U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-KSB

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended August 31, 2005

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from ________

Commission File Number: 0-19945

NoFire Technologies, Inc.

(Name of small business issuer in its charter)


      Delaware                          22-3218682
      --------                          ----------
(State or other jurisdiction of      (I.R.S. Employer
 incorporation or organization)      Identification No.)

21 Industrial Avenue, Upper Saddle River, New Jersey 07458
(Address of principal executive offices) (Zip Code)

Issuer's telephone number: (201) 818-1616

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, par value $0.01 per share


Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by the Court.

YES X NO___

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

YES X NO

Check if there is no disclosure of delinquent filers contained in this form in
response to Item 405 of Regulation S-B, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of the Form 10-KSB or any
amendment to this Form 10-KSB. [X]


Issuer's revenues for its fiscal year ended August 31, 2005 $543,801


Aggregate market value of the voting stock held by     $1,379,665
non-affiliates as of December 20, 2005


Number of shares of common stock outstanding as of
December 20, 2005                                      34,806,621


Documents incorporated by reference:  NONE


Transitional small business disclosure format.

                             YES___  NO X





PART I

Item 1. DESCRIPTION OF BUSINESS

BACKGROUND OF THE COMPANY; REORGANIZATION

NoFire Technologies, Inc. ("NoFire" or the "Company") is engaged in the
development, manufacture and marketing of fire retardant, intumescent products.
The Company was organized under the laws of the State of Delaware on
July 13, 1987.

Under a Chapter 11 proceeding, the Bankruptcy Court confirmed a Plan of
Reorganization for the Company, which became effective on August 11, 1995.
Claims of creditors, to the extent allowed under the Plan, were required to
be paid over a four year period. (See Note 3 to Financial Statements.)

BUSINESS OF THE COMPANY

The business of the Company is the development, manufacture and marketing of
fire retardant products and related consulting services. The Company
manufactures a liquid fire retardant for use as a coating material, like paint,
on many different kinds of substances to render them fire and heat resistant.
The product can be manufactured in various liquid forms, specifically adapted
for the particular substrate, application and degree of protection required;
or as a coated textile product, typically a woven fiberglass material, coated
with the NoFire liquid product.

The NoFire liquid product belongs to a class of materials called intumescents,
which means that they expand in size when heated. Intumescents, which have been
produced since the 1950's, have a high degree of fire retardation and add
significant heat protection to a coated surface upon expansion. The major
performance characteristics of intumescent products include: useful
temperature range; degree of fire and heat protection; adhesion to substrate;
degree of toxicity in both the liquid state and during combustion; amount of
flame spread and smoke developed during combustion; ease of application;
durability; resistance to weather; and price. Early intumescent products,
as well as many current products, have had significant deficiencies with
respect to several of these important performance characteristics (primarily
the degree of fire and heat protection, useful temperature range, and/or
toxicity) that have limited their usefulness.

The Company has developed intumescent products intended to eliminate or
minimize these deficiencies and (i) provide significant protection for a wide
range of substrates with relatively thin coats of fire protective material,
(ii) be useful over a wide temperature range and (iii) utilize a water based,
nontoxic formula. The NoFire products are manufactured based on formulas that
combine a fluid intumescent with fibers of various sizes and types, which
together provide the desired fire redundancy. The NoFire liquid formulas are
covered by three United States Patents and corresponding patents and patent
applications in over 30 foreign countries. The United States Patents are:

No. 4,879,320 - Intumescent Fire-Retardant Coating Material, issued
November 7, 1989, No. 4,965,296 - Intumescent Fire-Retardant and Electrically-
Conductive Coating Material, issued October 23,1990 and No. 5,723,515
Intumescent Fire-Retardant Composition for High Temperature and Long Duration
Protection, issued March 3, 1998.

The Company also has obtained United States Patents on certain applications:

No. 5,985,385 - Fire and Heat Protection Wrap for Conduits, Cable Trays, Other
Electrical Transmission Lines and Gas and Oil Pipelines, issued November 16,
1999 No. 6,048,805 - Fire, Heat and Back draft Protection Shield for
Firefighters, issued April 11, 2000 No. 6,074,714 - Fire and Heat Protection
Wrap for Structural Steel Columns, Beams and Open Web Joists, issued June 13,
2000 No. 6,114,003 - Insulation Blanket Having an Inner Metal Core Air Cell
and Adjoining Outer Insulation Layers, issued September 5, 2000
No. 6,510,807 Pre-Fabricated Fireproof Bulkhead with Special Interlocking
Joints for a ship, issued January 28, 2003.

During fiscal 1999 the Company purchased from a non-affiliate the following
United States Patent for $7,980:

No. 4,956,218 - Fire Protection Blanket, issued September 11, 1990.

The Company has submitted two additional patent applications to the United
States Patent Office.

Although the Company believes its patents are valid and enforceable, in the
event of a challenge to their validity or an infringement of such patents, the
Company's limited financial resources may restrict its ability to defend or
enforce its rights under such patents in legal proceedings.

The NoFire products are potentially useful on many different substrates,
including wood and wood products, metals (steel, aluminum, and various alloys),
certain plastics, fabrics and textiles (fiberglass, natural and synthetic
fibers). Industries that are presently using these types of product or are
evaluating applications for them include maritime, military, nuclear power
plants, construction, wood products manufacturing, public and private housing,




hotels, automotive, railway, and airports. In developing these opportunities,
the Company has passed numerous tests and obtained various certifications for
specific applications.

MARKETING/DISTRIBUTION

The Company markets its products using several different methods, depending
upon the applications, industry, product, or territory being targeted. These
methods include: direct marketing; use of independent agents/distributors; and
exclusive and nonexclusive licensing arrangements. Because the Company has
limited resources, it relies primarily upon independent parties to market and
distribute its products. In the past two fiscal years the Company has added
distributors for California, Hawaii, the South, Southwest and Middle Atlantic
States, as well as Europe, the Middle East, India, Korea, China, South East
Asia, Ghana and West Africa, Malaysia and Singapore, and Australia and Mexico.

COMPETITION

There are many types of fire retardant products in general use today for many
different applications. In addition to intumescent products, ablative,
insulative and cementitious products are used, depending on the particular
application, severity of fire retardant requirements, weight, space
restrictions and cost. Competition for the NoFire products may include all of
these types of fire retardants and will depend on the particular application
targeted. Typically, each application has a product or fire retardant
technique of choice, which is usually the least expensive fire protection that
meets the necessary requirements. Among the Company's primary competitors
(products) are: W.R. Grace & Co. (Monocote); Carboline Company (Pyrocrete,
Pyrolite, Nullifire); U.S. Gypsum (gypsum board); Stanchem Manufacturing
(Albiclad); A/D Fireproofing (A/D Firefilm); PPG Industries (PittChar); DuPont
(Nextel); Textron, Inc. (Chartek); Minerals Technology, Inc. (Firex); Herbert
Co. (Unitherm); and various wood coatings manufactured by Albi, American Vamag,
3M and DuPont. Such products may have a competitive advantage over the NoFire
products because they either have an established share of the market, are well
publicized and recognized, and/or are manufactured by companies having far
greater resources than the Company.

SOURCES OF SUPPLY

The NoFire liquid products are a blend of numerous liquids and solids,
purchased from various third party suppliers. Several of such components
are currently available only from a small number of suppliers. In the event
that such suppliers were to terminate the manufacture or sale of such
components for any reason, then the manufacture of NoFire products could be
interrupted. The Company has developed alternative sources of supply for
components and intends to continue seeking additional alternatives as the
demand for its products warrants.

MAJOR CUSTOMERS

The Company s two largest customers during the most recent fiscal year
represented %38.6 and %16.8 of total sales respectively. Sales to those
customers are expected to be an important part of future revenues, and
relations with them are good.

GOVERNMENT REGULATIONS AND APPROVALS; RESEARCH AND DEVELOPMENT

For most applications, fire retardant products are required to undergo testing
for approvals by government or independent laboratories. These requirements
are typically determined either by government agencies, such as the U.S.
Nuclear Regulatory Commission, U.S. Coast Guard or U.S. Navy; or nationally
recognized organizations, such as the American Society for Testing and
Material ("ASTM") or Underwriters Laboratories, Inc. ("UL"); or international
organizations such as the International Maritime Organization (IMO).

Product development is continuing in many different areas. New products have
been approved and introduced into the market. Some of these products are,
SBarrier (structural steel fire protection), NoFire LP (lower price high
performance), and OEM products.

Various NoFire products have been tested and certified by independent
laboratories for various applications in the areas of: building materials
and construction (ASTM E84-87, UL94, UL723, UL746C, ASTM E152 and UBC 8-
2); transportation (NFPA 417, FAR 25.855(c)); utilities (ASTM E814-88 and
IEEE 383); nuclear power plants (NRC Generic Letter 86-10 Supplement 1); and
high-speed ferries (IMO A.754(18)). In maritime, naval and other government
applications, products have been listed in the U.S. Navy s Qualified Product
List (QPL), were accepted for listing by the General Service Administration
for all U.S. Government applications, received type approval according to the
International Maritime Organization s SOLAS codes by the U.S. Coast Guard and
four of the world s major ship registries, and were approved by Det Norske
Veritas for distribution in the European Community (EC). The Company also has
state and city approvals from such as the states of California and Rhode Island
and a MEA (Material Equipment Acceptance) from the City of New York.

The Company also conducts in-house fire and heat endurance tests exclusively
for research and development and feasibility studies. These tests are used to
develop applications and solutions to problems, but are not a substitute for
tests by independent laboratories or government agencies that are generally
required before the product can be sold for particular applications. The
Company's direct costs for research and development (which has been conducted
primarily by its chief executive officer and chief technical officer, Dr.
Gottfried, as a part of his overall duties) have not been material and have not
been segregated for accounting purposes.

EMPLOYEES

As of   December 20, 2005, the Company had seven employees, six of whom were
full-time employees.

Item 2. DESCRIPTION OF PROPERTY

The Company occupies 12,700 square feet of space at 21 Industrial Avenue,
 Upper Saddle River, New Jersey. The facility includes office space, storage
space and an area for the mixing and testing of products and is adequate for
the Company's current requirements. The Company rents such space pursuant to a
lease expiring August 31, 2008. Monthly rent payments for the year ending
August 31, 2004 were approximately $10,741. Monthly rent payments for the year
ended August 31, 2005 are approximately $11,278.

Item 3. LEGAL PROCEEDINGS

As a result of the bankruptcy reorganization proceeding referred to in Item 1,
 until unsecured creditors whose claims were recognized in the Plan are paid
in full, the Bankruptcy Court has continuing jurisdiction relative to (i) the
approval and payment of certain claims and expenses and (ii) the disposition
of the two patents owned by the Company at the time of the bankruptcy.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

On March 4, 2005 the Company filed a Form 14c which showed a change in the
Companys certificate of incorporation. This change increased the authorized
shares of the Companys common stock from 50,000,000 to 150,000,000 and changed
the par value from $.20 to $01. This change was approved by a majority of the
shareholders.

PART II

Item 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a) MARKET INFORMATION The Company's shares are quoted on the "OTC Bulletin
Board". Pink Sheets, LLC, formerly The National Quotation Bureau, reported the
following high and low bid quotations which reflect inter-dealer prices,
without retail markup, markdown or commission and may not represent actual
transactions.


                     2004-2005             2003-2004
Quarter Ended      High      Low         High      Low
-------------      ----      ---         ----      ---
November 30      $0.31    $0.11          $0.27     $0.27
February 28      $0.29    $0.16          $0.30     $0.30
May 31           $0.34    $0.20          $0.15     $0.14
August 31        $0.23    $0.21          $0.12     $0.12




(b) HOLDERS As of August 31, 2005 there were approximately 256 holders of
record of the Company's outstanding Common Stock.

(c) DIVIDENDS The Company has not paid any cash dividends and intends to
retain earnings, if any, during the foreseeable future for use in its
operations. Payment of cash dividends in the future will be determined by the
Company's Board of Directors based upon the Company's earnings, financial
condition, capital requirements and other relevant factors.

RECENT SALES OF UNREGISTERED SECURITIES
The following table sets forth information regarding sales or issuances of our
securities without registration under the Securities Act 0f 1933 as amended
during the two years ended August 31,2005. All sales were made solely to
accredited investors, without a broker, and were made in reliance on Section
4(2) or 4(6) of the Securities Act, and Rule 506 under Regulation D.






                                Conversion
                                  Price
Date        Title     Number    Cash Price     Notes
 6/03       common    166,667     0.30
 8/04       common    675.000     0.14
 9/04       common     71,428     0.14
 9/04       common    214,428     0.14
 9/04       common    659,003     0.14  (1)
 9/04       common  9,323,444     0.14  (1)
 9/04       common     14,286     0.14  (3)
 9/04       common     12,500     0.23  (4)
12/04       common  2,271,941     0.14  (1)
 1/05       common    121,429     0.14  (1)
 2/05       common     50,000     0.20  (2)
 2/05       common     65,000     0.28  (3)
 3/05       common    214,286     0.14
 5/05       common     30,000     0.30  (2)
 8/05       common     15,000     0.22  (4)



(1) Issued in conjunction with a conversion of 8% Convertible Bonds
(2) Issued in conjunction with conversion of debt
(3) Issued as fees
(4) Issued for services rendered

Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL

The Company continues product development and application testing. As a result
these activities, certifications have been obtained for specific applications
as discussed in Item 1 - Government Regulations and Approvals; Research and
Development, and additional patent applications have been filed resulting in
the issuance of six patents since August 1995, and two applications awaiting
action by the U.S. Patent Office

Item 1 - Business of the Company. Marketing efforts to develop new
applications and establish new customers were continued in fiscal 2005. The
efforts undertaken by the Company in application development, product
approvals and marketing initiatives should assist it in creating greater sales
in fiscal 2006 and beyond.

The greatest obstacles encountered in obtaining major sales contracts are the
 multitude of tests and approvals required, competition against well
established and better-capitalized companies, cost, and the slow process of
specifying a new product in highly regulated applications. The Company intends
to continue its research efforts to adapt its products to meet market
requirements. Sales and marketing efforts will concentrate on current products
and applications through direct sales and distributor license agreements.
Continuing efforts are being made to obtain greater domestic and international
sales by enlarging the Company s distributor network.

The number of manufacturing and quality control employees will increase with
increased production. The salaried administrative and marketing staff will be
evaluated and may be increased to support sales and marketing initiatives.
Additional support for direct sales is expected to be provided by commissioned
independent agents or new full time employees on a heavily weighted
commission basis.

LIQUIDITY AND CAPITAL RESOURCES

During the fiscal year Mr. Oolie advanced to the Company $290,728. The Company
is accruing  interest on the advance at the rate of 15% per annum.

On January 13, 2005 an accredited individual loaned the Company $65,000. The
note is due January 12, 2006 and bears interest at the rate of 15% per annum.

In conjunction with the above the Company issued as a fee 65,000 shares of the
Companys common stock. In addition the Company pledged as collateral the net
proceeds of the sale of the  2004 New Jersey carry forward loss, and 500,000
shares of the Companys common stock to be held in escrow.

In December 2005 $35,856 was paid, on the collection of the above sale, to the
lender.

During the fiscal year two accredited investors purchased 500,000 shares of
The .Companys common stock for $70,000. In addition they received 1,500,000
ten-year warrants exercisable at $.14 per share.  The warrants vested
immediately.

In September 2005 an accredited individual loaned the Company $100,000 at 15%
interest. The note is due in one year and is collateralized by 2,000,000
shares of the Companys common stock to be held in escrow. An officer of the
Company also guaranteed the debt.

During the year, the officers deferred an additional $448,192 of their
salaries

Also in fiscal 2005, $49,928 was obtained through an additional sale of a
portion of the Company s New Jersey Operating Loss Carry Forward under a
program sponsored by that state.

Because of limited cash resources, the Company has deferred payment of
$378,031 from the installments of the Chapter 11 liability to unsecured
creditors that were due in September 1996, 1997, 1998 and 1999. In order
to pay those liabilities and meet working capital needs until significant
sales levels are achieved, the Company will continue to explore alternative
sources of funding including exercise of warrants, bank and other borrowings,
issuance of convertible debentures, issuance of common stock to settle debt,
and the sale of equity securities in a public or private offering.

There is no assurance that revenues from sales, and/or financing efforts
described above will be sufficient to fund the Company's cash requirements in
the future.

RESULTS OF OPERATIONS FOR FISCAL YEARS ENDED AUGUST 31, 2005 AND 2004

Sales of $543,801 represented an increase of $55,519 or 11.4% from the
$488,282 in the prior year.

The net loss of $1,734,935 for fiscal year 2005 was $2,048,769 or 54.2%
less than the net loss of $3,783,704 in the prior year.

General and administrative expenses and research and development costs of
$1,371,358 in fiscal year 2005 were $159,698 or 13.2% more than the prior
year.

The main components of the changes are as follows:


                               8/31/2005       8/31/2004    Difference


Material                      $  210,856       $  167,982   $   42,874
Testing                           52,359           62,969      (10,609)
Mfg O/H                           45,452           54,147      ( 8,695)
Rent                             135,332          128,887        6,445
Officers Salaries                508,481          488,213       20,268
Repricing warrants                35,310              0         35,310
Professional Fees                117,663          162,980      (45,317)
Insurance                         84,126           63,566       20,560
NJ Tax Refund                     49,928           43,290        6,638
Interest Expense                 739,631        2,943,971   (2,612,110)
Bad Debt Expense                 108,588              -        108,588
Corporate Stock Fees              11,731            7,533        4,198




The $2,612,110 decrease in interest expense resulted mainly from an amount
charged for the value of warrants issued to officers and directors in
conjunction with the debt conversion on August 30, 2004.

During the fiscal years 2004 and 2005, the Company realized approximately
$43,000 and $49,928 through the sale of a portion of its New Jersey Net
Operating Loss Carry Forward under a program sponsored by that state.

CRITICAL ACCOUNTING POLICIES

The discussion and analysis of our financial condition and results of
operations are based upon our financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United
States of America. The preparation of these financial statements requires us
to make estimates and judgments that affect the reported amount of assets and
liabilities, revenues and expenses, and related disclosure on contingent
assets and liabilities at the date of our financial statements. Actual results
may differ from these estimates under different assumptions and conditions.

Critical accounting policies are defined as those that are reflective of
significant judgments and uncertainties, and potentially result in materially
different results under different assumptions and conditions. We believe that
our critical accounting policies are limited to those described below. For a
detailed discussion on the application of these and other accounting policies
see our note 1 to our financial statements.

Accounting for Income Taxes

As part of the process of preparing the Companys financial statements the
Company is required to estimate our income taxes. Management judgment is
required in determining our provision of our deferred tax asset. We recorded a
valuation for the full deferred tax asset from our net operating losses carried
forward due to the Company not demonstrating any consistent profitable
operations. In the event that the actual results differ from these estimates
or we adjust these estimates in future periods we may need to adjust such
going Concern

The financial statements of the Company have been prepared assuming that the
Company will continue as a going concern. The Company has had negative working
capital for each of the least two years ended August 31, 2005 and 2004. The
Company lacks sufficient capital to pay their debts timely. Those conditions
raise substantial doubt about the abilities to continue as a going concern.
The financial statements of the Company do not include any adjustments that
might be necessary should the Company be unable to continue as a going concern

Accounting for Stock Based Compensation

We have adopted Statement of Financial Accounting Standard No. 123,
"Accounting for Stock-Based Compensation"("SFAS 123"). As provided for by
SFAS 123, we have also elected to account for our stock-based compensation
programs according to the provisions of Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees"("APB 25")." Accordingly,
compensation expense has been recognized based on the intrinsic value of
stock issued or warrants granted to employees and directors for services
rendered or warrants issued in connection with debt.

Item 7. FINANCIAL STATEMENTS

The Company's annual financial statements for the fiscal years ended
August 31, 2005, and August 31, 2004 together with the report thereon by the
Company's independent auditors, are set forth herein commencing on page F-1 of
this Form 10-KSB  and are incorporated herein by reference.


Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES.

The Company dismissed it auditors Radin, Glass and Co., LLP  as the principal
independent accountant effective March 22, 2005. They were engaged as the
principal accountant in April 2004 The Company engaged Sherb & Co., LLP as its
new independent registered public accountants.

The decision to change accountants was approved by the Board of Directors of
the Registrant.

During the fiscal year August 31 2005, and the subsequent interim period
through the date in the change in auditors, there were no disagreements on any
matter of accounting principles or practices, financial statement disclosure,
or auditing
scope or procedure, which, if not resolved to the former accountant's
satisfaction, would have caused it to make reference to the subject matter of
the disagreement in connection with its report.

Item 8A. CONTROLS AND PROCEDURES

Our management, including the Chief Executive Officer and Chief Financial
Officer, have conducted an evaluation of the effectiveness of the design and
operation of our disclosure controls and procedures pursuant to Rule 13a-15
under the Securities Exchange Act of 1934, as amended, (the "1934 Act"), as of
the end of the period covered by this Annual Report on Form 10-KSB. Based on
that evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures are effective in
ensuring that information required to be disclosed by us in the reports we
file or submit under the 1934 Act is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms.

There have been no changes in internal control over financial reporting that
have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting during the period covered by this
report.

PART III

Item 9. DIRECTORS AND EXECUTIVE OFFICERS

MANAGEMENT

The following table sets forth the names of all directors and officers of the
Company and the position in the Company held by them:


Name                         Age        Position

Samuel Gottfried              59        Director, Chief
                                        Executive Officer,
                                        Chief Technical
                                        Officer and
                                        Assistant Treasurer

Sam Oolie                     69        Director, Chairman
                                        of the Board, Chief
                                        Operating Officer,
                                        Chief Financial Officer
                                        and Treasurer

Bernard J. Koster             72        Director

Gerald H. Litwin              63        Director

Alphonso Margino              67        Secretary





Directors are elected to serve until the next annual meeting of stockholders
and until their successors have been elected and have qualified. Officers are
elected by the Board of Directors and serve at the pleasure of the Board of
Directors.

Sam Oolie
Mr. Oolie has served as a Director of the Company since September, 1993, as
Chairman of the Board and Chief Operating Officer and Chief Financial Officer
since August 16, 1995. He was Chief Executive Officer from August 16, 1995 to
July 26, 1999. Since 1985, Mr. Oolie has been Chairman of Oolie Enterprises, a
privately owned Investment Company. Mr. Oolie also serves as a Director of
Comverse Technology, Inc., a manufacturer of voice storage and forwarding
systems and message management computer services, since May 1985; and NCT
Group, Inc., a company that develops and manufactures electronic noise
cancellation devices and internet browsing speed enhancement, since April
1987.

Samuel Gottfried
Dr. Gottfried was named a director of the Company and appointed President of
its fire retardant products subsidiaries in August 1991. He was appointed
Interim Chairman of the Board and Chief Executive Officer on August 14, 1992
until August 15, 1995. On August 16, 1995 he was elected President, Chief
Technical Officer and Assistant Treasurer of the Company. On January 1, 2003
he was elected Chief Executive Officer. Dr.Gottfried holds a doctorate in
electrical engineering from New York University and a Ph.D. in electro physics
from the Polytechnic Institute of New York.

Bernard J. Koster
Mr. Koster has served as a Director of the Company since September 1993. Mr.
Koster is an attorney and accountant and since January 1, 1993 has been of
counsel to the law firm of Litwin & Tierman, P.A., formerly Gerald H.
Litwin, P.A.

Gerald H. Litwin
Mr. Litwin has served as a Director of the Company since August 16, 1995.
During the past five years, Mr. Litwin, an attorney, has been a principal in
the law firm of Litwin & Tierman, P.A., and  previously was the principal of
Gerald H. Litwin, P.A. Mr. Litwin's firms served as the Company's General
Counsel, and his current firm continues to provide certain legal services to
the Company.

Alphonso Margino
On June 15, 1998 Mr. Margino was appointed to the board and named to the
offices of Vice President and Secretary. He served on the board until November
24, 1998. Previous to June 15, 1998, he was associated with the Company in
marketing capacities.

During the past five years none of the foregoing persons (a) has served as a
general partner or an executive officer of any business as to which a
bankruptcy petition was filed during his service in such capacity or within
two years thereafter; (b) was convicted in a criminal proceeding or is
subject to a pending criminal proceeding (excluding traffic violations and
other minor offenses); or (c) has been subject to any order, judgment or
decree, not subsequently reversed, suspended or vacated, by any court of
competent jurisdiction, permanently or temporarily barring, suspending or
otherwise limiting his involvement in any type of business, securities or
banking activity.

The Board of Directors of the Company has established an Executive Committee
(Dr. Gottfried, Mr. Oolie), an Audit Committee (Mr. Litwin and Mr. Koster),
and a Compensation Committee (Mr. Koster, Mr. Litwin and Mr. Oolie).


Item 10. EXECUTIVE COMPENSATION

The Company's Summary Compensation Table is set forth below. Except as
discussed in Notes 2 and 3 to such table, the Company had no Option/SAR
Grants, Aggregated Option/SAR Exercises or Fiscal Year End Option/SAR's for
the years ended August 31, 2005, 2004, and 2003, nor were there any long-term
incentive plan awards, stock options or stock appreciation rights.

Non-employee Directors are not compensated for Board of Directors meetings or
committee meetings attended.

SUMMARY COMPENSATION TABLE

For the Years Ended August 31, 2005, 2004, and 2003


Name and               Year Ended  Salary    Salary     Options  All other
Principal Position     August 31   Paid    Deferred(1)  SAR's  Compensation
------------------     ----------   ------  -----------  -----  -----------

Samuel Gottfried
Chief Executive Officer   2005     $ 29,180  $188,779
from January 1, 2003      2004     $ 49,217  $144,837     (4)(5)    None
and Chief Technical       2003     $ 43,168   $99,759     (3)       None
Officer And Assistant
Treasurer from August 1



Sam Oolie                 2005     $  8,616  $210,187
Chairman of the Board,    2004     $ 44,591  $145,433    (4)(5)     None
Chief Operating Officer   2003     $ 30,668  $101,530     (3)       None
And Chief Executive Officer
until July 26, 1999, and
Chief Financial Officer
Since January 2, 2003


William A. Retz           2005        None   None
Chief Executive Officer   2004        None   None         (2)     $25,000
from September 1, 2000    2003     $ 19,038  $ 38,076     (3)    $113,811
until January 2, 2003

Alfonso Margino           2005      $15,000   $61,660
Vice President and        2004      $24,087   $58,708     (4)     None
Secretary since           2003      $21,585   $51,740     (3)     None
June 15, 1998





Note (1) Amounts shown as salary deferred are payable when revenues or
financings permit payment as determined by the Board of Directors.

Note (2) Consulting agreement as discussed below.

Note (3) On September 5, 2000 the Company s Executive Committee
authorized the issuance of a five-year warrant to Dr. Gottfried for 278,000
shares at an exercise price of $0.50 per share. This warrant became fully
vested on September 5, 2001. On November 5, 2001, a five- year warrant was
issued to Radm Retz for 100,000 shares at an exercise price of $0.35 per
share with immediate vesting. On November 5, 2001, expiring warrants were
replaced with new five-year warrants at an exercise price of $0.35 per share
to the following officers: Mr. Oolie, 300,000; Dr. Gottfried, 160,000; and
Mr. Margino, 100,000. The replacement options were immediately vested. On
July 22, 2003, seven-year warrants were issued at an exercise price of $0.30
per share to the following officers: Mr. Oolie, 725,000; Dr. Gottfried 500,000;
and Mr. Margino, 250,000. In conjunction with a debt conversion agreement all
of the above warrants have been cancelled as of August 30, 2004 (see note 4
below)

Note (4) On August 30, 2004 the Company entered into conversion of debt
agreement whereby officers and directors of the Company agreed to convert
certain debt into an 8% convertible debenture. The debenture allows for a
conversion at the rate of $0.14 per share of common stock.

In addition warrants were issued at the rate of 3 times the number of shares.

On August 30,2004 the officers and directors returned 8,305,460 previously
issued warrants as part of the transaction.

Note (5) In January 2004 the board of directors authorized an increase
in compensation to Dr. Gottfried and Mr. Oolie. The new compensation
beginning 1/1/04 is $213,00. annually for each of them.

In February 2003 the Company entered into a consulting agreement with Admiral
Retz for the period of one year, whereby he was to receive $3,000 per month
from February 1, 2003 to July 31, 2003 and $5,000 per month from August 1, 2003
to January 31, 2004. In conjunction with this agreement the Company
accelerated the vesting of warrants to purchase 100,000 shares of the
Company s common stock at $0.5625 per share. Accordingly, $25,000 has been
charged to consulting expense for the period


Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth as of December 20, 2005 the number of shares
of Common Stock owned of record or beneficially owned by each of the Company's
officers, directors, and stockholders owning at least 5% of the Company's
issued and outstanding shares of Common Stock, by all of the Company's
officers and directors as a group, and the percentage of the total outstanding
shares represented by such shares.


Name and Address           Shares Beneficially      Approximate
Beneficial Owner            Owned including       Percent of Class
   (1)                          Warrants
----------------           -------------------      --------------------

Sam Oolie                        18,384,127                 38.6%
NoFire Technologies, Inc.
21 Industrial Avenue
Upper Saddle River, NJ  07458

Samuel Gottfried                 15,700,123                 34.3%
NoFire Technologies, Inc.
21 Industrial Avenue
Upper Saddle River, NJ  07458

Alphonso Margino                 8,656,568                  21.1%
NoFire Technologies, Inc.
21 Industrial Avenue
Upper Saddle River, NJ  07458

Bernard J. Koster                  1,226,652                 3.4%
7 Old Smith Road
Tenafly, NJ  07670

Gerald H. Litwin                 7,471,600                  18.4%
Two University Plaza
Hackensack, NJ  07601

Lavin Holdings, LLC                    7,515,388            21.5%

Carole Salkind                    5,140,435                 14.7%

John Cavanna                      4,045,287                 10.9$





All officers and directors      51,439,070                  72.3%
as a group (five persons)





Note (1) As of December 20,2005, there were 34,806,622 shares of Common
Stock issued and outstanding. Percentage of Class for all officers and
directors as a group is computed on 71,148,576 shares. Percentage of class for
Lavin Holdings LLC, Carole Salkind and John Cavanna and NF Partners is computed
on outstanding common stock in the amount of 34,806,622


COMPLIANCE WITH SECTION 16(a) OF THE 1934 ACT

Section 16(a) of the 1934 Act requires the Company's directors and executive
officers and persons who own more than 05% of a registered class of the
Company's equity securities to file with the Commission initial reports of
ownership and reports of changes in ownership of the Company's Common Stock.
Officers, directors and greater than 05% stockholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file. Based on a review of copies of Forms 3, 4 and 5 and amendments thereto
furnished to the Company during or with respect to its fiscal year ended
August 31, 2004 the Company believes that no director or officer of the
Company or beneficial owner of more than 05% of the Company's Common Stock
failed to file on a timely basis reports required by Section 16(a) of the
Exchange Act during such fiscal year.

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

As a result of loans made to fund the Company's operations during its
trusteeship under a Chapter 11 bankruptcy that ended on August 11, 1995 plus
accrued interest to that date, there were balances due at September 1, 1996
of $171,137 to Mr. Oolie, and $10,918 to Mr. Koster.  Mr. Koster and Mr. Oolie
converted their claims into a convertible debenture on August 30, 2004
(see below)

On August 30, 2004 the company entered into conversion of debt agreement
whereby officers and directors, consultants of the company agreed to convert
certain debt into an 8% convertible debenture. The debenture allows for a
conversion at the rate of $0.14 per share of common stock. Additional interest
on such debt was converted at the same rate in November and December 2004.

In addition warrants were issued at the rate of 3 times the number of shares.
The total amount of shares and warrants issued for the $1,614,434 of debt
Converted was 11,716,512 shares of common stock and 35,614,434 warrants as
shown in the schedule below.


A schedule of the conversion is shown below:

Name                  Debt Converted        Shares        Warrants
---------              ---------------    ------------  -------------
Sam Oolie            $ 540,422            3,923,531     11,770,596
Samuel Gottfried       499,314            3,625,030     10,875,093
Alfonso Margino        275,726            2,008,642      6,025,026
Gerald Litwin          258,681            1,867,900      5,603,700
Bernard Koster          15,292              110,713        332,139
Mitchell Goldstone      25,000              180,998        542,994




All of the above was converted during the fiscal year

On November 5, 2001, five-year warrants were granted to replace expiring
warrants to the following officers and directors: Mr. Oolie, 300,000 shares,
Dr. Gottfried 160,000 shares, Mr. Margino 100,000 shares, Mr. Litwin 100,000
shares and Mr. Koster 25,000 shares. The replacement warrants have an exercise
price of $0.30 per share and are fully vested. On December 11, 2001, warrants
were granted to Mr. Koster and Mr. Litwin entitling them each to purchase
20,000 shares of the Company s Common Stock at a price of $0.40 per share.
On July 22, 2003 seven-year warrants were granted to the following officers
and directors: Mr. Oolie 725,000 Dr. Gottfried 500,000 Mr. Margino 250,000
and Mr. Koster 25,000. The warrants have an exercise price of $0.30 per
share. On August 30, 2004 all of the above warrants were cancelled as part
of the convertible debentures issued
(see above)

Mr. Litwin is a principal of the law firm of Litwin & Tierman, P.A., and
provides certain legal services to the Company. At August 31,2005, the
Company was obligated to that firm in the amount of $301,222,.Expenses in
fiscal 2005 were $33,980 for legal services, and in fiscal 2004, $ 17,461 in
fees. In addition, Litwin & Holsinger (a predecessor to Litwin and Tierman)
filed a claim as an unsecured creditor in the bankruptcy proceedings in the
gross amount of $140,403 in respect of pre-petition legal services rendered
and has received one distribution in the amount of $15,584 in respect thereof.
In August 2005 the balance of the bankruptcy debt was converted to an 8%
convertible debenture. In July 2003, the Company issued warrants to Mr. Litwin
to purchase a total of 700,000 shares of the Company s common stock for $0.30
per share, expiring in seven years, in settlement of interest owed to Litwin &
Tierman. The warrants vested immediately. In August 2004, as part of the
issuance of the convertible debenture, these warrants were cancelled.

During three fiscal years ended 2005, the officers deferred a total of
$1,100,709 of their salaries. Effective June 2, 2002, interest at the annual
rate of 6% was accrued on the salaries deferred. The total interest accrued
was $54,048 at August 30, 2005.

On November 14, 2005, in conjunction with loans made to the Company.  Mr. Oolie
was issued 1,000.000 ten year warrants. These warrants were issued at $.20 and
vested immediately.


Item 13. EXHIBITS

A. THE FOLLOWING FINANCIAL STATEMENTS OF THE COMPANY ARE BEING FILED PURSUANT
TO ITEM 7 AS PART OF THIS ANNUAL REPORT ON FORM 10-KSB

1. FINANCIAL STATEMENTS


Index to Financial Statements                             F-1

Report of Independent Registered Public Accounting Firm
Sherb & Co., LLP.                                         F-2

Report of Independent Registered Public Accounting
Firm Radin, Glass & Co., LLP.                             F-3


Financial Statements:

  Balance Sheet as of August 31, 2005                     F-4

  Statements of Operations for the Years
    Ended August 31, 2005 and 2004                        F-5

  Statements of Changes in Stockholders' Equity
    (Deficiency) for the years ended August 31,2005
     and 2004  )                                          F-6





Statements of Cash Flows for the Years

        Ended August 31, 2005 and 2004   and                 F-7

      Notes to Financial Statements                      F-9 to F-20

2.  EXHIBITS
        Code of Ethics                                Exhibit 1




Certification of Financial Information Exhibits 31.1 31.2

Sarbanes-Oxley Act Section 906 Certification Exhibits 32.1 32.2




ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT FEES

The aggregate fees billed and unbilled for the fiscal years ended August 31,
2005 and 2004 for professional services rendered by our principal accountants
for the audits of our annual financial statements, and the review of our
financial statements included in our quarterly reports on Form 10QSB were
approximately $23,021 and $18,000, respectively.

AUDIT-RELATED FEES

The aggregate fees billed for the fiscal years ended August 31, 2005 and 2004
for assurance and related services rendered by our principal accountants
related to the performance of the audit or review of our financial statements,
specifically accounting research, were $ 0 for each year.

TAX AND OTHER FEES

There aggregate fees billed for the fiscal years ended August 31, 2005 and
2004 for tax related or other services rendered by our principal accountants
in connection with the preparation of our federal and state tax returns was
$4,000 and $3,000, respectively.

APPROVAL OF NON-AUDIT SERVICES AND FEES

We did not have any non-audit services provided by our principal accountants
during fiscal 2005 or 2004.


SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

NOFIRE TECHNOLOGIES, INC.



Date: December 30, 2005                      By: /s/ Sam Gottfried
                                        ------------------------
                                        Sam Gottfried,
                                        Chief Executive Officer



Date: December 30, 2005                      By: /s/ Sam Oolie
                                        ------------------------
                                        Sam Oolie
                                        Chief Financial Officer





In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the dates indicated.



SIGNATURE                                   DATE

/s/ Samuel Gottfried
----------------------------                December 30, 2005
Samuel Gottfried, Director


/s/ Bernard J. Koster
-----------------------------               December 30, 2005
Bernard J. Koster, Director


/s/ Gerald H. Litwin
-----------------------------               December 30, 2005
Gerald H. Litwin, Director


/s/ Sam Oolie
-----------------------------               December 30, 2005
Sam Oolie, Director







INDEX TO FINANCIAL STATEMENTS


                                                               Page
                                                              ------
Report of Independent Registered Public Accounting Firm
Sherb & Co., LLP                                              F-2


Report of Independent Registered Public Accounting Firm
Radin, Glass & Co. LLP.                                       F-3

Financial Statements:

     Balance sheet at August 31, 2005                         F-4

     Statements of operations for the years ended
      August 31, 2005 and 2004                                F-5

     Statements of changes in stockholders' equity
      (deficiency) for years ended August 31,2005
       and 2004                                               F-6


     Statements of cash flows for the years ended
      August 31, 2005 and 2004                                F-7

     Notes to financial statements                         F-9 to F-20



F-1


 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Stockholders and Directors
NoFire Technologies, Inc.
Upper Saddle River, New Jersey

We have audited the accompanying balance sheet of NoFire Technologies, Inc.
as of August 31, 2005, and the related consolidated statements of operations,
stockholders? equity (deficiency) and cash flows for the year then ended
August 31, 2005.  These financial statements are the responsibility of the
Company?s management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe that
our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of NoFire
Technologies, Inc. as of August 31, 2005, and the results of its operations
and its cash flows for the year then ended August 31, 2005, in conformity with
accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.  The Company has suffered recurring
losses from operations, including a net loss of approximately $1.7 million for
the year ended August 31, 2005, and has a substantial working capital
deficiency as of August 31, 2005.  These factors raise substantial doubt the
Company?s ability to continue as a going concern.  The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.


                                        /s/ Sherb & Co., LLP
                                              Certified Public Accountants
    New York, New York
    December 20, 2005




F-2

Report of Independent Registered Public Accounting Firm Board of Directors
NoFire Technologies, Inc.

We have audited the accompanying balance sheet of NoFire Technologies, Inc.
as of August 31, 2004 and the related statements of operations, changes in
stockholder's equity (deficiency) and cash flows for the year ended August
31, 2004. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with the auditing standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit and the report of the other auditors provide a reasonable
basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respect, the financial position of NoFire Technologies, Inc. as
of August 31, 2004, and the result of its operations and its cash flows for
the years then ended in conformity with accounting principles generally
accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has incurred substantial losses from
operations since inception and at August 31, 2004 had a stockholder's
deficiency of $4,327,609 a working capital deficiency of $2,751,602. These
factors raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans in regard to these matters are also
described in Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

Radin, Glass & Co., LLP
Certified Public Accountants
New York, New York
November 17, 2004


F-3
NOFIRE TECHNOLOGIES, INC
ASSETS
August 31,2005

CURRENT ASSETS:

   Cash                                            $    14,099
   Accounts Receivable - trade                           5,313
   Inventories                                          81,628
   Prepaid expenses and other current assets             6,645
                                                   -----------
      Total Current Assets                            $107,685

EQUIPMENT, LESS ACCUMULATED DEPRECIATION
  OF $1,734                                              2,665

OTHER ASSETS:
   Security deposits                                    26,000
                                                      ---------
                                                      $136,350
                                                     ==========



LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES:

   Settled liabilities                             $   378,031
   Accounts payable and accrued expenses               841,036
   Loans and advances payable to stockholders          408,610
   Deferred salaries                                 1,440,445
   Loans payable                                       279,300
   Convertible debenture 8%                            469,928
                                                    ----------
      Total Current Liabilities                      3,817,350



COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIENCY):

Common stock $.01 par value:
Authorized -150,000,000 shares
  Issued, to be issued, and outstanding-
  34,806,622                                         348,066
Capital in excess of par value                    13,160,269
Unearned Compensation                                 (3,675)
Accumulated Deficit                              (17,185,660)
                                                  ----------
   Total Stockholders' Equity (Deficiency)        (3,681,000)
                                                  ----------
                                                $    136,350
                                                   =========
F-4

See accompanying notes to financial statements

NOFIRE TECHNOLOGIES, INC.
STATEMENTS OF OPERATIONS


                                    Year Ended August 31,
                                      2005           2004
                                 ----------     ----------
NET SALES                          $543,801      $ 488,282
                                 ----------     ----------
COSTS AND EXPENSES:
   Cost of sales                    217,604        159,933
   General and administrative     1,371,358      1,211,660
   Write-down of inventory             0            12,000
                                 ----------     ----------
                                  1,588,962      1,371,593
                                 ----------     ----------
LOSS FROM OPERATIONS            ( 1,045,161)     ( 883,311)
                                 ----------     ----------
OTHER EXPENSES (INCOME):
   Interest expense                 739,631      2,943,971
   Interest income                       71           (288)
                                 ----------     ----------
                                   739,702      2,943,683
                                 ----------     ----------

LOSS BEFORE INCOME TAXES         (1,784,863)    (3,826,994)
INCOME TAX BENEFIT                   49,928         43,290
                                 ----------     --------
NET LOSS                       $ (1,734,935)   $(3,783,704)
                                 ==========     =========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING-BASIC AND DILUTED    32,198,993     21,010,942
                                 ==========     ==========
BASIC AND DILUTED LOSS
  PER COMMON SHARE:             $      (.05)  $      (.18)
                                 ==========     ==========



See accompanying notes to financial statements

F-5
NOFIRE TECHNOLOGIES, INC.
STATEMENTS OF OPERATIONS

STATMENTS OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIENCY)

                                            Common Stock
                                      ------------------------
<TABLE>
<CAPTION>

<S>                                    <C>        <C>        <C>         <C>          <C>               <C>
                                    Number of         Capital in Excess  Accumulated   Unearned          Total
                                      Shares     Amount   of Par Value  (Deficit)  Compensation    Stockholders
                                                                                                   (Deficit)
                                                                                                    Equity
                                   ----------  ----------   --------  -----------   -----------    ---------
BALANCES, AUGUST 31,2003             20,939,019   $4,187,804 $4,000,757  $(11,667,022)              $(3,478,461)
YEAR ENDED AUGUST 31,2004
   Value of discount on convertible
     Debenture charged to interest expense                      138,000                                 138,000
   Issuance of common stock under
    private placement at $.15 per share 100,000      20,000     (5,000)                                  15,000
   Conversion of debt for stock
     at $.12 per share                  675,000     135,000     (54,000)                                 81,000
   Issuance of common stock in connection
     with services rendered              30,000       6,000      (1,500)                                  4,500
   Value of warrants issued in connection
     with conversion of debt, issuance
     of convertible debentures and services                    2,696,056                               2,696,056
   Net loss                                                                (3,783,704)                (3,783,704)
                                       ----------    -----------  ----------- ---------- ---------      ----------
BALANCES, AUGUST 31, 2004            21,744,019    $4,348,804 $6,774,313 $(15,450,726)    $  0        $(4,327,609)

YEAR ENDED AUGUST 31, 2005
Conversion of indebtedness              709,003       141,801    (39,539)                                 102,262
Conversion of indebtedness
related party                        11,716,814     2,343,363   (728,929)                               1,614,434
Sale of securities                      544,285       108,857    (28,845)                                  80,012
Repriced warrants                          0              0       35,310                                   35,310
Equities issued with debt/
beneficial conversion rights             65,000        13,000    515,067                                  528,067
Recapitalization adjustment
Change in par value May 23,2005                    (6,608,033) 6,608,033
Shares,options,warrants issued
for services                             27,500           275     24,859       0          (3,675)           21,459
Net loss                                                                    (1,734,934)                 (1,734,934)
                                      -----------   ----------  ---------  -----------    --------     --------------
BALANCES, August 31, 2005             34,806,621    $ 348,066  $13,160,269 $(17,185,660)  $ (3,675)     $(3,681,000)
                                    ============   ==========  =========== =============  =========     ==============
</TABLE>
F-6


NOFIRE TECHNOLOGIES, INC.
STATEMENTS OF CASH FLOWS

                                             Year Ended August 31,
                                                2005          2004
                                            ----------     ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                  $ (1,734,934 ) $(3,783,704)
 Adjustments to reconcile net loss
   to net cash flows from
   operating activities:
     Depreciation and amortization                6,742         7,106
     Amortization of interest expense for
       discount on note payable
     Amortization of interest expense for
       discount on convertible debentures            -         77,500
     Warrants issued for services and debt           -      2,687,056
     Common Stock issued as interest on current
       and past due loan payable                528,067
     Warrants issued for consulting services     21,459         9,000
     Repricing of warrants                       35,310
     Accounts receivable - trade                 10,649        43,391
     Inventories                                  4,484       (32,046)
     Prepaid expenses and other current           6,279        33,823
     Accounts payable and accrued
        expenses                                127,938       (63,845)
     Security deposits                           (1,120)        5,501
     Deferred salaries                          448,192       482,744

                                            ----------     ----------
            Net cash flows used by
             operating activities              (546,934)     (533,474)
                                            ----------     ----------
CASH FLOWS FROM INVESTING ACTIVITIES:            0              0
                                            ------------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Principal payments on settled
   liabilities                                   -           (15,292)
 Proceeds from issuance of common
   stock, net of related expenses               80,013       161,000
 Net proceeds from short-term loans            117,938       (43,290)
 Loans and advances received from
   stockholders                                314,448        12,601
 Proceeds from issuance of
   convertible debentures                       14,928       255,000
                                            ----------     ----------
            Net cash flows from
             financing activities              527,327        370,019
                                            ----------     ----------
NET CHANGE IN CASH                             (19,607)      (163,455)

CASH AT BEGINNING OF YEAR                       33,706        197,161
                                            ----------     ----------
CASH AT END OF YEAR                          $  14,099      $  33,706
                                            ==========     ==========
F-7

SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest paid                            $    30,000     $   7,235
                                            ==========     ==========
  Income taxes paid (benefit)              $   (49,928)    $( 43,290)
                                            ==========     ==========

Convertible debentures and other
debt converted to equity           $       $ 1,716,696   $ 1,610,294
                                            ==========     ==========
  Common stock issued in exchange
    for services                           $ 21,459      $   4,500
                                           ==========     ==========




See accompanying notes to financial statements


F-8
NOFIRE TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS

NOTE 1 - NATURE OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:
Nature of the Business - The Company manufactures and markets intumescent fire
retardant products, throughout the world.

Going Concern- The Company's financial statements have been presented on the
going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company has
reported substantial losses since inception. The Company's viability as a
going concern is dependent upon its ability to achieve profitable operations
through increased sales, obtaining additional financing or receiving
additional capital. This raises substantial doubt about the Companys ability
to continue as a going concern.

On August 11, 1995, the Company emerged from Chapter 11 of the United States
Bankruptcy Code pursuant to a plan of reorganization (the Plan). As of August
11, 1995, in accordance with AICPA Statement of Position 90-7 Financial
Reporting by Entities in Reorganization Under the Bankruptcy Code (SOP 90-7),
the Company adopted fresh start reporting and implemented the effects of such
adoption in its balance sheet as of August 31, 1995.

As discussed in Note 3, the Company has a liability for settled claims
payable to creditors and has incurred accrued expenses in connection with its
reorganization. Certain settled claims due on September 27, 1996 through 1999
remain unpaid. Without additional financing/capital or the achievement of
profitable operations, funds for repayment of these obligations would not be
available.

Estimates and Uncertainties - The preparation of financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results, as determined at a
later date, could differ from those estimates.

Financial Instruments - Financial instruments include accounts
receivable, other assets, accounts payable, accrued expenses, settled
liabilities, and due to stockholders. The amounts reported for financial
instruments are considered to be reasonable approximations of their fair
values. The fair value estimates presented herein were based on market or
other information available to management. The use of different market
assumptions and/or estimation methodologies could have a material effect on
the estimated fair value amounts.

Inventories - Inventories are stated at the lower of cost (first-in,
first-out method) or market.

Equipment - Equipment is recorded at cost and is depreciated primarily using
the straight-line method over the estimated useful lives of 5 to 7 years for
furniture and fixtures, manufacturing equipment and data processing equipment.
Depreciation expense was $1734 and $1,743  for of the years ended August 31,
2005 and 2004, respectively.
F-9
Intangible Assets - Patents are amortized on a straight-line basis over 5
years. Amortization expense was $5,008 and $4,956 for the years ended
August 31, 2005 and 2004, respectively.

Income Taxes - Deferred income taxes arise from temporary differences between
financial and tax reporting, principally for deferred compensation and net
operating loss carry forwards.

Risk Concentrations - The following summarizes the risk concentration of the
Company as of August 31, 2005:

Cash Concentrations - The Company maintains a cash balance with a financial
institution which at some times may exceed federally insured limits.

Accounts Receivable - The Company grants unsecured credit to virtually all of
its customers with three customers comprising a concentrated risk. Management
continually evaluates the credit risk associated with accounts receivable and
believes that the risk is limited


NOFIRE TECHNOLOGIES, INC
NOTES TO FINANCIAL STATEMENTS

Revenue Recognition Revenues are recognized when the Companys products are
shipped.

Cost of Sales - Cost of sales includes the following costs; material costs,
freight in, direct labor and packaging costs. Indirect costs of sale items
included as selling, general and administrative costs for the years ended
August 31, 2005 and 2004 are as follows; shipping and receiving labor of
$8,272 and $10,900 respectively.

Advertising Costs - The Company expenses costs for trade shows, marketing
and promotional activities as incurred. Expenses were approximately $7,563
and $7,800 for the years ended August 31, 2005 and August 31, 2004,
respectively.

Research and Development Costs Expenditures relating to the development of
new products and processes, including significant improvements to existing
products are expensed as incurred. The Company has not incurred any research
and development costs to be capitalized.

Loss per Share - Loss per share is based on the weighted average number of
shares outstanding during the periods. The effect of warrants outstanding is
not included since it would be anti-dilutive.

Equity Based Compensation- The Company follows the intrinsic value method of
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees (APB 25) and related interpretations in accounting for its employee
stock options because, in the opinion of management, Financial Accounting
Standards Board Statement No. 123, Accounting for Stock-Based Compensation
(FAS 123) requires use of option valuation models that were not developed for
use in valuing employee stock options. FAS 123 permits a company to elect to
follow the intrinsic value method of APB 25 rather than the alternative fair
value accounting provided under FAS 123, but requires pro forma net income
(loss) and earnings (loss) per share disclosures as well as various other
disclosures. The Company has adopted the disclosure provisions required under
Financial Accounting standards Board Statement No. 148, Accounting for
Stock-Based Compensation Transition and Disclosure (FAS 148).

If the recognition provisions of SFAS 123 using the Black-Scholes option
pricing model, were applied, the resulting pro-forma net income (loss)
available to common shareholders, and pro-forma net income (loss) available
to common shareholders per share would be as follows:


                                       Year ended
                                       August  31,
                                    2005             2004

Net loss as reported               $(1,734,934    $(3,783,704)
Deduct: Stock-based compensation,
Net of tax                          $ (155,146)     $ (459,513)
                                     -------        -----------
Net loss, pro-forma               $ (1,890,080)    $(4,423,217)
Basic earnings per share
     As reported                  $ (0.05)         $  (0.18)
     Pro-forma                    $ (0.06)         $  (0.20)
                                       F-10




NOFIRE TECHNOLOGIES, INC
NOTES TO FINANCIAL STATEMENT

The above stock-based employee compensation expense has been determined
utilizing a fair value method, the Black-Scholes option-pricing model.

The Company has recorded no compensation expense for stock options and
warrants granted to employees during the years ended August 31, 2005 and 2004.

In accordance with SFAS 123, the fair value of each option grant has been
estimated as of the date of the grant using the Black-Scholes option pricing
model with the following weighted average assumptions:


                                       For the Year  ended August 31,
                                                2005               2004

Risk free interest rate                        4.26%              4.00%
Expected life                                  8.5 yrs              5
yrs
Dividend rate                                  0.0%               0.0%
Expected volatility                             97%                44%





FASB 123 (revised 2004) ? Share-Based Payments

In December 2004, the FASB issued a revision to FASB Statement No. 123,
Accounting for Stock Based Compensation. This Statement supercedes APB
Opinion No. 25, Accounting for Stock Issued to Employees, and its
related implementation guidance. This Statement establishes standards
for the accounting for transactions in which an entity exchanges its
equity instruments for goods or services. It also addresses
transactions in which an entity incurs liabilities in exchange for
goods or services that are based on the fair value of the entity?s
equity instruments or that may be settled by the issuance of those
equity instruments. This Statement focuses primarily on accounting for
transactions in which an entity obtains employee services in share-
based payment transactions. This Statement does not change the
accounting guidance for share-based payment transactions with parties
other than employees provided in Statement 123 as originally issued and
EITF Issue No. 96-18, ?Accounting for Equity Instruments That Are
Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services.? This Statement does not address the
accounting for employee share ownership plans, which are subject to
AICPA Statement of Position 93-6, Employers? Accounting for Employee
Stock Ownership Plans.

A nonpublic entity will measure the cost of employee services received
in exchange for an award of equity instruments based on the grant-date
fair value of those instruments, except in certain circumstances.

A public entity will initially measure the cost of employee services
received in exchange for an award of liability instruments based on its

current fair value; the fair value of that award will be re-measured
subsequently at each reporting date through the settlement date.
Changes in fair value during the requisite service period will be
recognized as compensation cost over that period. A nonpublic entity
may elect to measure its liability awards at their intrinsic value through
the date of settlement.

The grant-date fair value of employee share options and similar
instruments will be estimated using the option-pricing models adjusted
for the unique characteristics of those instruments (unless observable
market prices for the same or similar instruments are available).

Excess tax benefits, as defined by this Statement, will be recognized
as an addition to paid-in-capital. Cash retained as a result of those
excess tax benefits will be presented in the statement of cash flows as
financing cash inflows. The write-off of deferred tax assets relating
to unrealized tax benefits associated with recognized compensation cost
will be recognized as income tax expense unless there are excess tax
benefits from previous awards remaining in paid-in capital to which it
can be offset.

The notes to the financial statements of both public and nonpublic
entities will disclose information to assist users of financial
information to understand the nature of share-based payment
transactions and the effects of those transactions on the financial
statements.

The effective date for public entities that do not file as small
business issuers will be as of the beginning of the first interim or
annual reporting period that begins after June 15, 2005. For public
entities that file as small business issuers and nonpublic entities the
effective date will be as of the beginning of the first annual
reporting period that begins after December 15, 2005. Management
intends to comply with this Statement at the scheduled effective date
for the relevant financial statements of the Company. Management
believes the effects of adopting this revision to FASB 123 will
approximate recording those amounts currently reported as compensation
herein on a pro-forma basis as allowed under FASB 123.

FASB 151 -  Inventory Costs

In November 2004, the FASB issued FASB Statement No. 151, which revised
ARB No.43,relating to inventory costs. This revision is to clarify the
accounting for abnormal amounts of idle facility expense, freight,
handling costs and wasted material (spoilage). This Statement requires
that these items be recognized as a current period charge regardless of
whether they meet the criterion specified in ARB 43. In addition, this
Statement requires the allocation of fixed production overheads to the
costs of conversion be based on normal capacity of the production
facilities. This Statement is effective for financial statements for
fiscal years beginning after June 15, 2005. Earlier application is
permitted for inventory costs incurred during fiscal years beginning
after the date of this Statement is issued. Management believes this
Statement will have no impact on the financial statements of the
Company once adopted.


FASB 152 ? Accounting for Real Estate Time-Sharing Transactions

In December 2004, the FASB issued FASB Statement No. 152, which amends
FASB Statement No. 66, Accounting for Sales of Real Estate, to
reference the financial accounting and reporting guidance for real
estate time-sharing transactions that is provided in AICPA Statement of
Position (SOP) 04-2, Accounting for Real Estate Time-Sharing
Transactions. This Statement also amends FASB Statement No. 67,
Accounting for Costs and Initial Rental Operations of Real Estate
Projects, to state that the guidance for (a) incidental operations and
(b) costs incurred to sell real estate projects does not apply to real-
estate time-sharing transactions. The accounting for those operations
and costs is subject to the guidance in SOP 04-2. This Statement is
effective for financial statements for fiscal years beginning after
June 15, 2005. Management believes this Statement will have no impact
on the financial statements of the Company once adopted.


FASB 153 ? Exchanges of Nonmonetary Assets

In December 2004, the FASB issued FASB Statement No. 153. This
Statement addresses the measurement of exchanges of nonmonetary  assets.
The guidance in APB Opinion No. 29, Accounting for Nonmonetary
Transactions, is based on the principle that exchanges of nonmonetary
assets should be measured based on the fair value of the assets
exchanged. The guidance in that Opinion, however, included certain
exceptions to that principle. This Statement amends Opinion 29 to
eliminate the exception for nonmonetary exchanges of similar
productive assets and replaces it with a general exception for
exchanges of nonmonetary assets that do not have commercial substance.
A nonmonetary exchange has commercial substance if the future cash
flows of the entity are expected to change significantly as a result of
the exchange. This Statement is effective for financial statements for
fiscal years beginning after June 15, 2005. Earlier application is
permitted for nonmonetary asset exchanges incurred during fiscal years
beginning after the date of this Statement is issued. Management
believes this Statement will have no impact on the financial statements
of the Company once adopted.

FASB 154 -  Accounting Changes and Error Corrections

In May 2005, the FASB issued FASB Statement No. 154, which replaces APB
Opinion No.20 and FASB No. 3. This Statement provides guidance on the
reporting of accounting changes and error corrections. It established,
unless impracticable retrospective application as the required method
for reporting a change in accounting principle in the absence of
explicit transition requirements to a newly adopted accounting
principle. The Statement also provides guidance when the retrospective
application for reporting of a change in accounting principle is
impracticable. The reporting of a correction of an error by restating
previously issued financial statements is also addressed by this
Statement. This Statement is effective for financial statements for
fiscal years beginning after December 15, 2005. Earlier application is
permitted for accounting changes and corrections of errors made in
fiscal years beginning after the date of this Statement is issued.
Management believes this Statement will have no impact on the financial
statements of the Company once adopted.

FIN-47 Accounting for Conditional Asset Retirement Obligations

     In March 2005, the Financial  Accounting  Standards  Board
("FASB")  issued interpretation No. 47, "Accounting for Conditional
Asset Retirement Obligations" ("FIN No. 47").  FIN No. 47 clarifies
that the term  conditional  obligation as used in FASB Statement No.
143, "Accounting for Assets Retirement Obligations", refers to a legal
obligation to perform an asset  retirement  activity in which the
timing and/or method of settlement  are  conditional  on a future event
that may or may not be within the control of the entity. FIN No. 47
requires that the uncertainty about the timing and/or method of
settlement of a conditional asset retirement obligation be factored
into the measurement of the liability when sufficient information
exists.  FIN No. 47 also clarifies when an entity would have sufficient
information to reasonably estimate the fair value of an asset
retirement obligation.  FIN No. 47 is effective for fiscal years ending
after December 15, 2005. The Company has not yet determined the impact,
if any, of the adoption of FIN No. 47 on its financial statements.





F-11

NOFIRE TECHNOLOGIES INC
NOTES TO FINANCIAL STATEMENTS

NOTE 2 - INVENTORIES:

Inventories, net of reserves, at August 31, 2005 consisted of the following:


Testing material   $  5,000
Raw material       $ 46,246
Finished goods       30,382
                   --------
                   $ 81,628
                   ========




NOTE 3 - SETTLED CLAIMS:
Settled claims consist of claims payable to creditors for which payment has
been deferred beyond the Plan's effective date pursuant to the terms and
conditions of the Plan, as agreed upon between the Company and its creditors.
At August 31, 2005, settled liabilities payable totaled $378,031

The claims settled were payable by the Company through September 27, 1999, and
during the year ended August 31, 2005, the Company converted approximately
$775,395 into an 8% convertible debenture.

The Company is currently delinquent on its scheduled payments to certain
creditors due September 27, 1996 through 1999 in the gross amount of
approximately $378,031 . The Company does not have funds available for
repayment and without additional sales, capital or financing, payments
cannot be made.

NOTE 4 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

Accounts payable and accrued expenses consist of the following:


Legal fees                      $ 327,791
Commissions                        21,052
Interest                          151,253
Payroll and payroll taxes          52,339
Accounts payable                  190,802
Other                              97,799
                               ----------
                               $  841,036

                                =========



NOTE 5 ? RELATED PARTY TRANSACTIONS


F-12

NOFIRE TECHNOLOGIES INC.
NOTES TO FINANCIAL STATEMENTS


In March 2003 the Company received $88,811 from a stockholder, in exchange
for a note bearing interest at 6.00% and payable by December 31, 2004. The
note is collateralized by a security interest in two of the Company s patents.
In August 2005 this note was purchased by Mr. Oolie. All original rights
remain the same.


As a result of loans made to fund the Company's operations during its
trusteeship under a Chapter 11 bankruptcy that ended on August 11, 1995 plus
accrued interest to that date, there were balances due at September 1, 1996
of $171,137 to Mr. Oolie, and $10,918 to Mr. Koster.  Mr. Koster and Mr. Oolie
converted their claims into a convertible debenture on August 30, 2004.
(see below)

On August 30, 2004 the company entered into conversion of debt agreement
whereby officers, directors and consultants of the company agreed to convert
certain debt into an 8% convertible debenture. The debenture allows for a
conversion at  the rate of $0.14 per share of common stock. Additional interest
on such debt was converted at the same rate in November and December 2004 In
addition warrants were issued at the rate of 3 times the number of shares.
The total amount of shares and warrants issued for the $1,614,434 of debt
Converted was 11,716,814 shares of common stock and 35,614,434 warrants as
in the schedule below.


A schedule of the conversion is shown below:

Name                  Debt Converted        Shares        Warrants
---------              ---------------    ------------  -------------
Sam Oolie            $ 540,422            3,923,531     11,770,596
Samuel Gottfried       499,314            3,625,030     10,875,093
Alfonso Margino        275,726            2,008,642      6,025,026
Gerald Litwin          258,681            1,867,900      5,603,700
Bernard Koster          15,292              110,713        332,139
Mitchell Goldstone      25,000              180,998        542,994




All of the above was converted during the fiscal year

On November 5, 2001, five-year warrants were granted to replace expiring
warrants to the following officers and directors: Mr. Oolie, 300,000 shares,
Dr. Gottfried 160,000 shares, Mr. Margino 100,000 shares, Mr. Litwin 100,000
shares and Mr. Koster 25,000 shares. The replacement warrants have an exercise
price of $0.30 per share and are fully vested. On December 11, 2001, warrants
were granted to Mr. Koster and Mr. Litwin entitling them each to purchase
20,000 shares of the Company s Common Stock at a price of $0.40 per share.
On July 22, 2003 seven-year warrants were granted to the following officers
and directors: Mr. Oolie 725,000 Dr. Gottfried 500,000 Mr. Margino 250,000
and Mr. Koster 25,000. The warrants have an exercise price of $0.30 per
share. On August 30, 2004 all of the above warrants were cancelled as part
of the convertible debentures issued.(see above)

Mr. Litwin is a principal of the law firm of Litwin & Tierman, P.A., and
provides certain legal services to the Company. At August 31,2005, the
Company was obligated to that firm in the amount of $301,222.Expenses in
fiscal 2005 were $33,980 for legal services, and in fiscal 2004, $ 17,461 in
fees. In addition, Litwin & Holsinger (a predecessor to Litwin and Tierman)
filed a claim as an unsecured creditor in the bankruptcy proceedings in the
gross amount of $140,403 in respect of pre-petition legal services rendered
and has received one distribution in the amount of $15,584 in respect thereof.
In August 2005 the balance of the bankruptcy debt was converted to an 8%
convertible debenture. In July 2003, the Company issued warrants to Mr. Litwin
to purchase a total of 700,000 shares of the Company s common stock for $0.30
per share, expiring in seven years, in settlement of interest owed to Litwin &
Tierman. The warrants vested immediately. In August 2004, as part of the
issuance of the convertible debenture, these warrants were cancelled.

During three fiscal years ended 2005, the officers deferred a total of
$1,100,709 of their salaries. Effective June 2, 2002, interest at the annual
rate of 6% was accrued on the salaries deferred. The total interest accrued
was $54,048 at August 30, 2005.

On November 14, 2005,in conjunction with loans made to the Company.  Mr. Oolie
was issued 1,000.000 ten year warrants. These warrants were issued at $.20 and
vested immediately.



NOTE 6 - SETTLED CLAIMS PAYABLE TO RELATED PARTIES:

At August 31, 2004, settled claims payable includes amounts due to current
officers and members of the Board of Directors of the Company totaling
approximately $775,395, all of which are delinquent. On August 30, 2005, the
Company converted  this amount into an 8% convertible debenture.(see above)

NOTE 7 CONVERTIBLE DEBENTURES AND OTHER DEBT:

During the year ended August 31, 2004; $138,000 of interest expense was
recorded for the value of the warrants recorded as a discount on convertible
debentures issued in the previous year.

In July 2004, $15,000 of debt was converted to equity at $0.15 a share or
100,000 shares. Another 30,000 shares were issued for services valued at
$4,500.


In August 2004, two debentures totaling $81,000, including accrued interest,
Was converted to common stock at $.12 per share for 675,000 shares. The $0.12
per share was market price at the conversion date.

During the fiscal year ended August 31,2005, $400,000 of Convertible
Debenture previously Issued  were reissued to include interest and penalties
in the amount of $69,928.

In conjunction with the above the Company issued 1,200,000 $0.22 ten-year
warrants to purchase the Companys common stock. The warrants vested
immediately. The Company charged $ 423,059 to interest expense on this
transaction.



F-13

NOFIRE TECHNOLOGIES INC.
NOTES TO FINANCIAL STATEMENTS


On August 30, 2004 the company entered into conversion of debt Agreement
whereby officers and directors of the company agreed to convert certain debt
into an 8% convertible debenture. The debenture allows for a conversion at
the rate of $0.14 per share of common stock. The beneficial conversion
feature related to these debentures has been valued at $2,588,056 and
expensed, since predominately all of such debt was converted into equity in
November 2004.

In addition warrants were issued at the rate of 3 times the number of shares.

From November 1, 2004 thru January 31, 2005 $1,614,434 including interest on
above debentures were converted into common stock.

In January 2005, the Company borrowed $65,000 from an individual. The note
is due January 12, 2006 and has an interest rate of 15%. The note is
partially collateralized with the proceeds from the sale of the Companys
2004 New Jersey carryforward. $35,856 was paid in December 2005.(see
subsequent)
events).

In conjunction with the above 65,000 shares of the Companys common stock were
issued at $.28 per share as a fee.


NOTE 8 - COMMITMENTS AND CONTINGENCIES:

Lease - The Company's lease of its facility expires on August 31, 2008 with
total annual lease commitments of $135,331 and $143,526 for the years
ending August 31, 2005 and 2006, respectively.

Rent expense, inclusive of taxes and insurance, was approximately $135,332
and $125,000 for the years ended August 31, 2005 and 2004, respectively.

In conjunction with a $100,000 loan made in September 2005, a lien was issued
by the Company on two patents as collateral for the loan.

Also, 2,000,000 shares of the Companys common stock were issued in escrow to
be issued if the loan payment is defaulted.


F-14

NOFIRE TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENT

NOTE 9 - SOURCES OF SUPPLY:

Several components of the Company s products are available from a small
number of suppliers. In the event that these suppliers were to terminate
the manufacture or sale of such components for any reason, then the
manufacture of the Company s products could be interrupted.

NOTE 10 - INCOME TAXES:

No provision for current and deferred income taxes is required for the years
ended August 31, 2005 and 2004.

The following is a reconciliation of income tax benefit computed at the 34%
statutory rate to the provision for income taxes:

                                    2005           2004
                                 ---------      ---------
Tax at statutory rate           $ 590,000      $1,287,000
Permanent and other items        (199,000)     (1,090,000)
Temporary timing differences     (152,000)           -
State income tax, net of federal
  income tax benefit               28,000          32,000
Valuation allowance              (267,000)       (229,000)
                                 ---------      ---------
                                 $   -          $    -
                                 =========      =========




As a result of the issuance of common stock pursuant to the Plan, the Company
experienced a greater than 50% change of ownership as defined in Internal
Revenue Code Section 382 ("Section 382"). Consequently, the Company's ability
to utilize net operating losses generated prior to the effective date of the
Plan is limited during the carry forward periods.

F-15

NOFIRE TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS

The Company has determined that the annual limitation under Internal Revenue
Code Section 382 on its ability to utilize net operating loss carry forwards,
totaling approximately $4,000,000, to be approximately $150,000 per year
expiring in 2010. Subsequent to the date of the Plan, the Company has
generated approximately $8,020,000 in net operating losses, which expire
through 2025.

The significant components of the Companys net deferred tax asset are
summarized as follows:

                                          August 31,
                                   ------------------------
                                            2005
                                         ----------
Net operating loss carry forwards        $4,090,000
                                         ----------
Valuation allowance                      $4,090,000
                                         ----------
                                         $     -
                                         ==========




A valuation allowance is provided when it is more likely than not that some
portion of the deferred tax asset will not be realized. The Company has
determined, based on the Companys prior history of recurring losses, that a
full valuation allowance is appropriate at August 31, 2005 and 2004.
At August 31, 2005, the Company has federal and state net operating loss
carry forwards for financial reporting and income tax purposes of
approximately $12,020,000 and $500,000 respectively, which can be used to
offset current and future taxable income through the year 2022.

During each of the fiscal years 2005 and 2004, the Company sold a portion of
its state net operating loss carry forwards (NOL) realizing approximately
$49,928 and $43,290 respectively.

NOTE 11 - MAJOR CUSTOMERS:

Sales to three customers represented 38.6%, 16.8% and 8.2% of net sales for the
year ended August 31, 2005. Sales to three customers represented 29.4% 6.4%
and 6.1% of net sales for the year ended August 31, 2004.

NOTE 12 ? WARRANTS AND COMMON STOCK:

For the years ended August 31, 2005 and 2004, a summary of the status of
warrants was as follows:

F-16

NOFIRE TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS


                                       2005                    2004
                                -------------------    --------------------
                                           Weighted                Weighted
                                 Number    Average       Number    Average
                                   of      Exercise        of      Exercise
                                 Shares     Price        Shares     Price
                               ----------  --------    ----------  --------
Outstanding, beginning of year  45,033,668   0.22      17,517,082   $0.70
Granted                          6,500,127   0.17      44,203,345    0.17
Exercised                                                    -         -
Cancelled/ forgiven               (125,000)  0.32      (8,692,619)   0.55
Cancelled to re-issue                                    (504,535)   1.41
Expired                          (4,176,980) 0.73      (7,498,705)   0.92
                               ----------   -----      ----------  -----
Outstanding, end of year        47,231,818   0.17      45,033,668    0.22
                               ==========   =====      ==========  =====
Exercisable, end of year        47,183,818   0.17      45,033,668    0.22
                               ==========   =====      ==========  =====






The following table summarizes warrant data as of August 31, 2005:

                                            Outstanding and exercisable

                         Number of        Weighted-       Weighted    Number
                        Outstanding    average remaining   average exercisable
                                            life in        exercise
                                             years         price
                       ------------   ------------------ ----------- -

Range of exercise
prices:
$.01-$.15               40,476,879           7.79           $0.14    40,476,879
$.16-$.50                6,054,939           3.08            0.29     6,024,939
$.51-$.99                  500,000            .01            0.56       500,000
$1.00 or more              200,000           1.18            2.00       200,000
                         ------------                              ----------
                         47,231,818                                  47,201,818



Information, at date of issuance, regarding warrant grants during the year
ended August 31, 2005:

F-17


                               NOFIRE TECHNOLOGIES, INC
                             NOTES TO FINANCIAL STATEMENTS

                                      Shares       Weighted        Weighted
                                                   average         average
                                                   exercise        fair
                                                   price           value
                                   ------------   ------------   ---------
Exercise price exceeds
market price
Exercise price equals
market price                        6,500,127      $0.17           $0.15
Exercise price is less
than market price




In addition the Company repriced and reissued warrants totaling
504,435 at a new exercise price of $0.14 per share. Due to the
repricing of these warrants, these warrants they are subject to revaluation
at the end of each reporting period under variable accounting. The stock
price has since increased to $0.21 as of the end of the year, resulting in a
$35,310 loss on revaluation.

The weighted average grant date fair value of warrants granted during the
year ended August 31, 2005 was $ 0.15. No warrants had been exercised by
holders as of August 31, 2005

F-18

NOFIRE TECHNOLOGIES, INC
NOTES TO FINANCIAL STATEMENTS


In January of 2004 the Company issued five-year warrants to purchase a total
of 28,500 shares of the Companys common stock to two employees and three
individuals at an exercise price of $0.30 per share. The warrants vested
immediately.

In January of 2004 the Company issued seven-year warrants to purchase a total
of 5,057,460 shares of the Companys common stock to three officers and two
directors at an exercise price of $0.33 per share. The warrants vested
immediately. As of August 30, 2004 these warrants were cancelled.

In April 2004, the Company issued warrants to eight individuals to purchase a
total of 100,000 and 20,000 shares of the Companys common stock for $0.50 and
$0.35 per share respectively, expiring in five years. The warrants vested
immediately.

In June 2004 the Company issued five year warrants to purchase 6,700 shares
of the Companys common stock for $0.30 for services. The warrants vested
immediately.

F-19

NOFIRE TECHNOLOGIES, INC
NOTES TO FINANCIAL STATEMENTS

In August 2004, the Company issued five-year warrants to purchase a total of
1,650,000 shares of the Companys common stock to an accredited investor at an
exercise price of $0.14 per share. These warrants were issued for the receipt
of $100,000 in debt, penalties for the failure to repay $300,000 of past due
debts and the inducement to restructure the terms of the $300,000 in past due
debts. The warrants vested immediately. In September 2003, this same debt
holder had 504,435 warrants cancelled and reissued with new terms expiring in
five years exercisable at $.30 per share. The value of such warrants of
$188,000 was recorded as an expense.

During the year ended August 31, 2005, warrants to purchase 4,176,980
shares of the Companys common stock expired unexercised.

In August 2004 three officers and two directors and a creditor cancelled
8,692,619 warrants in conjunction with a debt conversion agreement.

In October 2004, the Company issued ten-year warrants to two accredited
investors to purchase a total of 1,915,714 of the Companys common stock
at an exercise price of $.14 per share. Such warrants were issued with debt
proceeds and $86,808 of interest expense was recorded for the value of
such warrants issued. The warrants vested immediately.

In October 2004, the Company issued five-year warrants to four employees
to purchase 200,000 shares of the Companys common stock at an exercise
price of $.14 per share. No compensation expense has been recorded as the
warrant exercise price was at the then market price of the common stock.
The warrants vested immediately.

In November 2004, the Company issued ten-year warrants to two accredited
investors to purchase a total of 917,859 of the Companys common stock
at an exercise price of $.14 per share. Such warrants were issued with the
sale of common stock to these investors. The warrants vested immediately.

In January 2005, the Company issued five-year warrants to an employee
to purchase 25,000 shares of the Companys common stock at an exercise
price of $.14 per share. No compensation expense has been recorded as
the warrant exercise price was at the then market price of the common
stock. The warrants vested immediately.

In February 2005, the Company issued ten-year warrants to a Director of
The Company, for services rendered, to purchase 700,000 shares of the Companys
common stock at an exercise price of $.22 per share. No compensation expense
has been recorded as the warrant exercise price was at the then market price of
the commonstock.  The warrants vested immediately.

During February and March 2005, the Company issued to three creditors, 107,500
Shares of common stock and five-year warrants to purchase 237,000 shares of the
Companys common stock at .20 per share. The warrants were issued for services
rendered, equity raised and debt converted to equity. There was $22,969
recorded as compensation expense for the services portion. The warrants vested
immediately.

In March 2005, the Company issued ten-year warrants to an accredited
Investor  to purchase a total of 642,858 of the Companys common stock
at an exercise price of $.14 per share. Such warrants were issued with the sale
of common stock to these investors. The warrants vested immediately.


Also in March 2005, the Company issued to an individual
five-year warrants to purchase 17,500 shares of the Companys common
stock at .35 per share. The warrants were issued for services rendered,
which $4,554 of compensation expencs has been recorded  The warrants vested
immediately.

In May 2005, the Company issued ten-year warrants to an accredited
Investor  to purchase a total of 1,200,000 of the Companys common stock
at an exercise price of $.22 per share. These warrants were issued in
conjuction with an extension of a note payable. Interest expense in the
amount of $423,059 was recorded for such warrants. The warrants vested
immediately.



NOTE 13 - SUBSEQUENT EVENTS:

In September 2005 the Company borrowed $100,000 from an individual. The note
bears an interest rate of 15% and is guaranteed by an officer of the Company.
It is also collateralized with two of the Companys patents.

In conjuction with the above, the Company issued to an individual
ten-year warrants to purchase 1,000,000 shares of the Companys common
stock at .22 per share. The warrants vested immediately.


On November 14, 2005,in conjunction with loans made to the Company.  Mr. Oolie
was issued 1,000,000 ten year warrants. These warrants were issued at $.20 and
vested immediately.

In December 2005 $35,856 was repaid from the net proceeds on the sale of the
Companys New Jersey 2004 carryforward on a $65,000 note payable (see Note 7).









F-20




















NoFire Technologies, Inc. (NFTI)
Code of Ethics for the CEO and CFO

The Chief Executive Officer ("CEO"), or those performing similar functions,
and all Senior Financial Officers (including particularly the Chief Financial
Officer) are subject to the following specific policies relating to ethical
conduct and fair dealing, conflicts of interest, confidentiality of NFTI
information and compliance with law

Be committed to the highest standards of honest and ethical conduct,
including the ethical handling of actual or apparent conflicts of interest
between their personal and professional relationships in the performance of
their duties as CEO and Senior Financial Officers of NFTI.

Be committed to the full, fair, accurate, timely and understandable
disclosure in reports and documents that NFTI file with, or submits to, the
SEC and in other public communications made by NFTI, of all information
relating to NFTI, its financial condition and results of operations.

Be committed to compliance with all applicable governmental laws, rules and
regulations relating to the conduct of the businesses of NFTI and to required
reports regarding the financial condition and results of business operations
of NFTI, including the laws of all countries in which NFTI operates.

Act in good faith, responsibly, with due care, competence and diligence,
without misrepresenting material facts or allowing one' s independent
judgment to be subordinated to any personal interest.

Respect the confidentiality of information acquired in the course of serving
as CEO or a Senior Financial Officer of NFTI except when authorized or
otherwise legally obligated to make disclosure. Confidential information
shall not be used for personal advantage.

Report violations of this Code of Ethics to The General Counsel or directly
to the Audit Committee of the Board of Directors of NFTI, as soon as
practicable after learning of any such violation.

7 .Report to the General Counsel or Audit Committee any information concerning
(a) significant deficiencies in the design or operation of internal controls
  which could adversely affect NFTI's ability to record, process,
  summarize and report financial data or (b) any fraud, whether or not
  material, that involves management: or other employees who have a
  significant role in NFTI's financial reporting, disclosure or internal
  controls.

Report to the General Counsel or Audit Committee any material violations of
the securities or other laws, rules or regulations applicable to NFTI and the
operations of its business, by NFTI or any agent thereof.

Hold themselves accountable for adherence to this Code of Ethics, and
Understand that NFTI's Board of Directors will hold them accountable, as CEO
or Senior Financial Officers of NFTI, to this Code of Ethics.

Exhibit 1


Exhibit 31.1
CERTIFICATIONS*
I, Sam Gottfried, certify that:
1. I have reviewed this 10kSB of NoFire Technologies;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statement, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the small
business issuer as of, and for, the periods presented in this report;
4. The small business issuer's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d -15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f ) for the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the small business issuer,
is made known to us by others particularly during the period in which this
report is being prepared;
(b) Designed such internal control over financial reporting, or caused such
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes, in accordance
with generally accepted accounting principles;
(c) Evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the small business issuer's
internal control over financial reporting that occurred during the small
business issuer's most recent fiscal quarter (the small business issuer's
fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the small business
issuer's internal control over financial reporting; and
5. The small business issuer's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the small business issuer's auditors and the audit committee of
the small business issuer's board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the small business issuer's ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's internal
control over financial reporting.


Date: _December 30 , 2005________________

        /s/ Sam Gottfried
        Sam Gottfried
        Chief Financial Officer

Exhibit 31.2
CERTIFICATIONS*
I, Sam Oolie, certify that:
1. I have reviewed this 10kSB of NoFire Technologies;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statement, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the small
business issuer as of, and for, the periods presented in this report;
4. The small business issuer's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d -15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f )for the small business issuer and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the small business issuer,
is made known to us by others particularly during the period in which this
report is being prepared;
(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes, in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the small business issuer's
internal control over financial reporting that occurred during the small
business issuer's most recent fiscal quarter (the small business issuer's
fourth fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the small business
issuer's internal control over financial reporting; and
5. The small business issuer's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the small business issuer's auditors and the audit committee of
the small business issuer's board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the small business issuer's ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the small business issuer's internal
control over financial reporting.
Date: _December 30, 2005________________

        /s/ Sam Oolie
        Sam Oolie
        Chief Financial Officer







Exhibit 32-1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Financial Report of NoFire Technologies, Inc. on Form
10KSB for the Fiscal Year ended 8/31/05 as filed with the Securities and
Exchange Commission on the date hereof, I, Sam Gottfried, Chief Executive
Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Form 10KSBfully complies with the requirements of Section 13 (a) or
15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) The information contained in the Form 10KSB fairly presents, in all
material respects, the financial condition and results of operations of
the Company.



Dated: December 30 , 2005

Name  /s/ Sam Gottfried (CEO)


A signed original of this written statement required by Section 906,
or other
document authenticating, acknowledging, or otherwise adopting the
signature
that  appears in typed form within the electronic version of this
written
statement required by Section 906, has been provided to NoFire
Technologies,
Inc. and will be retained by NoFire Technologies, Inc. and furnished
to the
Securities and Exchange Commission or its staff upon request.







Exhibit 32-2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Financial Report of NoFire Technologies, Inc. on Form
10KSB for the Fiscal Year ended 8/31/2005 as filed with the Securities and
Exchange Commission on the date hereof, I, Sam Oolie, Chief Financial Officer
Of the Company, certify, pursuant to 18 U.S.C 1350, as adopted pursuant to
906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Form 10QKBfully complies with the requirements of Section 13 (a)
or 15 (d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o (d));
and

(2) The information contained in the Form 10KSBfairly presents, in all
material respects, the financial condition and results of operations of the
Company.

Dated December 30, 2005

Name Sam Oolie (CFO)

A signed original of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature
that appears in typed form within the electronic version of this written
statement required by Section 906, has been provided to NoFire Technologies,
Inc. and will be retained by NoFire Technologies, Inc. and furnished to the
Securities and Exchange Commission or its staff upon request.





End of Filing







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