<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, 1998

           [ ]  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: 11,996,434 shares of Common
Stock as of July 7, 1998.

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, 1998
         and August 31, 1997                                 3
         
         Statements of Operations for the
         Nine Months ended May 31, 1998
         and 1997; and the Three Months ended
         May 31, 1998 and 1997                             	 5

         Statements of Cash Flows for the
         Nine Months ended May 31, 1998 and 1997             6

         Notes to Unaudited Financial Statements             8

Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations      11


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.
                    (A Development Stage Company)

                           BALANCE SHEETS

                                                 May 31,    August 31,
                                                  1998         1997
                                              -----------   ----------
                                               (UNAUDITED)

              ASSETS

CURRENT ASSETS:
    Cash                                      $    6,482    $      505
    Inventory                                     84,112        96,842
    Prepaid expenses and other current assets     16,505        15,093
                                               ---------    ----------
    Total Current Assets                         107,099       112,440
                                               ---------    ----------
EQUIPMENT, less accumulated depreciation           4,381         3,749
                                               ---------    ----------
OTHER ASSETS:
    Patents, less accumulated amortization of
      $825,000 at May 31, 1998 and
      $600,000 at August 31, 1997                675,000       900,000
    Security deposits                             18,473        18,473
    Excess of reorganization value over net
      assets, less accumulated amortization
      of $116,061 at May 31, 1998 and
      $84,408 at August 31, 1997                  94,960       126,613
                                              ----------     ---------
                                                 788,433     1,045,086
                                              ----------     ---------
                                              $  899,913    $1,161,275
                                              ==========    ==========

See accompanying notes to financial statements

                                  Page 3
<PAGE>

                      NOFIRE TECHNOLOGIES, INC.
                    (A Development Stage Company)
                                    
                           BALANCE SHEETS
                                    
                                                 May 31,     August 31,
                                                  1998          1997
                                              -----------    ----------
                                              (UNAUDITED)

        LIABILITIES AND STOCKHOLDERS' EQUITY
                     (DEFICIENCY)

CURRENT LIABILITIES:
    Current portion of settled liabilities    $1,103,284      $ 839,357
    Accounts payable and accrued expenses        532,001        438,287
    Due to stockholders                           67,750         71,000
    Deferred salaries                            504,831        390,978
                                              ----------      ---------
                                               2,207,866      1,739,622
                                              ----------      ---------

OTHER LIABILITIES
    Settled liabilities, less current          
         maturities                            1,099,884      1,532,602
    Convertible debentures - 8% due
         January 31, 1999                        436,002        436,002
                                              ----------     ----------
                                               1,535,886      1,968,604
                                              ----------     ----------

STOCKHOLDERS'  EQUITY (DEFICIENCY):
    Common stock $.20 par value:
      Authorized - 25,000,000 shares
      Issued and outstanding - 10,556,750
       shares at May 31, 1998 and
       9,667,200 shares at August 31, 1997     2,111,350      1,933,440
    Capital deficiency                          (597,881)    (1,245,748)
    Retained earnings (deficit)               (4,357,308)    (3,234,643)
                                              ----------     ----------
    Total Stockholders' Equity (Deficiency)   (2,843,839)    (2,546,951)
                                              ----------     ----------
                                              $  899,913     $1,161,275 
                                              ==========     ==========

See accompanying notes to financial statements



                                  Page 4
<PAGE>

                  NOFIRE TECHNOLOGIES, INC.
                (A Development Stage Company)

                   STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                                           July 13, 1987
                                                                                             (Date of 
                                         For the Nine Months     For the Three Months       Inception) 
                                            Ended May 31,           Ended May 31,            through
                                           1998       1997         1998       1997         May 31, 1998
                                       ----------   ---------    ---------   ---------      ----------
                                             (UNAUDITED)             (UNAUDITED)
<S>                                    <C>          <C>          <C>        <C>            <C>    
NET SALES                               $  18,626    $  35,067    $ 12,225   $   7,484      $  418,593

COSTS AND EXPENSES:
    Cost of sales                           8,782       16,270       5,903       3,369         251,494
    Selling, general and administrative   953,015    1,033,728     341,931     302,702       7,462,051
                                       ----------   ----------   ---------   ---------      ----------
                                          961,797    1,049,998     347,834     306,071       7,713,545
                                       ----------   ----------   ---------   ---------      ----------
LOSS FROM OPERATIONS                     (943,171)  (1,014,931)   (335,609)   (298,587)     (7,294,952)
                                       ----------   ----------   ---------   ---------      ----------
OTHER EXPENSES:
    Interest expense                      179,496      222,378      55,834      78,815         745,028
    Interest income                         -            -           -           -              (6,774)
    Reorganization items                    -            -           -           -             365,426
    Litigation settlement                   -            -           -           -             198,996
                                       ----------   ----------   ---------   ---------      ----------
                                          179,496      222,378      55,834      78,815       1,302,676
                                       ----------   ----------   ---------   ---------      ----------
LOSS BEFORE DISCONTINUED OPERATIONS
  AND EXTRAORDINARY ITEM               (1,122,667)  (1,237,309)   (391,443)   (377,402)     (8,597,628)

DISCONTINUED OPERATIONS                     -            -           -           -          (1,435,392)
                                       ----------   ----------   ---------   ---------      ----------
LOSS BEFORE EXTRAORDINARY ITEM         (1,122,667)  (1,237,309)   (391,443)   (377,402)    (10,033,020)

EXTRAORDINARY ITEM - Gain on
  debt discharge                           -             -           -           -             449,583
                                       ----------   ----------   ---------   ---------      ----------
NET LOSS                              $(1,122,667) $(1,237,309)  $(391,443)  $(377,402)    $(9,583,437)
                                       ==========   ==========   =========   =========      ==========

WEIGHTED AVERAGE COMMON SHARES
  OUTSTANDING                          10,072,842    9,066,833  10,041,350   8,998,583
                                       ==========   ==========   =========   =========

EARNINGS (LOSS) PER SHARE              $    (0.11)  $    (0.14)  $   (0.04)  $   (0.04)
                                       ==========   ==========   =========   =========
</TABLE>

See accompanying notes to financial statements


                                Page 5
<PAGE>

                   NOFIRE TECHNOLOGIES, INC.
                (A Development Stage Company)

                   STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                           July 13, 1987
                                                                              (Date of 
                                                  For the Nine Months        Inception) 
                                                     Ended May 31,            through
                                                    1998       1997         May 31, 1998
                                                 ---------    ---------      ----------
                                                      (UNAUDITED)
<S>                                            <C>          <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                    $(1,122,667) $(1,237,309)    $(9,583,437)
   Adjustments to reconcile net loss to
     net cash flows from operating activities:
        Depreciation and amortization              257,081      259,296       1,041,172
        Extraordinary gain on debt discharge          -            -           (449,583)
        Interest expense incurred to state settled
          liabilities at present value             113,060      173,760         552,999
        Revaluation of assets and liabilities
          to fair value                               -            -            482,934
        Litigation settlement                         -            -            198,996
        Common stock issued in exchange for
          services                                  69,200       44,643         131,700
        Changes in operating assets and liabilities
         (net of effects from reverse purchase
          acquisition)
             Inventory                              12,730      (43,633)        (84,112)
             Prepaid expenses                       (1,412)      (6,200)        (16,505)
             Accounts payable and accrued
               expenses                             93,714      115,632       2,778,988
             Security deposits                        -            -            (18,473)
             Deferred salaries                     113,853      138,852         504,831
             Obligation from discontinued
                 operations                           -            -             51,118
                                                ----------    ---------      ----------
 Net cash flows from operating activities         (464,441)    (554,959)     (4,409,372)
                                                ----------    ---------      ----------


CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of equipment                            (1,060)      (1,032)        (28,861)
   Increase in patent costs                           -            -           (131,290)
   Acquisition accounted for as a
     reverse purchase                                 -            -           (517,893)
                                               -----------    ---------      ----------
Net cash flows from investing activities            (1,060)      (1,032)       (678,044)
                                               -----------    ---------      ----------
</TABLE>

See accompanying notes to financial statements


                          Page 6
<PAGE>

                  NOFIRE TECHNOLOGIES, INC.
                (A Development Stage Company)

                   STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                          July 13,1987
                                                                            (Date of 
                                                 For the Nine Months       Inception) 
                                                   Ended May 31,             through
                                                 1998         1997        May 31, 1998
                                               ---------     ---------      ----------
                                                    (UNAUDITED)
<S>                                           <C>           <C>           <C>     
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from notes payable                      -             -           721,000
   Principal Payments on notes payable              -             -           (75,000)
   Principal Payment of settled liabilities     (281,851)     (315,438)    (2,061,586)
   Proceeds from issuance of common stock        756,579       849,000      5,125,619
   Collection of stock subscription receivable      -             -            95,000
   Proceeds from issuance of long-term debt         -             -           785,113
   Net advances from stockholders                 (3,250)       24,900)        67,750
   Proceeds from issuance of 8% convertible
          debentures                                -             -           436,002
                                              ----------    ----------     ----------
Net cash flows from financing activities         471,478       558,462      5,093,898
                                              ----------    ----------     ----------
NET CHANGE IN CASH                                 5,977         2,471          6,482

CASH AT BEGINNING OF PERIOD                          505         2,474           - 
                                              ----------    ----------     ----------
CASH AT END OF PERIOD                         $    6,482    $    4,945     $    6,482
                                              ==========    ==========     ==========


SUPPLEMENTAL CASH FLOW INFORMATION

Interest paid                                 $    8,408    $    8,072     $   52,086
                                              ==========    ==========     ==========

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

Common stock issued in exchange
  for settlement of debt                      $  206,579    $     -        $  253,329
                                              ==========    ==========     ==========

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

Common stock issued in exchange for
  services                                   $   69,200    $   44,643     $  131,700
                                              ==========    ==========     ==========
</TABLE>

See accompanying notes to financial statements


                          Page 7
<PAGE>

                        NOFIRE TECHNOLOGIES, INC.
                      (A Development Stage Company)

                    NOTES TO THE FINANCIAL STATEMENTS
                               (Unaudited)
                                
                               May 31, 1998

NOTE 1 - Basis of Presentation:

The balance sheet at the end of the preceding fiscal year has been
derived from the audited balance sheet contained in the Company's Form
10-KSB for the year ended August 31, 1997 (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 issuable 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 of those subsidiaries were dissolved 
during the fiscal year ended August 31, 1997.


                                 Page 8
<PAGE>

                        NOFIRE TECHNOLOGIES, INC.
                      (A Development Stage Company)

                    NOTES TO THE FINANCIAL STATEMENTS
                               (Unaudited)
                                
                              May 31, 1998

On August 31, 1994, involuntary petitions for relief under Chapter 11 of
the Code were filed against the Company and certain of its 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.
                      (A Development Stage Company)

                    NOTES TO THE FINANCIAL STATEMENTS
                               (Unaudited)
                                
                               May 31, 1998

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
    --------             --------------
     997,500                  $1.00
     160,000                   1.50 
   3,353,050                   2.00
      35,000                   2.50
     422,500                   3.00
      50,000                   3.25
      12,000                   5.00
   ---------
   5,030,050

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


                                 Page 10
<PAGE>
                                    
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
         AND RESULTS OF OPERATIONS

GENERAL

The Company continued its product development and application testing.  It 
now has several certifications for specific applications and has filed for 
four additional patents.  One of those applications had led to the issuance 
of a patent during the present fiscal year.  Continuing marketing efforts 
have brought the Company closer to achieving significant sales for 
applications in such diverse industries as high-speed ferries and naval 
ships, electric utilities, wood product building components, concrete and 
structural steel column protection, and automotive.  In the nuclear power 
generating industry, a contractor has been awarded a contract to upgrade 
the fire protection of control wiring at a large U.S nuclear power plant 
specifying the Company's product.  The Company believes that orders to 
provide materials for that contract, as well as the first shipments against 
those orders, should occur within the present fiscal year.  The Company also 
believes that contracts will be obtained from other nuclear power plants as 
well as from other industries in this fiscal year.  The greatest obstacles 
to obtaining these other contracts are the continuing tests and approvals 
required, competition against well established and better capitalized 
companies, and the slow process of specifying new products in highly 
regulated industrial applications.  The Company's most pressing need is 
cash infusion as discussed below in the section on Liquidity and Capital 
Resources.  The Company's products perform their intended uses 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, 1998 AND MAY 31, 1997

The Company remained a development stage company. Sales of $18,626 for
the nine months ended May 31, 1998 represented a decrease of 47% from 
the $35,067 for the comparable nine-month period of the prior year.  
Cost of goods sold during the same periods decreased 46% from 
$16,270 to $8,782 resulting in a gross profit of $9,844 compared to 
$18,797 in the prior year.  Selling, general and administrative expenses 
for the nine months ended May 31, 1998 were $953,015 representing a 
decrease of $80,713 or 8% from the $1,033,728 of the similar period of 
the prior year.  Almost all categories of expense remained at constant 
levels or were reduced.  The most significant changes were reductions of 
$12,000 in travel and related expenses, $42,900 in interest expense, and 
$47,800 in salaries and related expenses resulting from a reduction in 
clerical staff and the retirement on November 30, 1997, of the former 
Vice President and Chief Financial Officer.


COMPARISON THREE MONTHS ENDED MAY 31, 1998 AND MAY 31, 1997

Sales of $12,225 for the three months ended May 31, 1998 represented an 
increase of 63% from the $7,484 for the comparable three-month period of 
the prior year.  Cost of goods sold during the same periods increased 75% 

                              Page 11
<PAGE>

from $3,369 to $5,903 resulting in a gross profit of $6,322 compared to 
$4,115 in the prior year.  Selling, general and administrative expenses for 
the three months ended May 31, 1998 were $341,931, representing an increase 
of $39,229 or 13% from the $302,702 of the similar period of the prior year.  
Most categories of expense remained at constant levels.  The most significant 
increase was a change in professional fees of $69,880 resulting principally 
from work done by marketing consultants and a financial public relations firm.  
Expense reductions were $13,700 in officers' salaries resulting from the 
retirement on November 30 1997, of the former Vice President and Chief 
Financial Officer, and $22,981 in interest expense.


LIQUIDITY AND CAPITAL RESOURCES

At May 31, 1998 the Company had cash balances of $6,482.  In order to fund 
continuing operations during the nine months ended on that date, $550,000 
was obtained by the private sales of unregistered common stock with warrants 
to several accredited investors.  In addition, one trade creditor and four 
Chapter 11 claimants settled a total of $206,579 in net present value of 
their claims against the Company by the issuance of 220,350 shares of the 
Company's common stock.  An additional 119,200 shares of common stock were 
issued as compensation to three recipients representing $69,200 in 
professional fees.  Because of limited cash resources, the Company has 
deferred payment of $185,126 of the second installment of the Chapter 11 
liability to unsecured creditors that was due in late September 1996, and 
$445,009 that was due in late September 1997.  In order to meet 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.  Subsequent to May 
31, 1998 and through July 7, 1998, an additional $1,250,000 was obtained in a 
private sale of unregistered common stock with warrants to a group of 
accredited investors.  The investment group has advised the company that 
they filed reports with the SEC that they deemed appropriate including 
Schelules 13D and Forms 3.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

No reports on Form 8-K were filed during the quarter ended May 31,1998.



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 14, 1998               NoFire Technologies, Inc.


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

                                     Page 12