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, 2002

       [  ]  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 $0.20 per share









                                     Page 1


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 31,2002    $249,102


Aggregate market value of the voting stock held by
non-affiliates as of December 2, 2002                       $3,779,820


Number of shares of common stock outstanding as of as of
December 2, 2002                                            20,627,530


Documents incorporated by reference:

                                 NONE


Transitional small business disclosure format.

                             YES___  NO X









                                     Page 2


                                PART I

Item 1.  DESCRIPTION OF BUSINESS

BACKGROUND OF THE COMPANY; REORGANIZATION

NoFire Technologies, Inc. ("NoFire" or the "Company") is a development
stage company 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 4 to Financial Statements,
page F-10.)


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.







                             Page 3

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 waterbased, 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 retardancy.  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 Backdraft 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

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.

Late in August 2002, the Company's patent attorney was notified that the
U.S. Patent and Trademark Office issued a Notice of allowance for the
following Patent Application, and a patent will be issued shortly:

     Pre-Fabricated Fireproof Bulkhead with Special Interlocking Joints
        for a ship.

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




                                 Page 4


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 and China.


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.

                            Page 5

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 three largest customers during the most recent fiscal year
represented 37%, 13% and 11% 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, and 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 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

                              Page 6


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 president 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 2, 2002, 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 at an approximate monthly rental of $10,230 pursuant to a
lease expiring August 31, 2003.


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

               None















                            Page 7


                                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.

                          2001-2002             2000-2001
     Quarter Ended      High      Low         High      Low
     -------------      ----      ---         ----      ---
     November 30       $0.47     $0.15       $0.4375   $0.3125
     February 29/28    $0.41     $0.31       $0.3125   $0.125
     May 31            $0.45     $0.36       $0.35     $0.13
     August 31         $0.45     $0.31       $0.65     $0.16

     (b)  HOLDERS
As of December 2, 2002, there were approximately 290 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.


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 five patents since August
1995, one patent allowed and to be issued shortly, and two applications
awaiting action by the U.S. Patent Office referred to in Item 1 - Business
of the Company.

Marketing efforts to develop new applications and establish new customers
were continued in fiscal 2002.  The efforts undertaken by the Company in
application development, product approvals and marketing initiatives
should assist it in creating greater sales in fiscal 2003 and beyond.



                               Page 8

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 fiscal year 2001, funds required to continue the Company's product
development and marketing efforts were provided by the private sale of
debentures of $1,000,000.  Those debentures, along with $500,000 sold in
the prior year and accrued interest of $94,640 were converted into common
stock during fiscal 2001 at the rate of $0.50 per share into 3,189,279
shares of common stock. The sale of debentures was to an accredited
investor who has advised the Company that he has and will continue to file
all reports with the SEC that he deems appropriate including Schedules 13D
and Forms 3 and 4.  During the year, the officers deferred $109,763 of
their salaries.  Also in fiscal 2001, $206,767 was obtained through the
sale of a portion of the Company's New Jersey Operating Loss Carry Forward
under a program sponsored by that state.

In fiscal 2002, the Company sold to an accredited investor a note
for $150,000.  The note bears interest at a rate of 8%, was due no later
than January 31, 2002 and was secured by the assignment of the proceeds
of an additional sale of the Company's New Jersey Net Operating Loss
Carry Forward.  $90,000 was repaid during the year.  The terms were
modified, and the $60,000 balance now has no specific maturity date and
no specific security.  In connection with the issuance of the note, five-
year warrants were granted for 100,000 shares of common stock at an
exercise price of $0.20 per share.  Also during fiscal 2002, additional
funding of $250,000 was obtained by the sale of 807,000 units consisting
of one share of common stock and five-year warrants to purchase 0.70363
shares at an exercise price of $0.50 per share.  The sales were made to
four accredited investors.  During the year, the officers deferred an
additional $311,650 of their salaries.   Also in fiscal 2002, $205,960
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.

                               Page 9

Because of limited cash resources, the Company has deferred payment of
$1,178,432 from the installments of the Chapter 11 liability to unsecured
creditors that were due in September 1996, 1997, 1998 and 1999.  Of the
delinquent amount, $790,686 is due to officers and directors of the
Company.  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, 2002 AND 2001

The Company remained a development stage company in fiscal year 2002.
Sales of $249,102 represented an increase of $9,917 or 4% from the
$239,185 in the prior year.

The net loss of $987,415 for fiscal year 2002 was $198,021 or 17%
less than the net loss of $1,185,436 in the prior year.

General and administrative expenses of $1,201,320 in fiscal year 2002
were $130,893 or 10% less than the prior year.  The most significant
decreases were $41,200 in testing expenses, $40,000 in marketing expenses,
$57,700 in professional fees, and $24,400 in travel expenses.

The $83,711 decrease in interest expense resulted mainly from the
conversion of debentures late in fiscal 2001.  During both fiscal 2001
and 2002, the Company realized about $206,000 through the sale of a
portion of its New Jersey Net Operating Loss Carry Forward under a program
sponsored by that state.
















                                  Page 10


Item 7.    FINANCIAL STATEMENTS

The Company's annual financial statements for the fiscal year ended
August 31, 2002, together with the report thereon by the Company's
independent auditors, Wiss & Company, LLP, ("Wiss"), 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.

None






































                                  Page 11



                                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

William A. Retz               62        Director and Chief
                                        Executive Officer

Sam Oolie                     66        Director, Chairman
                                        of the Board, Chief
                                        Operating Officer,
                                        Treasurer and Chief
                                        Financial Officer

Samuel Gottfried              56        Director, President,
                                        Chief Technical
                                        Officer and
                                        Assistant Treasurer

Bernard J. Koster             69        Director

Gerald H. Litwin              60        Director

Alphonso Margino              64        Vice President
                                        and 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.


William A. Retz
     Rear Admiral Retz USN (Ret) became Chief Executive Officer and a
director effective September 1, 2000.  Admiral Retz concluded a
distinguished thirty-two year career with the US Navy in 1995.  From 1996
to 1999 he was Vice President of ARAMARK Corp., a large managed services
company, and also was a consultant in his own company.  He presently serves
as a director of several non-profit organizations including Surface Navy
Association (PR Chair), National Defense Industrial Association (Vice
President) and Navy League of the US.





                             Page 12

Sam Oolie
     Mr. Oolie has served as a Director of the Company since September,
1993, as Chairman of the Board since August 16, 1995, and as Chief
Operating Officer since July 26, 1999.  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, 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.  On August 16, 1995 he was elected
President, Chief Technical Officer and Assistant Treasurer of the
Company.  Dr. Gottfried holds a doctorate in electrical engineering
from New York University and a Ph.D. in electrophysics 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. and prior to that, Litwin and
Holsinger, Hackensack, New Jersey.

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., previously the
principal of Gerald H. Litwin, P.A. and prior to that, a partner in the
law firm of Litwin & Holsinger, Hackensack, New Jersey.  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


                                 Page 13

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 and Radm Retz), an Audit Committee
(Mr. Koster and Mr. Litwin), 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, 2002, 2001, and 2000, 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, 2002, 2001, and 2000

Name and               Year Ended   Salary  Salary       Options  All other
Principal Position     August 31    Paid    Deferred(1)  SAR's  Compensation
------------------     ----------   ------  -----------  -----  -----------
Sam  Oolie                2002      $56,501   $97,600     (3)       None
Chairman  of the Board,   2001     $112,430   $36,251     None      None
Chief Operating Officer   2000     $153,605      None     None      None
since July 26, 1999 and
Chief Executive Officer
until July 26, 1999

William A. Retz           2002      $67,448  $103,323     (3)       None
Chief Executive Officer   2001     $125,733   $39,462     (2)    $10,080(2)
from September 1, 2000

Samuel Gottfried          2002      $88,379   $79,541     (3)       None
President and Chief       2001     $143,768   $24,616     (3)       None
Technical Officer         2000     $167,578      None     None      None

Alfonso Margino           2002      $42,563   $34,867     (3)       None
Vice President and        2001      $71,987    $5,753     None      None
Secretary since           2000      $78,005      None     None      None
June 15, 1998

                                 Page 14


Note (1)  Amounts shown as salary deferred for fiscal years 2001 and 2002
are payable when revenues or financings permit payment as determined by
the Board of Directors.

Note (2)  Warrants granted and compensation paid in the form of common
stock are discussed in the following description of RAdm Retz employment
agreement.

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.


EMPLOYMENT AGREEMENTS

On September 1, 2000, an employment agreement became effective with William
A. Retz, Rear Admiral, USN (Ret). The agreement is terminable by the
Company at any time, with or without defined cause.   Compensation consists
of a base annual salary of $165,000.  On the commencement date of the
agreement, 36,000 shares of common stock were released to RAdm Retz with the
$10,080 value recorded as additional compensation.  Also under the
agreement, a warrant for 500,000 shares of common stock was granted with
vesting of 100,000 shares on the first five anniversary dates of the
commencement date of the agreement.  All warrants expire on the earlier of
the seventh anniversary of the commencement date of the agreement or the
date at which a sale of the Company may occur.



















                    Page 15

Item 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
          AND MANAGEMENT

     The following table sets forth as of November 1, 2002 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 (1)                Percent of Class (2)
----------------           -------------------      ---------------------
William A. Retz                    236,000                 1.13%
NoFire Technologies, Inc.
21 Industrial Avenue
Upper Saddle River, NJ  07458

Sam Oolie                        1,900,000                 9.08%
NoFire Technologies, Inc.
21 Industrial Avenue
Upper Saddle River, NJ  07458

Samuel Gottfried                 2,038,000                 9.49%
NoFire Technologies, Inc.
21 Industrial Avenue
Upper Saddle River, NJ  07458

Alphonso Margino                   293,000                 1.41%
NoFire Technologies, Inc.
21 Industrial Avenue
Upper Saddle River, NJ  07458

Bernard J. Koster                  186,300                 0.90%
7 Old Smith Road
Tenafly, NJ  07670

Gerald H. Litwin                   185,000                 0.89%
Two University Plaza
Hackensack, NJ  07601

Robert Downey  (3)               2,937,353                12.93%
755 Park Avenue
New York, NY  10021

NF Partners  (3)                15,547,653                52.78%
667 Madison Avenue
New York, NY  10021

All officers and directors       4,838,300                21.64%
as a group (six persons)

                            Page 16


Note (1)  Shares Beneficially Owned includes fully vested warrants in the
following amounts: Retz 200,000; Oolie 300,000; Gottfried 838,000; Margino
105,000; Koster 102,500; Litwin 185,000; Downey 2,098,109; and NF Partners
8,827,410.

Note (2)  As of December 2, 2002, there were 20,627,530 shares of Common
Stock issued and outstanding.  Percentage of Class for all officers and
directors as a group is computed on 22,358,030 shares which includes
1,730,500 shares exercisable within 60 days pursuant to warrants owned by
all the persons included.

Note (3)  Mr. Downey and NF Partners are members of a group of accredited
investors who purchased their interest in the Company under agreements to
purchase units consisting of common stock and warrants for common stock at
varying prices beginning in 1998. The final purchase was made in fiscal
2000 and is discussed in the section on Liquidity and Capital Resources.
NF Partners purchased all of the debentures convertible into common stock
as described in that same section.  Forms 13D, which included as exhibits
the full text of the agreements, were filed with the SEC for each purchase
under the agreements and the purchase of convertible debentures.


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 10% 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 10%
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, 2002,
the Company believes that no director or officer of the Company or
beneficial owner of more than 10% 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.














                               Page 17


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.  No payments
have been made against these balances which are included in the Company's
liability for settled claims.

On September 5, 2000, the Company's Board of Directors authorized the
issuance of two five-year warrants to Dr. Gottfried entitling him to
purchase 222,000 shares and 278,000 shares respectively of the Company's
common stock at a price of $0.50 per share.  He immediately assigned the
warrant for 222,000 shares to an unrelated third party and retained the
warrant for 278,000 shares.  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 20, 2000, 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 $0.50 per share.  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 November 5, 2001, a five-year warrant was granted to RAdm
Retz to purchase 100,000 shares of the Company's Common Stock at a price of
$0.35 per share.  All of the retained warrants are included in the warrants
outstanding as noted in Item 11, Note 1.

Mr. Litwin is the principal of the law firm of Litwin & Tierman, P.A., and
provides certain legal services to the Company.  The Company is obligated to
that firm in the amount of $766,107 which includes fees for legal services
rendered during the pendency of the Company's bankruptcy reorganization
proceedings.  Interest has been accrued on unpaid balances since fiscal
1997.  Expenses of fiscal 2001 were $37,700 for legal services and $113,687
for interest charges, and in fiscal 2002, $36,457 in fees and $87,245 in
interest charges.  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.

During fiscal years 2001 and 2002, the officers deferred a total of $421,413
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
$6,200 at August 31, 2002.





                               Page 18

Item 13. EXHIBITS AND REPORTS ON FORM 8-K

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

    Independent Auditors' Report                             F-2

    Financial Statements:

      Balance Sheet as of August 31, 2002                    F-3

      Statements of Operations for the Years
        Ended August 31, 2002 and 2001 and
        the period July 13, 1987 (date of
        inception) through August 31, 2002                   F-4

      Statements of Changes in Stockholders' Equity
        (Deficiency) for the Years Ended August 31,
        1989 through August 31, 2002                      F-5 to F-6

      Statements of Cash Flows for the Years
        Ended August 31, 2002 and 2001 and
        the period July 13, 1987 (date of
        inception) through August 31, 2002                   F-7

      Notes to Financial Statements                      F-8 to F-15


2.  EXHIBITS

     Sarbanes-Oxley Act section 906 Certification        Exhibit 1


3.  REPORTS ON FORM 8-K

     None


Item 14.  CONTROLS AND PROCEDURES

Within the 90-day period prior to the date of this report, the Company's
Chief Executive Officer and Chief Financial Officer performed an evaluation
of disclosure controls and procedures, which have been designed to permit
the Company to effectively identify and timely disclose important
information.  They concluded that the controls and procedures were
effective.  Since the date of the evaluation no significant changes in
internal controls or in other factors that could significantly affect
internal controls have been made.

                               Page 19

                              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 9, 2002                 By: /s/ Sam Oolie
                                        ------------------------
                                        Sam Oolie,
                                        Chairman of the Board,
                                        Chief Operating Officer
                                        Treasurer and Chief Financial
                                        Officer

Date: December 9, 2002                 By: /s/ William A. Retz
                                        ------------------------
                                        William A. Retz,
                                        Chief Executive 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 9, 2002
Samuel Gottfried, Director


/s/ William A. Retz
-----------------------------               December 9, 2002
William A. Retz, Director


/s/ Bernard J. Koster
-----------------------------               December 9, 2002
Bernard J. Koster, Director


/s/ Gerald H. Litwin
-----------------------------               December 9, 2002
Gerald H. Litwin, Director


/s/ Sam Oolie
-----------------------------               December 9, 2002
Sam Oolie, Director


                               Page 20


I, Sam Oolie, certify that:

1. I have reviewed this annual report on Form 10-KSB of NoFire
Technologies, Inc.;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

   a) designed such disclosure controls and procedures to ensure that
   material information relating to the registrant, including its
   consolidated subsidiaries, is made known to us by others within those
   entities, particularly during the period in which this annual report is
   being prepared;

   b) evaluated the effectiveness of the registrant's disclosure controls
   and procedures as of a date within 90 days prior to the filing date
   of this annual report (the "Evaluation Date"); and

   c) presented in this annual report our conclusions about the
   effectiveness of the disclosure controls and procedures based on our
   evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's board of directors (or
persons performing the equivalent functions):

   a) all significant deficiencies in the design or operation of internal
   controls which could adversely affect the registrant's ability to record,
   process, summarize and report financial data and have identified for the
   registrant's auditors any material weaknesses in internal controls; and

   b) any fraud, whether or not material, that involves management or other
   employees who have a significant role in the registrant's internal
   controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal control

                       Page 21


subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.

Date: December 9, 2002                        /s/ Sam Oolie
                                              ---------------------------
                                              Sam Oolie,
                                              Chief Financial Officer










































                       Page 22


I, William A. Retz, certify that:

1. I have reviewed this annual report on Form 10-KSB of NoFire
Technologies, Inc.;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:

   a) designed such disclosure controls and procedures to ensure that
   material information relating to the registrant, including its
   consolidated subsidiaries, is made known to us by others within those
   entities, particularly during the period in which this annual report is
   being prepared;

   b) evaluated the effectiveness of the registrant's disclosure controls
   and procedures as of a date within 90 days prior to the filing date
   of this annual report (the "Evaluation Date"); and

   c) presented in this annual report our conclusions about the
   effectiveness of the disclosure controls and procedures based on our
   evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's board of directors (or
persons performing the equivalent functions):

   a) all significant deficiencies in the design or operation of internal
   controls which could adversely affect the registrant's ability to record,
   process, summarize and report financial data and have identified for the
   registrant's auditors any material weaknesses in internal controls; and

   b) any fraud, whether or not material, that involves management or other
   employees who have a significant role in the registrant's internal
   controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls

                             Page 23


subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.

Date: December 9, 2002                        /s/ William A. Retz
                                              ------------------------
                                              William A. Retz
                                              Chief Executive Officer










































                          Page 24



                 INDEX TO FINANCIAL STATEMENTS





                                                                Page
                                                               ------

Report of Independent Auditors                                  F-2

Financial Statements:

     Balance sheet at August 31, 2002                           F-3

     Statements of operations for the years ended
      August 31, 2002 and 2001 and the period July 13,
      1987 (date of inception) through August 31, 2002          F-4

     Statements of changes in stockholders' equity
      (deficiency) for the years ended August 31, 1989
      through August 31, 2002                              F-5 to F-6

     Statements of cash flows for the years ended
      August 31, 2002 and 2001 and the period July 13,
      1987 (date of inception) through August 31, 2002          F-7

     Notes to financial statements                         F-8 to F-15






















                                F-1

                  INDEPENDENT AUDITORS' REPORT


Board of Directors
NoFire Technologies, Inc.

We have audited the accompanying balance sheet of NoFire Technologies,
Inc. (A Development Stage Company) as of August 31, 2002 and the related
statements of operations, changes in stockholders' equity (deficiency)
and cash flows for the two years in the period then ended and the period
July 13, 1987, date of inception, through August 31, 2002.  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 audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America.  Those standards require that
we plan and perform the audits 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 audits provide 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. at August 31, 2002, and the results of its operations
and its cash flows for aforementioned periods 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 2 to
the financial statements, the Company has incurred substantial losses
from operations since inception and at August 31, 2002 had a
stockholders' deficiency of $3,081,179 and a working capital deficiency
of $3,126,004.  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 2.  The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.



                                            /s/ Wiss & Company, LLP
                                            WISS & COMPANY, LLP

Livingston, New Jersey
November 15, 2002



                               F-2

                     NOFIRE TECHNOLOGIES, INC.
                   (A Development Stage Company)

                         BALANCE SHEET
                        AUGUST 31, 2002

                            ASSETS

CURRENT ASSETS:
   Cash                                            $       483
   Accounts Receivable - trade                          26,086
   Inventories                                         138,285
   Prepaid expenses and other current assets            52,219
                                                   -----------
      Total Current Assets                                      $  217,073

EQUIPMENT, LESS ACCUMULATED DEPRECIATION
  OF $31,893                                                         8,819

OTHER ASSETS:
   Patents, less accumulated amortization
     of $1,516,404                                      16,627
   Security deposits                                    19,379
                                                    ----------
                                                                    36,006
                                                                ----------
                                                               $   261,898
                                                                ==========

       LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES:
   Current portion of settled liabilities          $ 1,178,432
   Accounts payable and accrued expenses             1,022,456
   Loans and advances payable to stockholders           10,550
   Deferred salaries                                 1,071,639
   Loan payable - 8%                                    60,000
                                                    ----------
      Total Current Liabilities                                  3,343,077

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIENCY):
   Common stock $.20 par value:
   Authorized - 50,000,000 shares
     Issued and outstanding - 20,627,530             4,125,506
   Capital in excess of par value                    3,352,919
   Deficit accumulated in the development stage    (10,559,604)
                                                    ----------
      Total Stockholders' Equity (Deficiency)                   (3,081,179)
                                                                ----------
                                                               $   261,898
                                                                ==========



             See accompanying notes to financial statements

                               F-3



                     NOFIRE TECHNOLOGIES, INC.
                   (A Development Stage Company)

                     STATEMENTS OF OPERATIONS

                                                             July 13, 1987
                                                        (Date of Inception)
                                  Year Ended August 31,         Through
                                    2002           2001     August 31, 2002
                                 ----------     ----------      ----------
NET SALES                       $   249,102    $   239,185     $ 1,302,200
                                 ----------     ----------      ----------
COSTS AND EXPENSES:
   Cost of sales                    125,549        106,221         681,742
   General and administrative     1,201,320      1,332,213      13,873,774
   Write-down of excess inventory      -              -             55,000
                                 ----------     ----------      ----------
                                  1,326,869      1,438,434      14,610,516
                                 ----------     ----------      ----------
LOSS FROM OPERATIONS             (1,077,767)    (1,199,249)    (13,308,316)
                                 ----------     ----------      ----------
OTHER EXPENSES (INCOME):
   Interest expense                 116,065        199,776       1,422,420
   Interest income                     (457)        (6,822)        (24,140)
   Reorganization items                -              -            365,426
   Litigation settlement               -              -            198,996
                                 ----------     ----------      ----------
                                    115,608        192,954       1,962,702
                                 ----------     ----------      ----------
LOSS BEFORE DISCONTINUED OPERATIONS
  AND EXTRAORDINARY ITEM         (1,193,375)    (1,392,203)    (15,271,018)

DISCONTINUED OPERATIONS                -              -         (1,435,392)
                                 ----------     ----------      ----------
LOSS BEFORE EXTRAORDINARY ITEM   (1,193,375)    (1,392,203)    (16,706,410)

EXTRAORDINARY ITEM -
   Gains on debt discharge             -              -            507,952
                                 ----------     ----------      ----------
LOSS BEFORE INCOME TAXES         (1,193,375)    (1,392,203)    (16,198,458)
DEFERRED INCOME TAX BENEFIT         205,960        206,767         412,727
                                 ----------     ----------      ----------
NET LOSS                        $  (987,415)   $(1,185,436)   $(15,785,731)
                                 ==========     ==========      ==========
WEIGHTED AVERAGE COMMON
  SHARES OUTSTANDING             20,028,931     17,294,084
                                 ==========     ==========
BASIC AND DILUTED LOSS
  PER COMMON SHARE:             $      (.05)   $      (.07)
                                 ==========     ==========

             See accompanying notes to financial statements

                                     F-4



                     NOFIRE TECHNOLOGIES, INC.
                   (A Development Stage Company)


     STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
<TABLE>
<CAPTION>
                                                                                       Deficit
                                                 Common Stock                        Accumulated
                                           ------------------------    Capital        During the
                                           Number of                  in Excess      Development
                                             Shares        Amount    of Par Value        Stage
                                           ----------    ----------    ----------   ------------
<S>                                        <C>          <C>           <C>          <C>
BALANCES, SEPTEMBER 1, 1988                      -      $      -      $      -     $        -
YEAR ENDED AUGUST 31, 1989:
   Issuance of common stock                     3,000         1,500          -              -
   Net loss                                      -             -             -           (45,844)
                                           ----------    ----------    ----------   ------------
BALANCES, AUGUST 31, 1989                       3,000         1,500          -           (45,844)
YEAR ENDED AUGUST 31, 1990:
   Issuance of common stock                        50         1,000          -              -
   Net loss                                      -             -             -          (278,916)
                                           ----------    ----------    ----------   ------------
BALANCES, AUGUST 31, 1990                       3,050         2,500          -          (324,760)
YEAR ENDED AUGUST 31, 1991:
   Adjustment due to reverse
     acquisition                               (3,050)       (2,500)        2,500           -
   Acquisition accounted for
     as a reverse purchase                  3,071,659           307          (307)      (517,893)
   Net loss                                      -             -             -          (592,276)
                                           ----------    ----------    ----------   ------------
BALANCES, AUGUST 31, 1991                   3,071,659           307         2,193     (1,434,929)
YEAR ENDED AUGUST 31, 1992:
   Issuance of common stock                   394,736            39     2,252,860           -
   Net loss                                      -             -             -        (1,414,562)
                                           ----------    ----------    ----------   ------------
BALANCES, AUGUST 31, 1992                   3,466,395           346     2,255,053     (2,849,491)
YEAR ENDED AUGUST 31, 1993
   Net loss                                      -             -             -        (1,357,669)
                                           ----------    ----------    ----------   ------------
BALANCES, AUGUST 31, 1993                   3,466,395           346     2,255,053     (4,207,160)
YEAR ENDED AUGUST 31, 1994
   Net loss                                      -             -             -          (699,650)
                                           ----------    ----------    ----------   ------------
BALANCES, AUGUST 31, 1994                   3,466,395           346     2,255,053     (4,906,810)
YEAR ENDED AUGUST 31, 1995
   Shares canceled in connection
     with the consummation of the
     reorganization plan                   (3,466,395)         (346)   (2,255,053)          -
   Net loss                                      -             -             -          (837,210)
   Effect of adoption of
     fresh-start reporting                       -             -       (2,814,258)     5,744,020
   Shares issued in connection
     with debt discharge at
     $.25 per share                           187,000        37,400         9,350           -
   Shares issued in connection
     with reorganization plan
     at $.25 per share                      8,000,000     1,600,000       400,000           -
                                           ----------    ----------    ----------   ------------
BALANCES, AUGUST 31, 1995                   8,187,000     1,637,400    (2,404,908)          -
</TABLE>
             See accompanying notes to financial statements

                               F-5




                     NOFIRE TECHNOLOGIES, INC.
                   (A Development Stage Company)


     STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
                          (Concluded)
<TABLE>
<CAPTION>
                                                                                       Deficit
                                                 Common Stock                        Accumulated
                                           ------------------------    Capital        During the
                                           Number of                  in Excess      Development
                                             Shares        Amount    of Par Value        Stage
                                           ----------    ----------    ----------   ------------
<S>                                       <C>           <C>          <C>          <C>
YEAR ENDED AUGUST 31, 1996
   Issuance of common stock
     under private placement
     at $1 per share                          300,000   $    60,000   $   240,000  $        -
   Issuance of common stock in
     exchange for services at
     $1 per share                              62,500        12,500        50,000           -
   Net loss                                                                           (1,634,802)
                                           ----------    ----------    ----------   ------------
BALANCES, AUGUST 31, 1996                   8,549,500     1,709,900    (2,114,908)    (1,634,802)
YEAR ENDED AUGUST 31, 1997:
   Issuance of common stock under
     private placement at a range
     of $.75 to $1 per share                1,117,700       223,540       869,160           -
   Net loss                                                                           (1,599,841)
                                           ----------    ----------    ----------   ------------
BALANCES, AUGUST 31, 1997                   9,667,200     1,933,440    (1,245,748)    (3,234,643)
YEAR ENDED AUGUST 31, 1998:
   Issuance of common stock under
     private placement at $.90
     per share, net of expenses
     of $76,745                             1,388,884       277,777       895,474           -
   Issuance of common stock under
     private placement at $1 per share        550,000       110,000       440,000           -
   Issuance of common stock in
     exchange for services at a
     range of $.50 to $1 per share            119,200        23,840        45,360           -
   Shares issued in connection with
     debt discharge at a range of
     $.89 to $1 per share                     220,350        44,070       162,509           -
   Net loss                                      -             -             -        (1,519,842)
                                           ----------    ----------    ----------   ------------
BALANCES, AUGUST 31, 1998                  11,945,634     2,389,127       297,595     (4,754,485)
YEAR ENDED AUGUST 31, 1999
   Issuance of common stock under
     private placements at a range
     of $.50 to $.72 per share,
     net of expenses of $19,793             2,071,115       414,223       845,986           -
   Shares issued in connection with
     debt discharge at a range of
     $.95 to $.99 per share                    19,225         3,845        14,636           -
   Net loss                                      -             -             -        (1,541,642)
                                           ----------    ----------    ----------   ------------
BALANCES, AUGUST 31, 1999                  14,035,974     2,807,195     1,158,217     (6,296,127)
YEAR ENDED AUGUST 31, 2000
   Issuance of common stock under
     private placements at $.67
     per share, net of expenses
     of $72,557                             1,641,792       328,358       699,085           -
   Issuance of common stock in
     exchange for conversion of
     convertible debentures at a
     rate of $.625 per share                  917,385       183,477       389,889           -
   Net loss                                      -             -             -        (2,090,626)
                                           ----------    ----------    ----------   ------------
BALANCES, AUGUST 31, 2000                  16,595,151     3,319,030     2,247,191     (8,386,753)
YEAR ENDED AUGUST 31, 2001
   Issuance of common stock in
     exchange for services at a
     rate of $.28 per share                    36,000         7,200         2,880           -
   Issuance of common stock in
     exchange for conversion of
     convertible debentures at a
     rate of $.50 per share                 3,189,279       637,856       956,784           -
   Net loss                                      -             -             -        (1,185,436)
                                           ----------    ----------    ----------   ------------
BALANCES, AUGUST 31, 2001                  19,820,430     3,964,086     3,206,855     (9,572,189)
YEAR ENDED AUGUST 31, 2002
   Value of warrants issued in
     connection with short-term loan
     treated as a discount on
     the loan                                    -             -           13,484           -
   Repricing of warrants                         -             -           44,000           -
   Issuance of common stock under
     private placements at $.50
     per share                                807,100       161,420        88,580           -
   Net loss                                      -             -             -          (987,415)
                                           ----------    ----------    ----------   ------------
BALANCES, AUGUST 31, 2002                  20,627,530    $4,125,506    $3,352,919   $(10,559,604)
                                           ==========    ==========    ==========   ============

</TABLE>
             See accompanying notes to financial statements

                               F-6


                     NOFIRE TECHNOLOGIES, INC.
                   (A Development Stage Company)

                     STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                           July 13, 1987
                                                                       (Date of Inception)
                                             Year Ended August 31,            Through
                                               2002           2001        August 31, 2002
                                            ----------     ----------        ----------
<S>                                        <C>            <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                  $  (987,415)   $(1,185,436)     $(15,785,731)
 Adjustments to reconcile net loss
   to net cash flows from
   operating activities:
     Depreciation and amortization               8,930          8,929         1,834,948
     Extraordinary gain on debt discharge         -              -             (507,952)
     Amortization of interest expense for
       settled liabilities                        -              -              634,522
     Amortization of interest expense for
       discount on note payable                 13,484           -               13,484
     Revaluation of assets and liabilities
       to fair value                              -              -              482,934
     Litigation settlement                        -              -              198,996
     Common stock issued in exchange
       for services                               -            10,080           141,780
     Write-down of excess inventory               -              -               55,000
     Repricing of warrants                      44,000           -               44,000
     Changes in operating assets and
       liabilities (net of effects from
       reverse purchase acquisition):
         Accounts receivable - trade            (3,633)         1,259           (26,086)
         Inventories                            14,810        (50,401)         (193,285)
         Prepaid expenses                         (955)         3,258           (52,219)
         Accounts payable and accrued
           expenses                            253,971         67,266         3,501,447
         Security deposits                        -              -              (19,379)
         Deferred salaries                     311,950        109,763         1,071,939
         Obligation from discontinued
           operations                             -              -               51,118
                                            ----------     ----------        ----------
            Net cash flows from
             operating activities             (344,858)    (1,035,282)       (8,554,484)
                                            ----------     ----------        ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchase of equipment                            -              -              (40,712)
 Increase in patent costs                         -              -             (164,320)
 Acquisition accounted for as a
   reverse purchase                               -              -             (517,893)
                                              ----------     ----------        ----------
            Net cash flows from
             investing activities                 -              -             (722,925)
                                            ----------     ----------        ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Proceeds from long-term debt                     -              -            1,506,113
 Principal payments on long-term debt             -              -              (75,000)
 Principal payments on settled
   liabilities                                  (9,071)       (23,913)       (2,884,416)
 Proceeds from issuance of common
   stock, net of related expenses              250,000           -            8,724,943
 Proceeds from short-term loan                  60,000           -               60,000
 Payments on advances from stockholder            -              -              (60,750)
 Loans and advances received from
   stockholders                                   -              -               79,053
 Interest accrued on loans from
   stockholder                                    -              -               (8,053)
 Proceeds from issuance of
   convertible debentures                         -         1,000,000         1,936,002
                                            ----------     ----------        ----------
            Net cash flows from
             financing activities              300,929        976,087         9,277,892
                                            ----------     ----------        ----------
NET CHANGE IN CASH                             (43,929)       (59,195)              483

CASH AT BEGINNING OF YEAR                       44,412        103,607              -
                                            ----------     ----------        ----------
CASH AT END OF YEAR                        $       483    $    44,412       $       483
                                            ==========     ==========        ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest paid                            $     6,132    $     2,895       $    80,253
                                            ==========     ==========        ==========
  Income taxes paid (benefit)              $  (205,960)   $  (206,767)      $  (412,727)
                                            ==========     ==========        ==========
  Common stock issued in exchange
    for settlement of debt                 $      -       $ 1,594,640       $ 2,439,816
                                            ==========     ==========        ==========
  Common stock issued in exchange
    for subscriptions receivable           $      -       $      -          $    95,000
                                            ==========     ==========        ==========
  Common stock issued in exchange
    for services                           $      -       $      -          $   131,700
                                            ==========     ==========        ==========

</TABLE>
             See accompanying notes to financial statements


                               F-7



                NOFIRE TECHNOLOGIES, INC.
              (A Development Stage Company)

              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.  The Company, which has realized
limited sales while it continues to develop a market for its products, has
been operating as a development stage enterprise since inception.

     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 cash, 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 $2,324 and $2,323 for
the years ended August 31, 2002 and 2001, respectively.

     Intangible Assets - Patents are amortized on a straight-line basis
over 5 years.  Amortization expense totaled $6,606 for each of the
years ended August 31, 2002 and 2001.

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

     Risk Concentrations - The following summarizes the risk concentration
of the Company as of August 31, 2002:

        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 two customers comprising a
         concentrated risk.  Management continually evaluates the credit
         risk associated with accounts receivable and believes that the
         risk is limited.

                           F-8


                NOFIRE TECHNOLOGIES, INC.
              (A Development Stage Company)

              NOTES TO FINANCIAL STATEMENTS

     Advertising Costs - The Company expenses costs for trade shows,
marketing and promotional activities as incurred.  Expenses were $14,000
and $52,000 for the years ended August 31, 2002 and August 31, 2001,
respectively.

     Stock-Based Compensation - Statement of Financial Accounting
Standards No. 123 "Accounting for Stock-Based Compensation," ("FAS 123")
encourages, but does not require companies to record compensation cost,
for stock-based employee compensation plans, at fair value.  The Company
has chosen to continue to account for stock-based compensation using the
intrinsic value method prescribed in Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees," and related
Interpretations.  Accordingly, compensation cost for warrants is
recognized as the excess, if any, of the quoted market price of the
Company's stock at the date of the grant over the amount an employee must
pay to acquire the stock.

     Earnings (Loss) Per Share - Statement of Financial Accounting
Standards (SFAS) No. 128 "Earnings Per Share" requires the disclosure of
both diluted and basic earnings per share.  Basic earnings per share is
based upon the weighted average of all common shares outstanding.  The
computation of diluted loss per share does not assume the conversion,
exercise or contingent issuance of securities which would have an
antidilutive effect on loss per share.

     Recent Accounting Pronouncements - In August 2001, the FASB issued,
SFAS No. 143 Accounting for Asset Retirement Obligations, which requires
companies to record a liability at fair value for asset retirement
obligations in the period in which they are incurred.  The associated
asset retirement costs are capitalized as part of the carrying amount of
the long-lived asset.  This Statement is effective for companies for
fiscal years beginning on or after June 1, 2003.  The Company is currently
evaluating the provisions of this Statement, but does not believe
adoption of the statement will result in material impact to its results
of operations; or financial position.  In October 2001, the FASB issued
SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, which provides a single accounting model for long-lived assets to
be disposed of.  This Statement is effective for the Company for the
fiscal year beginning August 1, 2002.  The Company is currently evaluating
the provisions of this Statement, but does not anticipate that adoption
will result in a material impact to its results of operations or financial
position.  In June 2002, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 146, "Accounting
for Costs Associated with Exit or Disposal Activities" (FAS 146) which
addresses the accounting and reporting for costs associated in an exit or
disposal activity.  FAS 146 requires that a liability for a cost
associated in an exit or disposal activity be recognized when the
liability is incurred rather than being recognized at the date of an
entity's commitment to an exit plan, which had been the method of
recognition under Emerging Issues Task Force Issue No. 94-3, which
FAS 146 supersedes.  FAS 146, which will be effective for exit or disposal
activities initiated after December 31, 2002, is not expected to have a
material impact on the company's results of operation, financial position
or cash flows.


NOTE 2 - BASIS OF PRESENTATION AND MANAGEMENT'S ACTIONS TO OVERCOME
         OPERATING AND LIQUIDITY PROBLEMS:

     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

                        F-9


                NOFIRE TECHNOLOGIES, INC.
              (A Development Stage Company)

              NOTES TO FINANCIAL STATEMENTS

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.

     Under the principles of fresh start reporting, the Company's total
assets were recorded at their estimated reorganization value, with the
reorganization value allocated to identifiable assets on the basis of
their estimated fair value.  The Company's reorganization value of
$1,750,000 included its patents for its intumescent fire retardant
products which were valued at $1,500,000.

     As discussed in Note 4, 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.

     Management believes that actions it has undertaken to revise the
Company's operating and marketing structure will provide it with the
opportunity to generate the revenues needed to realize profitable
operations and/or obtain the necessary financing and/or capital for the
payment of outstanding obligations.


NOTE 3 - INVENTORIES:

     Inventories at August 31, 2002 consisted of the following:
               Raw material       $ 27,694
               Finished goods      110,591
                                  --------
                                  $138,285
                                  ========

     At August 31, 2002, the Company had advanced approximately $40,000 to
a vendor towards the future purchase of inventory.  The advance has been
included as a component of prepaid expenses and other current assets.


NOTE 4 - 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, 2002, settled liabilities payable totaled
$1,178,432.

     The claims settled were payable by the Company through September 27,
1999 and during the year ended August 31, 2002, the Company repaid
approximately $9,000 towards settled claims.

                         F-10


                NOFIRE TECHNOLOGIES, INC.
              (A Development Stage Company)

              NOTES TO FINANCIAL STATEMENTS

     The Company is currently delinquent on its scheduled payments to
certain creditors due September 27, 1996 through 1999 in the gross amount
of approximately $1,178,432.  The Company does not have funds available
for repayment and without additional sales, capital or financing, payments
cannot be made.


NOTE 5 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

     Accounts payable and accrued expenses consist of the following:

               Legal fees and interest thereon  $766,107
               Interest                            9,386
               Payroll and payroll taxes          25,191
               Accounts payable                  206,812
               Other                              14,960
                                              ----------
                                              $1,022,456
                                              ==========


NOTE 6 - LOAN PAYABLE

     In September 2001, the Company received $150,000 from an accredited
investor in exchange for a note bearing interest at 8% and payable no
later than January 31, 2002.  $90,000 of principal was repaid during the
period.  The terms were modified, and the unsecured $60,000 balance now
has no specific maturity date.

NOTE 7 - SETTLED CLAIMS PAYABLE TO RELATED PARTIES:

     At August 31, 2002, settled claims payable includes amounts due to
current officers and members of the Board of Directors of the Company
totaling approximately $791,000, all of which are delinquent (Note 4).


NOTE 8 - COMMITMENTS AND CONTINGENCIES:

     Lease - The Company's lease of its facility expires on August 31,
2003 with total lease commitments for the year then ended approximating
$123,000.

     Rent expense, inclusive of taxes and insurance, was approximately
$119,000 and $111,000 for the years ended August 31, 2002 and 2001,
respectively.

                           F11



                NOFIRE TECHNOLOGIES, INC.
              (A Development Stage Company)

              NOTES TO FINANCIAL STATEMENTS

Employment Contract - Effective September 1, 2000, the Company entered
into an employment agreement with its Chief Executive Officer.
Compensation consists of an annual base salary of $165,000.  Additionally,
the Company granted a seven-year warrant for the purchase of 500,000 shares
of common stock, at an exercise price of $0.5625 per share, with vesting of
100,000 shares on the first five anniversary dates of the commencement date
of the agreement.

Deferred Salaries - During fiscal years 2001 and 2002, the four officers
deferred a portion of their salaries.  Effective June 2, 2002, interest at
the annual rate of 6% was accrued on the salaries deferred.  At August 31,
2001 accrued salaries were $109,800.  At August 31, 2002 accrued salaries
were $421,400 and accrued interest was $6,200


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, 2002 and 2001.

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

                                              2002           2001
                                           ---------      ---------
          Tax at statutory rate            $ 321,000      $ 403,000
          Permanent and other items           (2,000)        (1,000)
          State income tax, net of federal
            income tax benefit                20,000         42,000
          Valuation allowance               (339,000)      (444,000)
                                           ---------      ---------
                                           $    -         $    -
                                           =========      =========

     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 carryforward periods.
The Company has determined that the annual limitation under Internal
Revenue Code Section 382 on its ability to utilize net operating loss
carryforwards, 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 $7,046,000 in net operating losses.

                               F-12


                NOFIRE TECHNOLOGIES, INC.
              (A Development Stage Company)

              NOTES TO FINANCIAL STATEMENTS

     The significant components of the Company's net deferred tax asset are
summarized as follows:
                                                    August 31,
                                             ------------------------
                                                2002           2001
                                             ----------     ---------
          Net operating loss carryforwards   $2,933,000     $2,912,000
          Deferred compensation                 431,000        304,000
                                             ----------     ----------
                                              3,364,000      3,216,000
          Valuation allowance                 3,364,000      3,216,000
                                             ----------     ----------
                                             $     -        $     _
                                             ==========     ==========

     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 Company's prior history of recurring losses,
that a full valuation allowance is appropriate at August 31, 2002 and 2001.

     At August 31, 2002, the Company has federal and state net operating
loss carryforwards for financial reporting and income tax purposes of
approximately $8,103,000 and $2,960,000, respectively, which can be used to
offset current and future taxable income through the year 2021.  During
each of the fiscal years 2002 and 2001, the Company sold a portion of its
state net operating loss carryforwards (NOL) realizing approximately
$206,000 and $207,000 respectively.  The Company has been informed that it
is eligible to sell another portion of it state NOL during fiscal 2003.

NOTE 11 - MAJOR CUSTOMERS:

     Sales to three customers represented 37%, 13%, and 11% of net sales
for the year ended August 31, 2002.  Sales to two customers represented
23% and 11% of net sales for the year ended August 31, 2001.


NOTE 12 - WARRANTS:

     For the years ended August 31, 2002 and 2001, a summary of the status
of warrants was as follows:
                                       2002                    2001
                                -------------------    --------------------
                                           Weighted                Weighted
                                 Number    Average       Number    Average
                                   of      Exercise        of      Exercise
                                 Shares     Price        Shares     Price
                               ----------  --------    ----------  --------
Outstanding, beginning of year 19,341,753   $1.02      18,261,753   $1.05
Granted                           847,897    0.44       1,080,000    0.54
Expired                          (323,500)   1.98            -        -
                               ----------   -----      ----------   -----
Outstanding, end of year       19,866,150   $0.91      19,341,753   $1.02
                               ==========   =====      ==========   =====
Exercisable, end of year       19,452,150   $0.92      18,536,253   $1.04
                               ==========   =====      ==========   =====

                          F-13


                NOFIRE TECHNOLOGIES, INC.
              (A Development Stage Company)

              NOTES TO FINANCIAL STATEMENTS

     The following table summarizes warrant data as of August 31, 2002:

                                       Weighted
                                        Average
            Exercise     Number        Remaining       Number
              Price    Outstanding   Life in Years   Exercisable
            --------   -----------   -------------   -----------
             $0.20         100,000        4.1            100,000
              0.35         985,000        4.2            985,000
              0.40         120,000        2.7            120,000
              0.50       3,507,897        2.1          3,507,897
              0.5625       700,000        4.7            300,000
              0.67       4,104,480        2.4          4,104,480
              0.72       2,777,780        1.8          2,777,780
              0.75          22,500        2.3             22,500
              1.00       4,663,718        1.1          4,663,718
              1.25          52,000        1.5             52,000
              1.50         178,500        0.6            178,500
              2.00       2,231,775        0.4          2,217,775
              3.00         422,500        1.0            422,500
                        ----------      ------        ----------
                        19,866,150        1.7         19,452,150
                        ==========      ======        ==========

     The weighted average grant date fair value of warrants granted during
the year ended August 31, 2002 was $0.40.  No warrants had been exercised
by holders as of August 31, 2002.

     During the year ended August 31, 2001, the exercise dates for warrants
for 335,000 shares granted from August 1995 to August 1996 were extended to
December 31, 2001.  During the year ended August 31, 2002, the exercise
date for warrants for 877,100 shares granted from April 1997 to December
1997 were extended to December 31, 2002.

     In November 2001, warrants to purchase 885,000 shares of the
Company's common stock, granted from October 1996 to June 1997, were
repriced whereby the exercise price was reduced from $2.00 per share to
$0.35 per share.  At August 31, 2002, the Company recognized approximately
$44,000 of compensation expense relating to this repricing.

     In November 2001, the Company issued warrants to the Chief Executive
Officer of the Company to purchase 100,000 shares of the Company's common
stock for $0.35 per share, expiring in five years.  The warrants vest
immediately.

     In December 2001, the Company issued warrants to four employees and
two outside directors to purchase a total of 80,000 shares of the
Company's common stock for $0.40 per share, expiring in five years.  The
warrants vest immediately.  Also in December 2001, warrants for 323,500
shares expired.

     In May 2002, the Company issued five-year warrants to three
accredited investors for the purchase of 454,318 shares of the Company's
common stock at an exercise price of $0.50 per share.

     In July 2002, the Company issued five-year warrants to an accredited
investor for the purchase of 113,579 shares of the Company's common stock
at an exercise price of $0.50 per share.

     Proforma results of operations, had FAS 123 been used to account for
stock-based compensation cost, would have resulted in additional
compensation expense due to the vesting of warrants for 558,000 shares
during the year ended August 31, 2002.  Compensation expense, based
on the Black-Scholes option pricing formula, for those warrants, is
$227,000, resulting in a pro forma loss of $1,214,000 and $1,297,000 for
the fiscal years 2002 and 2001 respectively, or a corresponding loss per
share of $0.06 and $0.07.

     The fair value of the warrants was estimated at the date of grant
using a Black-Scholes option pricing model with the following weighted-
average assumptions, respectively:  risk-free interest rates of 4.0%,
dividend yield of 0.0%, volatility factors of the expected market price of
the Company's Common Stock of 247% and an expected life equaling the
warrants' exercise periods.

     The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting
restrictions and are fully transferable.  In addition, option valuation
models require the input of highly subjective assumptions including the
expected stock price volatility.  Because the Company's warrants have

                             F-14


                NOFIRE TECHNOLOGIES, INC.
              (A Development Stage Company)

              NOTES TO FINANCIAL STATEMENTS

characteristics significantly different from those of normal publicly
traded stock, and because changes in the subjective input assumptions can
materially affect the fair value estimate, in management's opinion, the
existing models do not necessarily provide a reliable single measure of
the fair value of its stock warrants.


NOTE 13 - SUBSEQUENT EVENTS:

     In November 2002, the Company issued a $75,000 note, to an unrelated
party, bearing interest at an annual rate of 12% and payable on the earlier
of the receipt by the Company of the proceeds from the sale of the
Company's state net operating loss carryforwards or December 31, 2002.


                             F-15




                                                      Exhibit 1

                        CERTIFICATION


Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a)
and (b) of section 1350, chapter 63 of title 18, United States Code), each
of the undersigned officers of NoFire Technologies, Inc., a Delaware
corporation (the Company), does hereby certify, to the best of such
officer's knowledge and belief, that:

   (1) The Annual Report on Form 10-KSB for the year ended August 31, 2002
of the Company fully complies with the requirements of section 13 (a) or
15 (d) of the Securities Exchange Act of 1934: and

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

Dated: December 9, 2002                       /s/ William A. Retz
                                              -----------------------
                                              Chief Executive Officer


Dated: December 9, 2002                       /s/ Sam Oolie
                                              -----------------------
                                              Chief Financial Officer























                                EXHIBIT 1