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 March 31, 2003

             [ ] 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)

                   7791 Alderbridge Way, Richmond B.C. V6X 2A4
                   -------------------------------------------
                     (Address of principal executive office)

                                 (604) 207-0221
                                 --------------
                            (Issuer 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 [X]     No [ ]

Issuer's Common Stock:
Common Stock, $0.01 par value-Issued 2,500,671 shares, not including 93,718
shares of treasury stock, held by the Company as of March 31, 2003.

     Transitional Small Business disclosure Format    Yes [ ]   No [X]

<PAGE>
<TABLE>
<CAPTION>

                           Glas-Aire Industries Group Ltd.

                                        INDEX
                                        -----


                                                                                 Page
                                                                                 ----
<S>                                                                              <C>
PART I.       FINANCIAL INFORMATION

     Item 1.  Financial Statements

              Consolidated Condensed Balance Sheets                               2
              March 31, 2003 (Unaudited) and December 31, 2002

              Consolidated Condensed Statements of Operations                     3
                For the three months ended March 31, 2003 and 2002 (Unaudited)

              Consolidated Condensed Statement of Stockholder's Equity            4
                For the three months ended March 31, 2003 (Unaudited)

              Consolidated Condensed Statements of Cash Flows                     5-6
                For the three months ended March 31, 2003 and 2002 (Unaudited)

              Notes to Consolidated Condensed Financial Statements (Unaudited)    7-12

              Forward Looking Statements                                          13

     Item 2.  Management's Discussion and Analysis of
                Financial Condition and Results of Operations                     14-17

     Item 3.  Controls and Procedures                                             18

PART II.  OTHER INFORMATION

     Item 1.  Legal Proceedings                                                   18

     Item 5.  Other Information                                                   19

     Item 6.  Exhibits and Reports on Form 8-K                                    20

SIGNATURES                                                                        21

<PAGE>

     PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
----------------------------

                           Glas Aire Industries Group Ltd.
                        Consolidated Condensed Balance Sheets

                                                           March 31,     December 31,
                                                             2003            2002
                                                          (Unaudited)     (Audited)
                                                          -----------    -----------
Assets
Current
     Cash and equivalents                                 $    72,712    $         0
     Accounts receivable, net of allowance
        for doubtful accounts of $4,306 (2002- $21,748)     1,920,011      1,509,423
     Inventories                                            1,427,530      1,203,022
     Income taxes refundable                                   77,979         31,877
     Prepaid expenses                                         120,829         83,735
     Deferred income taxes                                    196,011        196,011
                                                          -----------    -----------
                                                            3,815,072      3,024,068

Note receivable                                               200,000              0
Fixed assets, net                                           1,987,279      1,781,824
Net assets held for sale                                            0        323,555
                                                          -----------    -----------
                                                          $ 6,002,351    $ 5,129,447
                                                          ===========    ===========

Liabilities and Stockholders' Equity
Liabilities
Current
     Bank indebtedness                                    $ 1,429,867    $ 1,220,637
     Accounts payable                                       1,959,536      1,546,431
     Accrued liabilities                                    1,107,594      1,112,792
     Current portion - long-term debt                         469,734        755,327
     Current portion - capital lease                           27,037         36,832
                                                          -----------    -----------
                                                            4,993,768      4,672,019
Obligation under capital lease                                 51,643         51,050
Deferred income taxes                                         193,646        170,975
Net liabilities held for sale                                       0         13,252
                                                          -----------    -----------
                                                            5,239,057      4,907,296
                                                          -----------    -----------
Stockholders' equity
     Common stock                                              25,007         25,007
     Additional paid-in capital                             1,519,719      1,519,719
     Deferred compensation                                    (15,139)       (25,977)
     Accumulated Deficit                                     (858,524)    (1,329,785)
     Accumulated other comprehensive income
       Foreign currency translation adjustment                 92,231         33,187
                                                          -----------    -----------
                                                              763,294        222,151
                                                          -----------    -----------
                                                          $ 6,002,351    $ 5,129,447
                                                          ===========    ===========

                   See accompanying notes to financial statements

                                         2
<PAGE>

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

                                                          Three Months Ended
                                                      --------------------------
                                                        March 31,      March 31,
                                                          2003           2002
                                                      -----------    -----------

Sales                                                 $ 3,471,059    $ 2,693,271
Cost of sales                                           2,608,890      2,222,957
                                                      -----------    -----------
Gross profit                                              862,169        470,314
                                                      -----------    -----------
Expenses
     Depreciation                                          65,804         50,884
     Research and development                             154,456        163,774
     Selling and distribution                             278,624        209,781
     General and administrative                           250,650        297,785
     Foreign exchange  loss (gain)                        167,035        (12,549)
     Interest income                                          (40)          (543)
     Interest expense                                      29,228         24,421
                                                      -----------    -----------
                                                          945,757        733,553
                                                      -----------    -----------

Loss from continuing operations before income taxes       (83,588)      (263,239)
Income tax recovery                                       (33,990)       (77,001)
                                                      -----------    -----------
Loss from continuing operations                           (49,598)      (186,238)
Income from discontinued operations, net of
     Income taxes of $3,600                                     0         20,944
Gain on disposition of discontinued operations            520,859              0
                                                      -----------    -----------
Net income (loss) for the period                      $   471,261    $  (165,294)
                                                      ===========    ===========

Earnings (loss)  per share basic from
     Continuing operations                            $    (0.020)   $    (0.075)
     Discontinued operations                                0.208          0.008
                                                      -----------    -----------
                                                      $     0.188    $    (0.067)
Earnings (loss)  per share diluted from
     Continuing operations                            $    (0.019)   $    (0.075)
     Discontinued operations                                0.198          0.008
                                                      -----------    -----------
                                                      $     0.179    $    (0.067)
                                                      ===========    ===========


Weighted average common shares outstanding
(Basic - after deducting 93,718 (2002-1,375,677)
 shares of treasury stock  held by the Company)         2,500,671      2,472,630
 Effect of exercise of warrants                           134,143              0
                                                      -----------    -----------
Diluted                                                 2,634,814      2,472,630
                                                      ===========    ===========


                 See accompanying notes to financial statements

                                       3
<PAGE>

                                               Glas-Aire Industries Group Ltd.
                                  Consolidated Condensed Statement of Stockholders' Equity
                                              Three Months Ended March 31, 2003
                                                         (Unaudited)


                                Common Stock          Additional      Deferred     Accumulated    Accumulated   Stockholders'
                             Stock        Amount        Paid-in     Compensation     Deficit        Other         Equity
                                                        Capital       expense                    Comprehensive
                                                                                                    Income
                          -----------   -----------   -----------   -----------    -----------    -----------   -----------
Balance -
   December 31, 2002        2,500,671   $    25,007   $ 1,519,719   $   (25,977)   $(1,329,785)   $    33,187   $   222,151
                          -----------   -----------   -----------   -----------    -----------    -----------   -----------

Net income                                                                             471,261                      471,261
                          -----------   -----------   -----------   -----------    -----------    -----------   -----------

Deferred compensation                                                    10,838                                      10,838
                          -----------   -----------   -----------   -----------    -----------    -----------   -----------
Foreign currency
 translation adjustment                                                                                59,044        59,044
                          -----------   -----------   -----------   -----------    -----------    -----------   -----------
Balance -
   March 31, 2003           2,500,671   $    25,007   $ 1,519,719   $   (15,139)   $  (858,524)   $    92,231   $   763,294
                          -----------   -----------   -----------   -----------    -----------    -----------   -----------



Comprehensive income (loss) consists of the following:

                                                          2003           2002
                                                       ---------      ---------

Net income (loss)                                      $ 471,261      $(165,294)

Foreign currency translation adjustment                   59,044         (2,676)
                                                       ---------      ---------
Comprehensive income (loss)                            $ 530,305      $(167,970)
                                                       =========      =========



                 See accompanying notes to financial statements

                                       4
<PAGE>

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

                                                                  Three Months Ended
                                                                ----------------------
                                                                 March 31,    March 31,
                                                                   2003         2002
Increase (decrease) in cash
Cash flows from:
Operating activities
     Net loss for the period from continuing operations         $ (49,598)   $(186,238)
Adjustment to reconcile net loss for the
       period to net cash used in operating
       activities from continuing operations
     Depreciation                                                  65,804       50,884
     Deferred  compensation expense                                10,838        9,429
(Increase) decrease in assets
     Accounts receivable                                         (356,410)     213,898
     Inventories                                                 (132,761)    (187,271)
     Income taxes recoverable                                     (33,990)     (72,729)
     Prepaid expense                                              (29,906)     (25,321)
Increase (decrease) in liabilities
     Accounts payable                                             282,276      242,746
     Accrued liabilities                                           (5,199)    (255,532)
     Income taxes payable                                               0       (4,016)
                                                                ---------    ---------
        Net cash used in operating activities
         From continuing operations                              (248,946)    (214,150)
                                                                ---------    ---------
Cash flows from discontinued operations                                 0      (37,927)
                                                                ---------    ---------
 Net cash used  in operating activities                          (248,946)    (252,077)
                                                                ---------    ---------
Financing activities
     Repayment of capital lease obligation                        (15,061)      (7,344)
     Repayment of long-term debt                                 (326,572)     (64,958)
     Increase in bank indebtedness                                111,717      513,036
                                                                ---------    ---------
          Net cash (used in) provided by financing activities    (229,916)     440,734
                                                                ---------    ---------
Investing activities
Net proceeds on disposal of Orbital Polishing Division            631,162            0
     Purchase of fixed assets                                     (94,593)     (41,862)
                                                                ---------    ---------
     Net cash provided by (used in) investing activities          536,569      (41,862)
                                                                ---------    ---------
Foreign currency translation adjustment
      effect on cash and equivalents balances                      15,005       (3,096)
                                                                ---------    ---------
Increase in cash and equivalents during the period                 72,712      143,699
Cash and equivalents, beginning of period                               0      465,193
                                                                ---------    ---------
Cash and equivalents, end of period                             $  72,712    $ 608,892
                                                                =========    =========

                    See accompanying notes to financial statements

                                           5
<PAGE>

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

                                                             Three months ended
                                                             -------------------
                                                             March 31,  March 31,
                                                               2003       2002
                                                             --------   --------

Supplemental disclosure of cash flow relating to:

     Interest paid                                           $ 29,228   $ 24,421


     Income taxes paid                                       $      0   $ 41,178


Non - cash investing activities

     Note receivable on sale of Orbital Polishing Division   $200,000   $      0

     Common Stock issued in                                  $      0   $  9,429
     exchange for compensation









                 See accompanying notes to financial statements

                                       6
</TABLE>
<PAGE>

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

                                 March 31, 2003
                                   (Unaudited)

1.   Nature Of Business And Basis Of Presentation

     Glas-Aire Industries Group Ltd., a Nevada corporation (the "Company") was
     incorporated on September 29, 1992. The Company manufactures and
     distributes wind deflector products to automobile manufacturers in the
     United States, Canada and Japan.

     The interim financial statements included herein, are presented in
     accordance with United States generally accepted accounting principles and
     stated in United States dollars, and have been prepared by the Company,
     without audit, pursuant to the rules and regulations of the United States
     Securities and Exchange Commission.

     Certain information and footnote disclosures normally included in financial
     statements prepared in accordance with generally accepted accounting
     principles have been condensed or omitted pursuant to such rules and
     regulations, although the Company believes that the disclosures are
     adequate to make the information presented not misleading.

     These financial statements reflect all adjustments, consisting of normal
     recurring adjustments, which in the opinion of management, are necessary
     for fair presentation of the information contained therein. It is suggested
     that these interim financial statements be read in conjunction with the
     audited financial statements of the Company for the years ended December
     31, 2002 and 2001 included in the Company's 10-KSB Annual Report. The
     Company follows the same accounting policies in the preparation of interim
     reports.

     Results of operations for the interim periods are not necessarily
     indicative of annual results.

     These interim financial statements include the amounts of its wholly-owned
     subsidiaries, Wonder Tool, Inc. ("WTI"), Multicorp Holdings Inc., Glas-Aire
     Industries Ltd., Glas-Aire Industries Inc., and 326362 B.C. Ltd.



                                       7
<PAGE>

2.   Inventories by component are as follows:

                                              March 31,         December 31,
                                                 2003               2002
                                              ----------         ----------

     Raw materials                            $1,094,899         $  910,509
     Work-in-progress                            162,037            144,446
     Finished goods                              170,594            148,067
                                              ----------         ----------
                                              $1,427,530         $1,203,022
                                              ==========         ==========

3.   Bank indebtedness and long term debt

     The Company's banking facilities agreement contains covenants that, among
other things, require the maintenance of certain financial ratios (including
compliance with certain working capital and debt-to-equity ratios), and failure
to maintain these financial ratios could lead to the revocation of these banking
facilities. During 2002 the Company breached financial covenants contained in
its credit agreements and such breaches continued to exist at March 31, 2003. As
a result, the long-term portion of the debt has been reclassified to current
liabilities in the Company's consolidated balance sheets. HSBC (the lender)
continues to monitor the loan balances. While now due on demand, HSBC has
permitted the Company to continue paying the loans in accordance with the terms
and conditions in the banking agreement.

4.   Warranty Accrual

     Changes in the Company's warranty liability during the periods were as
follows:

                                                    Three months ended
                                                 -------------------------
                                                 March 31,       March 31,
                                                    2003            2002
                                                 ---------       ---------

     Balance, beginning of period                $ 113,284       $ 387,776
     Warranty expense                              137,255          45,678
     Settlements made                             (146,681)       (173,918)
                                                 ---------       ---------
     Balance, end of period                      $ 103,858       $ 259,536
                                                 =========       =========

5.   Common Stock

     At March 31, 2003 and December 31, 2002 the Company had 180,000 options
granted to directors and 255,000 warrants granted to its chief Executive Officer
and President outstanding and 93,718 shares of treasury stock. The options were
excluded from the calculation of earning per share due to their antidilutive
effect.

                                       8
<PAGE>

6.   Stock Based Compensation

     Stock options granted to non-employees are accounted for in accordance with
the fair value method prescribed in SFAS No. 123 using the Black-Scholes option
pricing model. There were no stock options granted to non-employees during the
period covered by these financial statements.

     The Company applies Accounting Principles Board ("APB') Opinion No. 25,
"Accounting for Stock issued to Employees," and related interpretations in
accounting for stock option plans. Under APB Opinion No. 25, compensation cost
is recognized for stock options granted at prices below market price of the
underlying common stock on date of grant. Stock options granted in tranches
(graded vesting) are amortized over the respective vesting period of each
tranche.

     The Company does not plan to adopt the fair value method of accounting for
stock-based compensation to employees. Consequently, related pro-forma
information as required under SFAS No. 123 has been disclosed below in
accordance with SFAS No. 148. To provide the require pro-forma information, the
Company estimates the fair value of each warrant granted at the grant date using
the Black-Scholes option-pricing model. The pro-forma results set out below are
based on the following assumptions: No dividends, risk-free interest rate of
3.47%, Volatility factor of the expected market price of the Company's common
stock of 137% and an estimated weighted average expected life of the warrants of
24 months. The fair value of warrants granted on April 12, 2002 to the Company's
Chief Executive Officer and President was $0.33 per warrant.

                                                           Three months ended
                                                              March 31, 2003
                                                              --------------

  Net income, as reported                                      $   471,261
  Add: stock-based compensation expense included in reported
     net income                                                     10,838
  Deduct: total stock-based compensation expense determined
        under fair-value based method                              (10,374)
                                                               -----------
  Net income, pro-forma                                        $   471,725
                                                               ===========

  Earnings (loss) per share
       - basic - as reported                                   $     0.188
       - diluted-as reported                                   $     0.179
       - basic-pro-forma                                       $     0.189
       - diluted - pro-forma                                   $     0.179


7.   Segmented Information

     (a)  As a result of the disposition of certain assets & liabilities of WTI
          in January 2003 the results of operations of WTI, for the period
          ending March 31, 2002, has been presented as discontinued operations
          in these financial statements, the Company now operates in only one
          business segment: the automotive accessories segment.

                                       9
<PAGE>

     (b)  Sales figures include sales to customers who are located in the
          following countries:

                                                   Three months ended
                                              -----------------------------
                                              March 31,          March 31,
                                                 2003               2002
                                              ----------         ----------
     United States                            $3,252,323         $2,455,332
     Canada                                      204,942            183,096
     Japan and other                              13,794             54,843
                                              ----------         ----------
                                              $3,471,059         $2,693,271
                                              ==========         ==========

     (c)  Sales to customers who each accounted for 10% or more of the Company's
          sales are as follows:

                                                    Three months ended
                                                ---------------------------
                                                 March 31,        March 31,
                                                   2003             2002
                                                ----------       ----------
     Nissan North America, Inc                  $1,031,073       $  520,747
     Honda Access America, Inc.                  1,042,889          377,291
     General Motors                                675,123          835,533
                                                ----------       ----------
                                                $2,749,085       $1,733,571
                                                ==========       ==========

     (d)  Sales figures are comprised of sales in the following products lines:

                                                    Three months ended
                                                ---------------------------
                                                March 31,        March 31,
                                                   2003             2002
                                                ----------       ----------
     Sunroof wind deflectors                    $2,189,924       $1,997,160
     Hood protectors                               927,016          473,402
     Rear air deflectors                           278,490          173,269
     Door visors                                    75,629           49,440
                                                ----------       ----------
                                                $3,471,059       $2,693,271
                                                ==========       ==========

8.   Going Concern

     The financial statements have been prepared on a going concern basis, which
contemplates the realization of assets and satisfaction of liabilities and
commitments in the normal course of business. The Company incurred a net loss of
$1,281,775 and $3,385,414 for the years ended December 31, 2002 and 2001
respectively. At March 31, 2003 we had working capital deficiency of $1,178,696.
We have historically met our cash requirements to sustain our operations from
funds from operation and debt financing. Cash and cash equivalent increased
$72,712 during the current quarter.

     Management believes the Company can return to profitability in the current
fiscal year and will generate cash flow therefrom to meet cash requirements over
the next twelve months. We estimate our current cash requirements to sustain our
operations for the next twelve months through March 2004 to be $13,200,000.
While the Company believes its plan to be achievable, there can be no assurance
that it will generate sufficient cash flow from operations to address all cash
flow needs. Additionally, the Company's primary lender has indicated that,

                                       10
<PAGE>

although the loans remain on a demand basis, the loans may be repaid in
accordance with the terms and conditions outlined in the banking agreement. This
includes amortized payments on the non-revolving facilities. Thus, the Company
will continue making periodic payments on the term debt. Management believes
that the Company will be able to maintain these credit facilities on a going
forward basis; however, there can be no assurance that this will occur. In
addition, management is pursuing alternative financing arrangements. There can
be no assurance that the Company will be able to secure alternative financing if
needed or obtain alternative financing on terms satisfactory to the Company.
Management has implemented a plan to increase sales and improve efficiencies
while reducing labor costs. Management has added additional personnel to
strengthen its manufacturing, engineering, quality control and research and
development departments in an effort to improve efficiencies and increase the
Company's profit margins. Management is optimistic that these steps will
contribute to the Company's return to profitability and provide sufficient cash
flow from operations, capital resources and liquidity to continue to operate
into the future and continue as a going concern. However, there can be no
assurance that the sales increase, improvement in efficiencies or reduction in
labor costs will be successful.

     These conditions raise doubt about the Company's ability to continue as a
going concern. These financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or
amounts and classification of liabilities that might be necessary if the Company
is unable to continue as a going concern.

9.   Discontinued Operations

     On January 9, 2003, the Company sold the assets and liabilities of its
Orbital Polishing Division for $920,140, comprised of cash of $720,140 and a
promissory note receivable of $200,000. The sale resulted in a gain of $520,859
which was recognized in 2003. Disposal costs of $88,978 for legal fees and
commission have been netted against the gain. The promissory note is unsecured
and bears interest at the rate of 7% per annum. The principal together with
interest shall be repaid in twenty quarterly installments of $13,859 commencing
March 31, 2005. During the first four years after the purchase transaction, the
purchaser shall pay to the Company 15% of the gross revenue in excess of the
amounts below from the products included in the Orbital Polishing Division (the
"Earn Out Payments"). Included in this gross revenue calculation is all revenue
derived from current products or variations to current products included in the
Orbital Polish Division. Any revenue derived from new products developed by the
purchaser shall be exempt from this gross revenue calculation. Payments shall be
limited to $50,000 for each year. The purchaser shall be responsible for the
Earn Out Payments only to the extent that gross revenues exceed the following
amounts:

                     Year              Gross Revenue

                     2003               $1,000,000
                     2004                1,100,000
                     2005                1,200,000
                     2006                1,300,000

     No amounts have been accrued in these financial statements in respect of
earn out payments.

                                       11
<PAGE>

     The Company follows SFAS No. 144 "Accounting for the impairment or Disposal
of Long-lived Assets" in accounting for this transaction. Consequently, the
Orbital Polishing Division is reported as discontinued for all periods
presented. Financial-information of the Orbital Polishing Division is as
follows:




                                                        Three months ended
                                                       --------------------
                                                       March 31,   March 31,
                                                         2003        2002
                                                       --------    --------
     Revenues                                          $      0    $167,349
     Pre-tax income                                    $      0    $ 24,544


                                                       March 31,  December 31,
                                                         2003        2002
                                                       --------    --------
     Accounts receivable                               $      0    $ 61,970
     Inventory                                         $      0    $261,585
     Accounts payable and accrued liabilities          $      0      13,252





                                       12
<PAGE>

FORWARD-LOOKING STATEMENTS

     This Form 10-QSB contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, and the Company intends
that such forward-looking statements be subject to the safe harbors created
thereby. These forward-looking statements include the plans and objectives of
management for future operations, including plans and objectives relating to our
products and future economic performance. The forward-looking statements
included herein are based on current expectations that involve a number of risks
and uncertainties. These forward-looking statements are based on assumptions
that we will continue in business as a "going concern," that we will continue to
develop, market and ship products on a timely basis, that competitive conditions
within the automotive industry will not change materially or adversely, that
demand for our products will remain strong, that we will retain existing
customers and key management personnel, that our forecasts will accurately
anticipate market demand, that our bank will continue to provide our various
credit facilities and loans, and that there will be no material adverse change
in our operations or business. Assumptions relating to the foregoing involve
judgments with respect to, among other things, future economic, competitive and
market conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond our control.
Although we believe the assumptions underlying the forward-looking statements
are reasonable, any of the assumptions could prove inaccurate and, therefore,
there can be no assurance that the results contemplated in forward-looking
information will be realized. In addition, our business and operations are
subject to substantial risks that increase the uncertainty inherent in such
forward-looking statements. In light of the significant uncertainties inherent
in the forward-looking information included herein, the inclusion of such
information should not be regarded as a representation by the Company or any
other person that the objectives or plans of the Company will be achieved.



                                       13
<PAGE>

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

Changes in Results of Operations: Three Months Ended March 31, 2003 Compared to
Three Months Ended March 31, 2002

     The Company's sales increased by 28.88% from $2,693,271 for the three
months ended March 31, 2002, to $3,471,059 for the three months ended March 31,
2003. This increase is primarily due to volume increases in hood protectors and
increased sales to existing customers.

     Gross profit margin, expressed as a percentage of sales, increased from
17.46% for the three months ended March 31, 2002 to 24.84% for the three months
ended March 31, 2003. Actual gross profit increased from $470,314 for the three
months ended March 31, 2002 to $862,169 for the three months ended March 31,
2003. This net increase in gross margin percentage of 7.38% was due primarily to
(i) a 4.26% decrease in materials costs and delivery charges for replacement of
products, (ii) a decrease in direct labor and overhead costs of 1.98%, (iii) an
increase of 1% in rent due to new facilities, (iv) a decrease of 0.86% in travel
related to quality control, and (v) a decrease of 1.28% in other operating
costs.

     Depreciation expense increased 29.32% from $50,884 for the three months
ended March 31, 2002, to $65,804 for the three months ended March 31, 2003. The
primary reason for this increase in depreciation was due to the placement of new
equipment into service.

     Expenses for research and development decreased by 5.69% from $163,774 for
the three months ended March 31, 2002 to $154,456 for the three months ended
March 31, 2003. This decrease resulted primarily from (i) an increase of $26,985
or 16.48% in consulting fee for research and development activities, (ii) a
decrease of $8,944 or 5.46% in travel expenses and extra services related to new
product designs, (iii) a decrease of $20,162 or 12.31% in research and
development supplies and related delivery charges, and (iv) a decrease of labor
and overhead cost of $7,197 or 4.40%.

     Selling and distribution expenses increased by 32.82%, from $209,781 for
the three months ended March 31,2002, to $278,624 for the three months ended
March 31, 2003. This increase was due primarily to (i) a decrease of $7,124 or
3.39% in travel expense, (ii) a decrease of payroll accrual of $9,880 or 4.7%
for a former officer of the company, (iii) a decrease of $7,636 or 3.65% related
to marketing services, (iv) a decrease of $4,040 or 1.95% in commission
expenses, (v) an increase of $91,577 or 43.65% in warranty claim expenses, (vi)
an increase of $3,895 or 1.87% of advertising & promotion expenses and (vii) an
increase of $2,051 or 0.98% due to other operating and personnel expenses.

     General and administrative expenses decreased by 15.83% from $297,785 for
the three months ended March 31, 2002, to $250,650 for the three months ended
March 31, 2003. This decrease is primarily due to (i) a decrease of $15,329 or
5.15% related to the 2002 employment relocation cost of a new manager, (ii) a
decrease of $18,095 or 6.08% in legal, consulting and accounting fees related to
the preparation of annual report, (iii) a decrease of $3,340 or 1.12% in
computer consulting fees, and (iv) a decrease of $10,371 or 3.48% in other
operating costs.

     Foreign exchange loss was $167,035 for the three months ended March 31,
2003 compared to a foreign exchange gain of $12,549 for the three months ended
March 31, 2002. This was the result of the decreased strength of the United
States dollar against the Canadian dollar and the Canadian subsidiaries having
U.S. dollar domestic accounts receivable, which resulted in exchange losses.

                                       14
<PAGE>

     Interest expense increased by 19.68% from $24,421 for the three months
ended March 31, 2002, to $29,228 for the three months ended March 31, 2003. This
was the result from increased bank indebtedness.

     Our loss from continuing operations decreased by 73.37% from a loss of
$186,238 for the three months ended March 31, 2002 compared to a loss of $49,598
for the three months ended March 31, 2003. This decline in the loss was
primarily due to (i) an increase in sales and a corresponding increase in gross
margin percentage, (ii) a reduction in research & development cost, (iii) an
increase in warranty claims, and (iv) loss on foreign currency exchange for the
three months ended March 31, 2003.

     Effective January 1, 2003 the Company sold certain assets and liabilities
of the Orbital Polishing Division for $920,140 comprised of cash of $720,140 and
a promissory note receivable of $200,000. The sales resulted in a gain of
$520,859. The Orbital Polishing Division operations have been reported as
discontinued operations for all periods presented. Any taxes owning as a result
of the sale of Orbital Polishing Division assets will be offset by recognition
of capital losses carry forward to which a valuation allowance has been
previously recorded.

Liquidity and Capital Resources

     Cash used in operating activities for the period ended March 31, 2003 was
$248,946 compared to $252,077 for the period ended March 31, 2002. The use of
cash for the three months ended can be primarily attributed to (i) fund loss of
$49,598 from continuing operations, (ii) an increase of accounts receivable of
$356,410 due to the increase in sales at the end of March 2003, (iii)
inventories increase by $132,761 as a result of the build up of raw materials,
(iv) an increase of accounts payable of $282,276 and (v) a decrease in income
taxes payable. Our current cash requirements to sustain our operations for the
next twelve months through March 2004 are estimated to be $13,200,000. We expect
that these requirements will be provided by operations.

     Cash provided by investing activities included (i) the purchase of fixed
assets for the period ended March 31, 2003 of $94,593 compared to the purchase
of fixed assets in the period ended March 31, 2002 of $41,862, or an increase of
$52,731, (ii) an increase of $631,162 (proceeds of $720,140 less selling costs
of $88,978) due to the sale of the assets and liabilities of the Orbital
Polishing Division. Bank debt increased by $111,717 and was used, in part, to
fund the reduced cash from continuing operations, the acquiring of the fixed
assets and the paying down of long term debt of $326,572.

     As of March 31, 2003, we had a $1,362,583 (CDN $2,000,000) line of credit
for working capital, secured by accounts receivable, inventories, certain
equipment and other assets of the Company and an unlimited guarantee by the
Company and its subsidiary, Glas-Aire Industries Ltd. As of March 31, 2003, the
Company had overdrawn $67,284 over the allowable Line of Credit.

     On March 31, 2003, there was a working capital deficiency of $1,178,696 as
compared to $1,647,951 at December 31, 2002. This improvement in working capital
was primarily due to (i) the reduction of a long-term loan paid down by funds

                                       15
<PAGE>

received from the sale of WTI, (ii) an increase in receivables as the result of
higher sales, (iii) an increase in inventory due to a higher volume of orders,
and (iv) an increase in payables. We expect that working capital requirements
and capital additions will continue to be funded through a combination of our
existing funds, internally generated funds and existing bank facilities and
capital leases. Our working capital requirements are expected to increase in
line with the growth of our business.

     During 2002, we were in violation of certain covenants contained in the
banking facilities agreement. Pursuant to GAAP, as a result of the covenant
breach invoking the bank's right to call the long-term debt on demand, the
long-term debt has been reclassified as a current liability. However, the
Company remains in close contact with its lenders and has never been in default
or breach of any payment and/or payment schedule set forth in its original loan
agreements.

     The independent auditor's report accompanying our December 31, 2002
consolidated financial statements contain an explanatory paragraph expressing
doubt about the Company's ability to continue as a going concern. The
consolidated financial statements have been prepared "assuming that the Company
will continue as a going concern," which contemplates that the Company will
realize its assets and satisfy its liabilities and commitments in the ordinary
course of business. Although we believe that we have reversed our operating
losses and are currently operating at a profitable level, there can be no
assurance that we will be able to generate sufficient positive cash flow from
operations to address all of our cash flow needs.

     We are dependent upon these existing banking facilities. Currently, these
banking facilities and our financial position are under review. Our banking
facilities agreement contains covenants that, among other things, requires the
maintenance of certain financial ratios (including compliance with certain
working capital and debt to equity ratios), and failure to maintain these
financial ratios could lead to the revocation of these banking facilities. We
were in violation of certain of the covenants contained in the facilities
agreement at March 31, 2003. However, the lender has not declared an event of
default, and has agreed to forbear from taking any action until August 31, 2003.
Management believes that our banking facilities will not be revoked; however if
the facilities are revoked, and a replacement lender cannot be found, we could
be materially and adversely affected.

Critical Accounting Policies and Estimates.

Accounting Estimates.

     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 could differ from those estimates.

Inventories.

     Inventories are recorded at the lower of cost, on a first-in, first-out
basis, or market value. Market value for raw materials is defined as replacement
cost and for work-in-process and finished goods as net realizable value.

                                       16
<PAGE>

Revenue Recognition.

     We recognize revenue on the sale of products at the time the products are
shipped to customers.

Allowance for Doubtful Accounts.

     The Company records an allowance for doubtful accounts based on
specifically identifiable amounts that we believe to be uncollectible. The
criteria for the allowance provision includes historical experience and the
Company's assessment of the general financial conditions affecting its client
base. If the Company's actual collections experience changes, revisions to the
allowance may be required.

Research and Development.

     Research and development costs are expensed as incurred.

Warranty Accrual.

     The Company records a liability for estimated costs that may be incurred
under its warranties at the time that product revenue is recognized. The Company
periodically assesses the adequacy of its recorded warranty liability and
adjusts the amounts as necessary.

Valuation of Long Lived Assets.

     The Company evaluated the future recoverability of its fixed assets when
events or changes in business circumstances indicate that the carry amount of
the assets may not be fully recoverable.

Foreign Currency Translation and Transactions

     The Company conducts business in both Canada and the United States and used
the U.S. dollar as tits reporting currency. The function currency of the
Canadian subsidiaries is the Canadian dollar. The financial statements of the
Canadian subsidiaries have been translated under SFAS No. 52. Asset and
liabilities are translated at the rate of exchange at the balance sheet date and
revenues and expenses are translated at the average exchange rate during the
year. The resulting exchange gains and losses are shown as a separate component
of stockholders' equity.

     Transactions conducted in foreign currencies are translated as follows:

     At the transaction date, each asset, liability, revenue and expense is
translated by the use of the exchange rate in effect at that date. At the period
and date, monetary assets and liabilities are translated by using the exchange
rate in effect at that date. The resulting foreign exchange gains and losses are
included in income in the current period.

                                       17
<PAGE>

Item 3. Controls and Procedures

     Within 90 days prior to the date of this Report (the "Evaluation Date"),
the Company carried out an evaluation, under the supervision and with the
participation of the Company's management, including the Company's Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures as defined in the
Securities Exchange Act of 1934, as amended, Rules 13a-14 and 15d-14.

     Based on this evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures are effective in
timely alerting them to material information required to be included in the
Company's periodic SEC filings. Since the Evaluation Date, there have not been
any significant changes in the internal controls of the Company, or in other
factors that could significantly affect these controls subsequent to the
Evaluation Date.

                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Alex Ding Litigation.

     Following his termination for cause from his position as president of the
Company on September 12, 2001, Alex Ding, a former director of the Company and
the Company's former president filed a Writ of Summons on September 13, 2001, in
the Supreme Court of British Columbia (Action No. S015104). Mr. Ding's claims
were made against the Company, Multicorp Holdings Inc., Glas-Aire Industries
Ltd., William R. Ponsoldt, Craig Grossman, Todd Garrett, Mark Baldinger, Regency
Affiliates, Inc. and Speed.com, Inc. (collectively the "Defendants"). Mr. Ding
asserted among other things that the redemption transaction involved a breach of
agreements with HSBC Bank Canada ("Bank"), securities laws, corporate laws, and
fiduciary duties owed by the Defendants to the Company's shareholders. Mr. Ding
asserted that the court should enjoin various actions relating to the redemption
and grant other relief. Mr. Ding has not served all of the Defendants
personally, and has not filed a Statement of Claim. The Company discussed the
redemption with its Canadian counsel prior to effecting the redemption, and
determined that proceeding with the redemption would not be in violation of a
court order or otherwise prohibited. Further, the Bank reviewed the proposed
redemption transaction with both outside counsel and an outside accounting firm.
After completion of these reviews, the Bank loaned the Company the funds
necessary to effect the redemption. On January 14, 2003, Mr. Ding filed a notice
of discontinuance against the Company, Multicorp Holdings Inc., Glas-Aire
Industries Ltd., William R. Ponsoldt, Craig Grossman, Todd Garrett, Mark
Baldinger, Regency Affiliates, Inc. and Speed.com, Inc.

     On November 14, 2001, the Company filed a Writ of Summons with a Statement
of Claim against Mr. Ding in the Supreme Court of British Columbia alleging that
Mr. Ding had breached his fiduciary duty of loyalty to the Company. The
Statement of Claim alleges that Mr. Ding violated his fiduciary duty after he
was terminated for cause by making false statements to HSBC Canada that the
Company would be rendered insolvent by proceeding with the redemption and would
be unable to repay the funds advanced by the Bank. Further, the Company alleges
that as a result of Mr. Ding's actions the Company was forced to incur
additional expense with the Bank for a separate accounting firm and the Bank's
attorneys to review the proposed redemption transaction. Further, Mr. Ding after
his dismissal retained a laptop computer that had been provided to him by the
Company for approximately one week and during that time he improperly deleted

                                       18
<PAGE>

communications to and from the Company's customers and other information that
was on the laptop computer ("Data"). The Data deleted was important and
sensitive information owned by the Company and critical to the ongoing
operations of the Company. The Company alleges that it was temporarily deprived
of the laptop computer, and permanently deprived of the Data since there are not
other copies of the Data in the Company's files. The Company alleges that Mr.
Ding's actions were in breach of his fiduciary duties to the Company and that
the Company has suffered damages as a result of Mr. Ding's actions. The Company
is seeking: (i) an order that Mr. Ding return all copies of the Data that he
retained; (ii) damages and costs, and (iii) other relief. Mr. Ding has filed a
counterclaim against the Company for wrongful dismissal. These matters are still
pending.

     Celco Plastics, Ltd. Litigation.

     On July 31, 2002, we filed suit against Celco Plastics Ltd. ("Celco") in
the Supreme Court of British Columbia (Action No. SO24264). We allege that
Celco, our supplier of extrusions in the form of gaskets, supplied defective
gaskets to us commencing in 2000. We are alleging breach of contract and the
negligent manufacture of gaskets against Celco. We are seeking general damages,
special damages, interests and costs. Celco has commenced a counterclaim against
us for payment of outstanding invoices in the amount of CDN $32,521.24 as well
as general damages, special damages, interests and costs.

     Universal Dynamics Limited Litigation.

     On February 14, 2003, Universal Dynamics Limited ("Universal") filed suit
against us in the Supreme Court of British Columbia (Action No. S024878). The
statement of claim alleges that we have refused or neglected to pay outstanding
invoices to Universal for services provided in the design, preparation of
drawings and consulting work with regard to our new facility in Richmond, B.C.
Universal is seeking damages in the amount of approximately CDN $90,000, plus
interest and costs. We have not yet filed a response to Universal's claims,
however, we assert that Universal failed to perform pursuant to our agreement
and we were forced to employ an additional consulting company to complete the
tasks. We intend to vigorously defend against this claim.

Items 2, 3, and 4 of Part II are not applicable.

Item 5. Other Information

     On January 9, 2003, we completed the sale of substantially all of the
assets and certain of the liabilities of the Orbital Polishing Division,
pursuant to an Asset Purchase Agreement. The transaction was effective as of
January 1, 2003, although the Asset Purchase Agreement was executed and the
closing occurred on January 9, 2003.

     The Company sold the assets associated with the Wonder Tool pneumatic
polishers, electric polishers, double drum pole polishers, cleaning and
polishing compounds, polishing bonnets, associated accessories, airline toilet
deodorants, and wet/dry vacuum cleaning machines, including the intellectual
property associated with these assets. The consideration received from the
Orbital Polishing Division asset sale was $720,140 in cash, a $200,000
promissory note and up to $200,000 that may be earned pursuant to an earn out
provision in the Asset Purchase Agreement.

                                       19
<PAGE>

Item 6. Exhibits and Reports on Form 8-K

a)   Exhibits:

     99.1 Certification Pursuant to 18 U.S.C. 1350 as adopted pursuant to
          Section 906 of the Sarbanes-Oxley Act of 2002.

b)   Reports Filed on Form 8-K.

     Form 8-K filed on January 24, 2003 Disclosing sale of Wonder Tool Assets

     Form 8-K/A filed on February 7, 2003 Disclosing sale of Wonder Tool Assets





                                       20
<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: May 15, 2003

                                        GLAS-AIRE INDUSTRIES GROUP LTD.



                                        /s/ Craig Grossman
                                        ----------------------------------------
                                        Craig Grossman
                                        President and Chief Executive Officer








                                       21
<PAGE>

                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


     I, Craig Grossman, certify that:

1.   I have reviewed this quarterly report on Form 10-QSB of Glas-Aire
     Industries Group, Ltd.;

2.   Based on my knowledge, this quarterly 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 discovered
     by this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly 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
     quarterly 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 we 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 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 quarterly report (the "Evaluation Date") and;

     (c)  presented in this quarterly 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 auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     (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

                                       22
<PAGE>

     (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 certifying officers and I have indicated in this quarterly
     report whether or not there were significant changes in internal controls
     or in other factors that could significantly affect internal controls
     subsequent to the date of our most recent evaluation, including any
     corrective actions with regard to significant deficiencies and material
     weaknesses.




     Date: May 15, 2003                    /s/ Craig Grossman
                                           -------------------------------------
                                           Craig Grossman, President & CEO



                                       23
<PAGE>

                            CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, Linda Kwan, certify that:

1.   I have reviewed this quarterly report on Form 10-QSB of Glas-Aire
     Industries Group, Ltd.;

2.   Based on my knowledge, this quarterly 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 discovered
     by this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly 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
     quarterly 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 we 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 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 quarterly report (the "Evaluation Date") and;

     (c)  presented in this quarterly 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 auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     (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

                                       24
<PAGE>

     (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 certifying officers and I have indicated in this quarterly
     report whether or not there were significant changes in internal controls
     or in other factors that could significantly affect internal controls
     subsequent to the date of our most recent evaluation, including any
     corrective actions with regard to significant deficiencies and material
     weaknesses.




     Date: May 15, 2003                      /s/ Linda Kwan
                                             -----------------------------------
                                             Linda Kwan, Chief Financial Officer








                                       25