcare business
which was intended, but was never commenced,  by Stopwatch,  and the reasons for
the termination of the Stopwatch  business plan,  reference is made to Item 1 of
Registrant's  annual report on Form 10-K for the fiscal year ended  December 31,
1988,  its transition  report on Form 10-K for the transition  period ended June
30,  1989,  and its annual  report on Form 10-KSB for the fiscal year ended June
30, 1995.


                                       6
<PAGE>

to Tirex Canada R & D Inc. (hereinafter referred to as "Tirex R&D"). The purpose
of these  changes was to transfer  all business  activities,  except those which
constitute research and development  activities  exclusively,  from Tirex R&D to
TCCI.  On April 22,  1998 the  Company  formed  another  wholly  owned  Canadian
subsidiary now known as Tirex  Advanced  Products  Quebec,  Inc.  ("TAP").  This
subsidiary  is  presently  dormant.  However,  the  Company  may, in the future,
transact finished product manufacturing activities through TAP. The Company also
has another dormant, wholly owned subsidiary, formed under the laws of the State
of  Delaware,  Tirex  Acquisition  Corp.  ("TAC"),  for which the Company has no
present plans.(2) The Company's  principal  executive offices are located at 740
St. Maurice,  Suite 201, Montreal,  Quebec H3C 1L5, Canada, its telephone number
is (514) 878-0727 and its Internet address is tirexcorp@aol.com.

      Although the Company has generated some limited  revenues from operations,
it is still in the development  stage. The Company began taking orders for TCS-1
Plants in October of 1995 and, to date,  has taken  orders on a total of fifteen
Plants  from five  customers,  two of which have given  refundable  deposits  of
$25,000  on one Plant  each and one of which has given  refundable  deposits  of
$25,000 on each of five Plants. Parts of one of the foregoing Plants (the "First
Production  Model") have been  delivered and the Company has received a total of
$880,000 in respect thereof. In December 1998, the Company entered into sale and
lease-back  arrangements  for  other  portions  of the First  Production  Model,
pursuant  to which it  received  a total of  $300,000  (see,  below,  "Sale  and
Lease-Back  Transactions").  All  undelivered  orders  are  subject to change by
reason of several factors, including possible cancellation of orders, changes in
terms of the  contracts,  and other  factors  beyond the  Company's  control and
should  not be relied  upon as being  necessarily  indicative  of the  Company's
future revenues or profits. The ultimate  consummation of each sale contemplated
by such  orders  will be  entirely  dependent  upon the  TCS-1  Plant's  meeting
performance  expectations,  each customer's  obtaining lease, or other financing
for the purchased  portions of the TCS-1 Plant (as well as all required  permits
and  licenses  to  operate  a system)  and the  Company's  obtaining  sufficient
production  financing  and capacity to meet delivery  requirements.  The Company
intends  to retain  ownership  rights to the  portions  of the First  Production
Model,  not included in the portions sold for the $880,000  noted above,  and to
use the entire First Production Model in the first Tirex Advanced Product Plant,
to be located in the Company's  Montreal  facility  (see  "Existing and Proposed
Business Proposed TCS-1 Plant Operations:  Sales of Rubber Crumb and Manufacture
and Sale of Finished  Products",  "Sales and Marketing - Agreements  with Oceans
Tire Recycling and Processing  Co., Inc.",  and "Backlog").  With respect to the
commercial manufacture of TCS-1 Plants, the Company has located and entered into
written  and  oral  agreements  with  various   engineering  and   manufacturing
subcontractors and component suppliers,  which Management believes will give the
Company sufficient  production capacity to meet all current and projected orders
for TCS-1  Plants,  as required,  commencing in or about March 1999. At present,
the Company has no scheduled  delivery date  obligations in connection  with any
orders it has received to date. With respect to projected  rubber mat production
operations,  the Company has ordered the  necessary  equipment  for flocking and
die-cutting. This equipment is expected to be installed in March of 1999. For

----------
      (2) Unless context necessarily requires otherwise,  references hereinafter
to the "Company"  refer to The Tirex  Corporation  and its  subsidiaries,  TCCI,
Tirex R&D, TAP and TAC, collectively.


                                       7
<PAGE>

the primary  molding of the rubber mats, the Company is currently in the process
of  evaluating  several  alternative  modes of  production,  including  in-house
production  as  well  as  outsourcing  to  one or  more  of  numerous  available
sub-contractors. Decisions respecting such operations are expected to be made by
management during the first half of March 1999.

Sale and Lease-back Transactions

      On December 16,  1998,  the Company  entered into two sale and  lease-back
transactions  by and  among the  Company,  Northshore  Leasing  &  Funding  Inc.
("NLFI"),  and Ocean  Utility  Contracting,  Inc.  ("OUCI").  Such  transactions
consisted of the Company's  sales to NLFI of the single  fracturing mill and the
single freezing tower,  which are components of the TCS-1 Plant installed at the
Company's  Montreal  facility and the lease back of such components to OUCI. The
Company  received an aggregate of $300,000 by way of the purchase prices for the
two components. The Company and OUCI have agreed that all of OUCI's rights under
the leases will be  assigned  to the Company and the Company  will assume all of
OUCI's  liabilities  thereunder.  Both  leases  are  for  a  sixty-month  period
commencing  on December  15,  1998,  with  monthly  lease  payments of $3,499.20
required under each of the two leases.  Both leases also provide that at the end
of the  lease  term,  the  lessee  will have the right to  purchase  the  leased
equipment  for  $1.00.  Such  right  to  purchase  will be  included  in  OUCI's
assignment to the Company of its rights under the leases.

Material Financing Activities

The Type A Private Placement

      Between  November 5, 1997 and May 11,  1998,  the Company  offered to sell
(the "Type A Private  Placement")  through H.J. Meyers & Co., Inc., as placement
agent  (the  "Placement  Agent"),  28 Units,  (the "Type A Units") at a price of
$25,000  per  Unit,   each  Type  A  Unit  consisting  of  one  10%  Convertible
Subordinated  Debenture  in  the  principal  amount  of  $25,000  (the  "Type  A
Debentures")  and 100,000  warrants  (the "Type A Warrants")  to purchase a like
number  of  shares  of the  common  stock of the  Company  (the  "Type A Warrant
Shares").  The Type A Private  Placement  was  terminated by the Company and the
Placement  Agent on May 11, 1998  following  the sale on April 9, 1998 of twenty
Type A Units to two  purchasers,  yielding  gross  proceeds of $500,000  and net
proceeds of $433,500 after payment of the Placement Agent's $10% commission,  3%
nonaccountable expense allowance,  and an escrow agent's fee of $1,500. The Type
A Private  Placement  was  effected  in  reliance  upon the  availability  of an
exemption  from the  registration  provisions of the Securities Act by virtue of
compliance  with the  provisions of Section 4(2) of the  Securities Act and Rule
506 of Regulation D thereof ("Rule 506"). The Type A Units were offered and sold
to  a  limited  number  of  sophisticated   investors  who  understood  and  are
economically  capable  of  accepting  the risks  associated  with a  speculative
investment,  including  the  complete  loss  of  such  investment,  and  who are
"Accredited  Investors"  within the meaning  prescribed by Regulation D and Rule
501 of the Securities Act.

      The 2,000,000  outstanding  Type A Warrants are  exercisable at a price of
$.001 per share.  Through  April 10, 1999,  the  principal  amount of the Type A
Debentures  and all interest due thereon is  convertible  into common stock at a
conversion  ratio of 66% of the closing bid price of the Company's common stock,
as traded in the over-the-counter ("OTC") market and quoted


                                       8
<PAGE>

in  the  OTC  Electronic  Bulletin  Board  of the  NASD,  on  the  trading  date
immediately  preceding  the  date  of  the  Company's  receipt  of a  notice  of
conversion from a holder of the Type A Debentures (the "Market  Price").  Unless
the registration  statement  discussed below is declared effective prior to June
11, 1999,  the conversion  rate will  decrease,  on a monthly basis at a rate of
1.5% per month,  until such date,  when it will stabilize at 61.5% of the Market
Price. There is no minimum conversion price. The Type A Debentures,  as amended,
are due  and  payable  on  December  31,  1999  (the  "Maturity  Date")  and are
redeemable  upon the request of a holder at any time after the Maturity  Date at
125% of the principal amount plus all accrued,  unpaid interest on the principal
amount.

      The resale of the 2,000,000  shares  issuable  pursuant to the exercise of
the Type A  Warrants  and the  resale of the  shares  issuable  pursuant  to the
conversion of the Type A Debentures are being  registered by way of inclusion in
the Company's  registration statement on Form SB-2 filed with the Securities and
Exchange Commission on May 21, 1998 (Registration No. 333-53255),  which has yet
to be declared effective (the "Registration Statement"). Following the effective
date of the  Registration  Statement,  to the extent that they are acquired from
the Company, the shares underlying the Type A Warrants and Type A Debentures may
be  offered  and resold by the  holders  thereof,  from time to time,  as market
conditions permit in transactions in the over-the-counter  market, in negotiated
transactions,  or a  combination  of such methods of sale, at fixed prices which
may be  changed,  at market  prices  prevailing  at the time of sale,  at prices
relating to prevailing market prices or at negotiated prices.

Merger with RPM Incorporated and The Type B Private Placement

      On January 7, 1998, The Company issued a total of 3,305,000  shares of its
common stock to thirty-six  persons,  none of whom had any affiliation  with the
Company.  These issuances were made pursuant to the terms of a merger  agreement
by  and  among  the  Company,  the  Company's   wholly-owned   subsidiary  Tirex
Acquisition Corp. ("TAC"), and RPM Incorporated ("RPM") respecting the merger of
RPM with and into TAC (the "RPM Merger"). The RPM Merger Agreement was effective
on January 7, 1998,  concurrent with the closing of a private placement of RPM's
securities (the "RPM Private Placement"), in which RPM had offered to sell, on a
best efforts 30 Units-or-none  basis, up to 85 units of its securities (the "RPM
Units"),  each  such RPM Unit  consisting  of one 10%  Convertible  Subordinated
Debenture in the principal  amount of $10,000 (the "RPM  Debentures") and 10,000
shares of the Common  Stock of RPM. The closing took place upon the sale of 30.5
RPM Units.  All of the net proceeds  from the RPM Private  Placement  ($276,085)
remained in RPM when it was merged  into TAC,  which was the  surviving  entity.
Such proceeds  thereby inured to the benefit of the Company.  In effectuation of
the RPM Merger, the Company:

      (i)   exchanged one share of its common stock ("Merger  Shares") for every
            issued and  outstanding  share of RPM common stock  (which  included
            305,000  shares  sold in the RPM  Private  Placement  and  3,000,000
            shares  which  had  been  issued  and   outstanding   prior  to  the
            commencement of the RPM Merger); and

      (ii)  assumed RPM's  liabilities and obligations under 30.5 RPM Debentures
            in  the  aggregate  principal  amount  of  $305,000  which  RPM  had
            theretofore sold in the


                                       9
<PAGE>

            RPM Private Placement;

      After the Merger, the Company commenced the "Type B Private Placement", in
which it offered and sold the same type of  securities,  as were sold in the RPM
Private Placements, i.e., the securities offered in the Type B Private Placement
consisted of "Type B Units" each  consisting  of 10,000  shares of the Company's
common stock and one  convertible  Subordinated  Debenture of the Company in the
principal amount of $10,000 (the "Type B Debenture"). The number of Type B Units
offered (54.5) was equal to the number of RPM Units  remaining  unsold as at the
time of the Merger.

      Prior  to the  Merger,  RPM  and  the  Company  were  completely  separate
entities.  However,  the RPM Private Placement,  the merger, the exchange of RPM
common  stock  for  Company  common  stock,  and the  subsequent  Type B Private
Placement by Tirex were at all times contemplated as interdependent transactions
and  described  in the RPM  Private  Placement  Memorandum  as  such.  Thus  the
contemplated  post-merger  Type B  Private  Placement  was  viewed  as  being  a
"continuance"  of the  RPM  Private  Placement.  The  Type B  Private  Placement
differed from the RPM Private  Placement only insofar as: (i) in the RPM Private
Placement,  RPM offered and sold  shares of RPM common  stock,  which were to be
exchanged for Company common stock in the merger,  while in the post-merger Type
B Private  Placement,  the Company  offered  and sold  shares of Company  common
stock;  and  (ii) in the  RPM  Private  Placement,  RPM  offered  and  sold  RPM
debentures,  which were to be assumed by the Company in the Merger, while in the
Type  B  Private  Placement,  the  Company  offered  and  sold  Company  Type  B
Debentures.  Except for the above,  the terms of the securities  included in the
Type B Units were identical to those included in the RPM Units

      Between  January 23,  1998 and May 11,  1998,  the Company  sold 23 Type B
Units,  consisting  in the  aggregate of 230,000  shares of its common stock and
twenty-three  10%  convertible  Debentures,  each  in the  principal  amount  of
$10,000, to 21 private investors, who had no affiliation with the Company.

      All of the  Type B  Debentures  and the RPM  Debentures,  which  had  been
assumed by the Company  (referred to  collectively,  hereinafter  as the "Type B
Debentures"),  provide  for:  (i) the  registration  of the shares  (the "Type B
Conversion  Shares") issuable upon the conversion of the Type B Debentures;  and
(ii)  restrictions  on the  transfer of the Type B  Conversion  Shares until the
first to occur of: (a) six months from the  effective  date of the  Registration
Statement,  or (b)  one  year  from  the  date  of the  issuance  of the  Type B
Debentures.  The Type B Debentures  are  convertible at a ratio of one share for
every  $0.20 of the  principal  amount of the  Debenture  plus  interest  earned
thereon  from  the  date  of  issuance.  The  principal  amounts  of the  Type B
Debentures  are due and payable on the first to occur of: (i) two years from the
issue  date or (ii) the  completion  and  closing  of a public  offering  of its
securities  by the Company.  The Type B Debentures  bear  interest at the annual
rate  of  10%  from  the  date  of  issuance  (the  "Issuance  Date"),   payable
semi-annually,  commencing  six months from the  Issuance  Date.  The company is
presently in default on interest  payments due on the Type B  Debentures.  As of
February  16,  1999,  the Company  had not  received  any  demands for  interest
payments from any of the holders of the Type B Debentures.  The Company  intends
to pay all interest  due and payable as soon as the funds  required to do so are
available.

      The resale of shares of the Company's  common stock  issuable  pursuant to
the conversion


                                       10
<PAGE>

of the Type B  Debentures,  are  being  registered  by way of  inclusion  in the
Registration Statement.

Pre-Placement RPM Shares

      3,000,000 shares (the  "Pre-Placement RPM Shares") of the 3,305,000 shares
of RPM common stock for which the Company issued Merger Shares,  constituted all
of the shares of RPM common stock which were issued and outstanding prior to the
commencement  of the RPM Private  Placement.  These  shares were  exchanged  for
3,000,000 Merger Shares in  consideration of RPM's waiver of certain  consulting
fees in the amount of $4,000  per month,  accrued  prior and  subsequent  to the
Merger pursuant to the terms of a certain five-year consulting agreement,  dated
June 9, 1997,  among RPM,  the  Company,  and Dr.  Eugene  Stricker and Mr. Mark
Schindler who were, prior to the Merger, RPM's principal shareholders, officers,
and directors (the "RPM Consulting  Agreement").  Pursuant to the RPM Consulting
Agreement,  Dr.  Stricker and Mr.  Schindler  rendered,  and continue to render,
consulting  services to the Company  concerning  matters in connection  with the
operation of the business, equipment financing, corporate acquisitions,  mergers
and other  business  combinations,  as well as management,  corporate  planning,
marketing,  organization and related  matters.  None of the RPM Shareholders had
any  affiliation  of any kind  with the  Company  prior to or after  the  Merger
(except  insofar as they have become  shareholders of the Company as a result of
the said Merger).  Based upon  information  provided by the recipients  (the RPM
Shareholders")  of the above  described  3,305,000  shares  of common  stock and
advice  from  the  principals  of RPM and the  opinion  of  RPM's  counsel,  all
3,000,000 of the  Pre-Placement RPM Shares were acquired by the RPM Shareholders
prior to March 31, 1997; all of the RPM Shareholders are "accredited  investors"
as that term is defined in Rule 501(a) of the  Securities  Act; all 3,305,000 of
the shares of RPM common stock (including the  Pre-Placement  RPM Shares as well
as the RPM Shares sold in the RPM Private  Placement)  which were  exchanged for
Merger  Shares  were  acquired  in  transactions  which  were  exempt  from  the
registration  requirements  of Section 5 of the Securities  Act available  under
Rule 506 of Regulation D thereof, which would not be integrated, as such term is
defined in Section  502(a) of  Regulation D under the  Securities  Act, with the
distribution  of the  Merger  Shares  to the RPM  Shareholders,  so as to render
unavailable,  for  such  distribution,   the  exemption  from  the  registration
provisions of the Securities Act under Rule 506 of Regulation D.

      Sales made in the RPM Private  Placement and the Type B Private  Placement
and the exchange of shares in the Merger were effected in  compliance  with Rule
506 to a limited  number of  sophisticated  investors  who  understood  and were
economically  capable  of  accepting  the risks  associated  with a  speculative
investment,  including  the  complete  loss of  such  investment,  and who  were
"Accredited  Investors"  within the meaning  prescribed by Regulation D and Rule
501 of the Securities Act.

The Type C Private Placement

      On May 11, 1998,  the Company  completed a private  placement (the "Type C
Private Placement") made directly by the Company, with all offers and sales made
by officers of the Company,  of a total of  11,760,000  shares of the  Company's
common  stock  (the  "Type C  Shares")  at a price of $.10 per  share,  yielding
proceeds of $1,176,000,  without deducting nominal incidental  expenses incurred
in  connection  with the  offering.  As was the case  with the Type A and Type B
Private Placements, the Type C Private Placement was effected in compliance with


                                       11
<PAGE>

Rule 506 and the Type C Shares were offered and sold only to a limited number of
sophisticated   investors  who  understood  and  were  economically  capable  of
accepting  the risks  associated  with a speculative  investment,  including the
complete loss of such investment, and who were "Accredited Investors" within the
meaning prescribed by Regulation D and Rule 501 of the Securities Act.

      The  11,760,000  Type C Shares  which were sold are being  registered  for
resale to the public by the  holders  thereof by way of their  inclusion  in the
Company's Registration Statement.

Registration Statement

      On May 21, 1998, the Company filed a  Registration  Statement on Form SB-2
(Registration  No. 333-53255) with the Securities and Exchange  Commission,  for
the registration of the resale of certain  presently  outstanding  shares of the
Company's  common stock and an  undetermined  number of shares issuable upon the
conversion or exercise of certain presently outstanding debentures, options, and
warrants.  None of the shares included in the  Registration  Statement are being
offered for sale by the Company and the Company  will  receive no proceeds  from
the resales of any of the shares included therein.

      The shares of common stock being  registered  pursuant to the Registration
Statement include: (i) 11,952,857 presently  outstanding shares of the Company's
common  stock  which are being  offered  by 58  selling  shareholders  including
11,760,000 shares issued to 57 persons in the Type C Private Placement described
under "Material Financing Activities" and 192,857 shares issued in November 1998
to one  individual;  (ii)  shares  underlying  an option  issued to CG Tire Inc.
("CGT") on April 24, 1997,  for the  purchase,  prior to April 23, 2000,  of the
number of shares which would constitute upon their issuance,  on a fully diluted
basis, up to ten percent (10%) of the issued and outstanding common stock of the
Company at an exercise  price equal to fifty percent (50%) of the average of the
final bid and ask prices for the Company's  common stock during the ten business
days preceding the date of exercise;  (iii)  2,000,000  shares issuable upon the
exercise of the Type A Warrants issued in the Type A Private Placement described
under "Material Financing  Activities";  (iv) 2,000,000 shares issuable upon the
exercise of currently  outstanding  common  stock  purchase  warrants  (the "SCT
Warrants")  to  purchase  666,666  shares of the  Company's  common  stock at an
exercise price of $.25 per share,  666,666 shares of the Company's  common stock
at an exercise price of $.40 per share,  and 666,666 shares at an exercise price
of $.50 per  share;  (iv)  shares  issuable  upon the  conversion  of the Type A
Debentures,  issued in the Type A Private  Placement  described  under "Material
Financing  Activities",  in the  aggregate  principal  amount of  $500,000  at a
conversion  rate  equal to a  maximum  of 67.6%  and a  minimum  of 61.5% of the
closing bid price of the Company's  common stock on the trading date immediately
prior to the date upon which the Company  receives a notice of  conversion  (see
the discussion, above, in this section, under the subcaption "The Type A Private
Placement";  and (v) 2,675,000 shares issuable upon the conversion of the Type B
Debentures,  issued under the Type B Private Placement described under "Material
Financing  Activities" in the aggregate  principal  amount of $535,000.  (At the
option of the holders of the Type A and Type B Debentures,  all unpaid  interest
accrued on the Debentures, through the date of conversion, may also be converted
into shares of the Company's common stock).

The Company is presently  preparing  to file an  amendment to such  Registration
Statement and expects to do so as promptly as  practicable  following the filing
of this Report.


                                       12
<PAGE>

                                  RISK FACTORS

      The  Company's  liquidity,  capital  resources,  and results of operations
indicate that an investment in the Company remains speculative,  involves a high
degree of risk,  and should not be made by persons who cannot afford the loss of
their entire investment.  Prospective  investors in the Company should carefully
consider all of the information contained in this Report before deciding whether
to purchase securities of the Company, and, in particular, the factors set forth
below.

      Information   contained  in  this  Prospectus  contains   "forward-looking
statements"  which can be identified by the use of  forward-looking  terminology
such as "believes",  "expects", "may", "should" or "anticipates" or the negative
thereof or other variations thereon or comparable  terminology or by discussions
of strategy.  No assurance can be given that the future  results  covered by the
forward-looking statements will be achieved. The following Risk Factors include,
among   other   things,   cautionary   statements   with   respect   to  certain
forward-looking   statements,   including   statements   of  certain  risks  and
uncertainties that could cause actual results to vary materially from the future
results referred to in such forward-looking statements.

      1.  Development  Stage  Company:  No  Assurance  as to  Future  Profitable
Operations.  Because it is in the  development  stage and has had no significant
operations  to date,  the Company  cannot  predict with any certainty the future
success or failure of its  operations.  The  Company's  existing  business  (the
design and  manufacture of tire recycling  equipment) and its proposed  business
(the operation of tire recycling  equipment and the production of products using
the recycled  rubber produced  therefrom),  are both subject to all of the risks
inherent in the  establishment  of new businesses and there is no assurance that
the Company will generate net income or  successfully  expand its  operations in
the future.  Moreover,  as a new  enterprise,  it is likely to remain subject to
risks and occurrences  which  management is unable to predict with any degree of
certainty,  and for which it is unable to fully  prepare.  The likelihood of the
success of the Company in either business segment must be considered in light of
the  problems,  expenses,  difficulties,  complications  and  delays  frequently
encountered  in  connection  with  the  formation  of a  new  business  and  the
competitive  environment  in which the  Company  will  operate.  Because  of the
Company's very limited business history,  there is little evidence for investors
to  analyze  in  order  to make an  informed  judgment  as to the  merits  of an
investment in the Company.  Any such investment should therefore be considered a
high risk investment in an unseasoned  start-up  company with the possibility of
the loss of the entire investment.

      2. Need For  Substantial  Additional  Capital.  During the period  between
January 7, and May 11, 1998, the Company  completed and closed certain financing
activities which yielded  aggregate net proceeds to the Company in the amount of
$2,063,795  (see Risk  Factor  No. 6  "Dilutive  and Other  Adverse  Effects  of
Presently Outstanding  Debentures,  Warrants, and Options").  Upon completion of
the last of such financing  activities in May of 1998,  management believed that
the proceeds  realized  therefrom  (together with Canadian and Quebec government
and  governmental  agency grants and loans,  in various forms) would provide the
Company with adequate  funding to  accomplish  the  following:  (i) complete and
cover all of the Company's  costs related to the first  production  model of the
TCS-1  Plant  (the  "Production   Model");   (ii)  renovate  the  Company's  new
manufacturing and assembly facility to bring it into full compliance with all


                                       13
<PAGE>

applicable provincial and municipal  regulations;  and (iii) cover the Company's
overhead  costs and expenses  through the end of October 1998.  The Company has,
however,  had to revise its estimates regarding the adequacy of such funding for
several  reasons,  including  but  not  limited  to the  necessity  for  certain
unanticipated  modifications  to the TCS-1 Plant design and the Company's  entry
into a second business segment  involving the operation of a TCS-1 Plant and the
production of molded rubber floor mats.

      During the "Stage 2" test phase of the First Production Model, the Company
encountered  certain  unanticipated  design  flaws in the TCS-1  which  required
modification and it also identified  several  opportunities  for improvements in
the original design of the TCS-1 Plant, which the Company believes will increase
economy  and  efficiency  of its  operation.  The  required  modifications  were
completed in December 1998 with respect to a single fracturing mill and a single
freezing  tower  in  the  First  Production  Model.  Completion  of  the  second
fracturing mill and freezing tower to be installed therein is scheduled to occur
in  April  of  1999.  The  costs  of  the  foregoing  modifications,   including
engineering fees,  aggregated to a previously unbudgeted amount of approximately
$500,000,  approximately  $250,000  of which had been paid by the  Company as of
December 31, 1998.

      The Company is also currently involved in establishing  rubber mat molding
operations under the IM2 Agreement.  In connection  therewith,  the Company will
incur  additional  costs  and  expenses  in an  estimated  aggregate  amount  of
approximately   $925,000.   This  includes:   (i)  approximately   $325,000  for
modifications to the Company's Montreal facility, necessary to accommodate these
operations,  and  for  materials  handling  equipment;  and  (ii)  approximately
$600,000 to cover the costs of purchasing and  installing a complete  rubber mat
molding and flocking plant.

      The  Company  has also had to,  and may,  in the near  future be forced to
continue  to, cover its  overhead  costs from sources  other than cash flow from
operations  because of the  unanticipated and lengthy delays in the commencement
of commercial operations.

      The Company  believes that it will be possible to meet its immediate goals
of: (a)  commencing  full  scale  commercial  production  of TCS-1  Plants;  (b)
commencing  rubber  mat  molding  operations  under the IM2  Agreement;  and (c)
covering  its  overhead  expenses  until  sufficient  cash flow is  generated by
operations,  out of a combination of some or all of the following  sources:  (i)
funds on hand;  (ii)  expected  cash flow  from  sales of four  TCS-1  Plants to
ENERCON America  Distribution  Limited  ("Enercon") of  Westerville,  Ohio. (see
"Existing  and  Proposed   Businesses  -  Sales  and  Marketing  -  The  Enercon
Agreements");  (iii)  Canadian and Quebec  government  and  governmental  agency
grants, loans, and refundable tax credits; (iv) sale and lease back financing on
inventory and equipment owned by the Company;  (v) conventional asset based debt
financing against receivables and inventory; (vi) refund of all of the 15% sales
tax paid by the Company on all goods, and services  purchased in connection with
the Company's manufacturing activities;  (vii) subcontractor financing; (viii) a
research and  development  tax credit facility from the Bank of Montreal for the
1999 calendar year; and/or (ix) vendor financing by way of installment purchases
of  equipment.  However,  the  sufficiency  of such funds,  if the Company  does
receive  them,  will be  completely  dependent  upon the  TCS-1  Plant's  as yet
unproven  ability to  operate  without  significant  problems,  on a  long-term,
continuous, commercial basis.


                                       14
<PAGE>

      Assuming the Company is able to cover the costs necessary to: (i) complete
the second  fracturing  mill and  freezing  tower;  and (ii)  install a complete
rubber mat molding and flocking facility, from the sources described above, full
scale commercial  manufacture of TCS-1 Plants and rubber mat molding  operations
are presently expected to occur during March 1999. However, 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 commercial operations.

      The Company's more long term future capital  requirements will depend upon
numerous factors, including the amount of revenues generated from operations (if
any), the cost of the Company's sales and marketing  activities and the progress
of the  Company's  research  and  development  activities,  none of which can be
predicted  with  certainty.  Receipt  of  any  projected  revenues  is  entirely
dependent upon the TCS-1's meeting performance  expectations,  ENERCON's ability
to meet its payment  obligations under its agreements with the Company,  Enercon
obtaining  all required  permits and licenses to operate a Plant,  the Company's
obtaining  sufficient  production,  financing  and  capacity  to  meet  delivery
requirements,  and the  rubber  crumb  produced  by the TCS-1  meeting  customer
requirements.  The Company  believes that if all of the foregoing  contingencies
are met, it will have  sufficient  cash flow to fund its operations for at least
the next twelve  months.  If  revenues  from  operations  within the next twelve
months should fail to meet current projections,  the Company may attempt to make
an  underwritten  public  offering of its  securities in order to insure that it
will have sufficient working capital. The Company notes that on August 13, 1997,
it  received  a  Letter  of  Intent  from  H.J.  Meyers,  Inc.   ("Meyers"),   a
broker-dealer  registered with the National  Association of Securities  Dealers,
Inc., for the  underwriting  of such a proposed  public  offering (the "Proposed
Public  Offering")  in an  amount  of not  less  than  $8,000,000.  On or  about
September 16, 1998,  however,  Meyers  abruptly  ceased doing  business.  If the
Company  should  determine  that it is necessary or desirable to effect a public
offering, it will have to locate another broker-dealer, ready, willing, and able
to  underwrite a public  offering of the Company's  securities.  There can be no
assurance  that the Company  will  succeed in finding an  underwriter  or that a
public  offering  will in fact be  completed  or that the Company  will  receive
adequate  financing  from  any  such  public  offering.  In the  event  that the
projected revenues are not generated and a public offering does not occur within
twelve  months,  the Company  intends to endeavor to obtain sale and  lease-back
financing  on  equipment  owned by the  Company,  conventional  asset based debt
financing  against  receivables  and inventory,  and/or to seek other avenues of
financing  through  private  offerings  of its debt or  equity  securities.  The
Company  believes that at least one, or a  combination  of more than one, of the
foregoing  avenues of financing will enable it to commence full scale production
of the TCS-1 Plant and its proposed product manufacturing and rubber crumb sales
operations  on a level  sufficient  to sustain the Company for at least the next
twelve months.  However, given the early stage of development of the Company, it
should  be  noted  that it is  impossible  at this  time to  estimate  with  any
certainty  what the  Company's  income from  operations  will be during the next
twelve  months and that 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.  While  management  does  not  believe  that  it  will  be the  case,
prospective  investors  in the  Company  should  note  that if all of the  above
described  internal  and  external  sources  for  financing  should  fail  to be
sufficient,  the Company  could be required  to reduce its  operations,  seek an
acquisition  partner or sell  securities on terms that may be highly dilutive or
otherwise disadvantageous.


                                       15
<PAGE>

      In the past,  the Company has  experienced  operational  difficulties  and
delays of more than five years,  three of which years occurred during the tenure
of the current  management.  All such difficulties and delays were the result of
working  capital  constraints  and the Company may continue to  experience  such
problems in the future.  Should such problems continue or reoccur in the future,
they could have a material adverse effect on the Company's  business,  financial
condition and results of operations.  The working capital  constraints which the
Company  experienced  were the  result  of its being  undercapitalized  from the
outset and therefore without sufficient  resources to hire required personnel or
pay  vendors  of  products   and   services,   including   but  not  limited  to
subcontractors  needed to design  and  build the First  Production  Model of the
TCS-1  Plant.  The Company  estimates  that it required  financing  in excess of
$2,000,000 to complete the design,  development,  and  construction  of the said
First Production Model of its TCS-1 Plant plus funds to maintain finance-raising
activities.  The Company actively sought  financing under its former  management
from 1992  through  1994 and  continued  to do so under its  current  management
beginning in January 1995. It did not raise  sufficient  financing to design and
construct the First Production Model to the point where initial testing could be
commenced  until May 1998.  Lack of  sufficient  working  capital also  required
management,   who  worked  for  the  Company  for  no,  or  very  limited,  cash
compensation, to devote a substantial amount of their time and effort to raising
the  required  financing.  The  Company  estimates,  that  if it had  sufficient
financing in January of 1995 when members of current  management  commenced  its
search for funding, it might have been able to complete the design, development,
and  construction of the First  Production  Model by October 1996.  Instead,  it
required an additional  three years for the Company to raise sufficient funds to
meet its  initial  goals and  objectives.  The  absence  of  operations  and the
resultant lack of significant cash flow from 1995 until the present,  compounded
the  Company's  problems  because  even the  overhead  required to sustain  fund
raising activities had to be financed from outside sources. This further delayed
the Company's ability to devote  sufficient  resources to completing the design,
development, and construction of the First Production Model of the TCS-1. By way
of example, the First Production Model was scheduled for delivery by February of
1997.  Instead,  the  last of the  three  major  components  of such  model  was
completed in June of 1998 and, as discussed  above,  the First  Production Model
underwent extended testing and "debugging" procedures until December 1998.

      3. History of Losses and Accumulated  Deficit. The Company has experienced
operating  losses in each fiscal period since its  formation in 1987,  including
the period since the 1993 inception of its tire  recycling  business plan. As at
June 30,  1998,  the Company had a deficit  accumulated  since  formation in the
aggregate approximate amount of $10,051,483,  approximately  $8,994,127 of which
was accumulated since the 1993 inception of the Company's present business plan.
The Company expects to incur  additional  operating  losses through at least the
end of the fiscal year ending June 30, 1999 and possibly thereafter (see, above,
Risk  Factor  No. 1  "Development  Stage  Company:  No  Assurance  as to  Future
Profitable  Operations").   Since  its  inception,  the  Company  has  generated
extremely limited revenues from operations.

      4. Going Concern Assumption. The Company's independent auditors' report on
the Company's  financial  statements for the years ended June 30, 1997 and 1998,
contains an explanatory  paragraph  indicating that: (i) the Company is still in
the  development  stage;  (ii) it  cannot  be  determined  at this time that the
Company's  tire  disintegration  technology  will be  developed  to a productive
stage; and (iii) the Company's uncertainty as to its productivity and


                                       16
<PAGE>

its  ability to raise  sufficient  capital  raise  substantial  doubt  about its
ability  to  continue  as a going  concern.  In  addition,  the  Company  had an
accumulated deficit of $10,051,483 as at June 30, 1998. The Company will require
substantial  additional funds in the future,  and there can be no assurance that
any independent  auditors' report on the Company's  future financial  statements
will not  include a similar  explanatory  paragraph  if the Company is unable to
raise sufficient funds or generate  sufficient cash from operations to cover the
cost  of  its  operations.  The  existence  of  the  explanatory  paragraph  may
materially   adversely  affect  the  Company's   relationship  with  prospective
customers and suppliers,  and therefore could have a material  adverse effect on
the Company's business, financial condition and results of operations.

      5. No  Guarantee of Product  Acceptance  in Market.  The first  production
model of the TCS-1  Plant was  completed  in May of 1998 and is  expected  to be
ready for commercial production,  on a complete "turn-key" basis, in March 1999.
Consequently, there is not yet any history of commercial operations of the TCS-1
Plant.  There can be no  assurance  that the TCS-1 Plant will be accepted in the
market  for  tire  disintegration  equipment.  Moreover,  the  Company's  market
research has focused on the potential demand for the TCS-1 Plant, and the rubber
crumb it is  designed  to  produce,  to the  exclusion  of  other  types of tire
disintegration  equipment.  Therefore,  the Company is not able to estimate with
any assurance the potential  demand for the TCS-1 Plant, if any. There can be no
assurance that sufficient  market  penetration can be achieved so that projected
production levels of the TCS-1 Plant will be absorbed by the market.

      6. Dilutive and Other Adverse Effects of Presently Outstanding Debentures,
Warrants,  and Options.  As of February 12, 1999, there were outstanding options
and warrants pursuant to which the Company is obligated to sell common stock, as
follows:

      (a)   2,000,000 common stock purchase  warrants (the "Type A Warrants") to
            purchase a like number of shares of the Company's common stock at an
            exercise price of $.001 per share, the resale of all of which shares
            are included in the Registration Statement on Form SB-2.

      (b)   10% convertible Type A Debentures in the aggregate  principal amount
            of $500,000, with principal and interest convertible, in whole or in
            part,  into shares of the  Company's  common  stock at a  conversion
            ratio equal to a percentage  ranging  between 67.5% and 61.5% of the
            closing bid price of the Company's  common stock on the trading date
            immediately  preceding the date of the Company's receipt of a notice
            of conversion  from a holder of the Type A Debentures.  Accordingly,
            if, on February 16, 1999, all of the principal  amount,  but none of
            the interest,  due on the Type A Debentures  had been converted into
            common  stock  (based on the market  price of the common stock as at
            February  12,  1999),  a total of  4,357,298  shares of common stock
            would have been issued in respect of such conversion.  The resale of
            all of which shares would be included in the Registration  Statement
            on Form  SB-2.  To the  extent  that  the  interest  portion  of the
            Debenture is not converted,  all accrued interest will be payable in
            cash.


                                       17
<PAGE>

      (c)   10% convertible Type B Debentures in the aggregate  principal amount
            of $535,000, with principal and interest convertible, in whole or in
            part,  into shares of the  Company's  common  stock at a  conversion
            ratio of one share for every $.20 of  principal  amount and interest
            earned thereon from the date of issuance. If the principal amount of
            all of the Type B Debentures,  but not the interest, were converted,
            the aggregate  number of shares  issuable  would be  2,675,000,  the
            resale  of  all  which  shares  are  included  in  the  Registration
            Statement on Form SB-2.  To the extent that the interest  portion of
            the Type B Debenture is not converted,  all accrued interest will be
            payable in cash.

      (d)   an option to purchase  235,294 shares,  held by Lenford  Robins,  an
            unaffiliated  consultant,  exercisable at a price of $.17 per share.
            Mr. Robins is an expert in all types of equipment  financing through
            sale and leaseback  arrangements,  and otherwise,  and has provided,
            and  continues to provide,  consulting  services to the Company with
            respect to locating,  structuring,  and arranging such financing for
            purchasers and potential purchasers of TCS-1 Plants. From the Summer
            of 1996 through the Spring of 1997, Mr. Robins provided  substantial
            consulting  services in connection with sale and leaseback financing
            for Ocean's Tire Recycling & Processing Co., Inc. ("OTRP").

      (e)   (i) options to purchase,  on or before March 31, 1999,  an aggregate
            of 250,000  shares,  at an exercise  price of $.1875 per share;  and
            (ii) options to purchase,  on or before June 30, 1999,  an aggregate
            of 250,000 shares,  at an exercise price of $.28 per share.  Each of
            the  above  described  options  are held  among  three  individuals,
            including  Sharon Sanzaro (the spouse of Louis  Sanzaro,  an officer
            and director of the Company),  who hold such options as designees or
            assignees of  Ocean/Venture  III, Inc., a company  controlled by Mr.
            Sanzaro.   These  options  were  granted  in  consideration  of  the
            agreements of  Ocean/Venture  III, Inc. given on March 31, 1996, and
            June 30, 1996 to extend the  maturity  date of certain  indebtedness
            which the Company owed to Ocean/Venture  III, Inc. for periods which
            ranged from 90 to 120 days from each of such dates.

      (f)   an option,  held by a former  outside  director of the  Company,  to
            purchase 20,000 shares of convertible  preferred stock at a price of
            $10 per share (the "Preferred Option"). If purchased, such preferred
            stock will be convertible  into shares of the Company's common stock
            at a conversion  ratio equal to the number of shares of common stock
            purchasable  for the purchase price of each preferred share ($10) at
            30% of the average market price of the Company's common stock during
            the five trading days  immediately  prior to the date of  conversion
            provided,  however,  that  should the total  number of shares of the
            Preferred  Stock which can be purchased  pursuant to the Option,  be
            convertible  into fewer than two million  (2,000,000)  shares of the
            Company's  Common  Stock,  the number of shares of  Preferred  Stock
            purchasable  under the Option,  at the exercise price of ten dollars
            per  preferred  share,  will  be  increased  to  such  number  as is
            convertible  to 2,000,000.  If the shares of  convertible  preferred
            stock had been converted  into shares of the Company's  common stock
            as at February 16, 1999, a total of 3,836,930 shares would have been
            issued in respect of such conversion.


                                       18
<PAGE>

      (g)   the CGT  Option to  purchase  a number of shares  equal,  on a fully
            diluted  basis,  to 10% of the total issued and  outstanding  common
            stock of the Company, at an exercise price equal to $.1195 per share
            with respect to 969,365 shares and at an exercise price with respect
            to the  balance of the shares  equal to fifty  percent  (50%) of the
            average of the final bid and ask  prices of the common  stock of the
            Company, as quoted in the OTC Bulletin Board during the ten business
            days  preceding  the exercise  date.  If all of the other  presently
            outstanding  debentures,  options,  and warrants were exercised,  as
            described  above,  the total number of shares of common stock of the
            Company issued and  outstanding  would be  91,699,663,  prior to the
            exercise  of the CGT  Option,  in which  case,  the number of shares
            subject to the CGT Option would be 10,188,851,  the resale of all of
            which shares would be included in the Registration Statement on Form
            SB-2.

      The  holders  of  the  convertible  debentures,   the  warrants,  and  the
outstanding  options  have an  opportunity  to profit  from a rise in the market
price of the common stock, if such rise should occur, with a resulting  dilution
in the interests of the other  shareholders.  Moreover,  if the above  described
debentures,  warrants, and options (the "Convertible  Securities") are converted
or  exercised,  most of the shares of common stock issued upon such  exercise or
conversion (the  "Underlying  Shares") will be available for immediate sale into
the  public  market,  commencing  on the  effective  date  of  the  Registration
Statement.  The sale or availability  for sale of substantial  amounts of common
stock in the public market could adversely affect the prevailing market price of
the  Company's  common  stock and could  impair the  Company's  ability to raise
additional capital through the sale of its equity securities.  In addition, even
if the Convertible Securities are not converted or exercised, the terms on which
the Company may obtain  additional  financing  may be adversely  affected by the
existence  of such  securities.  For  example,  the  holders of the  Convertible
Securities  could  convert  or  exercise  them at a time  when  the  Company  is
attempting  to obtain  additional  capital  through a new offering of securities
which have terms more favorable (to the Company) than those provided by the then
outstanding Convertible Securities.

      7. Additional Dilution from Issuance of Shares for Services.  To date, the
Company has had no significant operating revenues.  Accordingly, the bulk of its
cash assets have been,  and may  continue to be,  utilized to cover the expenses
associated  with the  development of the TCS-1 Plant.  Given the foregoing,  the
Company  regularly  pays  certain  of  its  financial   obligations  by  issuing
restricted  shares of its common  stock,  at a  discount,  in lieu of cash.  The
discounts at which such shares were issued was generally, but not always, set at
50% of the average market price of the stock, as traded in the  over-the-counter
market  and  quoted  in the OTC  Bulletin  Board.  Such  discounts  were  either
negotiated at arms length with third parties or  determined  arbitrarily  by the
Company,  in which  cases they bore no  relationship  to the  Company's  assets,
earnings,  book value or other such criteria of value.  Such issuances have, and
may  continue  to,  result in  substantial  dilution to the  Company's  existing
shareholders.

      Since  January  of 1995,  the  Company  has  issued a total of  32,756,186
shares,  constituting 41.94% of the issued and outstanding shares of the Company
in lieu of cash compensation due under employment and consulting agreements with
its  executive  officers,  employees,  and  corporate  counsel and in additional
compensation by way of directors shares and stock bonuses.  In addition,  during
that period, the Company issued 12,888,243 shares, constituting approximately


                                       19
<PAGE>

16.5% of the issued and  outstanding  common stock of the Company to  affiliated
and non-affiliated  consultants and  subcontractors  for consulting  services of
various  types.  For as long as the Company has  insufficient  cash resources to
meet its obligations to its officers,  counsel, and outside vendors, the Company
will,  to the extent  possible,  continue to issue shares of its common stock at
negotiated or arbitrary discounts. In addition, the Company intends to submit to
its shareholders, proposals to adopt three stock option plans for the benefit of
its employees (See Risk Factor No. 9 "Possible  Voting Control by Management and
Corporate  Counsel"  and Risk Factor No. 27 "Adverse  Effects of Proposals to Be
Presented at Annual Shareholders Meeting: Anti-Takeover Provisions,  Limitations
on Shareholders Voting Rights, and Stock Bonuses to Management").

      8.  Possible  Depressive  Effect on Price of Securities of Future Sales of
Common Stock.  The resale of 11,952,857 of the  78,095,141  common shares of the
Company, issued and outstanding as of February 4, 1999, has been included in the
Registration  Statement on Form SB- 2.  11,760,000 of such shares will be freely
tradeable commencing on the effective date of the Registration Statement on Form
SB-2 or, if the holders  thereof  shall choose to withdraw the  registration  of
such shares,  they will be tradeable under Rule 144 commencing May 11, 1999. The
resale  of  an  estimated  21,220,449  shares  issuable  upon  the  exercise  or
conversion of presently outstanding options,  warrants, and debentures have also
been  included  in the  Registration  Statement  on Form SB-2 and will be freely
tradeable  upon  the  later  of:  (i) the  effective  date  of the  Registration
Statement;  or  (ii)  their  issuance.  Alternatively,  if  the  holders  of the
convertible  debentures  and some of such warrants  (but not the options)  shall
choose  to  withdraw  them from the  Registration  Statement,  they will  become
tradeable under Rule 144 on  commencement  dates ranging from January 7, 1999 to
May 11, 1999. The sale or other disposition of much of the currently outstanding
shares of common stock is restricted by the  Securities  Act.  Unless such sales
are  registered,  these  shares  may only be sold in  compliance  with  Rule 144
promulgated  under the Securities Act or some other exemption from  registration
thereunder.  Rule 144 provides, among other matters, that if certain information
concerning  the  operating  and  financial  affairs of the  Company is  publicly
available,  persons who have held restricted securities for a period of one year
may thereafter sell in each  subsequent  three month period up to that number of
such shares equal to one percent of the Company's  total issued and  outstanding
common stock. The sale or availability for sale of substantial amounts of common
stock in the public  market  after the offering  being made by the  Registration
Statement on Form SB-2 could  adversely  affect the prevailing  market price for
the  Company's  common  stock and could  impair the  Company's  ability to raise
additional capital through the sale of its equity securities.

      9. Possible Voting Control by Management and Corporate  Counsel:  Possible
Depressive  Effect on Market  Prices.  As of  February  4, 1999,  the  Company's
officers and directors were the beneficial  owners of an aggregate of 29,391,199
shares,  constituting  approximately 37.16% of the Company's  outstanding common
stock.  The Company intends to hold the 1999 annual meeting of its  shareholders
prior to the end of the current  fiscal  year.  (See Risk Factor No. 27 "Adverse
Effects  of  Proposals  to  Be   Presented  at  Annual   Shareholders   Meeting:
Anti-Takeover  Provisions,  Limitations on Shareholders Voting Rights, and Stock
Bonuses to Management").  In addition to the proposals  discussed in Risk Factor
No. 27, the Board of Directors  has proposed that the  shareholders  approve the
adoption of three stock option plans. If adopted, two of these


                                       20
<PAGE>

plans will be for the benefit of all of the Company's employees,  but management
and key employees are expected to be the principal  beneficiaries  thereof.  The
third of these proposed plans, is intended to be specifically for the purpose of
awarding  options  for the  purchase  of  shares  of  common  stock at a nominal
exercise price of $.001 per share, to key employees and members of management in
respect of certain specified performance achievements attained or to be attained
by the Company due to their efforts.

      The other two stock  option  plans to be  presented  to the  Shareholders,
consist of a  statutory  and a  non-statutory  plan.  Key  management  and other
employees  will also be eligible  to receive  option  grants  under each of such
plans.  The exercise  price of options  granted under the statutory plan must be
not less than 100% of the market  price on the day the option is granted  unless
the grantee owns 10% or more of the total issued and outstanding common stock of
the Company,  in which case the exercise price must be not less than 110% of the
market  price on the day the option is  granted.  The  non-statutory  plan to be
proposed to the shareholders calls for an exercise price of not less than 50% of
the market price on the date the option is granted.

      The  concentration  of ownership by the  Company's  officers and directors
may,  along with other  "anti-takeover"  measures  which the Board of  Directors
plans to submit to the shareholders, discourage potential acquirors from seeking
control  of  the  Company  through  the  purchase  of  Common  Stock,  and  this
possibility  could  have a  depressive  effect  on the  price  of the  Company's
Securities.  (See  "Risk  Factor No. 27  "Adverse  Effects  of  Proposals  to Be
Presented at Annual Shareholders Meeting: Anti-Takeover Provisions,  Limitations
on Shareholders Voting Rights, and Stock Bonuses to Management").

      10.  Proposed  Reverse  Split:   Possible  Negative  Effect  on  Value  of
Securities.  As of  February  4,  1999,  there  were  78,095,141  shares  of the
Company's common stock issued and outstanding.  While the Company considers that
it would be highly  unlikely  if all of the  currently  outstanding  options and
warrants were to be exercised and all of the  currently  outstanding  debentures
were to be converted  with respect to the principal  amount of such  debentures,
there could be up to 103,887,814  shares of common stock issued and outstanding.
On August 13, 1997,  the Company  received a Letter of Intent from H.J.  Meyers,
Inc.  (the  "Meyers  Letter of Intent"),  a  broker-dealer  registered  with the
National  Association of Securities  Dealers,  Inc., for the  underwriting  of a
proposed public offering.  On or about September 16, 1998, however, H. J. Meyers
abruptly  ceased  doing  business.  The Company  intends to endeavor to effect a
public offering of its securities and is presently in negotiations  with another
potential underwriter. The Meyers Letter of Intent had required that the Company
have not more than ten million  (10,000,000)  shares of common  stock issued and
outstanding prior to the proposed public offering. The Company believes that any
potential  underwriter  for a public  offering of the Company's  securities will
require that the Company  effect a reverse  split to reduce the number of shares
of its common stock issued and outstanding because the total number of shares of
common stock currently  outstanding is  disproportionately  large in relation to
the  Company's  level of sales,  net  income and net  worth.  Additionally,  the
Company's  common stock has had a low market  value per share in recent  months,
which  may,  the  Company  believes,  tend to reduce  stockbroker  and  investor
interest in the  Company.  Further,  the Company  believes  that the current per
share price of the Company's common stock may limit the effective  marketability
of the Company's  common stock because of the reluctance of many brokerage firms
and institutional investors to recommend lower-priced stocks to their clients or
to hold them in their own portfolios. In light of the above, the Company intends
to call a meeting of its shareholders and


                                       21
<PAGE>

to submit to them a  proposal  to  reverse  split the number of shares of common
stock issued and  outstanding at a ratio of one post-split  share for every five
pre-split  shares,  or at some other,  possibly  higher,  ratio, as the board of
directors  shall  agree  is in  the  best  interests  of  the  Company  and  its
shareholders.  Based upon the  number of shares  issued  and  outstanding  as of
February  4, 1999,  and  assuming  that the  Reverse  Split is  approved  by the
shareholders and effected at a one-for-five  ratio,  there will be a decrease in
the number of outstanding shares of common stock of the Company to approximately
15,619,028  shares.  Because of standard  anti-dilution  clauses or market price
sensitive  exercise or conversion prices contained in all presently  outstanding
convertible  debentures,  warrants,  and options,  such reverse split would also
affect the number of shares of common stock issuable upon conversion or exercise
of  such  debentures,   warrants,   or  options.   Negotiations  with  potential
underwriters  may  result in a  different  reverse-split  ratio or even a second
reverse split.

      The  Company  believes  that a decrease  in the number of shares of common
stock  outstanding  may increase  the trading  price and  marketability  of such
shares.  However,  the market price of the Company's common stock should also be
expected to reflect Company performance and other factors,  some of which may be
unrelated  to the  number of shares  outstanding.  Accordingly,  there can be no
assurance that the market price of the Common Stock after the Reverse Split will
actually  increase in an amount  proportionate  to the decrease in the number of
outstanding  shares.  The Reverse Split may leave  stockholders with one or more
"odd lots" of the Company's  stock,  i.e. stock holdings in amounts of less than
100 shares.  These shares may be more  difficult  to sell,  or require a greater
commission per share to sell, than shares in lots of 100.

      Upon the  effectiveness  of the  Reverse  Split,  if it is approved by the
Shareholders, the presently issued certificates shall be deemed to represent the
number of shares equal to the number of pre-split shares originally  represented
by such certificate divided by the ratio of the reverse split, and rounded up to
the  next  full  number.  EXAMPLE:  if  the  reverse  split  is  effected  at  a
one-for-five  ratio,  a  certificate  which  originally  represented  an  10,523
pre-split  shares would be deemed to represent 10,523 divided by five (2,104.6),
rounded up to the next full  number,  i.e.,  2,105  shares.  Thus no  fractional
shares of common stock will result from the reverse  split (see "Risk Factor No.
6,  Dilutive  and Other  Adverse  Effects of Presently  Outstanding  Debentures,
Warrants and Options").

      11. Dependence on Major Customers. To date the Company has received orders
for fifteen TCS-1  Plants,  eight of which were ordered by  Ocean/Ventures  III,
Inc.("O/V III") of Toms River,  New Jersey ("O/V III") and parts of one of which
have been purchased by Oceans Tire Recycling & Processing Co., Inc. ("OTRP"),  a
company under common  control with O/V III. The eight Plants  ordered by O/V III
constitute  approximately  fifty-six  percent  (56%)  of the  Company's  present
backlog. The Company has also received orders for four TCS-1 Plants from ENERCON
America  Distribution  Limited  ("Enercon")  of  Westerville,  Ohio. The Enercon
orders  constitute  approximately  twenty-eight  percent  (28%) of the Company's
present  backlog.  The loss of either of these two customers  would have a major
adverse effect on the Company.  Both O/V III and OTRP are controlled by Louis V.
Sanzaro, an officer and director of the Company.

      Completion and consummation of all currently  outstanding orders for TCS-1
Plants,   are  entirely   dependent   upon  the  TCS-1's   meeting   performance
expectations,  each  customer's  obtaining  lease  or  other  financing  for the
purchased portions of the Plant (as well as all required


                                       22
<PAGE>

permits  and  licenses  to  operate a  Plant),  and to the  Company's  obtaining
sufficient production, financing and capacity to meet delivery requirements.

      12.  Uncertainty  of Product  and  Technology  Development:  Technological
Factors. The Company has completed initial development and construction,  of the
first  production  model of the TCS-1 Plant.  The Company's  success will depend
upon the TCS-1 Plant's meeting targeted  performance and cost objectives and its
timely introduction into the marketplace. Such an outcome will be subject to the
risks inherent in the development of a new product,  technology,  and, business,
including  unanticipated  delays,  expenses,  and  difficulties,  as well as the
possible insufficiency of funding to complete development (see Risk Factor No. 2
"Need for Substantial  Additional  Capital",  above).  There can be no assurance
that under  commercial  usage  conditions,  the TCS-1 Plant will  satisfactorily
perform the functions for which it has been  designed and  constructed,  that it
will meet  applicable  price or performance  objectives,  or that  unanticipated
technical or other problems will not occur which would result in increased costs
or material delays in establishing the Company's business at a profitable level.
There can be no assurance that,  despite  testing by the Company,  problems will
not be  encountered  in the TCS-1 Plant  after the  commencement  of  commercial
manufacture and sales, resulting in loss or delay in market acceptance.

      13.  International  Sales and Operations.  The Company plans to market the
TCS-1  Plant in Europe and India  during the 1999  calendar  year,  and in other
areas  throughout the world as  opportunities  arise.  There can however,  be no
assurances  that the  TCS-1  Plant  will be  successfully  marketed  or that any
anticipated  international  sales of TCS-1 Plants will take place.  In addition,
the Company may enter into joint  ventures  with  purchasers of TCS-1 Plants for
the purpose of engaging in the business of operating tire  recycling  businesses
equipped  with  TCS-1  Plants.  To  the  extent  that  the  Company  engages  in
international  sales  and/or  operations,  it will be subject  to various  risks
associated therewith, including but not limited to changes in tariff rates, lack
of reliability and availability of qualified labor, and instability of political
climate or economic environment. In addition, the value of any capital equipment
owned by such joint  ventures  and any  operating  lease or  equipment  purchase
financing payments received by the Company,  may, under certain  conditions,  be
valued  or paid  in  non-U.S.  currencies,  all of  which  will  be  subject  to
independent  fluctuating  exchange rates with the U.S.  dollar which may have an
adverse  affect on the  Company's  revenues or asset values in terms of the U.S.
dollar.

      14. Protection of Tirex Proprietary Technology and Potential Infringement.
The success of the Company's  proposed business depends in part upon its ability
to protect its  proprietary  technology  and the proposed TCS-1 Plant which will
utilize  such  technology.  On April 7, 1998,  the  Company  was issued a United
States patent on its Cryogenic Tire Disintegration Process and Apparatus (Patent
No. 5,735,471).  This patent will expire on December 18, 2016. In November 1998,
the Company filed this patent with the Canadian  Patent  Office.  The Company is
presently  unable to state how long the  Canadian  review  will take.  While the
Company  expects  a  Canadian  patent  to be  granted,  it is unable to give any
assurance that this will in fact be the case. Prior to obtaining its patent, the
Company  relied  on  trade  secrets,   proprietary  know-how  and  technological
innovation to develop its technology and the designs and  specifications for the
TCS- 1 Plant.  Except where the terms of their employment  agreements would make
it redundant or, in the sole  discretion of  management,  it is determined  that
because of the non-technical nature


                                       23
<PAGE>

of their duties,  such agreements are not necessary or appropriate,  the Company
has, and will continue to, enter into  confidentiality and invention  assignment
agreements  with all  employees  and  consultants  which  limit  access  to, and
disclosure  or use of, the  Company's  proprietary  technology.  There can be no
assurance,   however,   that  the   steps   taken  by  the   Company   to  deter
misappropriation  or third party  development of its technology and/or processes
will be adequate,  that others will not independently develop similar technology
and/or processes or that secrecy will not be breached. In addition, although the
Company believes that its technology has been  independently  developed and does
not infringe on the proprietary rights of others, there can be no assurance that
the Company's technology does not and will not so infringe or that third parties
will not assert infringement claims against the Company in the future. Moreover,
there can be no assurance that the Company will have the resources to defend its
Patent by bringing patent infringement or other proprietary rights actions.

      15. Limited  Public Market:  Company Not Eligible for Inclusion on NASDAQ.
To date  there  has been only a  limited  and  sporadic  public  market  for the
Company's  common stock.  There can be no assurance  that an active and reliable
public market will develop or, if developed, that such market will be sustained.
Purchasers  of  shares of  common  stock of the  Company  may,  therefore,  have
difficulty  in  reselling  such  shares.  As a  result,  investors  may  find it
impossible to liquidate their investment in the Company should they desire to do
so. The  Company's  common  stock is  currently  traded in the  over-the-counter
market and quoted on the OTC  Bulletin  Board.  The Company  intends to apply to
have its common stock  approved for quotation on the Nasdaq  SmallCap  Market at
such time, in the future,  that it meets the requirements  for inclusion.  As at
the date hereof, however, the Company is not eligible for inclusion in NASDAQ or
for  listing  on  any  national  stock  exchange.  All  companies  applying  and
authorized  for  NASDAQ are  required  to have not less than  $4,000,000  in net
tangible  assets,  a public  float(3)  with a market value of not less than five
million  dollars,  and a minimum bid of price of $4.00 per share. At the present
time,  the  Company is unable to state  when,  if ever,  it will meet the Nasdaq
application standards.  Unless the Company is able to increase its net worth and
market valuation  substantially,  either through the accumulation of surplus out
of earned income or successful  capital raising  financing  activities,  it will
never be able to meet the eligibility requirements of NASDAQ. In addition, it is
likely that the Company, which, as of February 4, 1999, had 78,095,141 shares of
common stock issued and outstanding,  will have to effect a reverse split of its
issued and outstanding stock, in order to meet the minimum bid price requirement
(see,  also, Risk Factor No. 6 "Dilutive and Other Adverse Effects of Debentures
and Warrants and Presently Outstanding Option").  Moreover,  even if the Company
meets the minimum  requirements  to apply for  inclusion in The Nasdaq  SmallCap
Market,  there  can be no  assurance,  that  approval  will be  received  or, if
received,  that the Company will meet the requirements for continued  listing on
the Nasdaq SmallCap  Market.  Further,  Nasdaq reserves the right to withdraw or
terminate a listing on the Nasdaq SmallCap Market at any time and for any reason
in its  discretion.  If the Company is unable to obtain or to maintain a listing
on the Nasdaq SmallCap Market,  quotations, if any, for "bid" and "asked" prices
of the common stock would be available  only on the OTC Bulletin Board where the
common stock is currently quoted or in the "pink sheets" published by

----------
      (3)   "Public  float" is defined as shares  that are not held  directly or
            indirectly by any officer or director of the issuer and by any other
            person  who is the  beneficial  owner of more than 10 percent of the
            total shares outstanding.


                                       24
<PAGE>

the National Quotation Bureau,  Inc. This can result in an investor's finding it
more difficult to dispose of or to obtain accurate  quotations of prices for the
common  stock  than would be the case if the  common  stock  were  quoted on the
Nasdaq  SmallCap  Market.  Irrespective  of whether  or not the common  stock is
included in the Nasdaq  SmallCap  system,  there is no assurance that the public
market for the common stock will become more active or liquid in the future.  In
that regard,  prospective purchasers should consider that this offering is being
made without the underwriting  arrangements typically found in a public offering
of  securities.  Such  arrangements  generally  provide  for the  issuer  of the
securities to sell the securities to an underwriter  which,  in turn,  sells the
securities to its customers and other members of the public at a fixed  offering
price,  with the result that the  underwriter  has a continuing  interest in the
market for such  securities  following  the  offering.  In order to qualify  for
listing on a national stock exchange, similar minimum criteria respecting, among
other things, the Company's net worth and/or income from operation must be met.

      Accordingly, market transactions in the Company's common stock are subject
to the "Penny Stock Rules" of the Securities and Exchange Act of 1934, which are
discussed in more detail,  below,  under "Risk Factor No. 16.  Applicability  of
Penny Stock Rules to Broker-Dealer  Sales of Company Common Stock".  These rules
could  make it  difficult  to trade  the  common  stock of the  Company  because
compliance  with them can delay and/or preclude  certain  trading  transactions.
This could  have an adverse  effect on the  ability of an  investor  to sell any
shares of the Company's common stock.

      16. Applicability of "Penny Stock Rules" to Broker-Dealer Sales of Company
Common Stock.  As discussed  above,  at the present time,  the Company's  common
stock  is not  listed  on The  Nasdaq  SmallCap  Stock  Market  or on any  stock
exchange.  Although  dealer prices for the Company's  common stock are listed on
the OTC  Bulletin  Board,  trading  has been  sporadic  and  limited  since such
quotations first appeared on April 4, 1994.

      The  Securities  Enforcement  and Penny Stock Reform Act of 1990  requires
special  disclosure  relating to the market for penny stocks in connection  with
trades in any stock defined as a "penny stock". Commission regulations generally
define a penny stock to be an equity  security  that has a market  price of less
than $5.00 per share and is not listed on The Nasdaq  SmallCap Stock Market or a
major stock exchange.  These regulations subject all broker-dealer  transactions
involving  such  securities to the special "Penny Stock Rules" set forth in Rule
15g-9 of the Securities Exchange Act of 1934 (the "34 Act"). It may be necessary
for the Selling  Shareholders and the Underlying  Share Selling  Shareholders to
utilize the services of broker-dealers  who are members of the NASD. The current
market price of the  Company's  common stock is  substantially  less than $5 per
share and such stock can, for at least for the foreseeable  future,  be expected
to continue to trade in the over-the-counter  market at a per share market price
of  substantially  less than $5.  Accordingly,  any  broker-dealer  sales of the
Company's  shares will be subject to the Penny Stock  Rules.  These Rules affect
the ability of  broker-dealers  to sell the  Company's  securities  and also may
affect the ability of  purchasers  of the  Company's  common stock to sell their
shares in the secondary market, if such a market should ever develop.

      The Penny Stock Rules also impose special sales practice  requirements  on
broker-dealers  who sell such securities to persons other than their established
customers or "Accredited  Investors." Among other things,  the Penny Stock Rules
require that a broker-dealer make a


                                       25
<PAGE>

special  suitability  determination  respecting  the  purchaser  and receive the
purchaser's written agreement to the transaction prior to the sale. In addition,
the  Penny  Stock  Rules  require  that a  broker-dealer  deliver,  prior to any
transaction,  a disclosure schedule prepared in accordance with the requirements
of the Commission relating to the penny stock market.  Disclosure also has to be
made about  commissions  payable to both the  broker-dealer  and the  registered
representative and the current quotations for the securities.  Finally,  monthly
statements have to be sent to any holder of such penny stocks  disclosing recent
price information for the penny stock held in the account and information on the
limited  market in penny  stocks.  Accordingly,  for so long as the Penny  Stock
Rules are applicable to the Company's common stock, it may be difficult to trade
such stock because  compliance with such Rules can delay and/or preclude certain
trading transactions.  This could have an adverse effect on the liquidity and/or
price of the Company's common stock.

      17.  Management's  Lack of Industry  Experience.  Although  Management has
significant  general business and engineering  experience,  potential  investors
should be aware  that no member of  management  has been  directly  involved  in
administering a tire disintegration, recycling, or tire disintegration equipment
manufacturing,  business, except for Mr. Sanzaro, who has more than twenty years
of experience in the recycling business (excluding tires).

      18.  Dependence on Key  Personnel.  The Company  believes that its success
depends to a  significant  extent on the efforts and abilities of certain of its
senior  management,  in  particular  those of Terence C. Byrne,  Chairman of the
Board of Directors and Chief  Executive  Officer;  Louis Sanzaro,  President and
Chief  Operating  Officer,  and  Louis V.  Muro,  Vice  President  in  charge of
engineering.  The loss of any of these  persons  could have a  material  adverse
affect on the Company's business,  prospects,  operating results,  and financial
condition.  The Company has entered  into  employment  agreements  with  Messrs.
Byrne,  Sanzaro,  and Muro.  The Company  does not  presently  have key man life
insurance  policies  and does not intend to obtain any unless  required to do so
under  future  financing  arrangements.  There  can be no  assurance  that  such
policies will be available to the Company on commercially  reasonable  terms, if
at all.  Additionally,  the ability of the Company to realize its business  plan
could be  jeopardized  if any of its  senior  management  becomes  incapable  of
fulfilling his  obligations to the Company and a capable  successor is not found
on a timely basis.  There can however be no assurance  that, in such event,  the
Company  will be able to locate and retain a capable  successor to any member of
its senior management.

      19.  Regulatory  and  Environmental  Considerations.  The Company does not
expect  that its  equipment  manufacturing  operations  will be  subject  to any
unusual  or  burdensome  governmental  regulations.   However,  the  Company  is
presently  in the  process of making  arrangements  to own the First  Production
Model of the TCS Plant and to operate it as a "Tirex  Advanced  Products  Plant"
for the purpose of selling rubber crumb produced by operation of the TCS-1 Plant
and manufacturing finished products, made wholly or partially from such rubber


                                       26
<PAGE>

crumb.  The  TCS-1  Plant  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 and to the best of the  Company's
knowledge,  will not result in the  emission of air  pollution,  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 landfilled.  However,
the operation of a TCS-1 Plant will involve,  to varying degrees and for varying
periods of time, the storage of scrap tires which,  with their size,  volume and
composition, can pose serious environmental problems. While the Company does not
believe that such storage will normally involve  quantities of tires so large or
storage periods so extensive as to constitute the  "stockpiling" of scrap tires,
it should  be noted  that  stockpiling,  should it  occur,  could  constitute  a
particularly serious environmental problem. Among the numerous problems relating
to scrap tires, is that when stockpiled above ground, tires create serious fire,
public health,  and  environmental  hazards  ranging from fires,  which generate
large and dense clouds of black smoke and are extremely difficult to extinguish,
to the creation of vast breeding grounds for mosquitoes and vermin.

      As a result,  many states have either  passed or have pending  legislation
regarding  discarded  tires including  legislation  limiting the storage of used
tires to specifically designated areas. The Company and other operators of TCS-1
Plants will therefore be subject to various local,  state,  and federal laws and
regulations including,  without limitation,  regulations  promulgated by federal
and state environmental,  health, and labor agencies. Establishing and operating
a TCS-1 Plant for tire  recycling will require  numerous  permits and compliance
with  environmental  and  other  government  regulations,  on  the  part  of the
Company's  customers,  both in the  United  States  and Canada and in most other
foreign countries. The process of obtaining required regulatory approvals may be
lengthy and  expensive  for both the Company and for its TCS-1 Plant  customers.
Moreover,  regulatory approvals, if granted, may include significant limitations
on either the Company's or its  customer's  operations.  The EPA and  comparable
state and local regulatory agencies actively enforce  environmental  regulations
and  conduct  periodic  inspections  to  determine  compliance  with  government
regulations.  Failure to comply  with  applicable  regulatory  requirements  can
result in, among other  things,  fines,  suspensions  of  approvals,  seizure or
recall of products, operating restrictions, and criminal prosecutions.

      Compliance  with applicable  environmental  and other laws and regulations
governing  the business of the Company,  and of all TCS-1 Plant  Operators,  may
impose  financial  burdens that could adversely  affect the business,  financial
condition,  prospects,  and results of operations,  of the Company. Such adverse
affects could include,  but may not be limited to, the burden of compliance with
laws and regulations governing the installation and/or operation of TCS-1 Plants
discouraging  potential  customers  from  purchasing a TCS-1  Plant.  Actions by
federal, state, and local governments concerning  environmental or other matters
could  result in  regulations  that could  increase  the cost of  producing  the
recyclable rubber, steel, and fiber which are the by-products from the operation
of the TCS-1 Plant and make such  by-products less profitable or even impossible
to sell at an economically feasible price level.

      The  Company  believes  that  existing   government   regulations,   while
extensive,  will not result in the disability of either the Company or its TCS-1
Plant customers to operate  profitably and in compliance with such  regulations.
However,  since  all  government  regulations  are  subject  to  change  and  to
interpretation  by local  administrations,  the effect of government  regulation
could  conceivably  prevent,  or delay for a  considerable  period of time,  the
development of the


                                       27
<PAGE>

Company's   business  as  planned   and/or  impose  costly  new  procedures  for
compliance,  or prevent the Company or its TCS-1  customers from  obtaining,  or
affect the timing of, regulatory approvals. Actions by federal, state, and local
governments   concerning   environmental   or  other  matters  could  result  in
regulations  that could therefore  increase the cost of producing the recyclable
rubber,  steel,  and fiber which are the  by-products  from the operation of the
TCS-1 Plant and make such by-products less profitable or even impossible to sell
at an economically  feasible price level, which could result in the Company's or
its TCS-1  customers'  businesses being less  profitable,  or  unprofitable,  to
operate.  Continually  changing government  compliance standards and technology,
could also affect the Company's future capital expenditure requirements relating
to environmental  compliance.  Likewise,  the burden of compliance with laws and
regulations  governing the  installation  and/or operation of TCS-1 Plants could
discourage  potential  customers  from  purchasing  a TCS-1  Plant  which  would
adversely  affect the  Company's  business,  prospects,  results,  and financial
condition.  As a result,  the  business  of the Company  could be  directly  and
indirectly affected by government regulations.

      20. Production and Supply. The Company intends to begin  manufacturing the
TCS-1 Plant on a commercial  basis in March 1999. In connection  therewith,  the
Company  will be  dependent  on  arrangements  with its  subcontractors  for the
manufacture and assembly of the principal components incorporated into the TCS-1
Plant.  It will  therefore  be  substantially  dependent  on the ability of such
subcontractors to satisfy performance and quality specifications and to dedicate
sufficient production capacity for all TCS-1 Plant scheduled delivery dates. The
Company believes that all of its subcontractors have the requisite manufacturing
capabilities  and the  willingness  to  dedicate  sufficient  amounts  of  their
manufacturing  capacity to the Company to meet all TCS-1 Plant  delivery  dates,
currently  scheduled  or  expected  to be  scheduled  within the next two years.
However,  no  assurance  can be  given  that  this  will in fact be the case and
failure  on the part of the  Company's  subcontractors  in these  regards  would
adversely  affect the Company's  ability to manufacture and deliver TCS-1 Plants
on a timely  and  competitive  basis.  In such event the  Company  would have to
replace or supplement its present subcontractors. There can be no assurance that
should it be  necessary  to do so,  the  Company  would be able to find  capable
replacements for its subcontractors on a timely basis and on terms beneficial to
the Company,  if at all; The Company's  inability to do so would have a material
adverse effect on its business.

      Components  of  the  TCS-1  Plants,  which  are  not  manufactured  by the
Company's  subcontractors  specifically for the TCS-1 Plant,  will be purchased,
either  directly by the Company or indirectly  through its  subcontractors  from
third-party  manufacturers.  The  Company  believes  that  numerous  alternative
sources of supply for all such components are readily available.

      21.  Technological  Changes.  To date, the market for tire  disintegration
equipment has not, to the best of management's knowledge,  been characterized by
rapid  changes  in  technology.  However,  there  can be no  assurance  that new
products or  technologies,  presently  unknown to the Company,  will not, at any
time in the future and without warning, render the Company's tire disintegration
technology  less  competitive or even obsolete.  Moreover,  the technology  upon
which the Company's tire disintegration system is based, could be susceptible to
being  analyzed  and  reconstructed  by an  existing  or  potential  competitor.
Although  the Company  has been issued a United  States  patent  respecting  its
proprietary disintegration system, the Company may not have


                                       28
<PAGE>

the financial resources to successfully defend such patent, were it is to become
necessary,  by bringing  patent  infringement  suits  against  parties that have
substantially  greater resources than are available to the Company.  The Company
must continue to create innovative new products reflecting technological changes
in design,  engineering,  and development,  not only of new tire  disintegration
machinery,  but of products, and machinery capable of producing products,  which
incorporate and recycle the rubber,  steel,  and/or fiber by-products which will
be produced by the operation of the TCS-1 Plant. Failure to do so, could prevent
to Company from gaining and  maintaining a significant  market for its products.
This may require a continuing high level of product development, innovation, and
expenditures. To the extent that the Company does not respond adequately to such
technological  advances,  its  products  may become  obsolete and its growth and
profitability may be adversely affected.

      22.  Competition.  Although  management believes that the Tirex Technology
has distinct  advantages over other existing tire  disintegration  methods,  the
Company will face competition from other equipment manufacturers,  virtually all
of whom will be larger than the Company, and will have substantially more assets
and resources than the Company.  Management  intends to meet such competition by
developing  technological  innovations  which  will  make the TCS-1  Plant  more
economical  and efficient  than other tire  disintegration  methods  although no
assurance can be given that this will prove to be the case.

      23. Lack of Liability  Insurance.  The proposed TCS-1 Plant may expose the
Company to  possible  product  liability  claims if,  among  other  things,  the
operation  of the TCS-1  Plant  results in  personal  injury,  death or property
damage.  There can be no assurance the Company will have sufficient resources to
satisfy any  liability  resulting  from such claims or will be able to cause its
component suppliers or customers to indemnify or insure the Company against such
claims.  The  Company  does not  presently  intend to obtain  product  liability
insurance prior to the commencement of commercial  operation of the TCS-1 Plant.
Should the Company  determine that such insurance is necessary,  there can be no
assurance  that  affordable  insurance  coverage  will be available in terms and
scope adequate to protect the Company  against  material  adverse effects in the
event of a successful claim.

      24. No Dividends and None  Anticipated.  The Company has not paid any cash
dividends,  nor does it contemplate or anticipate  paying any dividends upon its
common stock in the foreseeable future.

      25. Possible  Adverse Effects of  Authorization  and Issuance of Preferred
Stock.  The  Company's  amended  Certificate  of  Incorporation  authorizes  the
issuance of 5,000,000 shares of "Class A Stock".  Twenty thousand of such shares
are  reserved  for  issuance  as  preferred  stock under an  outstanding  option
therefor. The Board of Directors has the power to issue the balance of the Class
A Stock in such  series  and  classes  and with such  designations,  rights  and
preferences  as may be  determined  from time to time by the Board of Directors.
The issuance of any series of preferred stock having rights superior to those of
the common  stock may result in a decrease  in the value or market  price of the
common stock and could be used by the Board of Directors as a means to prevent a
change in control of the Company. Such preferred stock issuances could


                                       29
<PAGE>

make the possible  takeover of the Company,  or the removal of management of the
Company,  more difficult.  The issuance of such preferred stock could discourage
hostile  bids for control of the  Company in which  shareholders  could  receive
premiums for their common stock or warrants,  could adversely  affect the voting
and other rights of the holders of the common stock, or could depress the market
price of the common  stock.  Also,  the  voting  power and  percentage  of stock
ownership of the shareholders of the Company's  outstanding capital stock can be
substantially  diluted by such preferred stock  issuance.  See also, Risk Factor
No. 27 "Adverse  Effects of Proposals  to Be  Presented  at Annual  Shareholders
Meeting:  Anti-Takeover  Provisions,  Limitations on Shareholders Voting Rights,
and Stock Bonuses to Management".

      26.  Prior  Notice  Not  Required  For  Shareholder  Actions.  None of the
Company's  securities are registered under Section 12 of the Securities Exchange
Act of 1934, as amended (the "34 Act"). As a result,  the Company is not subject
to the Proxy Rules of Section 14 of the 34 Act. The Company is thus able to take
shareholder  actions in  conformance  with Section 228 of the  Delaware  General
Corporation  Act,  which  permits it to take any action which is required to, or
may, be taken at an annual or special meeting of the shareholders, without prior
notice and without a vote of the shareholders. Instead of such vote, the written
consent or consents in writing, setting forth the action so taken, can be signed
by the holders of  outstanding  stock having not less than the minimum number of
votes that would be  necessary  to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted on such action.
The only  notice  which  shareholders  other  than those who  consented  to such
action,  are entitled to, is required to be given  promptly after the action has
been taken.

      27.  Adverse  Effects of Proposals to Be Presented at Annual  Shareholders
Meeting: AntiTakeover Provisions, Limitations on Shareholders Voting Rights, and
Stock Bonuses to Management. The Company intends to hold the 1999 annual meeting
of its  shareholders  prior to the end of the current fiscal year.  This will be
the first meeting of the Shareholders  ever called by the Company.  The Board of
Directors has proposed that the Company's Certificate of Incorporation should be
amended and restated to contain  provisions  that may make it more  difficult to
acquire  control  of the  Company  by means of  tender  offer,  over-the-counter
purchases,  a proxy fight, or otherwise.  If adopted by the required vote of the
Company's shareholders, the amendments will include: (i) the addition of a "fair
price"  provision to the Certificate of  Incorporation  that regulates  business
combinations with any person or group beneficially  owning fifteen percent (15%)
or more of the  Company's  common  stock,  including  a  voting  requirement  of
seventy-five  percent (75%) of the voting power of all outstanding voting shares
of the Company  (excluding shares held by such fifteen percent (15%) stockholder
or group of  stockholders)  for a  business  combination,  unless  the  business
combination  is approved by a majority of the members of the Board of  Directors
who have held office  since prior to the date of the 1999  annual  meeting  (the
"Continuing  Directors")  or  satisfies  certain  minimum  price and  procedural
requirements;  (ii)  the  addition  to the  Certificate  of  Incorporation  of a
provision  granting  authority  to the Board of  Directors  to adopt one or more
shareholder rights plans, rights agreements, or other forms of "poison pills" in
the future  without  further  shareholder  approval,  (iii) the  addition to the
Certificate of Incorporation  of a provision  classifying the Board of Directors
into three classes;  (iv) the addition to the Certificate of  Incorporation of a
seventy-five  percent (75%) voting  requirement for any stockholder action to be
taken by written  consent;  (v) an amendment to the Certificate of Incorporation
requiring the affirmative  vote of the holders of seventy-five  percent (75%) of
the outstanding voting stock to amend, alter and repeal the By-laws and to allow
the Board of Directors to amend, alter or repeal the By-laws without stockholder


                                       30
<PAGE>

consent;  (vi) the addition to the Certificate of  Incorporation  of a provision
electing to be governed by the provisions of Section 203 of the Delaware General
Corporation  Law which,  under certain  circumstances,  imposes  restrictions on
proposed business  combinations between a company and an interested  stockholder
of such  company;  (vii) the  addition of a  seventy-five  percent  (75%) voting
requirement in order to amend, alter or repeal the foregoing proposed amendments
to the  Certificate  of  Incorporation;  (viii)  an  amendment  to  the  By-laws
eliminating the ability of stockholders to call a special meeting;  and (ix) the
addition  to the  By-laws of a  provision  requiring  that  stockholders  submit
director  nominations  and  other  business  to be  considered  at  meetings  of
stockholders  at least 90 days in advance of any such  meeting of  stockholders.
The proposed  amendments are not being submitted to the shareholders in response
to any effort, of which the Company is aware, to accumulate the Company's common
stock or to obtain control of the Company.

      The  proposed  amendments,  individually  and  collectively,  may have the
effect of making more difficult and discouraging a merger, tender offer or proxy
fight,  even if such transaction or occurrence may be favorable to the interests
of some or all of the Company's  stockholders.  The proposed amendments also may
delay the  assumption  of control by a holder of a large block of the  Company's
common stock and the removal of incumbent management, even if such removal might
be  beneficial  to some or all of the  stockholders.  Furthermore,  the proposed
amendments  may have the effects of deterring or  frustrating  certain  types of
future  takeover  attempts  that may not be approved by the  incumbent  Board of
Directors,  but that the holders of a majority of the shares of Company's common
stock  may deem to be in their  best  interests  or in which  some or all of the
stockholders may receive a substantial premium over prevailing market prices for
their stock.

      By having the  effect of  discouraging  takeover  attempts,  the  proposed
amendments also could have the incidental  effect of inhibiting  certain changes
in  management  (some or all of the  members of which  might be  replaced in the
course of a change of control) and also the temporary fluctuations in the market
price of the  Company's  common  stock that could  result from actual or rumored
takeover attempts. Moreover, tender offers or other non-open market acquisitions
of stock are  usually  made at prices  above the  prevailing  market  price of a
company's  stock.  In  addition,  acquisitions  of stock in the open  market  by
persons attempting to acquire control may cause the market price of the stock to
reach levels that are higher than might  otherwise be the case.  Approval of the
some or all of the proposed  amendments may deter such  purchases,  particularly
purchases for less than all of the Company's  shares,  and therefore may deprive
holders of the Company's  common stock of an opportunity to sell their shares at
a temporarily higher market price.

      Purchasers of the Company's  shares should note that such  amendments,  if
adopted,  will  result in there being  special  requirements  for  supermajority
shareholder  approval of any subsequent business combination and the possibility
that  after  an  acquiror  (for  purposes  of this  discussion,  an  "Interested
Shareholder")  purchases a certain  percentage of the Company's common stock, it
will be forced to pay a higher  price to other  Company  shareholders  in such a
business  combination.  This would  likely would make it more costly for a third
party to acquire  control of the  Company.  Thus,  the proposed  amendments  may
decrease the likelihood of a tender offer for less than all of the shares of the
common stock of the Company,  which may adversely affect stockholders who desire
to participate in such a tender offer. In certain cases, the proposed fair price
amendment's   minimum  price  provisions,   while  providing  objective  pricing
criteria, could


                                       31
<PAGE>

be arbitrary and not indicative of value. In addition, an Interested Stockholder
may be unable,  as a  practical  matter,  to comply  with all of the  procedural
requirements. In these circumstances, unless an Interested Stockholder were able
to obtain special stockholder  approval of a proposed Business  Combination,  it
would be  forced  either  to  negotiate  with the  Board of  Directors  on terms
acceptable  to the Board or to abandon the proposed  business  combination.  The
proposed  amendments  also would give veto power to minority  stockholders  with
respect  to a proposed  Business  Combination  that is opposed by a majority  of
Continuing  Directors  but  that  is  desired  by a  majority  of the  Company's
stockholders unless the minimum pricing and procedural requirements were met. If
members of the Company's current  management and principal  shareholders were to
maintain their current stock ownership, they would have the ability to block the
requisite  vote.  In  addition,  the  proposed  amendments  may tend to insulate
incumbent  directors  against  the  possibility  of  removal  in the  event of a
takeover attempt because only the Continuing  Directors would have the authority
to reduce  to a simple  majority  or  eliminate  the  special  stockholder  vote
required for a particular Business Combination.

      While  some  of  the  proposed   amendments   would  directly  affect  the
possibility  of the  Company's  being the subject of a tender offer or a hostile
takeover,  others will directly  limit the ability of minority  shareholders  to
participate in Company affairs.  The classified  Board of Directors  provisions,
will  divide the Board of  Directors  into three  classes of  directors  serving
staggered  two-year  terms,  with two  directors  to be elected  at each  annual
meeting  of  shareholders.  This will  extend  the time  required  to change the
composition of the Board of Directors.  The provision requiring  shareholders to
give 90 days advance notice to the Company of any nomination for election to the
Board of Directors, or other business to be brought at any shareholders' meeting
will make it more difficult for shareholders to nominate candidates to the Board
of Directors who are not supported by  management.  This  provision will make it
more  difficult  to  implement  shareholder  proposals  even  if a  majority  of
shareholders are in support thereof.  Each of these provisions may also have the
effect of  deterring  hostile  take-overs  or  delaying  changes  in  control or
management of the Company. In addition,  the  indemnification  provisions of the
Company's  Certificate of  Incorporation  and Bylaws may represent a conflict of
interest between  management and the  shareholders  since officers and directors
may be indemnified prior to any judicial determinations as to their conduct.

      Under Delaware law, each of the proposed  amendments to the Certificate of
Incorporation  and By-laws  described above requires the affirmative vote of the
holders of a majority of the Company's  outstanding  shares of common stock. All
of the proposals are permitted by law. If stockholders approve any or all of the
proposed   amendments,   the  Company  will  file  a  Restated   Certificate  of
Incorporation that reflects the proposed  amendments with the Secretary of State
of the  State  of  Delaware.  Each of the  proposed  amendments  adopted  by the
Company's  stockholders  will become effective  regardless of whether any of the
other proposed amendments to be acted upon at the Meeting is adopted.

      In addition to the proposed amendments to the Certificate of Incorporation
and By-laws,  the present  Certificate of Incorporation  authorizes the Board of
Directors to issue shares of Class A Stock having such rights,  preferences  and
privileges as designated by the Board of Directors without stockholder  approval
(see "Risk Factor No. 25 "Possible Adverse Effects of Authorization and Issuance
of Preferred Stock").


                                       32
<PAGE>

                              SELLING SHAREHOLDER

      35,057 of the 181,353 shares of common stock (the "Shares")  being offered
hereunder by the Selling Shareholder were acquired by him on or about August 11,
1998,  pursuant to the terms of his employment  agreement,  dated as of June 22,
1998, (the "Rapfogel Employment Agreement") for services rendered to the Company
during the period June 22, 1998  through on or about July 31,  1998.  146,296 of
the 181,353  Shares  being  offered  hereunder by the Selling  Shareholder  were
acquired  by him on or about May 1, 1999 for  services  rendered  to the Company
during the period August 1, 1998 through December 31, 1998 pursuant to the terms
of the Rapfogel  Employment  Agreement for the five month period which commenced
on August 1,  1998 and ended on  December  31,  1998.  The  Rapfogel  Employment
Agreement is an individually  negotiated written compensation agreement pursuant
to which the Selling  Shareholder  renders bona fide  services not in connection
with the offer or sale of  securities  in a capital  raising  transaction.  Such
agreement  constitutes  an Employee  Benefit Plan, as defined in Rule 405 of the
Securities  Act of 1933.  The Rapfogel  Employment  Agreement  may  sometimes be
referred to hereinafter as the "Plan". For purposes of this Reoffer  Prospectus,
all of the Shares being registered  hereunder are "restricted shares" insofar as
they were issued  under an employee  benefit plan  pursuant to a Securities  Act
exemption prior to their  inclusion in a registration  statement on Form S-8, of
which this Reoffer Prospectus is a part.

      The table which follows identifies: (i) the Selling Shareholder ; (ii) the
Plan pursuant to which the Shares being offered hereby have been acquired; (iii)
the nature of all positions,  offices or other material  relationships which the
Selling  Shareholder has had with the Company within the past three years;  (iv)
the number of shares of common stock owned by the Selling  Shareholder  prior to
the  offering;  (v) the number of shares of common  stock to be offered  for the
account of the Selling Shareholder; (vi) the number of shares of common stock to
be owned by the Selling  Shareholder  after the completion of the offering,  and
(vii) the  percentage of the  Company's  common stock to be owned by the Selling
Shareholder after completion of the offering.


                                       33
<PAGE>

<TABLE>
<CAPTION>
                                                                          Number of                 Number of    Percentage
                                                       Positions        Shares Owned   Number of   Shares Owned   of Shares
                         Compensation Agreement          With             Prior to       Shares     After the    Owned After
Selling Shareholder          (Name of Plan)             Company           Offering       Offered     Offering   the Offering
-------------------          --------------             -------           --------       -------     --------   ------------
<S>                      <C>                       <C>                    <C>            <C>             <C>          <C>
Scott Rapfogel           Employment Agreement of   Assistant Corporate    181,353        181,353         0            0
                         June 22, 1998.            Counsel              
</TABLE>


                                       34
<PAGE>

                              PLAN OF DISTRIBUTION

      The  Selling  Shareholder  has  offered  and sold no  shares  (the  "Prior
Shares") of the Company's  Common Stock pursuant to a registration  statement on
Form S-8 within the three-month  period preceding the date hereof. The number of
shares  offered  hereunder by the Selling  Shareholder  together  with the Prior
Shares  represents  less than one  percent of the total  number of shares of the
Company's common stock presently issued and outstanding. The Selling Shareholder
may sell all or part of the shares,  from time to time, in the  over-the-counter
market,  or in such other public  market for the  Company's  common stock as may
develop, at market prices then pertaining.  In connection  therewith the Selling
Shareholder may utilize the services of NASD registered broker-dealers,  none of
whom will act as underwriters with respect to sales of the Shares.  The names of
any such brokers-dealers, who have not yet been identified, will be set forth in
a supplement to this Reoffer Prospectus, to the extent required.

                            DESCRIPTION OF SECURITIES

      The authorized capital stock of the Company consists of one hundred twenty
million shares  (120,000,000),  par value $.001 per share,  of which one hundred
fifteen million (115,000,000) shares are designated Common Stock par value $.001
per share, and five million (5,000,000) shares are designated Class A Stock, par
value $.001 per share.  As at March 18, 1999 there were seventy  eight  million,
two hundred forty one thousand, four hundred thirty seven (78,241,437) shares of
Common Stock issued and  outstanding.  The Class A Stock may be issued from time
to time, in one or more classes, or one or more series within any class thereof,
in any manner permitted by law, as determined from time to time by the Company's
board of directors,  and stated in the resolution or  resolutions  providing for
the issuance of such shares adopted by the Company's board of directors pursuant
to authority vested in it in the Company's  Certificate of  Incorporation,  each
class or series to be  appropriately  designated,  prior to the  issuance of any
shares thereof, by some distinguishing  letter, number designation or title. All
shares of stock in such  classes or series may be issued for such  consideration
and have such voting powers,  full or limited,  or no voting  powers,  and shall
have such designations,  preferences and relative,  participating,  optional, or
other special rights, and qualifications,  limitations or restrictions  thereof,
permitted  by law,  as  shall be  stated  and  expressed  in the  resolution  or
resolutions,  providing for the issuance of such shares adopted by the Company's
board of directors pursuant to authority vested in the Company's  Certificate of
Incorporation.  The number of shares of stock of any class or series  within any
class,  so set forth in such resolution or resolutions may be increased (but not
above the total number of  authorized  shares) or  decreased  (but not below the
number of shares thereof then outstanding) by further  resolution or resolutions
adopted by the Company's board of directors  pursuant to authority  vested in it
in the Company's Certificate of Incorporation.

      The Company's  Board of Directors may determine the times when,  the terms
under which and the consideration for which the Company shall issue,  dispose of
or receive  subscriptions for its shares,  including treasury shares, or acquire
its own shares.  The  consideration for the issuance of the shares shall be paid
in full  before  their  issuance  and  shall  not be less than the par value per
share.  Upon  payment of such  consideration,  such shares shall be deemed to be
fully paid and nonassessable by the Company.


                                       35
<PAGE>

      The holders of shares of Common Stock are  entitled to dividends  when and
as declared by the Board of Directors  from funds  legally  available  therefore
and, upon  liquidation,  are entitled to share pro rata in any  distribution  to
shareholders.  Holders of the Common Stock have one non-cumulative vote for each
share hold. There are no pre-emptive,  conversion or redemption privileges,  nor
sinking fund provisions, with respect to the Common Stock.

      Stockholders  are  entitled to one vote of each share of Common Stock held
of record on matters submitted to a vote of stockholders.  The Common Stock does
not have cumulative voting rights. As a result,  the holders of more than 50% of
the shares of Common Stock voting for the election of directors can elect all of
the  directors  if they choose to do so, and, in such event,  the holders of the
remaining shares of Common Stock will not be able to elect any person or persons
to the board of directors of the Company.

                                     EXPERTS

      The financial statements and schedules of the Company and its subsidiaries
included in the  Company's  Annual  Report on Form  10-KSB,  for the fiscal year
ended  June 30,  1998,  which is  incorporated  herein by  reference,  have been
examined by Pinkham & Pinkham, P.C., Certified Public Accountants,  PA, and such
financial  statements  and  reports  are  incorporated  by  reference  herein in
reliance upon the authority of said firm as experts in accounting and auditing.

                                 LEGAL OPINIONS

      The  legality  of the Shares  offered  hereby has been passed upon for the
Company by Frances Katz Levine,  Esq., 621 Clove Road,  Staten Island, NY 10310.
Ms.  Levine,  serves as corporate and securities  counsel to the Company.  As at
March 18, 1999 Ms.  Levine and her  husband,  Robert  Levine were the record and
beneficial owners of approximately 6.37% of the Company's issued and outstanding
common stock.

                                 INDEMNIFICATION

      The Company's certificate of incorporation provides for indemnification to
the fullest extent permitted by Section 145 of the Delaware General  Corporation
Law ("Section 145").  Pursuant  thereto,  the Company  indemnifies its officers,
directors,  employees and agents to the fullest extent  permitted for losses and
expenses  incurred by them in connection with actions in which they are involved
by reason of their having been directors,  officers, employees, or agents of the
Company. Section 145 permits a corporation to indemnify any person who is or has
been a director, officer, employee, or agent of the corporation or who is or has
been serving as a director,  officer,  employee or agent of another corporation,
organization,  or  enterprise  at the  request of the  corporation,  against all
liability  and  expenses  (including  but not  limited  to  attorneys'  fees and
disbursements  and amounts paid in settlement or in satisfaction of judgments or
as fines or penalties)  incurred or paid in connection with any action,  suit or
proceeding,   whether  civil,  criminal,   administrative,   investigative,   or
otherwise,  in which he or she may be  involved by reason of the fact that he or
she served or is serving in these  capacities,  if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the


                                       36
<PAGE>

best interests of the  corporation  and, with respect to any criminal  action or
proceeding,  had no cause o believe his or her conduct was unlawful. In the case
of a claim, action, suit or proceeding made or brought by or in the right of the
corporation  to procure a recovery  or judgment  in its favor,  the  corporation
shall not  indemnify  such  person in respect of any claim issue or matter as to
which  such  person  has been  adjudged  to be  liable  to the  corporation  for
negligence  or  misconduct  int  he  performance  of  his  or  her  duty  to the
corporation,  except for such  expenses as the Court may allow.  Any such person
who has been wholly  successful  on the merits or otherwise  with respect to any
such claim,  action,  suit or proceeding or with respect to any claim,  issue or
matter  therein,  shall be  indemnified  as of right  against  all  expenses  in
connection therewith or resulting therefrom. The effect of this provision in the
certificate  of  incorporation  is to eliminate the rights of the Registrant and
its  stockholders  (through  stockholders'  derivative  suits on  behalf  of the
Registrant)  to  recover  monetary  damages  against a  director  for  breach of
fiduciary  duty as a director  (including  breaches  resulting from negligent or
grossly negligent behavior) except in the situations described above.

      The  Company's  By-laws  provide  for  indemnification  of  the  Company's
officers and directors  against all  liabilities  (including  reasonable  costs,
expenses,  attorney's  fees,  obligations  for payment in  settlement  and final
judgment)  incurred  by or  imposed  upon them in the  preparation,  conduct  or
compromise of any actual or threatened  action,  suit,  or  proceeding,  whether
civil,  criminal,  or  administrative,  including any appeals  therefrom and any
collateral  proceedings  in which they shall be involved by reason of any action
or omission by them in their  capacity as a director or officer of the  Company,
or of any other  corporation  which they  serve as a director  or officer at the
request of the  Company,  whether or not such person is a director or officer at
the time such  liabilities are incurred or any such action,  suit, or proceeding
is commenced against them. The indemnification  provided by the By-laws does not
extend,   however,   to  certain  situations   involving   misconduct,   willful
misfeasance, bad faith, or gross negligence.

      Insofar as  indemnification  for liabilities  arising under the Securities
Act of 1933 may be permitted to directors,  officers, and controlling persons of
the Company pursuant to the foregoing provisions,  the Company has been informed
that  in  the  opinion  of  the   Securities   and  Exchange   Commission   such
indemnification  is  against  public  policy  as  expressed  in the  Act and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such liabilities  (other than the payment by registrant of expenses  incurred in
the  successful  defense of any action,  suit or proceeding) is asserted by such
director,  officer or controlling person in connection with the securities being
registered, registrant will, unless in the opinion of its counsel the matter has
been  settled  by  controlling  precedent,  submit  to a  court  of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

      Except to the extent hereinabove set forth, there is no charter provision,
by-law,  contract,  arrangement  or statute  pursuant  to which any  director or
officer of registrant is indemnified  in any manner against any liability  which
he may incur in his capacity as such.


                                       37
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  registration
statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the City of Montreal, Province of Quebec, Canada, on the 22nd day
of March, 1999.

                                      THE TIREX CORPORATION

                                      By /s/ Terence C. Byrne
                                         ---------------------------------------
                                      Terence C. Byrne,
                                      Chairman of the Board of Directors
                                         and Chief Executive Officer

      Pursuant  to  the  requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the date indicated.

         Signature                        Title                        Date
         ---------                        -----                        ----

/s/ Terence C. Byrne              Chairman of the Board           March 22, 1999
------------------------------    of Directors and Chief          
Terence C. Byrne                  Executive Officer               
                                                                  
/s/ Michael D.A. Ash              Secretary, Treasurer            March 22, 1999
------------------------------    and Chief Financial and         
Michael D.A. Ash                  Accounting Officer              
                                                                  
Majority of the Board of Directors                                
                                                                  
/s/ Terence C. Byrne              Director                        March 22, 1999
------------------------------                                    
Terence C. Byrne                                                  
                                                                  
/s/ Louis Sanzaro                 Director                        March 22, 1999
------------------------------                                    
Louis Sanzaro                                                     
                                                                  
/s/ Louis V. Muro                 Director                        March 22, 1999
------------------------------                                    
Louis V. Muro                                                     
                                                                  
/s/ Henry Meier                   Director                        March 22, 1999
------------------------------                                 
Henry Meier


                                       38
<PAGE>

                                  EXHIBIT INDEX

Exhibit No.                           Item                                  Page
-----------                           ----                                  ----
5.1                  Opinion of Frances Katz Levine, Esq.
                     regarding the legality of the securities
                     being registered under this Registration
                     Statement                                               

24.1                 Consent of Pinkham & Pinkham, P.C.,
                     Certified Public Accountants,

                     Independent Auditors for the Company                    

24.2                 Consent of Frances Katz Levine, Esq.,
                     the counsel for the Registrant (set
                     forth in the opinion of counsel included
                     as Exhibit 5.1)


                                       39
[{"type": "S-8", "sequence": "1", "description": "FORM S-8", "secsgml_size_bytes": 144558}]
{"company-data": {"conformed-name": "TIREX CORP", "cik": "0000823072", "assigned-sic": "3550", "irs-number": "222824362", "state-of-incorporation": "DE", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-74939", "film-number": "99571351"}, "business-address": {"street1": "740 ST MAURICE STE 201", "city": "MONTREAL QUEBEC", "state": "A8", "zip": "H4R1W4", "phone": "5148780727"}, "former-company": {"former-conformed-name": "TIREX AMERICA INC", "date-changed": "19940715"}}
As filed with the Securities and Exchange Commission on March 24, 1999
                                                      Registration No. 333-62197
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   ----------

                                    FORM S-8
                          POST EFFECTIVE AMENDMENT NO.1

                             REGISTRATION STATEMENT
                        UNDER THE SECURITIES ACT OF 1933

                              THE TIREX CORPORATION
             (Exact name of registrant as specified in its charter)

          Delaware                                                3282985
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

       740 St. Maurice, Suite 201
          Montreal, Quebec                                        H3C 1L5
(Address of Principal Executive Offices)                         (Zip Code)

                              EMPLOYMENT AGREEMENT
                             BETWEEN REGISTRANT AND:
                                 SCOTT RAPFOGEL
                            (Full title of the Plan)

                               Frances Katz Levine
                                 621 Clove Road

                             Staten Island, NY 10310
           (Name and address, including zip code of agent for service)

                                 (718) 981-8485
          (Telephone number, including area code, of agent for service)

                         CALCULATION OF REGISTRATION FEE
===============================================================================================
                                            Proposed Maximum   Proposed Maximum     Amount of
Title of Securities           Amount to be   Offering Price   Aggregate Offering   Registration
 to be Registered              Registered      per Share*           Price*              Fee
-----------------------------------------------------------------------------------------------
Common Stock, Par Value,
$.001 Per Share, of The
Tirex Corporation Issued
Pursuant to Employment
Agreement with
Scott Rapfogel                   181,353        $.1525             $27,656            $8.38
-----------------------------------------------------------------------------------------------
    TOTAL                        181,353        $.1525             $27,656            $100
===============================================================================================
* Estimated solely for the purpose of calculating the amount of the registration
fee  pursuant  to Rule 457(c) on the basis of the average of the closing bid and
ask  prices  of  the  Common   Stock  of  the   Registrant   as  traded  in  the
over-the-counter  market and reported in the  Electronic  Bulletin  Board of the
National Association of Securities Dealers on March 19, 1999.
Cross Reference Sheet Showing Location in Reoffer Prospectus of
       Information Required by Items of Part I of Form S-3 Included Herein
                Under Cover of Form S-8, Pursuant to Rule 404(a)

     Form S-3 Item No. and Heading                      Heading in Prospectus
     -----------------------------                      ---------------------

1.  Forepart of the Registration Statement 
      and Outside Front Cover Page of 
      Prospectus ..................................   Outside Front Cover Page

2.  Inside Front and Outside Back Cover
      Pages of Prospectus .........................   AVAILABLE INFORMATION;
                                                        REPORTS TO SHAREHOLDERS;
                                                        INCORPORATION OF CERTAIN
                                                        DOCUMENTS BY REFERENCE;
                                                        TABLE OF CONTENTS

3.  Summary Information, Risk Factors and
      Ratio of Earnings to Fixed Charges ..........   Outside Front Cover Page;
                                                        THE COMPANY; RISK 
                                                        FACTORS

4.  Use of Proceeds ...............................   Not Applicable

5.  Determination of Offering Price ...............   Outside Front Cover Page;
                                                        PLAN OF DISTRIBUTION

6.  Dilution ......................................   Not Applicable

7.  Selling Security Holders ......................   SELLING SHAREHOLDER

8.  Plan of Distribution ..........................   Outside Front Cover Page;
                                                        PLAN OF DISTRIBUTION

9.  Description of Securities to be 
      Registered ..................................   DESCRIPTION OF SECURITIES

10. Interests of Named Experts and 
      Counsel .....................................   EXPERTS; LEGAL OPINIONS

11. Material Changes ..............................   Not Applicable

12. Incorporation of Certain Information
      by Reference ................................   INCORPORATION OF CERTAIN
                                                      DOCUMENTS BY REFERENCE

13. Disclosure of Commission Position
      on Indemnification For Securities
      Act Liabilities .............................    INDEMNIFICATION

                                       2
INCORPORATION OF EFFECTIVE REGISTRATION STATEMENT ON FORM S-8

      A registration statement on Form S-8 respecting the registration of shares
of the common stock of the  Registrant,  issued under the employee  benefit plan
named  on the  front  cover  page of this  registration  statement  (the  "Prior
Registration Statement"),  was filed with the Securities and Exchange Commission
on August 25, 1998, and is currently  effective.  The contents of the said Prior
Registration  Statement  (SEC File No.  333-62197)  are  incorporated  herein by
reference.

                                       3
R E O F F E R
P R O S P E C T U S

--------------------------------------------------------------------------------

                                 181,353 Shares

                                   ----------

                              THE TIREX CORPORATION

                                   ----------

                                  Common Stock
                                 $.001 Par Value

      The shares of common stock offered hereby (the "Shares") are being sold by
Scott Rapfogel,  a shareholder of The Tirex  Corporation  (the  "Company");  Mr.
Rapfogel is hereinafter  referred to as the "Selling  Shareholder".  The Company
will not  receive any of the  proceeds  from the sale of the common  stock.  The
common  stock is traded  in the  over-the-counter  market,  as  reported  in the
Over-The-Counter  Electronic  Bulletin  Board  of the  National  Association  of
Securities Dealers ("Bulletin  Board").  On March 19, 1999, the high ask and low
bid prices of the Company's common stock, as quoted on the Bulletin Board,  were
$ .18 and $ .125 per share,  respectively.  The Selling Shareholder  proposes to
offer his  Shares  for sale in the  over-the-counter  market  through  customary
brokerage channels at the then-current market price. See "Plan of Distribution".

                                   ----------

            THIS OFFERING INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"

                                   ----------

          THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
            SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
          PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
              REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

                                   ----------

                  The date of this Prospectus is March 24, 1999

                                       1
AVAILABLE INFORMATION

      The Company is subject to the information requirements of Section 15(d) of
the  Securities  Exchange Act of 1934 (the  "Exchange  Act"),  and in accordance
therewith files reports and other  information  with the Securities and Exchange
Commission  (the  "Commission").  Reports  and  other  information  filed by the
Company  can  be  inspected  and  copied  at  the  public  reference  facilities
maintained by the Commission at 1100 L Street, N.W. Room 6101, Washington,  D.C.
20005;  26 Federal Plaza,  Room 1100,  New York, New York 10007;  10960 Wilshire
Boulevard,  Suite 1710, Los Angeles,  California  90024;  and 219 South Dearborn
Street, Room 1228,  Chicago,  Illinois 60604; and copies of such material can be
obtained  from the  Public  Reference  Section  of the  Commission  at 500 North
Capital Street, N.W., Washington, D.C. 20549 at prescribed rates.

                             REPORTS TO SHAREHOLDERS

      The  Company  intends  to  furnish  to  its  shareholders  annual  reports
containing  audited financial  statements  together with an opinion with respect
thereto by its independent certified public accountants.

                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

      The Company  hereby  incorporates  by  reference  in this  Prospectus  the
Company's  annual report on Form 10-KSB for its fiscal year ended June 30, 1998,
filed  pursuant to Section 15(d) of the Exchange  Act, the  Company's  quarterly
reports on Forms 10-QSB for the fiscal  quarters  ended  September  30, 1998 and
December  31, 1998 filed  pursuant to Section  15(d) of the  Exchange  Act,  the
Company's Current Reports on Form 8-K, dated May 27, 1998 and September 14, 1998
filed on August 3,  1998 and  September  18,  1998  respectively,  and all other
reports, if any, filed by the Company pursuant to Section 13(a) for 15(d) of the
Exchange Act since the end of the fiscal year ended June 30, 1998.  In addition,
a  registration  statement  on Form S-8 (the  "Prior  Registration  Statement"),
respecting the  registration of shares of the common stock of the Company issued
under  the  employee  benefit  plan  named  on  the  front  cover  page  of  the
registration  statement of which this  Prospectus is a part,  was filed with the
Securities and Exchange  Commission ("SEC") )on August 25, 1998 and is currently
effective.  The contents of the said Prior Registration  Statement (SEC File No.
333-62197) are incorporated herein by reference.

      All reports and definitive proxy or information  statements filed pursuant
to Section 13(a),  13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this  Prospectus  and prior to the  termination of the offering of the Shares
shall be deemed to be incorporated by reference into this Prospectus and to be a
part hereof from the date of filing of such documents.  Any statement  contained
in a document  incorporated  or deemed to be  incorporated  by reference  herein
shall be deemed to be modified or superseded for purposes of this  Prospectus to
the extent that a statement  contained herein or in any other subsequently filed
document which also is  incorporated  or deemed to be  incorporated by reference
herein modified or supersedes such statement.  Any such statement so modified or
superseded  shall  not be  deemed,  except  as so  modified  or  superseded,  to
constitute a part of this Prospectus.

                                       2
Any person  receiving a copy of this Prospectus may obtain without charge,
upon request,  a copy of any of the documents  incorporated by reference herein,
except for the  exhibits  to such  documents.  Requests  should be  directed  to
Terence C. Byrne, The Tirex Corporation,  740 St. Maurice,  Suite 201, Montreal,
Quebec Canada, H3C 1L5.

                                       3
TABLE OF CONTENTS

                                                                            Page
                                                                            ----

Available Information..........................................................2

Reports to Shareholders........................................................2

Incorporation of Certain Documents
   by Reference................................................................2

The Company....................................................................6

Risk Factors

   1.  Development Stage Company - No Assurance
         as to Future Profitable Operations...................................13

   2.  Need for Substantial Additional
         Capital..............................................................13

   3.  History of Losses and Accumulated Deficit..............................16

   4.  Going Concern Assumption...............................................16

   5.  No Guarantee of Product
         Acceptance in Market.................................................17

   6.  Dilutive and Other Adverse Effects
         of Presently Outstanding Debentures, 
         Warrants and Options.................................................17

   7.  Additional Dilution from Issuance of 
         Shares for Services..................................................19

   8.  Possible Depressive Effect on Price of Securities
         of Future Sales of Common Stock......................................20

   9.  Possible Voting Control by Management and 
         Corporate Counsel; Possible Depressive Effect 
         on Market Prices.....................................................20

  10.  Reverse Split; Possible Negative Effect on 
         Values of Securities.................................................21

  11.  Dependence on Major Customer...........................................22

  12.  Uncertainty of Product and
         Technology Development:
         Technological Factors................................................23

                                       4
13.  International Sales and Operations.....................................23

  14.  Protection of Tirex Proprietary
         Technology and Potential Infringement................................23

  15.  Limited Public Market..................................................24

  16.  Applicability of "Penny Stock Rules"
         to Broker-Dealer Sales of
         Company Common Stock.................................................25

  17.  Management's Lack of Industry Experience...............................26

  18.  Dependence on Key Personnel............................................26

  19.  Regulatory and Environmental Considerations............................26

  20.  Production and Supply..................................................28

  21.  Technological Changes..................................................28

  22.  Competition............................................................29

  23.  Lack of Liability Insurance............................................29

  24.  No Dividends and None Anticipated......................................29

  25.  Possible Adverse Effects of Authorization and
         Issuance of Preferred Stock..........................................29

  26.  Prior Notice Required for Shareholder Actions..........................30

  27.  Adverse Effects of Proposals to be Presented at
         Annual Shareholders Meetings; Anti-Takeover Provisions,
         Limitations on Shareholders Voting Rights and Stock
         Bonuses to Management................................................30

Selling Shareholder...........................................................33

Plan of Distribution..........................................................35

Description of Securities.....................................................35

Experts.......................................................................36

Legal Opinions................................................................36

Indemnification...............................................................37

                                       5
THE COMPANY

      The Tirex Corporation  (hereinafter,  the "Company" or "Tirex") is engaged
in the early stages of the  business of  manufacturing,  selling,  and leasing a
patented "turn key" cryogenic tire recycling system (the "TCS-1 Plant") designed
and developed by Tirex,  which breaks down used tires into cleanly separated and
re-saleable rubber crumb, steel wire, and fiber. The Company was incorporated in
Delaware on August 19, 1987 under the name "Concord Enterprises,  Inc." Its name
was changed to "Stopwatch  Inc." on June 20, 1989(1) and to "Tirex America Inc."
on March 10,  1993.  On July 11,  1997,  in order to  encompass  the current and
projected international scope of its operations,  the Company's name was changed
to "The Tirex Corporation".  The Company, does business directly, and indirectly
through its Canadian  subsidiaries,  The Tirex Corporation Canada Inc. and Tirex
Canada R&D, Inc.  (formerly,  3143619  Canada Inc., and formerly known as "Tirex
Canada Inc.").

      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 raising the  financing  required  for such
project.  All major components of the TCS-1 Plant were  successfully  tested and
were  operational  on  a   non-continuous   running  basis  by  May  1998,  with
approximately  85%  of  the  TCS-1  Plant  components  meeting  all  of  Tirex's
specifications.  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.  This allows the TCS-1 Plant to process  only the
tread  portion of the tires.  The  addition  of the  second  freezing  tower and
fracturing  mill, which is expected to be completed in April of 1999, will allow
for the processing also of the sidewall portion of the tire.

      The  Company  is  also  in the  process  of  establishing  and  initiating
operations in a second business segment which will involve owning and operating,
directly  or  indirectly,   on  exclusive  or  joint  venture   bases,   product
manufacturing  plants (the "Tirex Advanced  Products Plants") which will utilize
TCS-1  Plants to  produce  recycled  rubber  crumb and  which  will  manufacture
finished  products  out  of  such  recycled  material.   The  Company's  initial
operations  in this  segment will be  conducted  pursuant to an  agreement  (the
"IM2/Tirex  Agreement") with IM2 Merchandising and Manufacturing,  Inc. ("IM2"),
in Quebec.  Pursuant to the IM2/Tirex  Agreement,  the Company will act as IM2's
exclusive  supplier of rubber  welcome mats and related  products  molded out of
rubber crumb ("IM2 Products").  The Company intends to use rubber crumb produced
by the TCS-1 Plant which has been installed,  and which will be operated, at the
Company's Montreal facility

      The Company's wholly-owned  subsidiary,  The Tirex Corporation Canada Inc.
("TCCI") was formed on June 1, 1998, and on June 3, 1998,  3143619 Canada Inc.'s
name was changed

----------

      (1) For a discussion of the merger with Stopwatch, the healthcare business
which was intended, but was never commenced,  by Stopwatch,  and the reasons for
the termination of the Stopwatch  business plan,  reference is made to Item 1 of
Registrant's  annual report on Form 10-K for the fiscal year ended  December 31,
1988,  its transition  report on Form 10-K for the transition  period ended June
30,  1989,  and its annual  report on Form 10-KSB for the fiscal year ended June
30, 1995.

                                       6
to Tirex Canada R & D Inc. (hereinafter referred to as "Tirex R&D"). The purpose
of these  changes was to transfer  all business  activities,  except those which
constitute research and development  activities  exclusively,  from Tirex R&D to
TCCI.  On April 22,  1998 the  Company  formed  another  wholly  owned  Canadian
subsidiary now known as Tirex  Advanced  Products  Quebec,  Inc.  ("TAP").  This
subsidiary  is  presently  dormant.  However,  the  Company  may, in the future,
transact finished product manufacturing activities through TAP. The Company also
has another dormant, wholly owned subsidiary, formed under the laws of the State
of  Delaware,  Tirex  Acquisition  Corp.  ("TAC"),  for which the Company has no
present plans.(2) The Company's  principal  executive offices are located at 740
St. Maurice,  Suite 201, Montreal,  Quebec H3C 1L5, Canada, its telephone number
is (514) 878-0727 and its Internet address is tirexcorp@aol.com.

      Although the Company has generated some limited  revenues from operations,
it is still in the development  stage. The Company began taking orders for TCS-1
Plants in October of 1995 and, to date,  has taken  orders on a total of fifteen
Plants  from five  customers,  two of which have given  refundable  deposits  of
$25,000  on one Plant  each and one of which has given  refundable  deposits  of
$25,000 on each of five Plants. Parts of one of the foregoing Plants (the "First
Production  Model") have been  delivered and the Company has received a total of
$880,000 in respect thereof. In December 1998, the Company entered into sale and
lease-back  arrangements  for  other  portions  of the First  Production  Model,
pursuant  to which it  received  a total of  $300,000  (see,  below,  "Sale  and
Lease-Back  Transactions").  All  undelivered  orders  are  subject to change by
reason of several factors, including possible cancellation of orders, changes in
terms of the  contracts,  and other  factors  beyond the  Company's  control and
should  not be relied  upon as being  necessarily  indicative  of the  Company's
future revenues or profits. The ultimate  consummation of each sale contemplated
by such  orders  will be  entirely  dependent  upon the  TCS-1  Plant's  meeting
performance  expectations,  each customer's  obtaining lease, or other financing
for the purchased  portions of the TCS-1 Plant (as well as all required  permits
and  licenses  to  operate  a system)  and the  Company's  obtaining  sufficient
production  financing  and capacity to meet delivery  requirements.  The Company
intends  to retain  ownership  rights to the  portions  of the First  Production
Model,  not included in the portions sold for the $880,000  noted above,  and to
use the entire First Production Model in the first Tirex Advanced Product Plant,
to be located in the Company's  Montreal  facility  (see  "Existing and Proposed
Business Proposed TCS-1 Plant Operations:  Sales of Rubber Crumb and Manufacture
and Sale of Finished  Products",  "Sales and Marketing - Agreements  with Oceans
Tire Recycling and Processing  Co., Inc.",  and "Backlog").  With respect to the
commercial manufacture of TCS-1 Plants, the Company has located and entered into
written  and  oral  agreements  with  various   engineering  and   manufacturing
subcontractors and component suppliers,  which Management believes will give the
Company sufficient  production capacity to meet all current and projected orders
for TCS-1  Plants,  as required,  commencing in or about March 1999. At present,
the Company has no scheduled  delivery date  obligations in connection  with any
orders it has received to date. With respect to projected  rubber mat production
operations,  the Company has ordered the  necessary  equipment  for flocking and
die-cutting. This equipment is expected to be installed in March of 1999. For

----------
      (2) Unless context necessarily requires otherwise,  references hereinafter
to the "Company"  refer to The Tirex  Corporation  and its  subsidiaries,  TCCI,
Tirex R&D, TAP and TAC, collectively.

                                       7
the primary  molding of the rubber mats, the Company is currently in the process
of  evaluating  several  alternative  modes of  production,  including  in-house
production  as  well  as  outsourcing  to  one or  more  of  numerous  available
sub-contractors. Decisions respecting such operations are expected to be made by
management during the first half of March 1999.

Sale and Lease-back Transactions

      On December 16,  1998,  the Company  entered into two sale and  lease-back
transactions  by and  among the  Company,  Northshore  Leasing  &  Funding  Inc.
("NLFI"),  and Ocean  Utility  Contracting,  Inc.  ("OUCI").  Such  transactions
consisted of the Company's  sales to NLFI of the single  fracturing mill and the
single freezing tower,  which are components of the TCS-1 Plant installed at the
Company's  Montreal  facility and the lease back of such components to OUCI. The
Company  received an aggregate of $300,000 by way of the purchase prices for the
two components. The Company and OUCI have agreed that all of OUCI's rights under
the leases will be  assigned  to the Company and the Company  will assume all of
OUCI's  liabilities  thereunder.  Both  leases  are  for  a  sixty-month  period
commencing  on December  15,  1998,  with  monthly  lease  payments of $3,499.20
required under each of the two leases.  Both leases also provide that at the end
of the  lease  term,  the  lessee  will have the right to  purchase  the  leased
equipment  for  $1.00.  Such  right  to  purchase  will be  included  in  OUCI's
assignment to the Company of its rights under the leases.

Material Financing Activities

The Type A Private Placement

      Between  November 5, 1997 and May 11,  1998,  the Company  offered to sell
(the "Type A Private  Placement")  through H.J. Meyers & Co., Inc., as placement
agent  (the  "Placement  Agent"),  28 Units,  (the "Type A Units") at a price of
$25,000  per  Unit,   each  Type  A  Unit  consisting  of  one  10%  Convertible
Subordinated  Debenture  in  the  principal  amount  of  $25,000  (the  "Type  A
Debentures")  and 100,000  warrants  (the "Type A Warrants")  to purchase a like
number  of  shares  of the  common  stock of the  Company  (the  "Type A Warrant
Shares").  The Type A Private  Placement  was  terminated by the Company and the
Placement  Agent on May 11, 1998  following  the sale on April 9, 1998 of twenty
Type A Units to two  purchasers,  yielding  gross  proceeds of $500,000  and net
proceeds of $433,500 after payment of the Placement Agent's $10% commission,  3%
nonaccountable expense allowance,  and an escrow agent's fee of $1,500. The Type
A Private  Placement  was  effected  in  reliance  upon the  availability  of an
exemption  from the  registration  provisions of the Securities Act by virtue of
compliance  with the  provisions of Section 4(2) of the  Securities Act and Rule
506 of Regulation D thereof ("Rule 506"). The Type A Units were offered and sold
to  a  limited  number  of  sophisticated   investors  who  understood  and  are
economically  capable  of  accepting  the risks  associated  with a  speculative
investment,  including  the  complete  loss  of  such  investment,  and  who are
"Accredited  Investors"  within the meaning  prescribed by Regulation D and Rule
501 of the Securities Act.

      The 2,000,000  outstanding  Type A Warrants are  exercisable at a price of
$.001 per share.  Through  April 10, 1999,  the  principal  amount of the Type A
Debentures  and all interest due thereon is  convertible  into common stock at a
conversion  ratio of 66% of the closing bid price of the Company's common stock,
as traded in the over-the-counter ("OTC") market and quoted

                                       8
in  the  OTC  Electronic  Bulletin  Board  of the  NASD,  on  the  trading  date
immediately  preceding  the  date  of  the  Company's  receipt  of a  notice  of
conversion from a holder of the Type A Debentures (the "Market  Price").  Unless
the registration  statement  discussed below is declared effective prior to June
11, 1999,  the conversion  rate will  decrease,  on a monthly basis at a rate of
1.5% per month,  until such date,  when it will stabilize at 61.5% of the Market
Price. There is no minimum conversion price. The Type A Debentures,  as amended,
are due  and  payable  on  December  31,  1999  (the  "Maturity  Date")  and are
redeemable  upon the request of a holder at any time after the Maturity  Date at
125% of the principal amount plus all accrued,  unpaid interest on the principal
amount.

      The resale of the 2,000,000  shares  issuable  pursuant to the exercise of
the Type A  Warrants  and the  resale of the  shares  issuable  pursuant  to the
conversion of the Type A Debentures are being  registered by way of inclusion in
the Company's  registration statement on Form SB-2 filed with the Securities and
Exchange Commission on May 21, 1998 (Registration No. 333-53255),  which has yet
to be declared effective (the "Registration Statement"). Following the effective
date of the  Registration  Statement,  to the extent that they are acquired from
the Company, the shares underlying the Type A Warrants and Type A Debentures may
be  offered  and resold by the  holders  thereof,  from time to time,  as market
conditions permit in transactions in the over-the-counter  market, in negotiated
transactions,  or a  combination  of such methods of sale, at fixed prices which
may be  changed,  at market  prices  prevailing  at the time of sale,  at prices
relating to prevailing market prices or at negotiated prices.

Merger with RPM Incorporated and The Type B Private Placement

      On January 7, 1998, The Company issued a total of 3,305,000  shares of its
common stock to thirty-six  persons,  none of whom had any affiliation  with the
Company.  These issuances were made pursuant to the terms of a merger  agreement
by  and  among  the  Company,  the  Company's   wholly-owned   subsidiary  Tirex
Acquisition Corp. ("TAC"), and RPM Incorporated ("RPM") respecting the merger of
RPM with and into TAC (the "RPM Merger"). The RPM Merger Agreement was effective
on January 7, 1998,  concurrent with the closing of a private placement of RPM's
securities (the "RPM Private Placement"), in which RPM had offered to sell, on a
best efforts 30 Units-or-none  basis, up to 85 units of its securities (the "RPM
Units"),  each  such RPM Unit  consisting  of one 10%  Convertible  Subordinated
Debenture in the principal  amount of $10,000 (the "RPM  Debentures") and 10,000
shares of the Common  Stock of RPM. The closing took place upon the sale of 30.5
RPM Units.  All of the net proceeds  from the RPM Private  Placement  ($276,085)
remained in RPM when it was merged  into TAC,  which was the  surviving  entity.
Such proceeds  thereby inured to the benefit of the Company.  In effectuation of
the RPM Merger, the Company:

      (i)   exchanged one share of its common stock ("Merger  Shares") for every
            issued and  outstanding  share of RPM common stock  (which  included
            305,000  shares  sold in the RPM  Private  Placement  and  3,000,000
            shares  which  had  been  issued  and   outstanding   prior  to  the
            commencement of the RPM Merger); and

      (ii)  assumed RPM's  liabilities and obligations under 30.5 RPM Debentures
            in  the  aggregate  principal  amount  of  $305,000  which  RPM  had
            theretofore sold in the

                                       9
RPM Private Placement;

      After the Merger, the Company commenced the "Type B Private Placement", in
which it offered and sold the same type of  securities,  as were sold in the RPM
Private Placements, i.e., the securities offered in the Type B Private Placement
consisted of "Type B Units" each  consisting  of 10,000  shares of the Company's
common stock and one  convertible  Subordinated  Debenture of the Company in the
principal amount of $10,000 (the "Type B Debenture"). The number of Type B Units
offered (54.5) was equal to the number of RPM Units  remaining  unsold as at the
time of the Merger.

      Prior  to the  Merger,  RPM  and  the  Company  were  completely  separate
entities.  However,  the RPM Private Placement,  the merger, the exchange of RPM
common  stock  for  Company  common  stock,  and the  subsequent  Type B Private
Placement by Tirex were at all times contemplated as interdependent transactions
and  described  in the RPM  Private  Placement  Memorandum  as  such.  Thus  the
contemplated  post-merger  Type B  Private  Placement  was  viewed  as  being  a
"continuance"  of the  RPM  Private  Placement.  The  Type B  Private  Placement
differed from the RPM Private  Placement only insofar as: (i) in the RPM Private
Placement,  RPM offered and sold  shares of RPM common  stock,  which were to be
exchanged for Company common stock in the merger,  while in the post-merger Type
B Private  Placement,  the Company  offered  and sold  shares of Company  common
stock;  and  (ii) in the  RPM  Private  Placement,  RPM  offered  and  sold  RPM
debentures,  which were to be assumed by the Company in the Merger, while in the
Type  B  Private  Placement,  the  Company  offered  and  sold  Company  Type  B
Debentures.  Except for the above,  the terms of the securities  included in the
Type B Units were identical to those included in the RPM Units

      Between  January 23,  1998 and May 11,  1998,  the Company  sold 23 Type B
Units,  consisting  in the  aggregate of 230,000  shares of its common stock and
twenty-three  10%  convertible  Debentures,  each  in the  principal  amount  of
$10,000, to 21 private investors, who had no affiliation with the Company.

      All of the  Type B  Debentures  and the RPM  Debentures,  which  had  been
assumed by the Company  (referred to  collectively,  hereinafter  as the "Type B
Debentures"),  provide  for:  (i) the  registration  of the shares  (the "Type B
Conversion  Shares") issuable upon the conversion of the Type B Debentures;  and
(ii)  restrictions  on the  transfer of the Type B  Conversion  Shares until the
first to occur of: (a) six months from the  effective  date of the  Registration
Statement,  or (b)  one  year  from  the  date  of the  issuance  of the  Type B
Debentures.  The Type B Debentures  are  convertible at a ratio of one share for
every  $0.20 of the  principal  amount of the  Debenture  plus  interest  earned
thereon  from  the  date  of  issuance.  The  principal  amounts  of the  Type B
Debentures  are due and payable on the first to occur of: (i) two years from the
issue  date or (ii) the  completion  and  closing  of a public  offering  of its
securities  by the Company.  The Type B Debentures  bear  interest at the annual
rate  of  10%  from  the  date  of  issuance  (the  "Issuance  Date"),   payable
semi-annually,  commencing  six months from the  Issuance  Date.  The company is
presently in default on interest  payments due on the Type B  Debentures.  As of
February  16,  1999,  the Company  had not  received  any  demands for  interest
payments from any of the holders of the Type B Debentures.  The Company  intends
to pay all interest  due and payable as soon as the funds  required to do so are
available.

      The resale of shares of the Company's  common stock  issuable  pursuant to
the conversion

                                       10
of the Type B  Debentures,  are  being  registered  by way of  inclusion  in the
Registration Statement.

Pre-Placement RPM Shares

      3,000,000 shares (the  "Pre-Placement RPM Shares") of the 3,305,000 shares
of RPM common stock for which the Company issued Merger Shares,  constituted all
of the shares of RPM common stock which were issued and outstanding prior to the
commencement  of the RPM Private  Placement.  These  shares were  exchanged  for
3,000,000 Merger Shares in  consideration of RPM's waiver of certain  consulting
fees in the amount of $4,000  per month,  accrued  prior and  subsequent  to the
Merger pursuant to the terms of a certain five-year consulting agreement,  dated
June 9, 1997,  among RPM,  the  Company,  and Dr.  Eugene  Stricker and Mr. Mark
Schindler who were, prior to the Merger, RPM's principal shareholders, officers,
and directors (the "RPM Consulting  Agreement").  Pursuant to the RPM Consulting
Agreement,  Dr.  Stricker and Mr.  Schindler  rendered,  and continue to render,
consulting  services to the Company  concerning  matters in connection  with the
operation of the business, equipment financing, corporate acquisitions,  mergers
and other  business  combinations,  as well as management,  corporate  planning,
marketing,  organization and related  matters.  None of the RPM Shareholders had
any  affiliation  of any kind  with the  Company  prior to or after  the  Merger
(except  insofar as they have become  shareholders of the Company as a result of
the said Merger).  Based upon  information  provided by the recipients  (the RPM
Shareholders")  of the above  described  3,305,000  shares  of common  stock and
advice  from  the  principals  of RPM and the  opinion  of  RPM's  counsel,  all
3,000,000 of the  Pre-Placement RPM Shares were acquired by the RPM Shareholders
prior to March 31, 1997; all of the RPM Shareholders are "accredited  investors"
as that term is defined in Rule 501(a) of the  Securities  Act; all 3,305,000 of
the shares of RPM common stock (including the  Pre-Placement  RPM Shares as well
as the RPM Shares sold in the RPM Private  Placement)  which were  exchanged for
Merger  Shares  were  acquired  in  transactions  which  were  exempt  from  the
registration  requirements  of Section 5 of the Securities  Act available  under
Rule 506 of Regulation D thereof, which would not be integrated, as such term is
defined in Section  502(a) of  Regulation D under the  Securities  Act, with the
distribution  of the  Merger  Shares  to the RPM  Shareholders,  so as to render
unavailable,  for  such  distribution,   the  exemption  from  the  registration
provisions of the Securities Act under Rule 506 of Regulation D.

      Sales made in the RPM Private  Placement and the Type B Private  Placement
and the exchange of shares in the Merger were effected in  compliance  with Rule
506 to a limited  number of  sophisticated  investors  who  understood  and were
economically  capable  of  accepting  the risks  associated  with a  speculative
investment,  including  the  complete  loss of  such  investment,  and who  were
"Accredited  Investors"  within the meaning  prescribed by Regulation D and Rule
501 of the Securities Act.

The Type C Private Placement

      On May 11, 1998,  the Company  completed a private  placement (the "Type C
Private Placement") made directly by the Company, with all offers and sales made
by officers of the Company,  of a total of  11,760,000  shares of the  Company's
common  stock  (the  "Type C  Shares")  at a price of $.10 per  share,  yielding
proceeds of $1,176,000,  without deducting nominal incidental  expenses incurred
in  connection  with the  offering.  As was the case  with the Type A and Type B
Private Placements, the Type C Private Placement was effected in compliance with

                                       11
Rule 506 and the Type C Shares were offered and sold only to a limited number of
sophisticated   investors  who  understood  and  were  economically  capable  of
accepting  the risks  associated  with a speculative  investment,  including the
complete loss of such investment, and who were "Accredited Investors" within the
meaning prescribed by Regulation D and Rule 501 of the Securities Act.

      The  11,760,000  Type C Shares  which were sold are being  registered  for
resale to the public by the  holders  thereof by way of their  inclusion  in the
Company's Registration Statement.

Registration Statement

      On May 21, 1998, the Company filed a  Registration  Statement on Form SB-2
(Registration  No. 333-53255) with the Securities and Exchange  Commission,  for
the registration of the resale of certain  presently  outstanding  shares of the
Company's  common stock and an  undetermined  number of shares issuable upon the
conversion or exercise of certain presently outstanding debentures, options, and
warrants.  None of the shares included in the  Registration  Statement are being
offered for sale by the Company and the Company  will  receive no proceeds  from
the resales of any of the shares included therein.

      The shares of common stock being  registered  pursuant to the Registration
Statement include: (i) 11,952,857 presently  outstanding shares of the Company's
common  stock  which are being  offered  by 58  selling  shareholders  including
11,760,000 shares issued to 57 persons in the Type C Private Placement described
under "Material Financing Activities" and 192,857 shares issued in November 1998
to one  individual;  (ii)  shares  underlying  an option  issued to CG Tire Inc.
("CGT") on April 24, 1997,  for the  purchase,  prior to April 23, 2000,  of the
number of shares which would constitute upon their issuance,  on a fully diluted
basis, up to ten percent (10%) of the issued and outstanding common stock of the
Company at an exercise  price equal to fifty percent (50%) of the average of the
final bid and ask prices for the Company's  common stock during the ten business
days preceding the date of exercise;  (iii)  2,000,000  shares issuable upon the
exercise of the Type A Warrants issued in the Type A Private Placement described
under "Material Financing  Activities";  (iv) 2,000,000 shares issuable upon the
exercise of currently  outstanding  common  stock  purchase  warrants  (the "SCT
Warrants")  to  purchase  666,666  shares of the  Company's  common  stock at an
exercise price of $.25 per share,  666,666 shares of the Company's  common stock
at an exercise price of $.40 per share,  and 666,666 shares at an exercise price
of $.50 per  share;  (iv)  shares  issuable  upon the  conversion  of the Type A
Debentures,  issued in the Type A Private  Placement  described  under "Material
Financing  Activities",  in the  aggregate  principal  amount of  $500,000  at a
conversion  rate  equal to a  maximum  of 67.6%  and a  minimum  of 61.5% of the
closing bid price of the Company's  common stock on the trading date immediately
prior to the date upon which the Company  receives a notice of  conversion  (see
the discussion, above, in this section, under the subcaption "The Type A Private
Placement";  and (v) 2,675,000 shares issuable upon the conversion of the Type B
Debentures,  issued under the Type B Private Placement described under "Material
Financing  Activities" in the aggregate  principal  amount of $535,000.  (At the
option of the holders of the Type A and Type B Debentures,  all unpaid  interest
accrued on the Debentures, through the date of conversion, may also be converted
into shares of the Company's common stock).

The Company is presently  preparing  to file an  amendment to such  Registration
Statement and expects to do so as promptly as  practicable  following the filing
of this Report.

                                       12
RISK FACTORS

      The  Company's  liquidity,  capital  resources,  and results of operations
indicate that an investment in the Company remains speculative,  involves a high
degree of risk,  and should not be made by persons who cannot afford the loss of
their entire investment.  Prospective  investors in the Company should carefully
consider all of the information contained in this Report before deciding whether
to purchase securities of the Company, and, in particular, the factors set forth
below.

      Information   contained  in  this  Prospectus  contains   "forward-looking
statements"  which can be identified by the use of  forward-looking  terminology
such as "believes",  "expects", "may", "should" or "anticipates" or the negative
thereof or other variations thereon or comparable  terminology or by discussions
of strategy.  No assurance can be given that the future  results  covered by the
forward-looking statements will be achieved. The following Risk Factors include,
among   other   things,   cautionary   statements   with   respect   to  certain
forward-looking   statements,   including   statements   of  certain  risks  and
uncertainties that could cause actual results to vary materially from the future
results referred to in such forward-looking statements.

      1.  Development  Stage  Company:  No  Assurance  as to  Future  Profitable
Operations.  Because it is in the  development  stage and has had no significant
operations  to date,  the Company  cannot  predict with any certainty the future
success or failure of its  operations.  The  Company's  existing  business  (the
design and  manufacture of tire recycling  equipment) and its proposed  business
(the operation of tire recycling  equipment and the production of products using
the recycled  rubber produced  therefrom),  are both subject to all of the risks
inherent in the  establishment  of new businesses and there is no assurance that
the Company will generate net income or  successfully  expand its  operations in
the future.  Moreover,  as a new  enterprise,  it is likely to remain subject to
risks and occurrences  which  management is unable to predict with any degree of
certainty,  and for which it is unable to fully  prepare.  The likelihood of the
success of the Company in either business segment must be considered in light of
the  problems,  expenses,  difficulties,  complications  and  delays  frequently
encountered  in  connection  with  the  formation  of a  new  business  and  the
competitive  environment  in which the  Company  will  operate.  Because  of the
Company's very limited business history,  there is little evidence for investors
to  analyze  in  order  to make an  informed  judgment  as to the  merits  of an
investment in the Company.  Any such investment should therefore be considered a
high risk investment in an unseasoned  start-up  company with the possibility of
the loss of the entire investment.

      2. Need For  Substantial  Additional  Capital.  During the period  between
January 7, and May 11, 1998, the Company  completed and closed certain financing
activities which yielded  aggregate net proceeds to the Company in the amount of
$2,063,795  (see Risk  Factor  No. 6  "Dilutive  and Other  Adverse  Effects  of
Presently Outstanding  Debentures,  Warrants, and Options").  Upon completion of
the last of such financing  activities in May of 1998,  management believed that
the proceeds  realized  therefrom  (together with Canadian and Quebec government
and  governmental  agency grants and loans,  in various forms) would provide the
Company with adequate  funding to  accomplish  the  following:  (i) complete and
cover all of the Company's  costs related to the first  production  model of the
TCS-1  Plant  (the  "Production   Model");   (ii)  renovate  the  Company's  new
manufacturing and assembly facility to bring it into full compliance with all

                                       13
applicable provincial and municipal  regulations;  and (iii) cover the Company's
overhead  costs and expenses  through the end of October 1998.  The Company has,
however,  had to revise its estimates regarding the adequacy of such funding for
several  reasons,  including  but  not  limited  to the  necessity  for  certain
unanticipated  modifications  to the TCS-1 Plant design and the Company's  entry
into a second business segment  involving the operation of a TCS-1 Plant and the
production of molded rubber floor mats.

      During the "Stage 2" test phase of the First Production Model, the Company
encountered  certain  unanticipated  design  flaws in the TCS-1  which  required
modification and it also identified  several  opportunities  for improvements in
the original design of the TCS-1 Plant, which the Company believes will increase
economy  and  efficiency  of its  operation.  The  required  modifications  were
completed in December 1998 with respect to a single fracturing mill and a single
freezing  tower  in  the  First  Production  Model.  Completion  of  the  second
fracturing mill and freezing tower to be installed therein is scheduled to occur
in  April  of  1999.  The  costs  of  the  foregoing  modifications,   including
engineering fees,  aggregated to a previously unbudgeted amount of approximately
$500,000,  approximately  $250,000  of which had been paid by the  Company as of
December 31, 1998.

      The Company is also currently involved in establishing  rubber mat molding
operations under the IM2 Agreement.  In connection  therewith,  the Company will
incur  additional  costs  and  expenses  in an  estimated  aggregate  amount  of
approximately   $925,000.   This  includes:   (i)  approximately   $325,000  for
modifications to the Company's Montreal facility, necessary to accommodate these
operations,  and  for  materials  handling  equipment;  and  (ii)  approximately
$600,000 to cover the costs of purchasing and  installing a complete  rubber mat
molding and flocking plant.

      The  Company  has also had to,  and may,  in the near  future be forced to
continue  to, cover its  overhead  costs from sources  other than cash flow from
operations  because of the  unanticipated and lengthy delays in the commencement
of commercial operations.

      The Company  believes that it will be possible to meet its immediate goals
of: (a)  commencing  full  scale  commercial  production  of TCS-1  Plants;  (b)
commencing  rubber  mat  molding  operations  under the IM2  Agreement;  and (c)
covering  its  overhead  expenses  until  sufficient  cash flow is  generated by
operations,  out of a combination of some or all of the following  sources:  (i)
funds on hand;  (ii)  expected  cash flow  from  sales of four  TCS-1  Plants to
ENERCON America  Distribution  Limited  ("Enercon") of  Westerville,  Ohio. (see
"Existing  and  Proposed   Businesses  -  Sales  and  Marketing  -  The  Enercon
Agreements");  (iii)  Canadian and Quebec  government  and  governmental  agency
grants, loans, and refundable tax credits; (iv) sale and lease back financing on
inventory and equipment owned by the Company;  (v) conventional asset based debt
financing against receivables and inventory; (vi) refund of all of the 15% sales
tax paid by the Company on all goods, and services  purchased in connection with
the Company's manufacturing activities;  (vii) subcontractor financing; (viii) a
research and  development  tax credit facility from the Bank of Montreal for the
1999 calendar year; and/or (ix) vendor financing by way of installment purchases
of  equipment.  However,  the  sufficiency  of such funds,  if the Company  does
receive  them,  will be  completely  dependent  upon the  TCS-1  Plant's  as yet
unproven  ability to  operate  without  significant  problems,  on a  long-term,
continuous, commercial basis.

                                       14
Assuming the Company is able to cover the costs necessary to: (i) complete
the second  fracturing  mill and  freezing  tower;  and (ii)  install a complete
rubber mat molding and flocking facility, from the sources described above, full
scale commercial  manufacture of TCS-1 Plants and rubber mat molding  operations
are presently expected to occur during March 1999. However, 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 commercial operations.

      The Company's more long term future capital  requirements will depend upon
numerous factors, including the amount of revenues generated from operations (if
any), the cost of the Company's sales and marketing  activities and the progress
of the  Company's  research  and  development  activities,  none of which can be
predicted  with  certainty.  Receipt  of  any  projected  revenues  is  entirely
dependent upon the TCS-1's meeting performance  expectations,  ENERCON's ability
to meet its payment  obligations under its agreements with the Company,  Enercon
obtaining  all required  permits and licenses to operate a Plant,  the Company's
obtaining  sufficient  production,  financing  and  capacity  to  meet  delivery
requirements,  and the  rubber  crumb  produced  by the TCS-1  meeting  customer
requirements.  The Company  believes that if all of the foregoing  contingencies
are met, it will have  sufficient  cash flow to fund its operations for at least
the next twelve  months.  If  revenues  from  operations  within the next twelve
months should fail to meet current projections,  the Company may attempt to make
an  underwritten  public  offering of its  securities in order to insure that it
will have sufficient working capital. The Company notes that on August 13, 1997,
it  received  a  Letter  of  Intent  from  H.J.  Meyers,  Inc.   ("Meyers"),   a
broker-dealer  registered with the National  Association of Securities  Dealers,
Inc., for the  underwriting  of such a proposed  public  offering (the "Proposed
Public  Offering")  in an  amount  of not  less  than  $8,000,000.  On or  about
September 16, 1998,  however,  Meyers  abruptly  ceased doing  business.  If the
Company  should  determine  that it is necessary or desirable to effect a public
offering, it will have to locate another broker-dealer, ready, willing, and able
to  underwrite a public  offering of the Company's  securities.  There can be no
assurance  that the Company  will  succeed in finding an  underwriter  or that a
public  offering  will in fact be  completed  or that the Company  will  receive
adequate  financing  from  any  such  public  offering.  In the  event  that the
projected revenues are not generated and a public offering does not occur within
twelve  months,  the Company  intends to endeavor to obtain sale and  lease-back
financing  on  equipment  owned by the  Company,  conventional  asset based debt
financing  against  receivables  and inventory,  and/or to seek other avenues of
financing  through  private  offerings  of its debt or  equity  securities.  The
Company  believes that at least one, or a  combination  of more than one, of the
foregoing  avenues of financing will enable it to commence full scale production
of the TCS-1 Plant and its proposed product manufacturing and rubber crumb sales
operations  on a level  sufficient  to sustain the Company for at least the next
twelve months.  However, given the early stage of development of the Company, it
should  be  noted  that it is  impossible  at this  time to  estimate  with  any
certainty  what the  Company's  income from  operations  will be during the next
twelve  months and that 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.  While  management  does  not  believe  that  it  will  be the  case,
prospective  investors  in the  Company  should  note  that if all of the  above
described  internal  and  external  sources  for  financing  should  fail  to be
sufficient,  the Company  could be required  to reduce its  operations,  seek an
acquisition  partner or sell  securities on terms that may be highly dilutive or
otherwise disadvantageous.

                                       15
In the past,  the Company has  experienced  operational  difficulties  and
delays of more than five years,  three of which years occurred during the tenure
of the current  management.  All such difficulties and delays were the result of
working  capital  constraints  and the Company may continue to  experience  such
problems in the future.  Should such problems continue or reoccur in the future,
they could have a material adverse effect on the Company's  business,  financial
condition and results of operations.  The working capital  constraints which the
Company  experienced  were the  result  of its being  undercapitalized  from the
outset and therefore without sufficient  resources to hire required personnel or
pay  vendors  of  products   and   services,   including   but  not  limited  to
subcontractors  needed to design  and  build the First  Production  Model of the
TCS-1  Plant.  The Company  estimates  that it required  financing  in excess of
$2,000,000 to complete the design,  development,  and  construction  of the said
First Production Model of its TCS-1 Plant plus funds to maintain finance-raising
activities.  The Company actively sought  financing under its former  management
from 1992  through  1994 and  continued  to do so under its  current  management
beginning in January 1995. It did not raise  sufficient  financing to design and
construct the First Production Model to the point where initial testing could be
commenced  until May 1998.  Lack of  sufficient  working  capital also  required
management,   who  worked  for  the  Company  for  no,  or  very  limited,  cash
compensation, to devote a substantial amount of their time and effort to raising
the  required  financing.  The  Company  estimates,  that  if it had  sufficient
financing in January of 1995 when members of current  management  commenced  its
search for funding, it might have been able to complete the design, development,
and  construction of the First  Production  Model by October 1996.  Instead,  it
required an additional  three years for the Company to raise sufficient funds to
meet its  initial  goals and  objectives.  The  absence  of  operations  and the
resultant lack of significant cash flow from 1995 until the present,  compounded
the  Company's  problems  because  even the  overhead  required to sustain  fund
raising activities had to be financed from outside sources. This further delayed
the Company's ability to devote  sufficient  resources to completing the design,
development, and construction of the First Production Model of the TCS-1. By way
of example, the First Production Model was scheduled for delivery by February of
1997.  Instead,  the  last of the  three  major  components  of such  model  was
completed in June of 1998 and, as discussed  above,  the First  Production Model
underwent extended testing and "debugging" procedures until December 1998.

      3. History of Losses and Accumulated  Deficit. The Company has experienced
operating  losses in each fiscal period since its  formation in 1987,  including
the period since the 1993 inception of its tire  recycling  business plan. As at
June 30,  1998,  the Company had a deficit  accumulated  since  formation in the
aggregate approximate amount of $10,051,483,  approximately  $8,994,127 of which
was accumulated since the 1993 inception of the Company's present business plan.
The Company expects to incur  additional  operating  losses through at least the
end of the fiscal year ending June 30, 1999 and possibly thereafter (see, above,
Risk  Factor  No. 1  "Development  Stage  Company:  No  Assurance  as to  Future
Profitable  Operations").   Since  its  inception,  the  Company  has  generated
extremely limited revenues from operations.

      4. Going Concern Assumption. The Company's independent auditors' report on
the Company's  financial  statements for the years ended June 30, 1997 and 1998,
contains an explanatory  paragraph  indicating that: (i) the Company is still in
the  development  stage;  (ii) it  cannot  be  determined  at this time that the
Company's  tire  disintegration  technology  will be  developed  to a productive
stage; and (iii) the Company's uncertainty as to its productivity and

                                       16
its  ability to raise  sufficient  capital  raise  substantial  doubt  about its
ability  to  continue  as a going  concern.  In  addition,  the  Company  had an
accumulated deficit of $10,051,483 as at June 30, 1998. The Company will require
substantial  additional funds in the future,  and there can be no assurance that
any independent  auditors' report on the Company's  future financial  statements
will not  include a similar  explanatory  paragraph  if the Company is unable to
raise sufficient funds or generate  sufficient cash from operations to cover the
cost  of  its  operations.  The  existence  of  the  explanatory  paragraph  may
materially   adversely  affect  the  Company's   relationship  with  prospective
customers and suppliers,  and therefore could have a material  adverse effect on
the Company's business, financial condition and results of operations.

      5. No  Guarantee of Product  Acceptance  in Market.  The first  production
model of the TCS-1  Plant was  completed  in May of 1998 and is  expected  to be
ready for commercial production,  on a complete "turn-key" basis, in March 1999.
Consequently, there is not yet any history of commercial operations of the TCS-1
Plant.  There can be no  assurance  that the TCS-1 Plant will be accepted in the
market  for  tire  disintegration  equipment.  Moreover,  the  Company's  market
research has focused on the potential demand for the TCS-1 Plant, and the rubber
crumb it is  designed  to  produce,  to the  exclusion  of  other  types of tire
disintegration  equipment.  Therefore,  the Company is not able to estimate with
any assurance the potential  demand for the TCS-1 Plant, if any. There can be no
assurance that sufficient  market  penetration can be achieved so that projected
production levels of the TCS-1 Plant will be absorbed by the market.

      6. Dilutive and Other Adverse Effects of Presently Outstanding Debentures,
Warrants,  and Options.  As of February 12, 1999, there were outstanding options
and warrants pursuant to which the Company is obligated to sell common stock, as
follows:

      (a)   2,000,000 common stock purchase  warrants (the "Type A Warrants") to
            purchase a like number of shares of the Company's common stock at an
            exercise price of $.001 per share, the resale of all of which shares
            are included in the Registration Statement on Form SB-2.

      (b)   10% convertible Type A Debentures in the aggregate  principal amount
            of $500,000, with principal and interest convertible, in whole or in
            part,  into shares of the  Company's  common  stock at a  conversion
            ratio equal to a percentage  ranging  between 67.5% and 61.5% of the
            closing bid price of the Company's  common stock on the trading date
            immediately  preceding the date of the Company's receipt of a notice
            of conversion  from a holder of the Type A Debentures.  Accordingly,
            if, on February 16, 1999, all of the principal  amount,  but none of
            the interest,  due on the Type A Debentures  had been converted into
            common  stock  (based on the market  price of the common stock as at
            February  12,  1999),  a total of  4,357,298  shares of common stock
            would have been issued in respect of such conversion.  The resale of
            all of which shares would be included in the Registration  Statement
            on Form  SB-2.  To the  extent  that  the  interest  portion  of the
            Debenture is not converted,  all accrued interest will be payable in
            cash.

                                       17
(c)   10% convertible Type B Debentures in the aggregate  principal amount
            of $535,000, with principal and interest convertible, in whole or in
            part,  into shares of the  Company's  common  stock at a  conversion
            ratio of one share for every $.20 of  principal  amount and interest
            earned thereon from the date of issuance. If the principal amount of
            all of the Type B Debentures,  but not the interest, were converted,
            the aggregate  number of shares  issuable  would be  2,675,000,  the
            resale  of  all  which  shares  are  included  in  the  Registration
            Statement on Form SB-2.  To the extent that the interest  portion of
            the Type B Debenture is not converted,  all accrued interest will be
            payable in cash.

      (d)   an option to purchase  235,294 shares,  held by Lenford  Robins,  an
            unaffiliated  consultant,  exercisable at a price of $.17 per share.
            Mr. Robins is an expert in all types of equipment  financing through
            sale and leaseback  arrangements,  and otherwise,  and has provided,
            and  continues to provide,  consulting  services to the Company with
            respect to locating,  structuring,  and arranging such financing for
            purchasers and potential purchasers of TCS-1 Plants. From the Summer
            of 1996 through the Spring of 1997, Mr. Robins provided  substantial
            consulting  services in connection with sale and leaseback financing
            for Ocean's Tire Recycling & Processing Co., Inc. ("OTRP").

      (e)   (i) options to purchase,  on or before March 31, 1999,  an aggregate
            of 250,000  shares,  at an exercise  price of $.1875 per share;  and
            (ii) options to purchase,  on or before June 30, 1999,  an aggregate
            of 250,000 shares,  at an exercise price of $.28 per share.  Each of
            the  above  described  options  are held  among  three  individuals,
            including  Sharon Sanzaro (the spouse of Louis  Sanzaro,  an officer
            and director of the Company),  who hold such options as designees or
            assignees of  Ocean/Venture  III, Inc., a company  controlled by Mr.
            Sanzaro.   These  options  were  granted  in  consideration  of  the
            agreements of  Ocean/Venture  III, Inc. given on March 31, 1996, and
            June 30, 1996 to extend the  maturity  date of certain  indebtedness
            which the Company owed to Ocean/Venture  III, Inc. for periods which
            ranged from 90 to 120 days from each of such dates.

      (f)   an option,  held by a former  outside  director of the  Company,  to
            purchase 20,000 shares of convertible  preferred stock at a price of
            $10 per share (the "Preferred Option"). If purchased, such preferred
            stock will be convertible  into shares of the Company's common stock
            at a conversion  ratio equal to the number of shares of common stock
            purchasable  for the purchase price of each preferred share ($10) at
            30% of the average market price of the Company's common stock during
            the five trading days  immediately  prior to the date of  conversion
            provided,  however,  that  should the total  number of shares of the
            Preferred  Stock which can be purchased  pursuant to the Option,  be
            convertible  into fewer than two million  (2,000,000)  shares of the
            Company's  Common  Stock,  the number of shares of  Preferred  Stock
            purchasable  under the Option,  at the exercise price of ten dollars
            per  preferred  share,  will  be  increased  to  such  number  as is
            convertible  to 2,000,000.  If the shares of  convertible  preferred
            stock had been converted  into shares of the Company's  common stock
            as at February 16, 1999, a total of 3,836,930 shares would have been
            issued in respect of such conversion.

                                       18
(g)   the CGT  Option to  purchase  a number of shares  equal,  on a fully
            diluted  basis,  to 10% of the total issued and  outstanding  common
            stock of the Company, at an exercise price equal to $.1195 per share
            with respect to 969,365 shares and at an exercise price with respect
            to the  balance of the shares  equal to fifty  percent  (50%) of the
            average of the final bid and ask  prices of the common  stock of the
            Company, as quoted in the OTC Bulletin Board during the ten business
            days  preceding  the exercise  date.  If all of the other  presently
            outstanding  debentures,  options,  and warrants were exercised,  as
            described  above,  the total number of shares of common stock of the
            Company issued and  outstanding  would be  91,699,663,  prior to the
            exercise  of the CGT  Option,  in which  case,  the number of shares
            subject to the CGT Option would be 10,188,851,  the resale of all of
            which shares would be included in the Registration Statement on Form
            SB-2.

      The  holders  of  the  convertible  debentures,   the  warrants,  and  the
outstanding  options  have an  opportunity  to profit  from a rise in the market
price of the common stock, if such rise should occur, with a resulting  dilution
in the interests of the other  shareholders.  Moreover,  if the above  described
debentures,  warrants, and options (the "Convertible  Securities") are converted
or  exercised,  most of the shares of common stock issued upon such  exercise or
conversion (the  "Underlying  Shares") will be available for immediate sale into
the  public  market,  commencing  on the  effective  date  of  the  Registration
Statement.  The sale or availability  for sale of substantial  amounts of common
stock in the public market could adversely affect the prevailing market price of
the  Company's  common  stock and could  impair the  Company's  ability to raise
additional capital through the sale of its equity securities.  In addition, even
if the Convertible Securities are not converted or exercised, the terms on which
the Company may obtain  additional  financing  may be adversely  affected by the
existence  of such  securities.  For  example,  the  holders of the  Convertible
Securities  could  convert  or  exercise  them at a time  when  the  Company  is
attempting  to obtain  additional  capital  through a new offering of securities
which have terms more favorable (to the Company) than those provided by the then
outstanding Convertible Securities.

      7. Additional Dilution from Issuance of Shares for Services.  To date, the
Company has had no significant operating revenues.  Accordingly, the bulk of its
cash assets have been,  and may  continue to be,  utilized to cover the expenses
associated  with the  development of the TCS-1 Plant.  Given the foregoing,  the
Company  regularly  pays  certain  of  its  financial   obligations  by  issuing
restricted  shares of its common  stock,  at a  discount,  in lieu of cash.  The
discounts at which such shares were issued was generally, but not always, set at
50% of the average market price of the stock, as traded in the  over-the-counter
market  and  quoted  in the OTC  Bulletin  Board.  Such  discounts  were  either
negotiated at arms length with third parties or  determined  arbitrarily  by the
Company,  in which  cases they bore no  relationship  to the  Company's  assets,
earnings,  book value or other such criteria of value.  Such issuances have, and
may  continue  to,  result in  substantial  dilution to the  Company's  existing
shareholders.

      Since  January  of 1995,  the  Company  has  issued a total of  32,756,186
shares,  constituting 41.94% of the issued and outstanding shares of the Company
in lieu of cash compensation due under employment and consulting agreements with
its  executive  officers,  employees,  and  corporate  counsel and in additional
compensation by way of directors shares and stock bonuses.  In addition,  during
that period, the Company issued 12,888,243 shares, constituting approximately

                                       19
16.5% of the issued and  outstanding  common stock of the Company to  affiliated
and non-affiliated  consultants and  subcontractors  for consulting  services of
various  types.  For as long as the Company has  insufficient  cash resources to
meet its obligations to its officers,  counsel, and outside vendors, the Company
will,  to the extent  possible,  continue to issue shares of its common stock at
negotiated or arbitrary discounts. In addition, the Company intends to submit to
its shareholders, proposals to adopt three stock option plans for the benefit of
its employees (See Risk Factor No. 9 "Possible  Voting Control by Management and
Corporate  Counsel"  and Risk Factor No. 27 "Adverse  Effects of Proposals to Be
Presented at Annual Shareholders Meeting: Anti-Takeover Provisions,  Limitations
on Shareholders Voting Rights, and Stock Bonuses to Management").

      8.  Possible  Depressive  Effect on Price of Securities of Future Sales of
Common Stock.  The resale of 11,952,857 of the  78,095,141  common shares of the
Company, issued and outstanding as of February 4, 1999, has been included in the
Registration  Statement on Form SB- 2.  11,760,000 of such shares will be freely
tradeable commencing on the effective date of the Registration Statement on Form
SB-2 or, if the holders  thereof  shall choose to withdraw the  registration  of
such shares,  they will be tradeable under Rule 144 commencing May 11, 1999. The
resale  of  an  estimated  21,220,449  shares  issuable  upon  the  exercise  or
conversion of presently outstanding options,  warrants, and debentures have also
been  included  in the  Registration  Statement  on Form SB-2 and will be freely
tradeable  upon  the  later  of:  (i) the  effective  date  of the  Registration
Statement;  or  (ii)  their  issuance.  Alternatively,  if  the  holders  of the
convertible  debentures  and some of such warrants  (but not the options)  shall
choose  to  withdraw  them from the  Registration  Statement,  they will  become
tradeable under Rule 144 on  commencement  dates ranging from January 7, 1999 to
May 11, 1999. The sale or other disposition of much of the currently outstanding
shares of common stock is restricted by the  Securities  Act.  Unless such sales
are  registered,  these  shares  may only be sold in  compliance  with  Rule 144
promulgated  under the Securities Act or some other exemption from  registration
thereunder.  Rule 144 provides, among other matters, that if certain information
concerning  the  operating  and  financial  affairs of the  Company is  publicly
available,  persons who have held restricted securities for a period of one year
may thereafter sell in each  subsequent  three month period up to that number of
such shares equal to one percent of the Company's  total issued and  outstanding
common stock. The sale or availability for sale of substantial amounts of common
stock in the public  market  after the offering  being made by the  Registration
Statement on Form SB-2 could  adversely  affect the prevailing  market price for
the  Company's  common  stock and could  impair the  Company's  ability to raise
additional capital through the sale of its equity securities.

      9. Possible Voting Control by Management and Corporate  Counsel:  Possible
Depressive  Effect on Market  Prices.  As of  February  4, 1999,  the  Company's
officers and directors were the beneficial  owners of an aggregate of 29,391,199
shares,  constituting  approximately 37.16% of the Company's  outstanding common
stock.  The Company intends to hold the 1999 annual meeting of its  shareholders
prior to the end of the current  fiscal  year.  (See Risk Factor No. 27 "Adverse
Effects  of  Proposals  to  Be   Presented  at  Annual   Shareholders   Meeting:
Anti-Takeover  Provisions,  Limitations on Shareholders Voting Rights, and Stock
Bonuses to Management").  In addition to the proposals  discussed in Risk Factor
No. 27, the Board of Directors  has proposed that the  shareholders  approve the
adoption of three stock option plans. If adopted, two of these

                                       20
plans will be for the benefit of all of the Company's employees,  but management
and key employees are expected to be the principal  beneficiaries  thereof.  The
third of these proposed plans, is intended to be specifically for the purpose of
awarding  options  for the  purchase  of  shares  of  common  stock at a nominal
exercise price of $.001 per share, to key employees and members of management in
respect of certain specified performance achievements attained or to be attained
by the Company due to their efforts.

      The other two stock  option  plans to be  presented  to the  Shareholders,
consist of a  statutory  and a  non-statutory  plan.  Key  management  and other
employees  will also be eligible  to receive  option  grants  under each of such
plans.  The exercise  price of options  granted under the statutory plan must be
not less than 100% of the market  price on the day the option is granted  unless
the grantee owns 10% or more of the total issued and outstanding common stock of
the Company,  in which case the exercise price must be not less than 110% of the
market  price on the day the option is  granted.  The  non-statutory  plan to be
proposed to the shareholders calls for an exercise price of not less than 50% of
the market price on the date the option is granted.

      The  concentration  of ownership by the  Company's  officers and directors
may,  along with other  "anti-takeover"  measures  which the Board of  Directors
plans to submit to the shareholders, discourage potential acquirors from seeking
control  of  the  Company  through  the  purchase  of  Common  Stock,  and  this
possibility  could  have a  depressive  effect  on the  price  of the  Company's
Securities.  (See  "Risk  Factor No. 27  "Adverse  Effects  of  Proposals  to Be
Presented at Annual Shareholders Meeting: Anti-Takeover Provisions,  Limitations
on Shareholders Voting Rights, and Stock Bonuses to Management").

      10.  Proposed  Reverse  Split:   Possible  Negative  Effect  on  Value  of
Securities.  As of  February  4,  1999,  there  were  78,095,141  shares  of the
Company's common stock issued and outstanding.  While the Company considers that
it would be highly  unlikely  if all of the  currently  outstanding  options and
warrants were to be exercised and all of the  currently  outstanding  debentures
were to be converted  with respect to the principal  amount of such  debentures,
there could be up to 103,887,814  shares of common stock issued and outstanding.
On August 13, 1997,  the Company  received a Letter of Intent from H.J.  Meyers,
Inc.  (the  "Meyers  Letter of Intent"),  a  broker-dealer  registered  with the
National  Association of Securities  Dealers,  Inc., for the  underwriting  of a
proposed public offering.  On or about September 16, 1998, however, H. J. Meyers
abruptly  ceased  doing  business.  The Company  intends to endeavor to effect a
public offering of its securities and is presently in negotiations  with another
potential underwriter. The Meyers Letter of Intent had required that the Company
have not more than ten million  (10,000,000)  shares of common  stock issued and
outstanding prior to the proposed public offering. The Company believes that any
potential  underwriter  for a public  offering of the Company's  securities will
require that the Company  effect a reverse  split to reduce the number of shares
of its common stock issued and outstanding because the total number of shares of
common stock currently  outstanding is  disproportionately  large in relation to
the  Company's  level of sales,  net  income and net  worth.  Additionally,  the
Company's  common stock has had a low market  value per share in recent  months,
which  may,  the  Company  believes,  tend to reduce  stockbroker  and  investor
interest in the  Company.  Further,  the Company  believes  that the current per
share price of the Company's common stock may limit the effective  marketability
of the Company's  common stock because of the reluctance of many brokerage firms
and institutional investors to recommend lower-priced stocks to their clients or
to hold them in their own portfolios. In light of the above, the Company intends
to call a meeting of its shareholders and

                                       21
to submit to them a  proposal  to  reverse  split the number of shares of common
stock issued and  outstanding at a ratio of one post-split  share for every five
pre-split  shares,  or at some other,  possibly  higher,  ratio, as the board of
directors  shall  agree  is in  the  best  interests  of  the  Company  and  its
shareholders.  Based upon the  number of shares  issued  and  outstanding  as of
February  4, 1999,  and  assuming  that the  Reverse  Split is  approved  by the
shareholders and effected at a one-for-five  ratio,  there will be a decrease in
the number of outstanding shares of common stock of the Company to approximately
15,619,028  shares.  Because of standard  anti-dilution  clauses or market price
sensitive  exercise or conversion prices contained in all presently  outstanding
convertible  debentures,  warrants,  and options,  such reverse split would also
affect the number of shares of common stock issuable upon conversion or exercise
of  such  debentures,   warrants,   or  options.   Negotiations  with  potential
underwriters  may  result in a  different  reverse-split  ratio or even a second
reverse split.

      The  Company  believes  that a decrease  in the number of shares of common
stock  outstanding  may increase  the trading  price and  marketability  of such
shares.  However,  the market price of the Company's common stock should also be
expected to reflect Company performance and other factors,  some of which may be
unrelated  to the  number of shares  outstanding.  Accordingly,  there can be no
assurance that the market price of the Common Stock after the Reverse Split will
actually  increase in an amount  proportionate  to the decrease in the number of
outstanding  shares.  The Reverse Split may leave  stockholders with one or more
"odd lots" of the Company's  stock,  i.e. stock holdings in amounts of less than
100 shares.  These shares may be more  difficult  to sell,  or require a greater
commission per share to sell, than shares in lots of 100.

      Upon the  effectiveness  of the  Reverse  Split,  if it is approved by the
Shareholders, the presently issued certificates shall be deemed to represent the
number of shares equal to the number of pre-split shares originally  represented
by such certificate divided by the ratio of the reverse split, and rounded up to
the  next  full  number.  EXAMPLE:  if  the  reverse  split  is  effected  at  a
one-for-five  ratio,  a  certificate  which  originally  represented  an  10,523
pre-split  shares would be deemed to represent 10,523 divided by five (2,104.6),
rounded up to the next full  number,  i.e.,  2,105  shares.  Thus no  fractional
shares of common stock will result from the reverse  split (see "Risk Factor No.
6,  Dilutive  and Other  Adverse  Effects of Presently  Outstanding  Debentures,
Warrants and Options").

      11. Dependence on Major Customers. To date the Company has received orders
for fifteen TCS-1  Plants,  eight of which were ordered by  Ocean/Ventures  III,
Inc.("O/V III") of Toms River,  New Jersey ("O/V III") and parts of one of which
have been purchased by Oceans Tire Recycling & Processing Co., Inc. ("OTRP"),  a
company under common  control with O/V III. The eight Plants  ordered by O/V III
constitute  approximately  fifty-six  percent  (56%)  of the  Company's  present
backlog. The Company has also received orders for four TCS-1 Plants from ENERCON
America  Distribution  Limited  ("Enercon")  of  Westerville,  Ohio. The Enercon
orders  constitute  approximately  twenty-eight  percent  (28%) of the Company's
present  backlog.  The loss of either of these two customers  would have a major
adverse effect on the Company.  Both O/V III and OTRP are controlled by Louis V.
Sanzaro, an officer and director of the Company.

      Completion and consummation of all currently  outstanding orders for TCS-1
Plants,   are  entirely   dependent   upon  the  TCS-1's   meeting   performance
expectations,  each  customer's  obtaining  lease  or  other  financing  for the
purchased portions of the Plant (as well as all required

                                       22
permits  and  licenses  to  operate a  Plant),  and to the  Company's  obtaining
sufficient production, financing and capacity to meet delivery requirements.

      12.  Uncertainty  of Product  and  Technology  Development:  Technological
Factors. The Company has completed initial development and construction,  of the
first  production  model of the TCS-1 Plant.  The Company's  success will depend
upon the TCS-1 Plant's meeting targeted  performance and cost objectives and its
timely introduction into the marketplace. Such an outcome will be subject to the
risks inherent in the development of a new product,  technology,  and, business,
including  unanticipated  delays,  expenses,  and  difficulties,  as well as the
possible insufficiency of funding to complete development (see Risk Factor No. 2
"Need for Substantial  Additional  Capital",  above).  There can be no assurance
that under  commercial  usage  conditions,  the TCS-1 Plant will  satisfactorily
perform the functions for which it has been  designed and  constructed,  that it
will meet  applicable  price or performance  objectives,  or that  unanticipated
technical or other problems will not occur which would result in increased costs
or material delays in establishing the Company's business at a profitable level.
There can be no assurance that,  despite  testing by the Company,  problems will
not be  encountered  in the TCS-1 Plant  after the  commencement  of  commercial
manufacture and sales, resulting in loss or delay in market acceptance.

      13.  International  Sales and Operations.  The Company plans to market the
TCS-1  Plant in Europe and India  during the 1999  calendar  year,  and in other
areas  throughout the world as  opportunities  arise.  There can however,  be no
assurances  that the  TCS-1  Plant  will be  successfully  marketed  or that any
anticipated  international  sales of TCS-1 Plants will take place.  In addition,
the Company may enter into joint  ventures  with  purchasers of TCS-1 Plants for
the purpose of engaging in the business of operating tire  recycling  businesses
equipped  with  TCS-1  Plants.  To  the  extent  that  the  Company  engages  in
international  sales  and/or  operations,  it will be subject  to various  risks
associated therewith, including but not limited to changes in tariff rates, lack
of reliability and availability of qualified labor, and instability of political
climate or economic environment. In addition, the value of any capital equipment
owned by such joint  ventures  and any  operating  lease or  equipment  purchase
financing payments received by the Company,  may, under certain  conditions,  be
valued  or paid  in  non-U.S.  currencies,  all of  which  will  be  subject  to
independent  fluctuating  exchange rates with the U.S.  dollar which may have an
adverse  affect on the  Company's  revenues or asset values in terms of the U.S.
dollar.

      14. Protection of Tirex Proprietary Technology and Potential Infringement.
The success of the Company's  proposed business depends in part upon its ability
to protect its  proprietary  technology  and the proposed TCS-1 Plant which will
utilize  such  technology.  On April 7, 1998,  the  Company  was issued a United
States patent on its Cryogenic Tire Disintegration Process and Apparatus (Patent
No. 5,735,471).  This patent will expire on December 18, 2016. In November 1998,
the Company filed this patent with the Canadian  Patent  Office.  The Company is
presently  unable to state how long the  Canadian  review  will take.  While the
Company  expects  a  Canadian  patent  to be  granted,  it is unable to give any
assurance that this will in fact be the case. Prior to obtaining its patent, the
Company  relied  on  trade  secrets,   proprietary  know-how  and  technological
innovation to develop its technology and the designs and  specifications for the
TCS- 1 Plant.  Except where the terms of their employment  agreements would make
it redundant or, in the sole  discretion of  management,  it is determined  that
because of the non-technical nature

                                       23
of their duties,  such agreements are not necessary or appropriate,  the Company
has, and will continue to, enter into  confidentiality and invention  assignment
agreements  with all  employees  and  consultants  which  limit  access  to, and
disclosure  or use of, the  Company's  proprietary  technology.  There can be no
assurance,   however,   that  the   steps   taken  by  the   Company   to  deter
misappropriation  or third party  development of its technology and/or processes
will be adequate,  that others will not independently develop similar technology
and/or processes or that secrecy will not be breached. In addition, although the
Company believes that its technology has been  independently  developed and does
not infringe on the proprietary rights of others, there can be no assurance that
the Company's technology does not and will not so infringe or that third parties
will not assert infringement claims against the Company in the future. Moreover,
there can be no assurance that the Company will have the resources to defend its
Patent by bringing patent infringement or other proprietary rights actions.

      15. Limited  Public Market:  Company Not Eligible for Inclusion on NASDAQ.
To date  there  has been only a  limited  and  sporadic  public  market  for the
Company's  common stock.  There can be no assurance  that an active and reliable
public market will develop or, if developed, that such market will be sustained.
Purchasers  of  shares of  common  stock of the  Company  may,  therefore,  have
difficulty  in  reselling  such  shares.  As a  result,  investors  may  find it
impossible to liquidate their investment in the Company should they desire to do
so. The  Company's  common  stock is  currently  traded in the  over-the-counter
market and quoted on the OTC  Bulletin  Board.  The Company  intends to apply to
have its common stock  approved for quotation on the Nasdaq  SmallCap  Market at
such time, in the future,  that it meets the requirements  for inclusion.  As at
the date hereof, however, the Company is not eligible for inclusion in NASDAQ or
for  listing  on  any  national  stock  exchange.  All  companies  applying  and
authorized  for  NASDAQ are  required  to have not less than  $4,000,000  in net
tangible  assets,  a public  float(3)  with a market value of not less than five
million  dollars,  and a minimum bid of price of $4.00 per share. At the present
time,  the  Company is unable to state  when,  if ever,  it will meet the Nasdaq
application standards.  Unless the Company is able to increase its net worth and
market valuation  substantially,  either through the accumulation of surplus out
of earned income or successful  capital raising  financing  activities,  it will
never be able to meet the eligibility requirements of NASDAQ. In addition, it is
likely that the Company, which, as of February 4, 1999, had 78,095,141 shares of
common stock issued and outstanding,  will have to effect a reverse split of its
issued and outstanding stock, in order to meet the minimum bid price requirement
(see,  also, Risk Factor No. 6 "Dilutive and Other Adverse Effects of Debentures
and Warrants and Presently Outstanding Option").  Moreover,  even if the Company
meets the minimum  requirements  to apply for  inclusion in The Nasdaq  SmallCap
Market,  there  can be no  assurance,  that  approval  will be  received  or, if
received,  that the Company will meet the requirements for continued  listing on
the Nasdaq SmallCap  Market.  Further,  Nasdaq reserves the right to withdraw or
terminate a listing on the Nasdaq SmallCap Market at any time and for any reason
in its  discretion.  If the Company is unable to obtain or to maintain a listing
on the Nasdaq SmallCap Market,  quotations, if any, for "bid" and "asked" prices
of the common stock would be available  only on the OTC Bulletin Board where the
common stock is currently quoted or in the "pink sheets" published by

----------
      (3)   "Public  float" is defined as shares  that are not held  directly or
            indirectly by any officer or director of the issuer and by any other
            person  who is the  beneficial  owner of more than 10 percent of the
            total shares outstanding.

                                       24
the National Quotation Bureau,  Inc. This can result in an investor's finding it
more difficult to dispose of or to obtain accurate  quotations of prices for the
common  stock  than would be the case if the  common  stock  were  quoted on the
Nasdaq  SmallCap  Market.  Irrespective  of whether  or not the common  stock is
included in the Nasdaq  SmallCap  system,  there is no assurance that the public
market for the common stock will become more active or liquid in the future.  In
that regard,  prospective purchasers should consider that this offering is being
made without the underwriting  arrangements typically found in a public offering
of  securities.  Such  arrangements  generally  provide  for the  issuer  of the
securities to sell the securities to an underwriter  which,  in turn,  sells the
securities to its customers and other members of the public at a fixed  offering
price,  with the result that the  underwriter  has a continuing  interest in the
market for such  securities  following  the  offering.  In order to qualify  for
listing on a national stock exchange, similar minimum criteria respecting, among
other things, the Company's net worth and/or income from operation must be met.

      Accordingly, market transactions in the Company's common stock are subject
to the "Penny Stock Rules" of the Securities and Exchange Act of 1934, which are
discussed in more detail,  below,  under "Risk Factor No. 16.  Applicability  of
Penny Stock Rules to Broker-Dealer  Sales of Company Common Stock".  These rules
could  make it  difficult  to trade  the  common  stock of the  Company  because
compliance  with them can delay and/or preclude  certain  trading  transactions.
This could  have an adverse  effect on the  ability of an  investor  to sell any
shares of the Company's common stock.

      16. Applicability of "Penny Stock Rules" to Broker-Dealer Sales of Company
Common Stock.  As discussed  above,  at the present time,  the Company's  common
stock  is not  listed  on The  Nasdaq  SmallCap  Stock  Market  or on any  stock
exchange.  Although  dealer prices for the Company's  common stock are listed on
the OTC  Bulletin  Board,  trading  has been  sporadic  and  limited  since such
quotations first appeared on April 4, 1994.

      The  Securities  Enforcement  and Penny Stock Reform Act of 1990  requires
special  disclosure  relating to the market for penny stocks in connection  with
trades in any stock defined as a "penny stock". Commission regulations generally
define a penny stock to be an equity  security  that has a market  price of less
than $5.00 per share and is not listed on The Nasdaq  SmallCap Stock Market or a
major stock exchange.  These regulations subject all broker-dealer  transactions
involving  such  securities to the special "Penny Stock Rules" set forth in Rule
15g-9 of the Securities Exchange Act of 1934 (the "34 Act"). It may be necessary
for the Selling  Shareholders and the Underlying  Share Selling  Shareholders to
utilize the services of broker-dealers  who are members of the NASD. The current
market price of the  Company's  common stock is  substantially  less than $5 per
share and such stock can, for at least for the foreseeable  future,  be expected
to continue to trade in the over-the-counter  market at a per share market price
of  substantially  less than $5.  Accordingly,  any  broker-dealer  sales of the
Company's  shares will be subject to the Penny Stock  Rules.  These Rules affect
the ability of  broker-dealers  to sell the  Company's  securities  and also may
affect the ability of  purchasers  of the  Company's  common stock to sell their
shares in the secondary market, if such a market should ever develop.

      The Penny Stock Rules also impose special sales practice  requirements  on
broker-dealers  who sell such securities to persons other than their established
customers or "Accredited  Investors." Among other things,  the Penny Stock Rules
require that a broker-dealer make a

                                       25
special  suitability  determination  respecting  the  purchaser  and receive the
purchaser's written agreement to the transaction prior to the sale. In addition,
the  Penny  Stock  Rules  require  that a  broker-dealer  deliver,  prior to any
transaction,  a disclosure schedule prepared in accordance with the requirements
of the Commission relating to the penny stock market.  Disclosure also has to be
made about  commissions  payable to both the  broker-dealer  and the  registered
representative and the current quotations for the securities.  Finally,  monthly
statements have to be sent to any holder of such penny stocks  disclosing recent
price information for the penny stock held in the account and information on the
limited  market in penny  stocks.  Accordingly,  for so long as the Penny  Stock
Rules are applicable to the Company's common stock, it may be difficult to trade
such stock because  compliance with such Rules can delay and/or preclude certain
trading transactions.  This could have an adverse effect on the liquidity and/or
price of the Company's common stock.

      17.  Management's  Lack of Industry  Experience.  Although  Management has
significant  general business and engineering  experience,  potential  investors
should be aware  that no member of  management  has been  directly  involved  in
administering a tire disintegration, recycling, or tire disintegration equipment
manufacturing,  business, except for Mr. Sanzaro, who has more than twenty years
of experience in the recycling business (excluding tires).

      18.  Dependence on Key  Personnel.  The Company  believes that its success
depends to a  significant  extent on the efforts and abilities of certain of its
senior  management,  in  particular  those of Terence C. Byrne,  Chairman of the
Board of Directors and Chief  Executive  Officer;  Louis Sanzaro,  President and
Chief  Operating  Officer,  and  Louis V.  Muro,  Vice  President  in  charge of
engineering.  The loss of any of these  persons  could have a  material  adverse
affect on the Company's business,  prospects,  operating results,  and financial
condition.  The Company has entered  into  employment  agreements  with  Messrs.
Byrne,  Sanzaro,  and Muro.  The Company  does not  presently  have key man life
insurance  policies  and does not intend to obtain any unless  required to do so
under  future  financing  arrangements.  There  can be no  assurance  that  such
policies will be available to the Company on commercially  reasonable  terms, if
at all.  Additionally,  the ability of the Company to realize its business  plan
could be  jeopardized  if any of its  senior  management  becomes  incapable  of
fulfilling his  obligations to the Company and a capable  successor is not found
on a timely basis.  There can however be no assurance  that, in such event,  the
Company  will be able to locate and retain a capable  successor to any member of
its senior management.

      19.  Regulatory  and  Environmental  Considerations.  The Company does not
expect  that its  equipment  manufacturing  operations  will be  subject  to any
unusual  or  burdensome  governmental  regulations.   However,  the  Company  is
presently  in the  process of making  arrangements  to own the First  Production
Model of the TCS Plant and to operate it as a "Tirex  Advanced  Products  Plant"
for the purpose of selling rubber crumb produced by operation of the TCS-1 Plant
and manufacturing finished products, made wholly or partially from such rubber

                                       26
crumb.  The  TCS-1  Plant  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 and to the best of the  Company's
knowledge,  will not result in the  emission of air  pollution,  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 landfilled.  However,
the operation of a TCS-1 Plant will involve,  to varying degrees and for varying
periods of time, the storage of scrap tires which,  with their size,  volume and
composition, can pose serious environmental problems. While the Company does not
believe that such storage will normally involve  quantities of tires so large or
storage periods so extensive as to constitute the  "stockpiling" of scrap tires,
it should  be noted  that  stockpiling,  should it  occur,  could  constitute  a
particularly serious environmental problem. Among the numerous problems relating
to scrap tires, is that when stockpiled above ground, tires create serious fire,
public health,  and  environmental  hazards  ranging from fires,  which generate
large and dense clouds of black smoke and are extremely difficult to extinguish,
to the creation of vast breeding grounds for mosquitoes and vermin.

      As a result,  many states have either  passed or have pending  legislation
regarding  discarded  tires including  legislation  limiting the storage of used
tires to specifically designated areas. The Company and other operators of TCS-1
Plants will therefore be subject to various local,  state,  and federal laws and
regulations including,  without limitation,  regulations  promulgated by federal
and state environmental,  health, and labor agencies. Establishing and operating
a TCS-1 Plant for tire  recycling will require  numerous  permits and compliance
with  environmental  and  other  government  regulations,  on  the  part  of the
Company's  customers,  both in the  United  States  and Canada and in most other
foreign countries. The process of obtaining required regulatory approvals may be
lengthy and  expensive  for both the Company and for its TCS-1 Plant  customers.
Moreover,  regulatory approvals, if granted, may include significant limitations
on either the Company's or its  customer's  operations.  The EPA and  comparable
state and local regulatory agencies actively enforce  environmental  regulations
and  conduct  periodic  inspections  to  determine  compliance  with  government
regulations.  Failure to comply  with  applicable  regulatory  requirements  can
result in, among other  things,  fines,  suspensions  of  approvals,  seizure or
recall of products, operating restrictions, and criminal prosecutions.

      Compliance  with applicable  environmental  and other laws and regulations
governing  the business of the Company,  and of all TCS-1 Plant  Operators,  may
impose  financial  burdens that could adversely  affect the business,  financial
condition,  prospects,  and results of operations,  of the Company. Such adverse
affects could include,  but may not be limited to, the burden of compliance with
laws and regulations governing the installation and/or operation of TCS-1 Plants
discouraging  potential  customers  from  purchasing a TCS-1  Plant.  Actions by
federal, state, and local governments concerning  environmental or other matters
could  result in  regulations  that could  increase  the cost of  producing  the
recyclable rubber, steel, and fiber which are the by-products from the operation
of the TCS-1 Plant and make such  by-products less profitable or even impossible
to sell at an economically feasible price level.

      The  Company  believes  that  existing   government   regulations,   while
extensive,  will not result in the disability of either the Company or its TCS-1
Plant customers to operate  profitably and in compliance with such  regulations.
However,  since  all  government  regulations  are  subject  to  change  and  to
interpretation  by local  administrations,  the effect of government  regulation
could  conceivably  prevent,  or delay for a  considerable  period of time,  the
development of the

                                       27
Company's   business  as  planned   and/or  impose  costly  new  procedures  for
compliance,  or prevent the Company or its TCS-1  customers from  obtaining,  or
affect the timing of, regulatory approvals. Actions by federal, state, and local
governments   concerning   environmental   or  other  matters  could  result  in
regulations  that could therefore  increase the cost of producing the recyclable
rubber,  steel,  and fiber which are the  by-products  from the operation of the
TCS-1 Plant and make such by-products less profitable or even impossible to sell
at an economically  feasible price level, which could result in the Company's or
its TCS-1  customers'  businesses being less  profitable,  or  unprofitable,  to
operate.  Continually  changing government  compliance standards and technology,
could also affect the Company's future capital expenditure requirements relating
to environmental  compliance.  Likewise,  the burden of compliance with laws and
regulations  governing the  installation  and/or operation of TCS-1 Plants could
discourage  potential  customers  from  purchasing  a TCS-1  Plant  which  would
adversely  affect the  Company's  business,  prospects,  results,  and financial
condition.  As a result,  the  business  of the Company  could be  directly  and
indirectly affected by government regulations.

      20. Production and Supply. The Company intends to begin  manufacturing the
TCS-1 Plant on a commercial  basis in March 1999. In connection  therewith,  the
Company  will be  dependent  on  arrangements  with its  subcontractors  for the
manufacture and assembly of the principal components incorporated into the TCS-1
Plant.  It will  therefore  be  substantially  dependent  on the ability of such
subcontractors to satisfy performance and quality specifications and to dedicate
sufficient production capacity for all TCS-1 Plant scheduled delivery dates. The
Company believes that all of its subcontractors have the requisite manufacturing
capabilities  and the  willingness  to  dedicate  sufficient  amounts  of  their
manufacturing  capacity to the Company to meet all TCS-1 Plant  delivery  dates,
currently  scheduled  or  expected  to be  scheduled  within the next two years.
However,  no  assurance  can be  given  that  this  will in fact be the case and
failure  on the part of the  Company's  subcontractors  in these  regards  would
adversely  affect the Company's  ability to manufacture and deliver TCS-1 Plants
on a timely  and  competitive  basis.  In such event the  Company  would have to
replace or supplement its present subcontractors. There can be no assurance that
should it be  necessary  to do so,  the  Company  would be able to find  capable
replacements for its subcontractors on a timely basis and on terms beneficial to
the Company,  if at all; The Company's  inability to do so would have a material
adverse effect on its business.

      Components  of  the  TCS-1  Plants,  which  are  not  manufactured  by the
Company's  subcontractors  specifically for the TCS-1 Plant,  will be purchased,
either  directly by the Company or indirectly  through its  subcontractors  from
third-party  manufacturers.  The  Company  believes  that  numerous  alternative
sources of supply for all such components are readily available.

      21.  Technological  Changes.  To date, the market for tire  disintegration
equipment has not, to the best of management's knowledge,  been characterized by
rapid  changes  in  technology.  However,  there  can be no  assurance  that new
products or  technologies,  presently  unknown to the Company,  will not, at any
time in the future and without warning, render the Company's tire disintegration
technology  less  competitive or even obsolete.  Moreover,  the technology  upon
which the Company's tire disintegration system is based, could be susceptible to
being  analyzed  and  reconstructed  by an  existing  or  potential  competitor.
Although  the Company  has been issued a United  States  patent  respecting  its
proprietary disintegration system, the Company may not have

                                       28
the financial resources to successfully defend such patent, were it is to become
necessary,  by bringing  patent  infringement  suits  against  parties that have
substantially  greater resources than are available to the Company.  The Company
must continue to create innovative new products reflecting technological changes
in design,  engineering,  and development,  not only of new tire  disintegration
machinery,  but of products, and machinery capable of producing products,  which
incorporate and recycle the rubber,  steel,  and/or fiber by-products which will
be produced by the operation of the TCS-1 Plant. Failure to do so, could prevent
to Company from gaining and  maintaining a significant  market for its products.
This may require a continuing high level of product development, innovation, and
expenditures. To the extent that the Company does not respond adequately to such
technological  advances,  its  products  may become  obsolete and its growth and
profitability may be adversely affected.

      22.  Competition.  Although  management believes that the Tirex Technology
has distinct  advantages over other existing tire  disintegration  methods,  the
Company will face competition from other equipment manufacturers,  virtually all
of whom will be larger than the Company, and will have substantially more assets
and resources than the Company.  Management  intends to meet such competition by
developing  technological  innovations  which  will  make the TCS-1  Plant  more
economical  and efficient  than other tire  disintegration  methods  although no
assurance can be given that this will prove to be the case.

      23. Lack of Liability  Insurance.  The proposed TCS-1 Plant may expose the
Company to  possible  product  liability  claims if,  among  other  things,  the
operation  of the TCS-1  Plant  results in  personal  injury,  death or property
damage.  There can be no assurance the Company will have sufficient resources to
satisfy any  liability  resulting  from such claims or will be able to cause its
component suppliers or customers to indemnify or insure the Company against such
claims.  The  Company  does not  presently  intend to obtain  product  liability
insurance prior to the commencement of commercial  operation of the TCS-1 Plant.
Should the Company  determine that such insurance is necessary,  there can be no
assurance  that  affordable  insurance  coverage  will be available in terms and
scope adequate to protect the Company  against  material  adverse effects in the
event of a successful claim.

      24. No Dividends and None  Anticipated.  The Company has not paid any cash
dividends,  nor does it contemplate or anticipate  paying any dividends upon its
common stock in the foreseeable future.

      25. Possible  Adverse Effects of  Authorization  and Issuance of Preferred
Stock.  The  Company's  amended  Certificate  of  Incorporation  authorizes  the
issuance of 5,000,000 shares of "Class A Stock".  Twenty thousand of such shares
are  reserved  for  issuance  as  preferred  stock under an  outstanding  option
therefor. The Board of Directors has the power to issue the balance of the Class
A Stock in such  series  and  classes  and with such  designations,  rights  and
preferences  as may be  determined  from time to time by the Board of Directors.
The issuance of any series of preferred stock having rights superior to those of
the common  stock may result in a decrease  in the value or market  price of the
common stock and could be used by the Board of Directors as a means to prevent a
change in control of the Company. Such preferred stock issuances could

                                       29
make the possible  takeover of the Company,  or the removal of management of the
Company,  more difficult.  The issuance of such preferred stock could discourage
hostile  bids for control of the  Company in which  shareholders  could  receive
premiums for their common stock or warrants,  could adversely  affect the voting
and other rights of the holders of the common stock, or could depress the market
price of the common  stock.  Also,  the  voting  power and  percentage  of stock
ownership of the shareholders of the Company's  outstanding capital stock can be
substantially  diluted by such preferred stock  issuance.  See also, Risk Factor
No. 27 "Adverse  Effects of Proposals  to Be  Presented  at Annual  Shareholders
Meeting:  Anti-Takeover  Provisions,  Limitations on Shareholders Voting Rights,
and Stock Bonuses to Management".

      26.  Prior  Notice  Not  Required  For  Shareholder  Actions.  None of the
Company's  securities are registered under Section 12 of the Securities Exchange
Act of 1934, as amended (the "34 Act"). As a result,  the Company is not subject
to the Proxy Rules of Section 14 of the 34 Act. The Company is thus able to take
shareholder  actions in  conformance  with Section 228 of the  Delaware  General
Corporation  Act,  which  permits it to take any action which is required to, or
may, be taken at an annual or special meeting of the shareholders, without prior
notice and without a vote of the shareholders. Instead of such vote, the written
consent or consents in writing, setting forth the action so taken, can be signed
by the holders of  outstanding  stock having not less than the minimum number of
votes that would be  necessary  to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted on such action.
The only  notice  which  shareholders  other  than those who  consented  to such
action,  are entitled to, is required to be given  promptly after the action has
been taken.

      27.  Adverse  Effects of Proposals to Be Presented at Annual  Shareholders
Meeting: AntiTakeover Provisions, Limitations on Shareholders Voting Rights, and
Stock Bonuses to Management. The Company intends to hold the 1999 annual meeting
of its  shareholders  prior to the end of the current fiscal year.  This will be
the first meeting of the Shareholders  ever called by the Company.  The Board of
Directors has proposed that the Company's Certificate of Incorporation should be
amended and restated to contain  provisions  that may make it more  difficult to
acquire  control  of the  Company  by means of  tender  offer,  over-the-counter
purchases,  a proxy fight, or otherwise.  If adopted by the required vote of the
Company's shareholders, the amendments will include: (i) the addition of a "fair
price"  provision to the Certificate of  Incorporation  that regulates  business
combinations with any person or group beneficially  owning fifteen percent (15%)
or more of the  Company's  common  stock,  including  a  voting  requirement  of
seventy-five  percent (75%) of the voting power of all outstanding voting shares
of the Company  (excluding shares held by such fifteen percent (15%) stockholder
or group of  stockholders)  for a  business  combination,  unless  the  business
combination  is approved by a majority of the members of the Board of  Directors
who have held office  since prior to the date of the 1999  annual  meeting  (the
"Continuing  Directors")  or  satisfies  certain  minimum  price and  procedural
requirements;  (ii)  the  addition  to the  Certificate  of  Incorporation  of a
provision  granting  authority  to the Board of  Directors  to adopt one or more
shareholder rights plans, rights agreements, or other forms of "poison pills" in
the future  without  further  shareholder  approval,  (iii) the  addition to the
Certificate of Incorporation  of a provision  classifying the Board of Directors
into three classes;  (iv) the addition to the Certificate of  Incorporation of a
seventy-five  percent (75%) voting  requirement for any stockholder action to be
taken by written  consent;  (v) an amendment to the Certificate of Incorporation
requiring the affirmative  vote of the holders of seventy-five  percent (75%) of
the outstanding voting stock to amend, alter and repeal the By-laws and to allow
the Board of Directors to amend, alter or repeal the By-laws without stockholder

                                       30
consent;  (vi) the addition to the Certificate of  Incorporation  of a provision
electing to be governed by the provisions of Section 203 of the Delaware General
Corporation  Law which,  under certain  circumstances,  imposes  restrictions on
proposed business  combinations between a company and an interested  stockholder
of such  company;  (vii) the  addition of a  seventy-five  percent  (75%) voting
requirement in order to amend, alter or repeal the foregoing proposed amendments
to the  Certificate  of  Incorporation;  (viii)  an  amendment  to  the  By-laws
eliminating the ability of stockholders to call a special meeting;  and (ix) the
addition  to the  By-laws of a  provision  requiring  that  stockholders  submit
director  nominations  and  other  business  to be  considered  at  meetings  of
stockholders  at least 90 days in advance of any such  meeting of  stockholders.
The proposed  amendments are not being submitted to the shareholders in response
to any effort, of which the Company is aware, to accumulate the Company's common
stock or to obtain control of the Company.

      The  proposed  amendments,  individually  and  collectively,  may have the
effect of making more difficult and discouraging a merger, tender offer or proxy
fight,  even if such transaction or occurrence may be favorable to the interests
of some or all of the Company's  stockholders.  The proposed amendments also may
delay the  assumption  of control by a holder of a large block of the  Company's
common stock and the removal of incumbent management, even if such removal might
be  beneficial  to some or all of the  stockholders.  Furthermore,  the proposed
amendments  may have the effects of deterring or  frustrating  certain  types of
future  takeover  attempts  that may not be approved by the  incumbent  Board of
Directors,  but that the holders of a majority of the shares of Company's common
stock  may deem to be in their  best  interests  or in which  some or all of the
stockholders may receive a substantial premium over prevailing market prices for
their stock.

      By having the  effect of  discouraging  takeover  attempts,  the  proposed
amendments also could have the incidental  effect of inhibiting  certain changes
in  management  (some or all of the  members of which  might be  replaced in the
course of a change of control) and also the temporary fluctuations in the market
price of the  Company's  common  stock that could  result from actual or rumored
takeover attempts. Moreover, tender offers or other non-open market acquisitions
of stock are  usually  made at prices  above the  prevailing  market  price of a
company's  stock.  In  addition,  acquisitions  of stock in the open  market  by
persons attempting to acquire control may cause the market price of the stock to
reach levels that are higher than might  otherwise be the case.  Approval of the
some or all of the proposed  amendments may deter such  purchases,  particularly
purchases for less than all of the Company's  shares,  and therefore may deprive
holders of the Company's  common stock of an opportunity to sell their shares at
a temporarily higher market price.

      Purchasers of the Company's  shares should note that such  amendments,  if
adopted,  will  result in there being  special  requirements  for  supermajority
shareholder  approval of any subsequent business combination and the possibility
that  after  an  acquiror  (for  purposes  of this  discussion,  an  "Interested
Shareholder")  purchases a certain  percentage of the Company's common stock, it
will be forced to pay a higher  price to other  Company  shareholders  in such a
business  combination.  This would  likely would make it more costly for a third
party to acquire  control of the  Company.  Thus,  the proposed  amendments  may
decrease the likelihood of a tender offer for less than all of the shares of the
common stock of the Company,  which may adversely affect stockholders who desire
to participate in such a tender offer. In certain cases, the proposed fair price
amendment's   minimum  price  provisions,   while  providing  objective  pricing
criteria, could

                                       31
be arbitrary and not indicative of value. In addition, an Interested Stockholder
may be unable,  as a  practical  matter,  to comply  with all of the  procedural
requirements. In these circumstances, unless an Interested Stockholder were able
to obtain special stockholder  approval of a proposed Business  Combination,  it
would be  forced  either  to  negotiate  with the  Board of  Directors  on terms
acceptable  to the Board or to abandon the proposed  business  combination.  The
proposed  amendments  also would give veto power to minority  stockholders  with
respect  to a proposed  Business  Combination  that is opposed by a majority  of
Continuing  Directors  but  that  is  desired  by a  majority  of the  Company's
stockholders unless the minimum pricing and procedural requirements were met. If
members of the Company's current  management and principal  shareholders were to
maintain their current stock ownership, they would have the ability to block the
requisite  vote.  In  addition,  the  proposed  amendments  may tend to insulate
incumbent  directors  against  the  possibility  of  removal  in the  event of a
takeover attempt because only the Continuing  Directors would have the authority
to reduce  to a simple  majority  or  eliminate  the  special  stockholder  vote
required for a particular Business Combination.

      While  some  of  the  proposed   amendments   would  directly  affect  the
possibility  of the  Company's  being the subject of a tender offer or a hostile
takeover,  others will directly  limit the ability of minority  shareholders  to
participate in Company affairs.  The classified  Board of Directors  provisions,
will  divide the Board of  Directors  into three  classes of  directors  serving
staggered  two-year  terms,  with two  directors  to be elected  at each  annual
meeting  of  shareholders.  This will  extend  the time  required  to change the
composition of the Board of Directors.  The provision requiring  shareholders to
give 90 days advance notice to the Company of any nomination for election to the
Board of Directors, or other business to be brought at any shareholders' meeting
will make it more difficult for shareholders to nominate candidates to the Board
of Directors who are not supported by  management.  This  provision will make it
more  difficult  to  implement  shareholder  proposals  even  if a  majority  of
shareholders are in support thereof.  Each of these provisions may also have the
effect of  deterring  hostile  take-overs  or  delaying  changes  in  control or
management of the Company. In addition,  the  indemnification  provisions of the
Company's  Certificate of  Incorporation  and Bylaws may represent a conflict of
interest between  management and the  shareholders  since officers and directors
may be indemnified prior to any judicial determinations as to their conduct.

      Under Delaware law, each of the proposed  amendments to the Certificate of
Incorporation  and By-laws  described above requires the affirmative vote of the
holders of a majority of the Company's  outstanding  shares of common stock. All
of the proposals are permitted by law. If stockholders approve any or all of the
proposed   amendments,   the  Company  will  file  a  Restated   Certificate  of
Incorporation that reflects the proposed  amendments with the Secretary of State
of the  State  of  Delaware.  Each of the  proposed  amendments  adopted  by the
Company's  stockholders  will become effective  regardless of whether any of the
other proposed amendments to be acted upon at the Meeting is adopted.

      In addition to the proposed amendments to the Certificate of Incorporation
and By-laws,  the present  Certificate of Incorporation  authorizes the Board of
Directors to issue shares of Class A Stock having such rights,  preferences  and
privileges as designated by the Board of Directors without stockholder  approval
(see "Risk Factor No. 25 "Possible Adverse Effects of Authorization and Issuance
of Preferred Stock").

                                       32
SELLING SHAREHOLDER

      35,057 of the 181,353 shares of common stock (the "Shares")  being offered
hereunder by the Selling Shareholder were acquired by him on or about August 11,
1998,  pursuant to the terms of his employment  agreement,  dated as of June 22,
1998, (the "Rapfogel Employment Agreement") for services rendered to the Company
during the period June 22, 1998  through on or about July 31,  1998.  146,296 of
the 181,353  Shares  being  offered  hereunder by the Selling  Shareholder  were
acquired  by him on or about May 1, 1999 for  services  rendered  to the Company
during the period August 1, 1998 through December 31, 1998 pursuant to the terms
of the Rapfogel  Employment  Agreement for the five month period which commenced
on August 1,  1998 and ended on  December  31,  1998.  The  Rapfogel  Employment
Agreement is an individually  negotiated written compensation agreement pursuant
to which the Selling  Shareholder  renders bona fide  services not in connection
with the offer or sale of  securities  in a capital  raising  transaction.  Such
agreement  constitutes  an Employee  Benefit Plan, as defined in Rule 405 of the
Securities  Act of 1933.  The Rapfogel  Employment  Agreement  may  sometimes be
referred to hereinafter as the "Plan". For purposes of this Reoffer  Prospectus,
all of the Shares being registered  hereunder are "restricted shares" insofar as
they were issued  under an employee  benefit plan  pursuant to a Securities  Act
exemption prior to their  inclusion in a registration  statement on Form S-8, of
which this Reoffer Prospectus is a part.

      The table which follows identifies: (i) the Selling Shareholder ; (ii) the
Plan pursuant to which the Shares being offered hereby have been acquired; (iii)
the nature of all positions,  offices or other material  relationships which the
Selling  Shareholder has had with the Company within the past three years;  (iv)
the number of shares of common stock owned by the Selling  Shareholder  prior to
the  offering;  (v) the number of shares of common  stock to be offered  for the
account of the Selling Shareholder; (vi) the number of shares of common stock to
be owned by the Selling  Shareholder  after the completion of the offering,  and
(vii) the  percentage of the  Company's  common stock to be owned by the Selling
Shareholder after completion of the offering.

                                       33
Number of                 Number of    Percentage
                                                       Positions        Shares Owned   Number of   Shares Owned   of Shares
                         Compensation Agreement          With             Prior to       Shares     After the    Owned After
Selling Shareholder          (Name of Plan)             Company           Offering       Offered     Offering   the Offering
-------------------          --------------             -------           --------       -------     --------   ------------
Scott Rapfogel           Employment Agreement of   Assistant Corporate    181,353        181,353         0            0
                         June 22, 1998.            Counsel
34
PLAN OF DISTRIBUTION

      The  Selling  Shareholder  has  offered  and sold no  shares  (the  "Prior
Shares") of the Company's  Common Stock pursuant to a registration  statement on
Form S-8 within the three-month  period preceding the date hereof. The number of
shares  offered  hereunder by the Selling  Shareholder  together  with the Prior
Shares  represents  less than one  percent of the total  number of shares of the
Company's common stock presently issued and outstanding. The Selling Shareholder
may sell all or part of the shares,  from time to time, in the  over-the-counter
market,  or in such other public  market for the  Company's  common stock as may
develop, at market prices then pertaining.  In connection  therewith the Selling
Shareholder may utilize the services of NASD registered broker-dealers,  none of
whom will act as underwriters with respect to sales of the Shares.  The names of
any such brokers-dealers, who have not yet been identified, will be set forth in
a supplement to this Reoffer Prospectus, to the extent required.

                            DESCRIPTION OF SECURITIES

      The authorized capital stock of the Company consists of one hundred twenty
million shares  (120,000,000),  par value $.001 per share,  of which one hundred
fifteen million (115,000,000) shares are designated Common Stock par value $.001
per share, and five million (5,000,000) shares are designated Class A Stock, par
value $.001 per share.  As at March 18, 1999 there were seventy  eight  million,
two hundred forty one thousand, four hundred thirty seven (78,241,437) shares of
Common Stock issued and  outstanding.  The Class A Stock may be issued from time
to time, in one or more classes, or one or more series within any class thereof,
in any manner permitted by law, as determined from time to time by the Company's
board of directors,  and stated in the resolution or  resolutions  providing for
the issuance of such shares adopted by the Company's board of directors pursuant
to authority vested in it in the Company's  Certificate of  Incorporation,  each
class or series to be  appropriately  designated,  prior to the  issuance of any
shares thereof, by some distinguishing  letter, number designation or title. All
shares of stock in such  classes or series may be issued for such  consideration
and have such voting powers,  full or limited,  or no voting  powers,  and shall
have such designations,  preferences and relative,  participating,  optional, or
other special rights, and qualifications,  limitations or restrictions  thereof,
permitted  by law,  as  shall be  stated  and  expressed  in the  resolution  or
resolutions,  providing for the issuance of such shares adopted by the Company's
board of directors pursuant to authority vested in the Company's  Certificate of
Incorporation.  The number of shares of stock of any class or series  within any
class,  so set forth in such resolution or resolutions may be increased (but not
above the total number of  authorized  shares) or  decreased  (but not below the
number of shares thereof then outstanding) by further  resolution or resolutions
adopted by the Company's board of directors  pursuant to authority  vested in it
in the Company's Certificate of Incorporation.

      The Company's  Board of Directors may determine the times when,  the terms
under which and the consideration for which the Company shall issue,  dispose of
or receive  subscriptions for its shares,  including treasury shares, or acquire
its own shares.  The  consideration for the issuance of the shares shall be paid
in full  before  their  issuance  and  shall  not be less than the par value per
share.  Upon  payment of such  consideration,  such shares shall be deemed to be
fully paid and nonassessable by the Company.

                                       35
The holders of shares of Common Stock are  entitled to dividends  when and
as declared by the Board of Directors  from funds  legally  available  therefore
and, upon  liquidation,  are entitled to share pro rata in any  distribution  to
shareholders.  Holders of the Common Stock have one non-cumulative vote for each
share hold. There are no pre-emptive,  conversion or redemption privileges,  nor
sinking fund provisions, with respect to the Common Stock.

      Stockholders  are  entitled to one vote of each share of Common Stock held
of record on matters submitted to a vote of stockholders.  The Common Stock does
not have cumulative voting rights. As a result,  the holders of more than 50% of
the shares of Common Stock voting for the election of directors can elect all of
the  directors  if they choose to do so, and, in such event,  the holders of the
remaining shares of Common Stock will not be able to elect any person or persons
to the board of directors of the Company.

                                     EXPERTS

      The financial statements and schedules of the Company and its subsidiaries
included in the  Company's  Annual  Report on Form  10-KSB,  for the fiscal year
ended  June 30,  1998,  which is  incorporated  herein by  reference,  have been
examined by Pinkham & Pinkham, P.C., Certified Public Accountants,  PA, and such
financial  statements  and  reports  are  incorporated  by  reference  herein in
reliance upon the authority of said firm as experts in accounting and auditing.

                                 LEGAL OPINIONS

      The  legality  of the Shares  offered  hereby has been passed upon for the
Company by Frances Katz Levine,  Esq., 621 Clove Road,  Staten Island, NY 10310.
Ms.  Levine,  serves as corporate and securities  counsel to the Company.  As at
March 18, 1999 Ms.  Levine and her  husband,  Robert  Levine were the record and
beneficial owners of approximately 6.37% of the Company's issued and outstanding
common stock.

                                 INDEMNIFICATION

      The Company's certificate of incorporation provides for indemnification to
the fullest extent permitted by Section 145 of the Delaware General  Corporation
Law ("Section 145").  Pursuant  thereto,  the Company  indemnifies its officers,
directors,  employees and agents to the fullest extent  permitted for losses and
expenses  incurred by them in connection with actions in which they are involved
by reason of their having been directors,  officers, employees, or agents of the
Company. Section 145 permits a corporation to indemnify any person who is or has
been a director, officer, employee, or agent of the corporation or who is or has
been serving as a director,  officer,  employee or agent of another corporation,
organization,  or  enterprise  at the  request of the  corporation,  against all
liability  and  expenses  (including  but not  limited  to  attorneys'  fees and
disbursements  and amounts paid in settlement or in satisfaction of judgments or
as fines or penalties)  incurred or paid in connection with any action,  suit or
proceeding,   whether  civil,  criminal,   administrative,   investigative,   or
otherwise,  in which he or she may be  involved by reason of the fact that he or
she served or is serving in these  capacities,  if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the

                                       36
best interests of the  corporation  and, with respect to any criminal  action or
proceeding,  had no cause o believe his or her conduct was unlawful. In the case
of a claim, action, suit or proceeding made or brought by or in the right of the
corporation  to procure a recovery  or judgment  in its favor,  the  corporation
shall not  indemnify  such  person in respect of any claim issue or matter as to
which  such  person  has been  adjudged  to be  liable  to the  corporation  for
negligence  or  misconduct  int  he  performance  of  his  or  her  duty  to the
corporation,  except for such  expenses as the Court may allow.  Any such person
who has been wholly  successful  on the merits or otherwise  with respect to any
such claim,  action,  suit or proceeding or with respect to any claim,  issue or
matter  therein,  shall be  indemnified  as of right  against  all  expenses  in
connection therewith or resulting therefrom. The effect of this provision in the
certificate  of  incorporation  is to eliminate the rights of the Registrant and
its  stockholders  (through  stockholders'  derivative  suits on  behalf  of the
Registrant)  to  recover  monetary  damages  against a  director  for  breach of
fiduciary  duty as a director  (including  breaches  resulting from negligent or
grossly negligent behavior) except in the situations described above.

      The  Company's  By-laws  provide  for  indemnification  of  the  Company's
officers and directors  against all  liabilities  (including  reasonable  costs,
expenses,  attorney's  fees,  obligations  for payment in  settlement  and final
judgment)  incurred  by or  imposed  upon them in the  preparation,  conduct  or
compromise of any actual or threatened  action,  suit,  or  proceeding,  whether
civil,  criminal,  or  administrative,  including any appeals  therefrom and any
collateral  proceedings  in which they shall be involved by reason of any action
or omission by them in their  capacity as a director or officer of the  Company,
or of any other  corporation  which they  serve as a director  or officer at the
request of the  Company,  whether or not such person is a director or officer at
the time such  liabilities are incurred or any such action,  suit, or proceeding
is commenced against them. The indemnification  provided by the By-laws does not
extend,   however,   to  certain  situations   involving   misconduct,   willful
misfeasance, bad faith, or gross negligence.

      Insofar as  indemnification  for liabilities  arising under the Securities
Act of 1933 may be permitted to directors,  officers, and controlling persons of
the Company pursuant to the foregoing provisions,  the Company has been informed
that  in  the  opinion  of  the   Securities   and  Exchange   Commission   such
indemnification  is  against  public  policy  as  expressed  in the  Act and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such liabilities  (other than the payment by registrant of expenses  incurred in
the  successful  defense of any action,  suit or proceeding) is asserted by such
director,  officer or controlling person in connection with the securities being
registered, registrant will, unless in the opinion of its counsel the matter has
been  settled  by  controlling  precedent,  submit  to a  court  of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

      Except to the extent hereinabove set forth, there is no charter provision,
by-law,  contract,  arrangement  or statute  pursuant  to which any  director or
officer of registrant is indemnified  in any manner against any liability  which
he may incur in his capacity as such.

                                       37
SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-8 and has  duly  caused  this  registration
statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the City of Montreal, Province of Quebec, Canada, on the 22nd day
of March, 1999.

                                      THE TIREX CORPORATION

                                      By /s/ Terence C. Byrne
                                         ---------------------------------------
                                      Terence C. Byrne,
                                      Chairman of the Board of Directors
                                         and Chief Executive Officer

      Pursuant  to  the  requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the date indicated.

         Signature                        Title                        Date
         ---------                        -----                        ----

/s/ Terence C. Byrne              Chairman of the Board           March 22, 1999
------------------------------    of Directors and Chief          
Terence C. Byrne                  Executive Officer               
                                                                  
/s/ Michael D.A. Ash              Secretary, Treasurer            March 22, 1999
------------------------------    and Chief Financial and         
Michael D.A. Ash                  Accounting Officer              
                                                                  
Majority of the Board of Directors                                
                                                                  
/s/ Terence C. Byrne              Director                        March 22, 1999
------------------------------                                    
Terence C. Byrne                                                  
                                                                  
/s/ Louis Sanzaro                 Director                        March 22, 1999
------------------------------                                    
Louis Sanzaro                                                     
                                                                  
/s/ Louis V. Muro                 Director                        March 22, 1999
------------------------------                                    
Louis V. Muro                                                     
                                                                  
/s/ Henry Meier                   Director                        March 22, 1999
------------------------------                                 
Henry Meier

                                       38
EXHIBIT INDEX

Exhibit No.                           Item                                  Page
-----------                           ----                                  ----
5.1                  Opinion of Frances Katz Levine, Esq.
                     regarding the legality of the securities
                     being registered under this Registration
                     Statement                                               

24.1                 Consent of Pinkham & Pinkham, P.C.,
                     Certified Public Accountants,

                     Independent Auditors for the Company                    

24.2                 Consent of Frances Katz Levine, Esq.,
                     the counsel for the Registrant (set
                     forth in the opinion of counsel included
                     as Exhibit 5.1)

                                       39