U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-QSB


     [X]       QUARTERLY  REPORT  UNDER  SECTION  13 OR 15(D) OF THE  SECURITIES
               EXCHANGE ACT OF 1934

               For the quarterly period ended        April 30, 1998
                                              ------------------------------

     [ ]       TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

               For the transition period from _____________ to _______________

               Commission file number     1-14244

                         GLAS-AIRE INDUSTRIES GROUP LTD.
         ---------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

           NEVADA                                         84-1214736
--------------------------------------------------------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)

                 3137 GRANDVIEW HIGHWAY, VANCOUVER, B.C. V5M 2E9
--------------------------------------------------------------------------------
                     (Address of principal executive office)

                                 (604) 435-8801
--------------------------------------------------------------------------------
                           (Issuer's telephone number)


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

     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        No  X
        -----     -----

Number of shares outstanding of the issuer's Common Stock:

           Class                                   Outstanding at April 30, 1998
-----------------------------                      -----------------------------
Common Stock, $0.01 par value                                1,587,504

      Transitional Small Business disclosure Format  Yes       No  X
                                                        -----    -----
                                                   
<PAGE>


Glas-Aire Industries Group Ltd.

                                      INDEX
                                      -----


                                                                           Page
                                                                           ----
PART I.   FINANCIAL INFORMATION

  Item 1. Financial Statements

             Consolidated Condensed Balance Sheets -
               April 30, 1998 and January 31, 1998                           1

             Consolidated Condensed Statement of Operations
               for the three months ended April 30, 1998 and 1997            2

             Consolidated Condensed Statement of Cash Flow
               for the three months ended April 30, 1998 and 1997            3

             Notes to Consolidated Condensed Financial Statements            6

  Item 2.  Management's Discussion and Analysis of
             Financial Condition and Results of Operations                 7-8

PART II.  OTHER INFORMATION

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


SIGNATURES                                                                   9


                                      - 2 -
<PAGE>


                          PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
----------------------------
        
                         Glas Aire Industries Group Ltd.
                      Consolidated Condensed Balance Sheet

                                                      April 30,      January 31,
                                                        1998            1998
                                                     (Unaudited)      (Audited)
                                                     -----------      ---------
Assets

Current

     Cash and equivalents                            $ 2,138,669    $ 1,645,953

     Accounts receivable                                 793,181      1,200,451

     Inventories                                         693,365        772,780

     Prepaid expenses                                     12,367         19,095
                                                     -----------    -----------
                                                       3,637,582      3,638,279

Fixed assets                                           1,613,336      1,408,816
                                                     -----------    -----------
                                                     $ 5,250,918    $ 5,047,095
                                                     ===========    ===========

Liabilities and Shareholders' Equity

Current

     Bank indebtedness                               $   148,416    $      --

     Accounts payable and accrued liabilities            414,151        460,680

     Incomes taxes payable                                (1,660)        92,464

     Current portion - capital lease                     152,744           --
                                                     -----------    -----------
                                                         713,651        553,144

Deferred Income Taxes                                    281,327        281,327
                                                     -----------    -----------
                                                         994,978        834,471
                                                     -----------    -----------
Shareholders' Equity
     Share capital                                        15,875         15,875

     Contributed surplus                               3,462,334      3,462,334

     Treasury stock                                     (236,163)      (236,163)

     Retained earnings                                 1,068,065      1,045,962

     Cumulative translation adjustment                   (54,171)       (75,384)
                                                     -----------    -----------
                                                       4,255,940      4,212,624
                                                     -----------    -----------
                                                     $ 5,250,918    $ 5,047,095
                                                     ===========    ===========


                                      - 3 -


<PAGE>

                         Glas Aire Industries Group Ltd.
                 Consolidated Condensed Statement of Operations
                                   (Unaudited)


                                                         Three Months Ended
                                                    ---------------------------
                                                     April 30,        April 30,
                                                       1998             1997
                                                       ----             ----

Sales                                               $ 1,085,596     $ 1,195,641

Cost of sales                                           740,392         814,617
                                                    -----------     -----------
Gross Profit                                            345,204         381,024
                                                    -----------     -----------
Expenses

     Depreciation                                        42,951          35,418

     Research and development                           102,598          95,876

     Selling and distribution                            79,306          86,094

     General and administrative                         109,351         128,518

     Provision for profit sharing                         3,530           5,832

     Interest                                           (24,261)        (23,905)
                                                    -----------     -----------
                                                        313,475         327,833
                                                    -----------     -----------

Income from before income taxes                          31,729          53,191
Income taxes - current                                    9,625          17,097

Income taxes - deferred                                    --              --
                                                    -----------     -----------
Net Income (loss) for the period                         22,104          36,094
                                                    -----------     -----------
Net income per share of common stock                $      .014     $      .024
                                                    ===========     ===========
Weighted average common shares outstanding            1,587,504       1,525,421
                                                    ===========     ===========



                             See accompanying notes.


                                      - 4 -


<PAGE>

                         Glas Aire Industries Group Ltd.
                 Consolidated Condensed Statement of Cash Flows
                                   (Unaudited)

                                                         Three Months Ended
                                                     --------------------------
                                                       April 30,      April 30,
                                                         1998           1997
                                                         ----           ----

Increase (Decrease) in Cash
Cash Flows from:
Operating Activities
     Net Income for the period                       $    22,104    $    36,094
     Depreciation                                         42,951         35,418
     Deferred Income Taxes                                  --           (6,788)
     Gain on sale of capital assets                         --             --
     Net change in non-cash working capital              352,758       (176,813)
     Cumulative translation adjustment                    21,213        (26,535)
                                                     -----------    -----------
        Net cash (used in) operating activities          439,026       (138,624)
                                                     -----------    -----------

Financing Activities
     Increase in obligation under capital lease          161,569           --
     Repayment of capital lease                           (8,825)
     Repayment of long-term debt                            --             --
     Purchase of treasury stock                             --          (58,438)
     Increase (decrease) in bank indebtedness            148,416        115,797
     Common stock                                           --             --
                                                     -----------    -----------
     Net cash (used in) financing activities             301,160         57,359
                                                     -----------    -----------

Investing Activities
     Proceeds from sale of fixed assets
     Purchase of capital assets                         (247,470)       (95,670)
                                                     -----------    -----------
     Net cash used in investing activities              (247,470)       (95,670)
                                                     -----------    -----------

Decrease in cash during the period                       492,716       (176,935)

Cash and equivalents, beginning of period              1,645,953      1,119,932
                                                     -----------    -----------

Cash and equivalents, end of period                  $ 2,138,669    $   942,997
                                                     ===========    ===========


Changes in non-cash working capital

     Accounts receivable                                 407,270        (51,297)
     Inventories                                          79,415       (174,878)
     Prepaid expense                                       6,726        (42,996)
     Accounts payable and accrued liabilities            (46,529)       105,791
     Income taxes payable                                (94,124)       (13,433)
                                                     -----------    -----------
                                                     $   352,758    $  (176,813)
                                                     ===========    ===========

                             See accompanying notes.


                                      - 5 -
<PAGE>

                         Glas Aire Industries Group Ltd.
               Notes to Consolidated Condensed Financial Statement

                                 April 30, 1998

1.   In the opinion of the  Company,  the  accompanying  unaudited  consolidated
     condensed financial statements contain all adjustments  (consisting of only
     those which are normal and recurring in nature) necessary to present fairly
     the financial  position of the Company as of April 30, 1998 and the results
     of  operations  and cash flows for the three month  periods ended April 30,
     1998 and 1997

2.   These  financial  statements  included  the accounts of the Company and its
     wholly-owned  subsidiaries,  Multicorp Holdings Inc.,  Glas-Aire Industries
     Ltd.,  Glas-Aire  Industries,  Inc., and 326362 B.C. Ltd. All inter-company
     transactions are eliminated.

     These financial statements have been prepared in accordance with accounting
     principles   generally   accepted  in  the  United   States.   For  further
     information,  refer to the Company's  consolidated financial statements and
     footnotes thereto included in the Company's Registration Statement filed on
     Form 10K-SB with the Securities and Exchange Commission for the fiscal year
     ended January 31, 1998.

3.   Certain  comparative  figures from the prior year have been reclassified to
     conform with the current year's presentation.

4.   Inventories by component are as follows:

                                             April 30,            April 30,
                                               1998                 1997
                                               ----                 ----

     Raw materials                           $496,338             $587,340
     Work-in-progress                          76,535              126,398
     Finished goods                           102,718               67,318
     Supplies                                  17,774               22,245
                                               ------               ------
                                             $693,365             $803,301
                                             --------             --------

5.   Bank Indebtedness

                                             April 30,            April 30,
                                               1998                 1997
                                               ----                 ----

     Revolving Bank loan                     $148,416             $225,897
                                             ========             ========

     The revolving bank loan is a Cdn. $1,000,000  overdraft facility,  which is
     due on demand and bears interest at Canadian bank prime rates (6.5%-January
     31, 1998,  6.5%-April 30, 1998) plus 1/2%. This line of credit is renewable
     annually.

     The following have been provided as collateral for these loans:

     (a)  general assignments of accounts receivable and inventories.

     (b)  a Cdn.  $2,000,000  demand debenture  granting a first fixed charge on
          certain  equipment and a floating  charge over all other assets of the
          Company.

     (c)  an unlimited  guarantee by the Company and its  subsidiary,  Glas-Aire
          Industries Ltd.

6.   Income  (loss) per share is  calculated  by dividing the  weighted  average
     number of shares of common  stock  outstanding  each period into the income
     (loss) for the period.  Warrants  outstanding were anti-dilutive.  Treasury
     stock  held  by  the  Company  is not  included  in the  number  of  shares
     outstanding this time.


                                      - 6 -
<PAGE>



Item 2. Management's  Discussion and Analysis of Financial  Condition and Result
        of Operations
--------------------------------------------------------------------------------

     The Company's sales decreased by 9.2 % from $1,195,641 for the three months
ended April 30, 1997, to  $1,085,596  for the three months ended April 30, 1998.
This decrease resulted  primarily from a general decline in automotive sales, in
particular non-U.S. based manufacturers during the first quarter of 1998.

     Gross profit margins, expressed as a percentage of sales, was 31.8% for the
three months ended April 30, 1998. This was approximately the same as the 31.87%
achieved for the three months ended April 30, 1997.

     Depreciation  expense increased by 21.27% from $35,418 for the three months
ended April 30, 1997, to 42,951 for the three months ended April 30, 1998.  This
increase was the result of bringing new equipment into service.

     Expenses for research and  development  increased by 7.01% from $95,876 for
the three months  ended April 30,  1997,  to $102,598 for the three months ended
April 30, 1998. This increase resulted from R&D activities  relating to a number
of new projects that led to a significant increase in engineering activities.

     Selling and distribution  expenses decreased by 7.88%, from $86,094 for the
three months  ended April 30, 1997,  to $79,306 for the three months ended April
30, 1998. This decrease was primarily due to (1) decreased  commission  expenses
associated  with decreased  sales and (2) deferral of advertising  and promotion
until later in the year in 1998.

     General and  administrative  expenses decreased by 14.91% from $128,518 for
the three months  ended April 30,  1997,  to $109,351 for the three months ended
April 30,  1998.  This was the result of (1) gain in foreign  exchange of approx
(10%),  (2) a decrease in the number of persons  employed in  administration  in
line with the lower sales, and (3) deferral of expenses to the later part of the
year.

     Provision  for profit  sharing  decreased  from $5,832 for the three months
ended April 30, 1997,  to $3,530 for the three months ended April 30, 1998, as a
result of the decrease in profit.

     Interest  income (net of interest  expense)  increased from $23,905 for the
three months  ended April 30, 1997,  to $24,261 for the three months ended April
30, 1998.  This was the net result of (1)  increased  interest  earnings on cash
deposits  and (2)  interest  expenses  increased  approximately  $2,012 from the
leasing cost of CNC Milling Machine Centre

     Before income taxes,  the Company's  income  decreased from $53,191 for the
three months  ended April 30, 1997,  to $31,729 for the three months ended April
30, 1998. This decrease in income resulted primarily from the decline in sales.

     The Company's  accrued  income taxes  decreased  from $17,097 for the three
months  ended April 30,  1997,  to $9,625 for the three  months  ended April 30,
1998, as a result of the decrease in taxable income.

     Net income  decreased  from  $36,094 for the three  months  ended April 30,
1997,  to $22,104 for the three  months  ended April 30,  1998,  primarily  as a
result of lower sales.



                                      - 7 -
<PAGE>


Financial Condition and Liquidity

     For the three months ended April 30, 1998, net cash provided from operating
activities  totaled  $439,026,  including  income from  operating  activities of
$22,104, depreciation of $42,951, a cumulative translation adjustment of $21,213
and a net  change  in  non-cash  working  capital  of  $352,758.  Net cash  from
financing  activities  was $301,160 that resulted from an increase in obligation
under capital lease of $161,569,  repayment of capital lease of ($8,825), and an
increase in bank indebtedness of $148,416. Net cash used in investing activities
was $247,470 as a result of the purchase of capital assets.  Accounts receivable
decreased by $407,270 primarily due to increased collection efforts. Inventories
decreased by $79,415 as a result of the usage of the  build-up of raw  materials
from the last quarter.  Prepaid expenses  decreased by $6,726.  Accounts payable
and accrued liabilities  decreased by $46,529 as a result of lower sales. Income
taxes payable  decreased by $94,124 due to income tax payment due in April 1998.
Working  capital at April 30, 1998,  was $2,923,931 as compared to $3,085,135 at
January  31,  1998.  During the next six months the company  anticipates  making
total capital expenditures of approximately $250,000 as follows: (1) $70,000 for
computer aided design software and related hardware,  (2) $30,000 for the QA9000
(Quality  Control   Certification)   process  and  (3)  $150,000  for  leasehold
improvements.



                           PART II. OTHER INFORMATION

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


a)   Exhibits: There are no exhibits for the three months ended April 30, 1998.

b)   Reports on Form 8-K:  There were no reports on Form 8-K filed for the three
     months ended April 30, 1998.



                                      - 8 -


<PAGE>


                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


Date:  June 13, 1998
     -----------------
                                          GLAS-AIRE INDUSTRIES GROUP LTD.



                                          /s/ Alex Y.W. Ding
                                          --------------------------------------
                                          Alex Y.W. Ding
                                          President and Chief Operating Officer








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