<PAGE>
                         SECURITIES AND EXCHANGE COMMISSION

                              Washington, D.C.  20549

                                   FORM 10-QSB

               [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                          OF THE SECURITIES EXCHANGE ACT OF 1934
                      For the Quarterly Period Ended May 31, 1997

               [ ]  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
                                                -------------

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Securities Exchange Act of 1934 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 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
                        ---     ---

State the number of shares of each of the issuer's classes of common equity
outstanding at the latest practicable date: 9,597,200 shares of Common
Stock as of July 3, 1997.

Transitional Small Business Disclosure Format (check one):
                         YES            NO  X
                             ---           ---


                                Page 1
<PAGE>
                        NOFIRE TECHNOLOGIES, INC.
                                    
                               FORM 10-QSB
                                    
                                  INDEX

PART I -  FINANCIAL INFORMATION                                 PAGE

Item 1.   Unaudited Financial Statements:

          Balance Sheets as of May 31, 1997 
          and August 31, 1996                                    3

          Statements of Operations for
          the Nine Months ended May 31, 1997
          and 1996; and the Three Months ended
          May 31, 1997 and 1996                                  5

          Statements of Cash Flows for the
          Nine Months ended May 31, 1997 and 1996                6

          Notes to Financial Statements                          8

Item 2.   Management's Discussion and Analysis of
          Financial Condition and Results of Operations         10


PART II - OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K                      12

          Signatures                                            12



                                Page 2
<PAGE>
                          Part I - FINANCIAL INFORMATION

Item 1.  FINANCIAL STATEMENTS

                        NOFIRE TECHNOLOGIES, INC.
                       (Development Stage Company)

                            BALANCE SHEETS

                                                    May 31,     August 31,
                                                     1997           1996
                                                ------------   ------------
                                                 (UNAUDITED)
                    ASSETS

CURRENT ASSETS:
     Cash                                       $      4,945   $      2,474
     Inventory                                       100,394         56,761
     Prepaid expenses and other current assets        13,922          7,722
                                                ------------   ------------
     Total Current Assets                            119,261         66,957
                                                ------------   ------------
EQUIPMENT, less accumulated depreciation               4,631          6,240
                                                ------------   ------------
OTHER ASSETS:
     Patents, less accumulated amortization
       of $525,000 at May 31, 1997 and
       $300,000 at August 31, 1996                   975,000      1,200,000
     Security deposits                                18,473         18,473
     Excess of reorganization value over net
       assets, less accumulated amortization
       of $73,857 at May 31, 1997 and
       $42,204 at August 31, 1996                    137,164        168,817
                                                ------------   ------------
                                                   1,130,637      1,387,290
                                                ------------   ------------
                                                $  1,254,529   $  1,460,487
                                                ============   ============

See accompanying notes to financial statements


                                Page 3
<PAGE>

                     NOFIRE TECHNOLOGIES, INC.
                    (Development Stage Company)

                        BALANCE SHEETS

                                                     May 31,    August 31,
                                                      1997         1996
                                                ------------   ------------
                                                 (UNAUDITED)
     LIABILITIES AND STOCKHOLDERS' EQUITY
               (DEFICIENCY)

CURRENT LIABILITIES:
     Current portion of settled liabilities     $    790,441   $    592,853
     Accounts payable and accrued expenses           439,405        323,773
     Due to stockholders                             101,153         76,253
     Deferred salaries                               339,822        200,970
     Other current liabilities                        20,000         20,000
                                                ------------   ------------
                                                   1,690,821      1,213,849
                                                ------------   ------------

OTHER LIABILITIES
     Settled liabilities, less current
       maturities                                  1,555,823      1,895,089
     Convertible debentures - 8% due
       January 31, 1999                              436,002        436,002
                                                ------------   ------------
                                                   1,991,825      2,331,091
                                                ------------   ------------

STOCKHOLDERS'  EQUITY (DEFICIENCY):
     Common stock $.20 par value:
      Authorized - 25,000,000 shares
      Issued and outstanding - 9,423,500 
        shares at May 31, 1997 and 8,549,500
        shares at August 31, 1996                  1,884,700      1,709,900
     Capital deficiency                           (1,440,706)    (2,114,908)
     Retained earnings (deficit)                  (2,872,111)    (1,634,802)
     Unearned stock compensation                       -            (44,643)
                                                 -----------   ------------
     Total Stockholders' Equity (Deficiency)      (2,428,117)    (2,084,453)
                                                 -----------   ------------
                                                 $ 1,254,529   $  1,460,487
                                                 ===========   ============

See accompanying notes to financial statements



                                Page 4
<PAGE>
                           NOFIRE TECHNOLOGIES, INC.
                          (Development Stage Company)
                     
                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                                                     Cumulative
                                            For the Nine Months          For the Three Months        Development
                                                Ended May 31                  Ended May 31              Stage
                                            1997           1996           1997           1996    (Since Inception)
                                         -----------   -----------     -----------   -----------      -----------
                                                 (UNAUDITED)                  (UNAUDITED)
<S>                                      <C>           <C>             <C>            <C>             <C>
NET SALES                                $    35,067   $    35,274     $     7,484    $    6,054      $   392,992

COSTS AND EXPENSES:
     Cost of sales                            16,270        21,650           3,369         3,694          240,024
     Selling, general and administrative   1,033,728     1,106,912         302,702       368,058        6,224,447
                                         -----------   -----------     -----------   -----------      -----------
                                           1,049,998     1,128,562         306,071       371,752        6,464,471
                                         -----------   -----------     -----------   -----------      -----------
LOSS FROM OPERATIONS                      (1,014,931)   (1,093,288)       (298,587)     (365,698)      (6,071,479)
                                         -----------   -----------     -----------   -----------      -----------

OTHER EXPENSES:
     Interest expense                        222,378       184,394          78,815        65,756          483,302 
     Interest income                           -             -               -             -               (6,774)  
     Reorganization items                      -             -               -             -              365,426
     Litigation settlement                     -             -               -             -              198,996
                                         -----------   -----------     -----------   -----------      -----------
                                             222,378       184,394          78,815        65,756        1,040,950
                                         -----------   -----------     -----------   -----------      -----------
LOSS BEFORE DISCONTINUED OPERATIONS
     AND EXTRAORDINARY ITEM               (1,237,309)   (1,277,682)       (377,402)     (431,454)      (7,112,429)

DISCONTINUED OPERATIONS                        -             -               -             -           (1,435,392)
                                         -----------   -----------     -----------   -----------      -----------
LOSS BEFORE EXTRAORDINARY ITEM            (1,237,309)   (1,277,682)       (377,402)     (431,454)      (8,547,821)

EXTRAORDINARY ITEM - Gain on
     debt discharge                            -             -               -             -              449,583
                                         -----------   -----------     -----------   -----------      -----------
NET LOSS                                 $(1,237,309)  $(1,277,682)    $  (377,402)  $  (431,454)     $(8,098,238)
                                         ===========   ===========     ===========   ===========      ===========

WEIGHTED AVERAGE COMMON SHARES
          OUTSTANDING                      9,066,833     8,188,782       8,998,583     8,188,782
                                         ===========   ===========     ===========   ===========

EARNINGS (LOSS) PER SHARE                $     (0.14)   $    (0.16)    $     (0.04)  $     (0.05)
                                         ===========   ===========     ===========   ===========
</TABLE>
See accompanying notes to financial statements



                                       Page 5
<PAGE>
                   NOFIRE TECHNOLOGIES, INC.
                  (Development Stage Company) 
        
                    STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                    During
                                                       For the Nine Months        Development
                                                          Ended May 31              Stage
                                                        1997        1996       (Since Inception)
                                                    -----------  -----------     -----------
                                                     (UNAUDITED)
<S>                                                 <C>          <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net loss                                       $(1,237,309) $(1,277,682)    $(8,098,238)
     Adjustments to reconcile net loss to
      net cash flows from operating activities:
        Depreciation and amortization                   259,296      259,068         697,660
        Extraordinary gain on debt discharge              -            -            (449,583)
        Interest expense incurred to state settled
          liabilities at present value                  173,760      164,504         382,018
        Revaluation of assets and liabilities
          to fair value                                   -            -             482,934
        Litigation settlement                             -            -             198,996
        Common stock released in exchange for services   44,643        -              62,500
        Changes in operating assets and liabilities
         (net of effects from reverse purchase
         acquisition)
          Inventory                                     (43,633)     (19,889)       (100,394)
          Prepaid expenses                               (6,200)       1,245         (13,922)
          Accounts payable and accrued expenses         115,632     (123,467)      2,706,392
          Security deposits                               -           (8,714)        (18,473)
          Deferred salaries                             138,852      138,852         339,822
          Obligation from discontinued operations         -            -              51,118
                                                    -----------  -----------     -----------       
Net cash flows from operating activities               (554,959)    (866,083)     (3,759,170)
                                                    -----------  -----------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of equipment                               (1,032)      (3,485)        (27,801)
     Increase in patent costs                             -            -            (131,290)
     Acquisition accounted for as a
        reverse purchase                                  -            -            (517,893)
                                                    -----------  -----------      ----------
Net cash flows from investing activities                 (1,032)      (3,485)       (676,984)
                                                    -----------  -----------      ----------
</TABLE>
See accompanying notes to financial statements



                                   Page 6
<PAGE>
                            NOFIRE TECHNOLOGIES, INC.
                           (Development Stage Company)

                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                   Cumulative
                                                                                     During
                                                        For the Nine Months        Development
                                                            Ended May 31              Stage
                                                         1997         1996     (Since Inception)
                                                    -----------   -----------      -----------
                                                           (UNAUDITED)
<S>                                                 <C>           <C>              <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds of notes payable                            -            -               721,000
     Payments on notes payable                            -            -               (75,000)
     Payment of settled liabilities                    (315,438)   (1,310,370)      (1,747,509)
     Proceeds from issuance of common stock             849,000         -            4,125,340
     Collection of stock subscription receivable          -            95,000           95,000
     Proceeds from issuance of long-term debt             -             -              785,113
     Advances received from stockholders                 24,900       165,000          101,153
     Proceeds from issuance of 8% convertible
          debentures                                      -           436,002          436,002
                                                    -----------   -----------      -----------
Net cash flows from financing activities                558,462      (614,368)       4,441,099
                                                    -----------   -----------      -----------
NET CHANGE IN CASH                                        2,471    (1,483,936)           4,945

CASH AT BEGINNING OF PERIOD                               2,474     1,496,442            -
                                                    -----------   -----------      -----------
CASH AT END OF PERIOD                               $     4,945   $    12,506      $     4,945
                                                    ===========   ===========      ===========
SUPPLEMENTAL CASH FLOW INFORMATION

Interest paid                                       $     8,072   $    27,938      $    40,903
                                                    ===========   ===========      ===========

Income taxes paid                                   $     -       $     -          $     -
                                                    ===========   ===========      ===========

Common stock issued in exchange
     for settlement of debt                         $     -       $     -          $    46,750
                                                    ===========   ===========      ===========

Common stock issued in exchange  
     for subscriptions receivable                   $     -       $     -          $    95,000
                                                    ===========   ===========      ===========

Common stock issued in exchange for
     services, net of unearned compensation         $    44,643   $     -          $    62,500
                                                    ===========   ===========      ===========
</TABLE>
See accompanying notes to financial statements




                                    Page 7
<PAGE>
                      NOFIRE TECHNOLOGIES, INC.
                     (Development Stage Company)

                    NOTES TO FINANCIAL STATEMENTS
                            (Unaudited)

                            May 31, 1997

NOTE 1 -  Basis of Presentation:

The balance sheet at the end of the preceding fiscal year has been derived
from the audited consolidated balance sheet contained in the Company's Form
10-KSB for the year ended August 31, 1996 (the "10-KSB") and is presented for
comparative purposes.  All other financial statements are unaudited.  In the
opinion of management, all adjustments which include only normal recurring
adjustments necessary to present fairly the financial position, results of
operations and cash flows for all periods presented have been made.  The
results of operations for interim periods are not necessarily indicative of
the operating results for the full year.

Footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted in
accordance with the published rules and regulations of the Securities and
Exchange Commission.  These financial statements should be read in conjunction
with the financial statements and notes thereto included in the 10-KSB for the
most recent fiscal year.

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


NOTE 2 -  Reorganization:

Prior to August 11, 1995, the effective date of its confirmed Plan of
Reorganization (the "Plan") pursuant to Chapter 11 proceedings under the
United States Bankruptcy Code (the "Code"), the Company operated under the
name of PNF Industries, Inc. ("PNF") and subsidiaries.

PNF was organized under the laws of the State of Delaware on July 13, 1987.
Effective February 27, 1990, PNF acquired all the outstanding common stock of
Portafone Communications, Inc. ("Portafone") with its wholly owned
subsidiary, Unicell Corporation ("Unicell").  Portafone was engaged in the
business of selling, installing and renting cellular telephones.  Unicell was
licensed to act as a reseller of cellular services in New York and
Massachusetts.  The cellular phone business was discontinued during calendar
year 1993.

Effective August 6, 1991, PNF acquired 89% of the outstanding common stock of
both No Fire Engineering, Inc. and No Fire Ceramic Products, Inc. in a
transaction accounted for as a reverse acquisition.  Collectively, those two
companies developed, manufactured and sold fire retardant intumescent
products.  Both these subsidiaries were disolved during the present fiscal year.

                                 Page 8
<PAGE>
                   NOFIRE TECHNOLOGIES, INC.
                  (Development Stage Company)

                 NOTES TO FINANCIAL STATEMENTS
                          (Unaudited)

                         May 31, 1997


On August 31, 1994, involuntary petitions for relief under Chapter 11 of the
Code were filed against the Company and certain of its former subsidiaries. 
Under the provisions of the Code, claims against the Company in existence prior
to the Petition Date were stayed.  The Company continued its business operations
and was managed by a Bankruptcy Trustee.  On April 7, 1995 the Bankruptcy
Court confirmed the Plan.  The Plan provided that virtually all pre-petition
claims of the Company would be paid in full over a four-year period.

On August 11, 1995, the effective date of the Plan, PNF emerged from Chapter
11 as a reorganized company under the name NoFire Technologies, Inc.  For
financial reporting purposes, the Company reported the effective date as of
August 31, 1995.

As of August 11, 1995, the Company adopted "fresh start reporting" and
implemented the effects of such adoption in its balance sheet as of August
31, 1995.


NOTE 3-   Fresh Start Reporting:

At August 31, 1995, under the principles of fresh start reporting, the
Company's total assets were recorded at their estimated reorganization value
of $1,750,000, with such value allocated to identifiable assets on the basis
of their estimated fair value.  The reorganization value included the patents
for intumescent fire retardant products which patents were valued at
$1,500,000.


NOTE 4 -  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's viability as a
going concern is dependent upon its ability to achieve profitable operations
through increased sales and raising additional financing.

The Company has a liability for settled claims payable to creditors and
accrued expenses incurred in connection with the Plan.  Without the
achievement of profitable operations or additional financing, funds for
repayment would not be available.



                                 Page 9
<PAGE>
                      NOFIRE TECHNOLOGIES, INC.
                     (Development Stage Company)

                    NOTES TO FINANCIAL STATEMENTS
                            (Unaudited)

                             May 31, 1997

Management believes that actions currently being undertaken to obtain
significant sales contracts will provide it with the opportunity to realize
profitable operations and to attract the necessary financing and/or capital
for the payment of outstanding obligations.


NOTE 5 - Warrants:

The Company has issued warrants for the purchase of common stock as follows:

                    Shares      Exercise Price
                    -------     --------------
                    990,000          $1.00  
                  1,426,500           2.00  
                     35,000           2.50  
                    100,000           3.00  
                     50,000           3.25  
                     12,000           5.00  
                 ----------
                  2,613,500

The warrants vest to the holders in various intervals ranging from issue date
to three years from issuance.


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

GENERAL

The Company continued its product improvement and testing.  It now has several
certifications for specific applications and has filed for three additional
patents.  Continuing marketing efforts have brought the Company closer to
achieving significant sales for applications in such diverse industries as
nuclear generation plants, high-speed ferries, electric utilities, low-cost 
manufactured homes, and automotive.  The Company believes that important supply
contracts will be obtained from one or more of these areas within the next year
permitting the Company to leave the development stage.  The greatest obstacles 
to obtaining such contracts are the continuing tests and approvals required and 
the high price of the product.  The Company's most pressing need is a cash 
infusion as discussed below in the section on Liquidity and Capital Resources.  



                                 Page 10
<PAGE>
The Company's products perform their intended functions well and have been 
developed to the stage where they can be sold commercially in a form that is 
safe and easy to use.  The Company intends to continue its research and testing 
efforts to meet market opportunities.  The number of manufacturing and quality 
control employees will increase with increased production.  The salaried 
administrative and marketing staff is anticipated to remain constant with 
additional sales and marketing efforts provided by commissioned independent
contractors.


COMPARISON NINE MONTHS ENDED MAY 31, 1997 AND MAY 31, 1996

The Company remained a development stage company.  Sales of $35,067 for the
nine months ended May 31, 1997 represented a decrease of 1% from the
$35,274 for the comparable nine-month period of the prior year.  Cost of goods
sold during the same periods decreased 25% from $21,650 to $16,270 resulting
in a gross profit of $18,797 compared to $13,624 in the prior year.  Selling,
general and administrative expenses for the nine-months ended May 31, 1997 were
$1,033,728 representing a decrease of $73,184 or 7% from the $1,106,912
of the similar period of the prior year.  Interest expense of $222,378 in the
current period was an increase of $37,984 or 21% from the $184,394 of the
similar period of the prior year.  The change is represented by interest accrued
on delinquent payments to a supplier of services and the interest expense 
accrued on the convertible debentures issued in the prior fiscal year.


COMPARISON THREE MONTHS ENDED MAY 31, 1997 AND MAY 31, 1996

Sales of $7,484 for the three months ended May 31, 1997 represented an increase
of 24% from the $6,054 for the comparable three-month period of the prior year.
Cost of goods sold during the same periods decreased 9% from $3,694 to $3,369
resulting in a gross profit of $4,115 compared to $2,360 in the prior year. 
Selling, general and administrative expenses for the three months ended May 31,
1997 were $302,702 representing a decrease of $65,356 or 18% from the $368,058
of the similar period of the prior year.  Most ongoing expenses were lower in
the current year.  The largest reductions were in testing, $12,700, salaries,
$13,200, and professional fees, $13,600.  Interest expense of $78,815 in the
current period was an increase of $13,059 or 20% from the $65,756 of the similar
period of the prior year.  The change is represented by the interest accrued on
delinquent payments to a supplier of services and interest accrued on the 
convertible debentures issued in the prior fiscal year.


LIQUIDITY AND CAPITAL RESOURCES

At May 31, 1997 the Company had cash balances of $4,945.  In order to fund 
continuing operations during the nine months ended on that date, $849,000 was
obtained by the private sales of unregistered common stock with warrants to 
several accredited investors.  Because of limited cash resources, the Company
has deferred payment of $271,772 of the second installment of the Chapter 11
liability to unsecured creditors that was due in late September 1996.  In order
to meet that liability and meet working capital needs until significant sales


                                 Page 11
<PAGE>
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 and the sale of equity securities in a public or private
offering.  From June 1 to July 3, 1997, an additional $173,700 was obtained in
private sales of unregistered common stock with warrants to accredited 
investors.


                    Part II - OTHER INFORMATION


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

No reports on Form 8-K were filed during the quarter ended May 31, 1997.


SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant 
caused this report to be signed on its behalf by the undersigned, thereunto 
duly authorized.

Dated: July 7, 1997               NoFire Technologies, Inc.

                          
                                  By: /s/ Sam Oolie
                                      Sam Oolie
                                      Chairman and Chief Executive
                                         Officer


                                  By: /s/ Charles R. Stone
                                      Charles R. Stone
                                      Vice President and Chief Financial
                                         Officer
                                      (Chief Accounting Officer)


                                 Page 12