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, 2008
[] 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, 2008  $ 722,469



Aggregate market value of the voting stock held by

non-affiliates as of November 15, 2008                  $1,581,955


Number of shares of common stock outstanding as of
November 15, 2008                                       40,273,465

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 protection. The NoFire liquid formulas are
covered by a United States Patent and corresponding patents and patent
applications in over 30 foreign countries. The United States Patent is:



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; and
No. 6,510,807 Pre-Fabricated Fireproof Bulkhead with Special Interlocking
Joints for a Ship, issued January 28, 2003.

The Company has submitted two additional patent applications to the United
States Patent and Trademark 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 would 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 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 five largest customers during the most recent fiscal year
represented 26.0%, 17.4%, 9.7%, 6.6% and 4.3% 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
S Barrier (structural steel fire protection), NoFire LP (lower price high
performance), NOFIRE/SAFTEE arc and fireproof tape 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, 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 approvals from 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.

EMPLOYEES

As of December 07, 2008, the Company had eight employees, five 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 which expired August 31, 2008. Monthly rent payments for the year ended
August 31, 2007 were approximately $12,733.  Monthly rent payments for the year
ended August 31, 2008 were approximately $13,171.

The Company is presently negotiating a new lease with the landlord.

Item 3. LEGAL PROCEEDINGS


A complaint was filed in the Superior Court of New Jersey, Law Division, Bergen
County on May 27, 2008. It is alleged by the plaintiff that the Company entered
into a contract with Otis and June Hastings and $250,000 remains due and owing
under said contract. The Company maintains that it has fully satisfied the
terms of the contract, including all monetary obligations. On December 10, 2008
a  mediation was held but the case was not resolved. Discovery is proceeding.
The Company believes this lawsuit is without merit and intends to vigorously
dispute the claim.

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

None
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.


                     2007-2008             2006-2007
Quarter Ended      High      Low         High      Low
-------------      ----      ---         ----      ---
November 30      $0.55    $0.38          $0.23     $0.10
February 28      $0.27    $0.22          $1.37     $0.42
May 31           $0.51    $0.24          $0.95     $0.71
August 31        $0.40    $0.13          $1.00     $0.60




(b) HOLDERS: As of October 31, 2008 there were approximately 289 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
Company securities without registration under the Securities Act of 1933, as
amended Securities Act) during the two years ended August 31, 2007 and
August 31, 2008. 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

 9/06       common    180,000     0.14
10/06       common    597,322     0.11-0.17
11/06       common    123,048     0.14-0.20
12/06       common    584,919     0.14-0.18
01/07       common    209,583     0.16-0.25
02/07       common    284,749     0.34
03/07       common    136,994     0.20-0.85
04/07       common     86,192     0.99-1.11
05/07       common    253,650     0.0875-0.50
07/07       common     41,667     0.60
08/07       common  1,078,250     0.60-0.80
09/07       common    126,077     0.60
10/07       common    179,862     0.50
11/07       common     30,000     0.55
12/07       common     60,000     0.40
1/08        common     62,500     0.25
2/08        common     90,909     0.235
6/08        common    272,500     0.202




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
of 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 and Trademark Office.

Item 1 - Business of the Company. Marketing efforts to develop new
applications and establish new customers were continued in fiscal 2008. The
efforts undertaken by the Company in application development, product
approvals and marketing initiatives should assist it in creating greater sales
in fiscal 2008 and beyond.

The greatest obstacles encountered in obtaining major sales contracts are the
multitude of tests and approvals required, competition against well
established, better-capitalized companies, cost, the slow process of
specifying a new product in highly regulated applications and educating the
public on the existence of fire protection products and the advantages of
Nofire over other well publicized but low performance products. 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 an additional $48,437 to the Company.
The Company is accruing interest on the advance at the rate of 15% per annum.

During the fiscal year accredited investors purchased  519,348 shares
of the Company s common stock for  $228,259. In addition they received
259,674 five-year warrants exercisable at prices ranging from $0.25 to $0.60
per share. The warrants vested immediately. In addition another 291,185 shares
were issued for the exercise of warrants which resulted in proceeds to the
Company of $55,125.

During the year, the officers deferred an additional $518,014 of their
salaries.

Also in fiscal 2008, $48,152 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 revenue 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, 2008 AND 2007

Sales of $722,469 represented a decrease of $282,245 or 28% from sales of
$1,004,714 in the prior year.

The net loss of $1,741,544 for fiscal year 2008 was $2,100,381 less than the
net loss of $3,841,925 in the prior year.

General and administrative expenses and research and development costs of
$1,244,193 in fiscal year 2008 were $123,451, or 11%, more than the prior year.

The main components of the changes are as follows:


                               8/31/2008        8/31/2007    Difference


Material                      $  286,604          460,749     (174,145)
Testing                           66,756           47,299       19,457
Mfg O/H                           80,952           45,432       35,520
Rent                             159,420          152,794        6,626
Professional Fees                136,929          108,803       28,126
Insurance                         46,064           29,584       16,480
NJ Tax Refund                     48,152           38,255        9,897
Interest Expense                 748,560        3,153,684   (2,405,124)
Commissions                       31,366           19,633       11,733
Salaries management              526,023          513,152       12,871
Salaries administrative           64,326           74,380      (10,054)
Equity based compensation        194,353          139,021       55,332


During the fiscal years 2007 and 2008, the Company realized approximately
$38,255 and $48,152 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 the Company s 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 the Company 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 the 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
the Company s critical accounting policies are limited to those described
below. For a detailed discussion on the application of these and other
accounting policies see note 1 to our financial statements.

Accounting for Income Taxes

As part of the process of preparing the Company s financial statements, the
Company is required to estimate its income tax position. Management judgment is
required in determining the provision of its deferred tax asset. The Company
recorded a valuation for the full-deferred tax asset from its 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 the Company adjusts these estimates in future periods
the Company may need  to adjust such estimates to a going concern basis.

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 last two years ended August 31, 2008 and 2007. The
Company lacks sufficient capital to pay its debts timely. Those conditions
raise substantial doubt about the ability 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

The computation of the expense associated with stock-based compensation
requires the use of a valuation model.  SFAS 123(R) is a complex accounting
standard, the application of which requires significant judgment and the use of
estimates, particularly surrounding Black-Scholes assumptions such as stock
price volatility, expected option lives, and expected option forfeiture rates,
to value equity-based compensation.  The Company currently uses a Black-Scholes
option pricing model to calculate the fair value of its stock options.  The
Company primarily uses historical data to determine the assumptions to be used
in the Black-Scholes model and has no reason to believe that future data are
likely to differ materially from historical data. However, changes in the
assumptions to reflect future stock price volatility and future stock award
exercise experience could result in a change in the assumptions used to value
awards in the future and may result in a material change to the fair value
calculation of stock-based awards.  SFAS 123(R) requires the recognition of the
fair value of stock compensation in net income.  Although every effort is made
to ensure the accuracy of our estimates and assumptions, significant
unanticipated changes in those estimates, interpretations and assumptions may
result in recording stock option expense that may materially impact our
financial statements.

Item 7. FINANCIAL STATEMENTS

The Company's annual financial statements for the fiscal years ended
August 31, 2008 and August 31, 2007, 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

During the fiscal years ended August 31 2008 and August 31, 2007 there were no
disagreements on any matter of accounting principles or practice s, financial
statement disclosure, or auditing scope or procedure, which, if not resolved to
the accountant's satisfaction, would have caused it to make reference to the
subject matter of the disagreement in connection with its report.

ITEM 8A (T). CONTROLS AND PROCEDURES.

      (a)   Evaluation of Disclosure Controls and Procedures
 Our management, with the participation of our president and chief financial
 officer, carried out an evaluation of the effectiveness of our disclosure
 controls and procedures (as defined in the Securities Exchange Act of 1934
 (the Exchange Act) Rules 13a-15(e) and 15-d-15(e)) as of the end of the
 period covered by this report (the Evaluation Date).  Based upon that
 evaluation, the president and chief financial officer concluded
 that as of the Evaluation Date, our disclosure controls and procedures are
 effective to ensure that information required to be disclosed by us in the
 reports that we file or submit under the Exchange Act (i) is recorded
 processed, summarized and reported, within the time periods specified in the
 SEC s rules and forms and (ii) is accumulated and communicated to our
 management, including our president and chief financial officer, as
 appropriate to allow timely decisions regarding required disclosure.

 Our management, including our president and chief financial officer, does not
 expect that our disclosure controls and procedures or our internal controls
 will prevent all errors and all fraud. A control system, no
 matter how well conceived and operated, can provide only reasonable, not
 absolute, assurance that the objectives of the control system are met.
 Further, the design of a control system must reflect the fact that there are
 resource constraints and the benefits of controls must be considered relative
 to their costs. Because of the inherent limitations in all control systems, no
 evaluation of controls can provide absolute assurance that all control issues
 and instances of fraud, if any, within NoFire Technologies, Inc. will be
 detected.

       (b) Management's Report on Internal Control over Financial Reporting
 Our management is responsible for establishing and maintaining adequate
 internal control over financial reporting (as defined in Rule 13a-15(f) under
 the Exchange Act). Our management assessed the effectiveness of our internal
 control over financial reporting as of August 31, 2008.  In making this
 assessment, our management used the criteria set forth by the Committee of
 Sponsoring Organizations of the Treadway Commission in Internal Control-
 Integrated Framework.  Our management has concluded that, as of August 31,
 2008, our internal control over financial reporting is effective based on
 these criteria.  This annual report does not include an attestation report of
 our registered public accounting firm regarding internal control over
 financial reporting.  Management's report was not subject to attestation by
 our registered public accounting firm pursuant to temporary rules of the SEC
 that permit us to provide only management's report in this annual report.

      (c)   Changes in Internal Control over Financial Reporting
 There were no changes in our internal controls over financial reporting that
 occurred during the period covered by this report that has materially
 affected, or is reasonably likely to materially affect, our internal control
 over financial reporting.

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              62        Director, Chief
                                        Executive Officer,
                                        Chief Technical
                                        Officer and
                                        Assistant Treasurer

Sam Oolie                     72        Director, Chairman
                                        of the Board, Chief
                                        Operating Officer,
                                        Chief Financial Officer
                                        and Treasurer

Bernard J. Koster             75        Director

Gerald H. Litwin              66        Director

Alphonso Margino              70        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 and, 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.

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..


Gerald H. Litwin
Mr. Litwin has served as a Director of the Company since August 16, 1995.
During the past eight 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 Counsel, and
his current firm continues to provide certain legal services to the Company.

Alphonso Margino
On June 15, 1992 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, 1992, 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. The Company had
no Option/SAR Grants, Aggregated Option/SAR Exercises or Fiscal Year End
Option/SAR's for the years ended August 31, 2008, 2007, and 2006, 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, 2008, 2007, and 2006


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

Samuel Gottfried          2008       None    $212,992
Chief Executive Officer   2007       None    $213,100
from January 1, 2003      2006       None    $221,184
and Chief Technical
Officer And Assistant
Treasurer from
August 1, 2003


Sam Oolie                 2008        None   $230,022
Chairman of the Board,    2007     $  None   $216,400
Chief Operating Officer   2006     $  None   $221,184
And Chief Executive Officer
until July 26, 1999, and
Chief Financial Officer
Since January 2, 2003



Alfonso Margino           2008      $  None   $75,000
Vice President            2007      $  None   $75,000
And Secretary since       2006      $ 3,750   $61,660
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.



Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth as of November 15, 2008 the number of shares
of Common Stock owned of record or beneficially 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
NoFire Technologies, Inc.        19,784,127            34.4%
21 Industrial Avenue
Upper Saddle River, NJ  07458

Samuel Gottfried
NoFire Technologies, Inc.        15,700,123            29.0%
21 Industrial Avenue
Upper Saddle River, NJ  07458

Alphonso Margino
NoFire Technologies, Inc.         9,116,303            18.3%
21 Industrial Avenue
Upper Saddle River, NJ  07458

Bernard J. Koster
7 Old Smith Road                 1,317,652              2.9%
Tenafly, NJ  07670

Gerald H. Litwin
Two University Plaza             7,621,600              15.5%
Hackensack, NJ  07601

Lavin Holdings, LLC
483 Winthrop Road                8,354,632              19.3%
Teaneck, NJ 07666

Carole Salkind
18911 Collins Ave                8,140,436              15.9%
Sunny Isles Beach, FL. 33160

John Cavanna
2337 Lemoine Ave                 4,268,730               9.3%
Fort Lee, NJ 07024

Iroquois Capital Management LLC  6,000,000              12.1%
641 Lexington Ave
New York. NY 10022


All officers and directors      53,539,805              68.2%
as a group (five persons)





Note (1) As of November 15, 2008, there were 40,273,465 shares of Common
Stock issued and outstanding. Percentage of class for all officers and
directors as a group is computed on 78,510,583 shares which includes
38,234,954 warrants held by these individuals. Percentage of class for
Lavin Holdings LLC, Carole Salkind, John Cavanna and Iroquois Capital
Management LLC is computed on outstanding common stock in the amount of
40,273,790.


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 5% 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 5% 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, 2008 the Company believes that no director or officer of the
Company or beneficial owner of more than 5% of the Company's Common Stock
failed to file on a timely basis reports required by Section 16(a) of the
1934 Act during such fiscal year.

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Mr. Litwin is a principal of the law firm of Litwin & Tierman, P.A. which
provides certain legal services to the Company. At August 31, 2008, the
Company was obligated to that firm in the amount of $448,575. Expenses in
fiscal 2007 were $31,262 for legal services, and in fiscal 2008, $37,064
for legal services.

In April 2006 the Company borrowed $25,000 from a director of the Company. The
note carries an interest rate of $500 per month . In conjunction with the
transaction the Company issued five-year warrants to purchase 50,000 shares of
the Company?s common stock at an exercise price of$.20 per share.

 During the three fiscal years ended 2008, the officers deferred a total of
$1,526,522 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 $421,097 at August 31, 2008.


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

Financial Statements:

  Balance Sheet as of August 31, 2008                     F-3

  Statements of Operations for the years
         ended August 31, 2008 and 2007                   F-4

 Statements of Changes in Stockholders' Equity
    (Deficiency) for the years ended August 31,2008
     and 2007                                             F-5





Statements of Cash Flows for the Years

      Ended August 31, 2008 and 2007                      F-6

      Notes to Financial Statements                       F-7 to F-15

2.  EXHIBITS                                              none



2. Certification of Financial Information Exhibits 31.1 31.2

3. 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,
2008 and 2007 for professional services rendered by the Company s principal
accountants for the audits of its annual financial statements and the review
of its financial statements included in our quarterly reports on Form 10QSB
were approximately $36,500 and $25,000, respectively.

AUDIT-RELATED FEES

The aggregate fees billed for the fiscal years ended August 31, 2008 and 2007
for assurance and related services rendered by our principal accountants
related to the performance of the audit or review of the Company s financial
statements, specifically accounting research was $0 for each year.

TAX AND OTHER FEES

The aggregate fees billed for the fiscal years ended August 2008 and
2007 for tax related or other services rendered by the Company s principal
accountants in connection with the preparation of its federal and state income
tax returns was $3,000 and $-0-, respectively.

APPROVAL OF NON-AUDIT SERVICES AND FEES

We did not have any non-audit services provided by our principal accountants
during fiscal 2008 or 2007.


SIGNATURES

In accordance with Section 13 or 15(d) of the 1934 Act, the registrant
has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                NOFIRE TECHNOLOGIES, INC.



Date: January  13, 2009                  By: /s/ Sam Gottfried
                                       ------------------------
                                          Sam Gottfried,
                                        Chief Executive Officer



Date: January 13, 2009                 By: /s/ Sam Oolie
                                        ------------------------
                                           Sam Oolie
                                        Chief Financial Officer




In accordance with the 1934 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
----------------------------                January 13, 2009
Samuel Gottfried, Director


/s/ Bernard J. Koster
-----------------------------               January 13, 2009
Bernard J. Koster, Director


/s/ Gerald H. Litwin
-----------------------------               January 13, 2009
Gerald H. Litwin, Director


/s/ Sam Oolie
-----------------------------               January 13, 2009
Sam Oolie, Director







INDEX TO FINANCIAL STATEMENTS


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

Financial Statements:

     Balance sheet at August 31, 2008                         F-3

     Statements of operations for the years ended
      August 31, 2008 and 2007                                F-4

     Statements of changes in stockholders' equity
      (deficiency) for years ended August 31, 2008
       and 2007                                               F-5


     Statements of cash flows for the years ended
      August 31, 2008 and 2007                                F-6

     Notes to financial statements                            F-7 to F-15



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, 2008, and the related
statements of operations, stockholders  equity (deficiency)
and cash flows for each of the years ended
August 31, 2008 and 2007.  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 financial statements referred to above present
fairly, in all material respects, the financial
position of NoFire Technologies, Inc. as of August 31, 2008, and
the results of its operations and its cash flows for each of the
years  ended August 31, 2008 and 2007, 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 and $3.8 million for each of the years
ended August 31, 2008 and 2007, and has a substantial working capital
deficiency as of August 31, 2008.  These factors raise substantial doubt
concerning 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 23, 2008


F-2



NOFIRE TECHNOLOGIES, INC
BALANCE SHEET
ASSETS
August 31, 2008

CURRENT ASSETS:

   Cash                                        $     2,334
   Accounts receivable ? trade, net                 83,451
   Inventories                                     203,068
   Prepaid expenses and other current assets        22,419
                                                -----------
      Total Current Assets                         311,272



  OTHER ASSETS:
   Security deposits                                37,065
                                                  ---------
                                                  $348,337
                                                 ==========


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES:

   Settled liabilities                             $   378,031
   Accounts payable and accrued expenses             1,610,733
   Loans and advances payable to stockholders          247,874
   Deferred salaries                                 2,449,900
   Loans payable                                       408,583
   Convertible debenture 8%                            595,928
                                                    ----------
      Total Current Liabilities                      5,691,049



LONG TERM LIABILITIES:  Deferred Revenue-licenses           12,550


STOCKHOLDERS' EQUITY (DEFICIENCY):

Common stock $.01 par value:
Authorized -150,000,000 shares
  issued, and outstanding-40,273,465              402,735
Capital in excess of par value                 18,778,156
Stock subscriptions receivable                    (13,250)
Accumulated Deficit                           (24,522,904)
                                               ----------
   Total Stockholders' Equity (Deficiency)     (5,355,263)
                                                ----------
                                              $   348,337
                                                =========

See accompanying notes to financial statements
F-3





NOFIRE TECHNOLOGIES, INC.
STATEMENTS OF OPERATIONS


                                    Year Ended August 31,
                                      2008        2007
                                 ----------     ----------
Sales:
   Sales of product              $  610,932     $ 838,530
   Royalty revenues                 111,537       166,184
                                 ------------------------
NET SALES                           722,469     1,004,714
                                 ----------     ----------
COSTS AND EXPENSES:
   Cost of sales                    297,245       460,749
   Research and development costs    66,757        47,299
   General and administrative
   (includes equity based
   compensation of $194,353
   and $136,337, respectively)    1,371,789     1,209,780
                                  ----------    ----------
                                  1,735,791     1,717,828
                                 ---------     ----------
LOSS FROM OPERATIONS             (1,013,322)     (713,114)
                                 ----------     ----------
OTHER EXPENSES (INCOME):
   Interest expense (includes equity
   based portion $419,016 and
   $2,835,734, respectively)        755,930     3,153,684
   Other income                      (6,920)        0
                                   --------       --------
                                    749,010     3,153,684
LOSS BEFORE INCOME TAXES         (1,762,332)   (3,866,798)
INCOME TAX BENEFIT                   20,788        24,873
                                 ----------      --------
NET LOSS                       $ (1,741,544)  $(3,841,925)
                                 ==========     =========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING-BASIC AND DILUTED    39,885,615     37,533,174
                                 ==========     ==========
BASIC AND DILUTED LOSS
  PER COMMON SHARE:             $    (.04)  $      (.10)
                                 ==========     ==========



See accompanying notes to financial statements

F-4


















NOFIRE TECHNOLOGIES, INC.
STATMENTS OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIENCY)

<TABLE>
<CAPTION>

<S>                                 <C>        <C>        <C>        <C>             <C>              <C>
                                      Common Stock       Capital
                                 Number of               in Excess    Accumulated  Stock Subscriptions  Total
                                   Shares      Amount   of Par Value    (Deficit)     Receivable    Stockholders
                                                                                                     (Deficit)
                                                                                                       Equity

BALANCES, August 31, 2006          35,806,621   $ 358,066   $13,923,791  $(18,939,435)            $(4,657,578)

Issuance of warrants with debt
-related party                                                 139,908                                139,908
Equities issued with debt/beneficial
Conversion rights                                            2,572,899                              2.572,899
Sale of stock                       2,559,275       25,593     756,810                               782,403
Exercise of warrants                  867,400        8,674     346,126                               354,800
Equity issued for services            149,636        1,496     137,525                               139,021
Net loss                                                                  (3,841,925)             (3,841,925)
                                  ------------------------------------ ---------------- ---------- ------------
Balance as of August 31,2007       39,382,932      393,830  17,877,058   (22,781,360)              (4,510,472)

Equities issued with debt/beneficial
Conversion rights                      30,000          300      418,716                               419,016
Sale of stock                         519,348        5,193      223,066                               228,259
Stock subscription                     50,000          500       12,750                  (13,250)       -
Exercise of warrants                  291,185        2,912       52,213                                55,125
Equities issued for services            0              0        194,353                               194,353
Net loss                                                                  (1,741,544)              (1,741,544)
                                   -----------   ---------  -----------  ------------- ----------- -----------
Balance as of August 31, 2008      40,273,465     402,735    18,778,156  (24,522,904)    (13,250)  (5,355,263)
                                   ==========    =========  ===========  ============  =========== ===========


</TABLE>
F-5




See accompanying notes to financial statements



























NOFIRE TECHNOLOGIES, INC.
STATEMENTS OF CASH FLOWS

                                               Year Ended August 31,
                                                2008         2007
                                            ----------     ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                  $ (1,741,544 )$(3,841,925)
 Adjustments to reconcile net loss
   to net cash flows from
   operating activities:
     Depreciation and amortization                 0            1,086
     Amortization of unearned compensation
     and debt discount                             0          120,243
     Equities issued as interest and beneficial
     conversion features on current and past
     due loans payable                          419,016     2,712,807
     Equities issued for consulting services    194,353       139,021
     Accounts receivable - trade                217,835      (296,875)
     Inventories                               (105,284)      (30,381)
     Prepaid expenses and other current          72,423      (94,842)
     Accounts payable and accrued
     expenses                                   247,504       210,818
     Deferred revenue                            12,550          0
     Deferred salaries                          369,397       205,285
                                             ----------     ----------
 Net cash flows used by
     operating activities                     (313,750)      (874,763)
                                             ----------      ----------
CASH FLOWS FROM INVESTING ACTIVITIES
     Security deposits                             0          (351)
                                             -----------   -----------
NET CASH FLOWS FROM INVESTING ACTIVITIES           0          (351)
                                            ------------    ---------
CASH FLOWS FROM FINANCING ACTIVITIES:

 Proceeds from issuance of common
   stock and exercise of warrants,
   net of related expenses                     283,384    1,137,203
 Payments on short term loans                 (165,000)     (98,680)
 Net proceeds from short-term loans            117,848      126,000
 Loans and advances received from
   stockholders                                 48,436     (276,100)
                                             ----------   ----------
            Net cash flows from
             financing activities              284,668      888,423
                                            ----------     ----------
NET INCREASE (DECREASE) IN CASH                (29,082)      13,309

CASH AT BEGINNING OF YEAR                       31,416       18,107
                                            ----------     ----------
CASH AT END OF YEAR                         $    2,334     $ 31,416
                                            ==========     ==========

SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest paid                            $  127,824      $  57,066
                                            ==========     ==========
  Income taxes paid (benefit)              $  (20,788)     $( 24,873)
                                            ==========     ==========

  Equity issued in exchange
    for services                            $ 194,353      $  139,021
                                            ==========     ==========

See accompanying notes to financial statements
F-6


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 Company s 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 $ 0 and $1,086 for the years ended August 31,
2008 and 2007, respectively.

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

Risk Concentrations - The following summarizes the risk concentration of the
Company as of August 31, 2008:

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


F-7

  NOFIRE TECHNOLOGIES, INC
NOTES TO FINANCIAL STATEMENTS

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

Revenue Recognition- Revenue for product sales are recognized when there is
evidence of an arrangement, the amount is fixed and determinable, and
collectibility is probable. Company s products are shipped. Revenues from
royalty sales are recognized once such royalties are deemed earned and
collectible.

Cost of Sales - Cost of sales includes the following costs: material costs,
freight in, direct labor and packaging costs. Indirect costs of sales
include selling, general and administrative costs for the years ended
August 31, 2008 and 2007 they are as follows: shipping and receiving labor of
$22,135 and $8,343, and shipping costs of $24,938 and $10,296, respectively.

Advertising Costs - The Company expenses costs for trade shows, marketing
and promotional activities as incurred. Expenses were approximately $8,659
and $9,535 for the years ended August 31, 2008 and August 31, 2007,
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.

Loss per Share - Loss per share is based on the weighted average number of
shares outstanding during the periods. The effect of 62,591,244 and 60,556,794
warrants outstanding is not included for fiscal 2008 and 2007 respectively
since it would be anti-dilutive.

Equity based compensation -

Effective September 1, 2006, the Company adopted provisions of SFAS 123R for
recording equity based compensation.

The weighted average fair value of warrants has been estimated on the date of
grant using the Black-Scholes warrants pricing model. The Company has granted
warrants to purchase common stock to employees in the years ended
August 31, 2007, and August 31, 2008 which have been recorded as an expense in
the amount of $86,171 and $194,353, respectively, as such warrants vested
immediately upon issuance.


In accordance with SFAS 123, the fair value of each warrant 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,
                                     2008         2007

Risk free interest rate               3.10 %       4.74 %
Expected life                         4.75 yrs     4.75 yrs
Dividend rate                        0.00 %         0.0%
Expected volatility                    211%         112%



F-8









NOFIRE TECHNOLOGIES INC.
NOTES TO FINANCIAL STATEMENTS

FASB 157 - Fair Value Measurements

In September 2006, the FASB issued FASB Statement No. 157. This
Statement defines fair value, establishes a framework for measuring
fair value in generally accepted accounting principles (GAAP), and
expands disclosures about fair value measurements. This Statement
applies under other accounting pronouncements that require or permit
fair value measurements, the Board having previously concluded in those
accounting pronouncements that fair value is a relevant measurement
attribute. Accordingly, this Statement does not require any new fair
value measurements. However, for some entities, the application of this
Statement will change current practices. This Statement is effective
for financial statements for fiscal years beginning after November 15,
2007. Earlier application is permitted provided that the reporting
entity has not yet issued financial statements for that fiscal year.
Management believes this Statement will have no impact on the financial
statements of the Company once adopted.

FASB 159 - Fair Value Option for Financial Assets and Financial Liabilities

In February 2007, the FASB issued FASB Statement No. 159, ?The Fair Value
Option for Financial Assets and Financial Liabilities ? Including an Amendment
of FASB Statement No. 115? (SFAS 159). This Statement provides companies with
an option to measure, at specified election dates, many financial instruments
and certain other items at fair value that are not currently measured at fair
value. A company that adopts SFAS 159 will report unrealized gains and losses
on items for which the fair value option has been elected in earnings at each
subsequent reporting date. This Statement also establishes presentation and
disclosure requirements designed to facilitate comparisons between entities
that choose different measurement attributes for similar types of assets and
liabilities. This Statement is effective for fiscal years beginning after
November 15, 2007, which for the Company is the first quarter of fiscal 2009.
Management doesn?t believe that the adoption of SFAS 159 will have a material
impact.

NOTE 2 - INVENTORIES:

Inventories, net of reserves, at August 31, 2008 consisted of the following:


Testing material   $  5,000
Raw material       $ 12,431
Finished goods      185,637
                   --------
                   $203,068
                   ========


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, 2008, settled liabilities payable totaled $378,031.

The Company is currently delinquent on its scheduled payments to certain
Creditors that were 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.
F-09
NOFIRE TECHNOLOGIES INC.
NOTES TO FINANCIAL STATEMENTS

NOTE 4 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

Accounts payable and accrued expenses consist of the following:


Legal fees                      $ 396,089
Commissions                        67,357
Interest                          562,976
Payroll and payroll taxes         114,222
Accounts payable                  330,164
Other                             139,925
                               ----------
                             $  1,610,733
                                =========



NOTE 5   RELATED PARTY TRANSACTIONS

Mr. Litwin is a principal of the law firm of Litwin & Tierman, P.A., which
provides certain legal services to the Company. At August 31, 2008, the
Company was obligated to that firm in the amount of $385,156. Expenses in
fiscal 2008 were $37,064 for legal services, and in fiscal 2007, $ 31,262.
In addition, Litwin & Holsinger (a predecessor to Litwin and Tierman P.A)
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.

During the three fiscal years ended 2008, the officers deferred a total of
$1,526,542 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 $421,097 at August 31, 2008.

During 2008 Mr.Oolie advanced the Company $48,437.

These advances are due on demand and bear interest at 15% per annum.

NOTE 6 CONVERTIBLE DEBENTURES AND OTHER DEBT:

In September 2005 an accredited investor loaned the Company $100,000 at 15%
interest. The note was due in one year and is collateralized by 2,000,000
shares of the Company s common stock to be held in escrow. An officer of the
Company also guaranteed the debt. In October  2006 the Company paid $40,000
of principal and interest to October 25, 2006 on the entire amount. As of
August 31, 2008, a portion of this amount is still due.


In conjunction with the above $100,000 note, ten year $.14 warrants were
issued for the purchase of 1,000,000 shares of the Company s common stock

In April 2006 the Company borrowed $25,000 from a director of the Company. The
note carries an interest rate of $500 per month. In conjunction with the
transaction the Company issued five-year warrants to purchase 50,000 shares of
the Company s common stock at an exercise price of $.20 per share.

As of December 15, 2008 the above amounts are still unpaid.






F-10

NOTES TO NOFIRE TECHNOLOGIES, INC.
FINANCIAL STATEMENTS

 In August 2006 the Company sold a 10% Convertible Debenture for $165,000.
The debenture was due in February 2007 and is convertible into the Company s
common stock at the rate of $0.10 per share. There was no beneficial
conversion feature to value for the conversion terms as the stock price
exceeded the conversion price on the debt issue date.

In conjunction with the above the Company issued 2,000,000 five-year
warrants convertible into the Company s common stock at the rate of $0.10
per share. The warrants vested immediately. These warrants were valued at
$87,010 and are being amortized over the term of the debt.

In February 2007 the Company and its lender extended the maturity date of the
10% Convertible Debenture in the amount of $165,000 to April 2007.
In conjunction with the above the Company issued 2,000,000 five-year
warrants exercisable into the Company?s common stock at the rate of $0.10
per share. The Company recorded an expense of $1,050,192 for this extension
fee.
On April 8, 2007, the Company and its lender extended the maturity date of
the 10% Convertible Debenture  in the amount of $165,000, to August 7, 2007.
The Company issued  warrants to purchase 1,000,000 shares of common stock with
a term of five years at an exercise price of $0.10 per share and
1,000,000 shares of common stock with a term of five years  at an exercise
price of $0.20. The warrants contain a repricing provision should shares be
issued at less than $0.10 during the term of the warrant. A cashless exercise
provision and certain provisions similar to the holders of common stock for
other equity related transactions are also provided. The market price of the
Company?s stock at the extension date was $0.45, hence the fair market value
of such warrants, $888,808, was expensed as an extension fee during the quarter
ended May 31, 2007.

The chairman of the board  pledged his stock holdings in the Company, and
the Company has pledged all of its assets, to secure the above Debenture (See
Note 7).

In September 2007 the Debenture with accrued interest was repaid in full.

During the quarter ended February 29, 2008 the Company borrowed $105,000
from three individuals all due by July 2008. The terms were 2% interest per
month.

In conjunction with the above five year warrants were issued to purchase 45,000
shares of the Company?s common stock at $.25 to $.30. These warrants are valued
at $12,294 and expensed in fiscal 2008. The warrants vested immediately.

During June 2008 the Company borrowed $10,000 from an individual.
The chairman of the board  pledged his stock holdings in an unrelated
company to secure the debt. The note carries a 2% per month interest charge and
is due in January 2009.

In conjunction with the above, the Company issued 8,000 warrants to purchase the
Company?s common stock at $.36 per share. These warrants are valued at $2,819
and expensed in fiscal 2008. The warrants vested immediately.

During July of 2008 the Company borrowed $15,000 from an individual.
The chairman of the board has pledged his stock holdings in an unrelated
company to secure the debt. The note carries a 2% per month interest charge and
is due in September 2008.

During August 2008 the Company borrowed $50,000 from an individual. The terms
were 2% interest per month, due May 31, 2009.
F-11



NOTES TO NOFIRE TECHNOLOGIES, INC.
FINANCIAL STATEMENTS
In conjunction with the above five year warrants were issued to
purchase 30,000 shares of the Company?s common stock at $0.30 per share.
These warrants are valued at $8,927 and expensed in fiscal 2008 The warrants
vested immediately.

Also during August 2008 an individual converted $14,000 of his loan into
50,000 shares of the Company?s common stock at $.28 per share.

Note 7? Manufacturing Agreement:

In March 2008, the Company entered into a Manufacturing Agreement, with a
Singapore based company. This Manufacturing Agreement has several financial
components which require payments over a period of time within a year. These
payments are for a 10 year license fee of $18,200, consultancy work totaling
$57,995 and prepaid material for product development. The license fee portion
and $7,800 of prepaid material were paid already and will be amortized over the
term of the agreement ratably. Once the Singapore company begins manufacturing
the Nofire products, the Singapore company will be obligated to pay a 2%
royalty on Nofire product sales.

In addition to the above the Company will generate additional profit from the
sale of propriety chemicals?to the licensee. These chemicals are necessary in
the manufacture of the product.

NOTE 8 - COMMITMENTS AND CONTINGENCIES:
Lease - The Company's lease of its facility expired on August 31, 2008 with a
total annual lease commitment of $153,500 for the year
ended August 31, 2008.

At present the Company is negotiating a new lease.
Rent expense, inclusive of taxes and insurance, was approximately $159,420
and $152,794 for the years ended August 31, 2008 and 2007, respectively.

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

As of December 2008, the balance due was approximately $7,000.

A complaint was filed in the Superior Court of New Jersey, Law Division, Bergen
County on May 27, 2008. It is alleged by the plaintiff that the Company entered
into a contract with Otis and June Hastings and $250,000 remains due and owing
under said contract. The Company maintains that it has fully satisfied the
terms of the contract, including all monetary obligations. On December 10, 2008
a  mediation was held but the case was not resolved. Discovery is proceeding.
The Company believes this lawsuit is without merit and intends to vigorously
dispute the claim.

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, 2008 and 2007.

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





F-12

NOFIRE TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS



                                    2008           2007
                                 ---------      ---------
Tax at statutory rate          $   592,000     $ 1,306,000
Permanent and other items         (209,000)     (1,011,000)
Temporary timing differences     ( 125,000)       (131,000)
State income tax, net of federal
  income tax benefit                 7,000          12,000
Valuation allowance               (265,000)       (176,000)
                                 ---------      ---------
                                 $   -          $    -
                                 =========      =========


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.

The Company has determined that the annual limitation under Section 382 on its
ability to utilize net operating loss carry forwards, totaling approximately
$1,856,000, to be approximately $150,000 per year expiring through 2010.
Subsequent to the date of the Plan, the Company has generated approximately
$10,474,000 in net operating losses, which expire through 2027.

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

                                         August 31,
                                   ------------------------
                                            2008
                                         ----------
Net operating loss carry forwards        $ 4,192,000
                                         ----------
Valuation allowance                       (4,192,000)
                                         ----------
                                         $    -
                                         ===========


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, 2008 and 2007.

At August 31, 2008, the Company has federal and state net operating loss
carry forwards for financial reporting and income tax purposes of
approximately $12,331,000, which can be used to offset current and future
taxable income through the year 2028.

During each of the fiscal years 2007 and 2006, the Company sold a portion of
its state net operating loss carry forwards realizing approximately
$20,788 and $38,255, respectively. The Company has not yet sold its net
operating loss carry forward for the fiscal year ended August 31, 2008.

NOTE 11 - MAJOR CUSTOMERS:
Sales to five customers represented 26%,17.4%, 9.7% 6.6% and 4.3% of net sales
for the year ended August 31, 2008. Sales to four customers represented 29% 14%
11% and 10.0% of net sales for the year ended August 31, 2007.
F-13

NOFIRE TECHNOLOGIES INC.
NOTES TO FINANCIAL STATEMENT

NOTE 12   WARRANTS AND COMMON STOCK:

For the years ended August 31, 2008 and 2007, a summary of the status of
warrants were as follows:

                                      2008                    2007
                                -------------------    --------------------
                                           Weighted                Weighted
                                 Number    Average       Number    Average
                                   of      Exercise        of      Exercise
                                 Shares     Price        Shares     Price
                               ----------  --------    ----------  --------
Outstanding, beginning of year   60,556,794   0.16     54,289,824   $0.17
Granted                           2,622,674   0.28      7,915,108    0.17

Exercised                          (347,500)  0.21      (867,400)    0.41
Cancelled/ forgiven                    -       -            -         -
Expired                            (240,724)  0.25       (780,738)   0.82
                               ----------    -----      ----------  -----
Outstanding, end of year         62,591,244   0.16      60,556,794    0.16
                               ==========    =====      ==========  =====
Exercisable, end of year         62,591,244   0.16      60,556,794    0.16
                               ============  =====    ==========    =====


The following table summarizes warrant data as of August 31, 2008:

                                            Outstanding and exercisable
                         Number of        Weighted-       Weighted    Number
                        Outstanding    average remaining   average exercisable
                                            life in        exercise
                                             years         price
                       ------------   ------------------ ----------- -
Range of exercise prices:
$.01-$.15               48,050,449           3.64            0.13    48,050,449
$.16-$.50               14,290,885           2.92            0.24    14,290,885
$.51-$.99                  203,113           3.64            0.43       203,113
$1.00 or more               46,797           3.62            1.10        46,797
                         ------------                                -----------

                        62,591,244                                   62,591,244

Information, at date of issuance, regarding warrant grants during the year
ended August 31, 2008:

                                      Shares       Weighted        Weighted
                                                   average         average
                                                   exercise        fair
                                                   price           value
                                   ------------   ------------   ---------
Exercise price exceeds
market price
Exercise price equals
market price                        2,622,675      $0.28          $0.26


Exercise price is less
than market price




F-14
                               NOFIRE TECHNOLOGIES, INC
                             NOTES TO FINANCIAL STATEMENT



The weighted average grant date fair value of warrants granted during the
year ended August 31, 2008 was $ 0.23. Warrants had been exercised by
holders during the year ended August 31, 2008 in the amount of 347,500 with
proceeds of $55,125.

During fiscal year ended August 31, 2008 the following equity
transactions occurred:

   The Company sold 519,348 shares of common stock and issued 259,674
five year warrants with exercise prices ranging from $0.25 to $0.60 per
share for $228,259, which was the then trading prices of the common stock on
each respective sale date.

The Company issued 1,658,000 warrants and 30,000 shares of common stock to
unrelated parties for the inducement of debt extensions and the lending of
additional monies during the year. These warrants have exercise prices ranging
from $0.24 to $0.39 per share and expire in five years. The Company recorded
$419,016 for the beneficial conversion rights and warrants issued in
connection with such debt extended.

The Company issued another 705,000 warrants for services rendered during the
year by consultants and its employees which such warrants and shares have been
fairly valued at $194,353, which has been expensed. These warrants have a
five-year term with exercise prices ranging from $0.28 to $0.34 per share. The
exercise prices were the then trading prices of the common stock at each
respective issue date.

All warrants vested immediately.


NOTE 13 - SUBSEQUENT EVENTS:

In October 2008 the Company received royalties from foreign sources of $57,731
covering amounts due through June 30, 2008.

The Company repaid an officer $59,000 of loans he had made to the Company.













F-15





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