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 September 30, 2005
                ------------------------------------------------


[ ]  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 registrant as specified in its charter)

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

                 145 TYEE DRIVE, #1641, POINT ROBERTS, WA 98281
               --------------------------------------------------
                     (Address of principal executive office)

                                 (360) 447-0210
  ----------------------------------------------------------------------------
                          (Registrant telephone number)

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

     Securities registered pursuant to Section 12(B) of the Act:

                                                   Name of Each Exchange On
 Title of Each Class                                 Which Registered
--------------------                               -------------------------
   COMMON STOCK                                             OTC

         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 2,711,213 shares, not including 93,718
shares of treasury stock held by the Company as of September 30, 2005.

         Transitional Small Business Disclosure Format

        Yes_______        No___X____
<PAGE>

                         Glas-Aire Industries Group Ltd.

                                      INDEX

<TABLE>
<CAPTION>

<S>      <C>                                                                                                <C>
PART I.  FINANCIAL INFORMATION                                                                              PAGE

         Item 1.  Financial Statements                                                                         1

         Consolidated Condensed Balance Sheets
         September 30, 2005 (Unaudited) and December 31, 20024                                                 1

         Consolidated  Condensed  Statements of Operations  For the three months
         ended September 30, 2005 and 2004 and
         the nine months ended September 30, 2005 and 2004 (Unaudited)                                         2

         Consolidated Condensed Statement of Stockholders' Equity                                              3
         For the nine months ended September 30, 2005 (Unaudited)

         Consolidated  Condensed  Statements of Comprehensive  (Loss) Income For
         the three months ended September 30, 2005 and 2004
         and the nine months ended September 30, 2005 and 2004 (unaudited)                                     4

         Consolidated Condensed Statements of Cash Flows
         For the nine months ended September 30, 2005 and 2004 (Unaudited)                                     5

         Notes to Consolidated Condensed Financial Statements (Unaudited)                                      7

         Forward Looking Statements                                                                           16

         Item 2.  Management's Discussion and Analysis of                                                     16
                  Financial Condition and Results of Operations

         Item 3.  Controls and Procedures                                                                     20

PART II.  OTHER INFORMATION                                                                                   21

         Item 1.  Legal Proceedings                                                                           21

         Item 2.  Changes in Securities                                                                       21

         Item 3.  Defaults Upon Senior Securities                                                             21

         Item 4.  Submission of Matters to a Vote of Security Holders                                         21

         Item 5.  Other Information                                                                           21

         Item 6.  Exhibits and Reports on Form 8-K                                                            21

SIGNATURES                                                                                                    23
</TABLE>


<PAGE>
                         Glas-Aire Industries Group Ltd.
                      Consolidated Condensed Balance Sheets

<TABLE>
<CAPTION>
                                                                    September 30,             December 31,
                                                                         2005                     2004
                                                                    (Unaudited)                (Audited)
                                                                    --------------------------------------
ASSETS
Current
<S>                                                                 <C>                        <C>
     Cash                                                           $     10,949               $    34,550
                                                                    ------------               -----------
                                                                          10,949                    34,550

Property, plant and equipment, net
                                                                    ------------               -----------
                                                                    $     10,949               $    34,550
                                                                    ============               ===========


LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Current
     Accrued liabilities                                                 276,128                   105,008
     Income taxes payable                                                 35,500                    35,500
                                                                    ------------               -----------
                                                                         311,628                   140,508

Stockholders' equity
     Common stock                                                         27,112                    27,112
     Additional paid-in capital                                        1,549,313                 1,549,313
     Deferred compensation                                                     0                         0
     Accumulated Deficit                                              (2,529,882)               (2,335,161)

     Accumulated other comprehensive income
     Foreign currency translation adjustment                             652,778                   652,778
                                                                    ------------               -----------
                                                                        (300,679)                 (105,958)
                                                                    ------------               -----------
                                                                    $     10,949               $    34,550
                                                                    ============               ===========
</TABLE>





                 See accompanying notes to financial statements

                                       1
<PAGE>


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

<TABLE>
<CAPTION>
                                                             Three Months Ended                Nine Months Ended
                                                       September 30,    September 30,     September 30,     September 30,
                                                            2005            2004              2005               2004
                                                       -------------    --------------    -------------     -------------
<S>                                                    <C>              <C>               <C>               <C>
Sales                                                  $         0      $        483      $         0       $  1,637,754
Cost of sales                                                                 18,736                0          1,469,250
Gross profit                                                     0           (18,253)               0            168,504
                                                       -------------    --------------    -------------     -------------
Expenses
     Depreciation                                                0                 0                0             97,641
     Research and development                                    0                 0                0             71,857
     Selling and distribution                                    0                 0                              61,474
     General and administrative                             53,025            86,498          177,573            307,702
     Foreign exchange (gain) loss                                0                 0                             (18,371)
     Interest income                                             0                 0                0               (712)
     Interest expense                                       17,148                             17,148             31,451
                                                       -------------    --------------    -------------     -------------
                                                            70,173            86,498          194,720            551,042
                                                       -------------    --------------    -------------     -------------
Loss from continuing operations before
     Income taxes                                          (70,173)         (104,751)        (194,721)          (382,538)
     Income taxes - recovery                                     0                 0                0                  0
                                                       -------------    --------------    -------------     -------------
Loss from continuing operations                            (70,173)         (104,751)        (194,721)          (382,538)
Gain on disposition of operations                                               (739)                            662,792
                                                       -------------    --------------    -------------     -------------


Net income (loss) for the period                           (70,173)         (105,490)        (194,721)         280,254
                                                       =============    ==============    =============     =============

Earnings (loss) per share basic and diluted from
     Continuing operations                             $     (0.03)     $      (0.04)     $     (0.07)      $     0.10
     Discontinued operations                                                                                         -
                                                       -------------    --------------    -------------     -------------
                                                       $     (0.03)     $      (0.04)     $     (0.07)      $     0.10
                                                       =============    ==============    =============     =============
Weighted average common shares outstanding
(Basic and diluted - after deducting 93,718
shares of treasury stock  held by the Company)           2,711,213         2,711,213        2,711,213        2,711,213
                                                       =============    ==============    =============     =============
</TABLE>






           See accompanying notes to consolidated financial statements

                                       2
<PAGE>


                         Glas-Aire Industries Group Ltd.
            Consolidated Condensed Statement of Stockholders' Equity
                      Nine Months Ended September 30, 2005
                                   (Unaudited)

<TABLE>
<CAPTION>
--------------------- -------------- ------------ --------------- ---------------- -------------- ----------------- ----------------
<S>                   <C>            <C>          <C>             <C>              <C>            <C>               <C>

                         Common        Stock      Additional       Deferred        Accumulated     Accumulated        Stockholders'
                         Stock         Amount     Paid-in          Compensation    Deficit         Other              Equity
                                                  Capital          expense                         Comprehensive
                                                                                                   Income
--------------------- -------------- ------------ --------------- ---------------- --------------- ----------------- ---------------
     Balance -
      December 31,        2,711,213      $27,112    $1,549,313                  -    $(2,335,161)        $652,778         $(105,958)
        2004
--------------------- -------------- ------------ --------------- ---------------- --------------- ----------------- ---------------
     Net loss                     -            -             -                  -       (194,721)               -          (194,721)
--------------------- -------------- ------------ --------------- ---------------- --------------- ----------------- ---------------
     Deferred                     -            -             -
     compensation
--------------------- -------------- ------------ --------------- ---------------- --------------- ----------------- ---------------
     Shares issued                                                                             -                -
--------------------- -------------- ------------ --------------- ---------------- --------------- ----------------- ---------------
     Foreign currency             -            -             -                  -              -                -                 -
      translation
     adjustment
--------------------- -------------- ------------ --------------- ---------------- --------------- ----------------- ---------------
     Balance -
      September  30,      2,711,213      $27,112    $1,549,313                 $-    $(2,529,882)        $652,778         $(300,679)
         2005
--------------------- -------------- ------------ --------------- ---------------- --------------- ----------------- ---------------
</TABLE>











           See accompanying notes to consolidated financial statements

                                       3

<PAGE>



                         Glas-Aire Industries Group Ltd.
        Consolidated Condensed Statements of Comprehensive (Loss) Income
                                   (Unaudited)


<TABLE>
<CAPTION>

                                                                 Three months ended                       Nine months ended
                                                      ----------------------------------------- ------------------------------------
                                                             September 30,       September 30,    September 30,       September 30,
                                                                 2005                2004             2005                2004
                                                      --------------------- ------------------- ----------------- ------------------
<S>                                                              <C>                <C>               <C>                   <C>
Net loss                                                         $(70,173)          $(105,490)        $(194,720)            $280,254
Foreign currency translation adjustment                                 0                (222)                0              225,810

                                                      --------------------- ------------------- ----------------- ------------------
Comprehensive income (loss)                                      $(70,173)          $(105,712)        $(194,720)            $506,064
                                                      ===================== =================== ================= ==================
</TABLE>











                 See accompanying notes to financial statements

                                       4
<PAGE>


                         Glas-Aire Industries Group Ltd
                 Consolidated Condensed Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                                         Nine Months Ended
                                                                          September 30,                    September 30,
                                                                               2005                             2004
                                                                        -------------------------------------------------
Cash flows from:
Operating activities
<S>                                                                      <C>                             <C>
     Net loss for the period from continuing operations                  $   (194,721)                   $     280,251
     Depreciation                                                                                               97,641
     Deferred income taxes                                                                                     (76,632)
     Deferred stock warrant compensation amortized                                                                   0
     Unrealized foreign exchange loss                                                                                0
     Stock issued for directors' services                                                                            0
Decrease in assets
     Accounts receivable                                                                                     1,038,674
     Inventories                                                                                             1,264,126
     Income taxes recoverable                                                                                   68,543
     Prepaid expenses                                                                                           60,617
Increase (decrease) in liabilities
     Accounts payable                                                                                       (2,329,824)
     Accrued liabilities                                                      171,120                         (726,479)
     Income taxes payable                                                                                       35,500
                                                                        ---------------                   ---------------
        Net cash used in operating activities                                 (23,601)                        (287,583)
         From continuing operations
Cash flows from discontinued operations                                             -                                0
                                                                        ---------------                   ---------------
        Net cash used in operating activities                                 (23,601)                        (287,583)
                                                                        ---------------                   ---------------
Financing activities
     Proceeds on issuance of shares                                                 0                                0
     Increase in long-term debt                                                     0                                0
     Repayment of capital lease obligation                                          0                          (54,792)
     Repayment of long-term debt                                                    0                         (317,958)
     Increase in bank indebtedness                                                  0                       (1,645,421)
                                                                        ---------------                   ---------------
        Net cash (used in) provided by financing activities                         0                       (2,018,171)
                                                                        ---------------                   ---------------
Investing activities
     Disposal of fixed assets                                                                                2,160,796
     Purchase of equipment                                                          0                                0
                                                                        ---------------                   ---------------
     Net cash provided by (used in) investing activities                            0                        2,160,796
                                                                        ---------------                   ---------------

Foreign currency translation adjustment
      effect on cash balances                                                        0                         225,810
                                                                        ---------------                   ---------------
Increase (decrease) in cash                                                    (23,601)                         80,852

Cash, beginning of period                                                       34,550                               0
                                                                        ---------------                   ---------------
Cash, end of period                                                      $      10,949                     $    80,852
                                                                        ===============                   ===============
</TABLE>



                 See accompanying notes to financial statements

                                       5
<PAGE>


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

<TABLE>
<CAPTION>
                                                                                Nine Months Ended
                                                           ---------------------------------------------------------------
                                                                     September 30,               September 30,
                                                                         2005                        2004
                                                            --------------------------------------------------------------

Supplemental disclosure of cash flow relating to:

<S>                                                                      <C>                         <C>
     Interest paid                                                       $17,148                     $31,451

     Income taxes paid                                                   $     0                     $     0


Non - cash investing and financing activities

Stock warrant compensation,                                              $     0                     $     0

</TABLE>



























                 See accompanying notes to financial statements

                                       6
<PAGE>


                         Glas-Aire Industries Group Ltd.
              Notes to Consolidated Condensed Financial Statements
                               September 30, 2005
                                   (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.  These interim  financial
statements in conjunction with the audited  financial  statements of the Company
for the years ended  December 31, 2004 and unaudited  financial  statements  for
2003 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.

The  interim  financial  statements  include  the  amounts  of its  wholly-owned
subsidiary Glas-Aire Industries Ltd. Effective June 30, 2003, the Company merged
Wonder Tool,  Inc.,  Glas-Aire  Industries,  Inc.,  consisting of all the United
States subsidiaries into Glas-Aire  Industries Group, Ltd. Also,  effective June
30, 2003,  the Company wound up Glas-Aire  Industries  Ltd. and 326362 B.C. Ltd.
into Multicorp  Holdings Inc. Multicorp Holdings Inc. was then renamed Glas-Aire
Industries Ltd.

These  interim  financial  statements  include the  amounts of its wholly  owned
subsidiary  GlasAire  Industries  Ltd., to March 23, 2004. On March 24, 2004 the
Canadian  Operation filed Bankruptcy with the Supreme Court of British Columbia.
On July 31, 2004 Glas-Aire  Industries,  Inc.'s warehouse  operation was closed.
Glas-Aire Industries Group Ltd. and all inter-company  transactions and accounts
have been eliminated from the statements.


                                       7
<PAGE>


                         Glas-Aire Industries Group Ltd.
              Notes to Consolidated Condensed Financial Statements
                               September 30, 2005
                                   (Unaudited)


1. NATURE OF BUSINESS AND BASIS OF PRESENTATION(CONTINUED)

BANKRUPTCY

On March 24, 2004,  the Supreme  Court of British  Columbia  (Case No.  L040758)
appointed  KPMG Inc.  as  receiver  over all the right,  title and  interest  of
Glas-Aire  Industries Ltd, the wholly owned  subsidiary of Glas-Aire  Industries
Group  Ltd  (the  "Corporation"),   property,  assets,  and  undertakings.   The
Corporation was in default of certain financial ratios in its banking facilities
agreement with HSBC as was indebted to HSBC Bank for approximately  $2.7 million
(Canadian).  The Corporation has entered into  forbearance  agreements with HSBC
while it attempted to restructure its debt;  however the  forbearance  agreement
expired  on March 23,  2004 and HSBC  called the loans  into  default.  HSBC has
security on the Corporation's  assets,  however the assets are expected to yield
significantly  less than the Corporation's debt and is expected that no recovery
is likely for the Corporation's unsecured creditors.

Craig  Grossman,  President  and  chief  Executive  Officer  of the  Corporation
resigned as the sole officer and director of Glas-Aire  Industries Ltd Effective
March 22, 2004.


2. 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.  On December 16, 2003 HSBC (the lender) called the loan into default
as the  Company  was  deemed to be in  violation  of  certain  of the  covenants
contained in the facilities  agreement.  On January 5, 2004 the Company  entered
into a forbearance agreement with HSBC to attempt to restructure its debt within
the next 3 months.  However the forbearance agreement expired on March 23, 2004.
On March 24,  2004 the  Supreme  Court of British  Columbia  (Case No.  L040758)
appointed  KPMG Inc.  as  receiver  over all the right,  title and  interest  of
Glas-Aire  Industries Ltd, the wholly owned  subsidiary of Glas-Aire  Industries
Group Ltd (the "Corporation"), property assets, and undertaking. The Corporation
was in default of certain financial ratios in its banking  facilities  agreement
with  HSBC  as  was  indebted  to  HSBC  bank  for  approximately  $2.7  million
(Canadian).




                                       8
<PAGE>



                         Glas-Aire Industries Group Ltd.
              Notes to Consolidated Condensed Financial Statements
                               September 30, 2005
                                   (Unaudited)


3. WARRANTY ACCRUAL

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

<TABLE>
<CAPTION>
                                                                          Nine months ended
                                                                ---------------------------------------
                                                                   September 30,       September 30,
                                                                        2005                2004
                                                                ------------------- -------------------

<S>                                                                 <C>                   <C>
Balance, beginning of period                                        $            0        $    229,940
Warranty expense                                                                 0              34,664
Settlements made                                                                 0            (264,604)
                                                                ------------------- -------------------
Balance, end of period                                              $            0        $          0
                                                                =================== ===================
</TABLE>


4. COMMON STOCK

         (a) Authorized

            30,000,000 Common shares with a par value of $0.01 each
            1,000,000 Preferred shares with a par value of $0.01 each


         (b) Issued and outstanding

            2,711,213 Common shares

On April 12, 2003 and August 12,  2003,  the  company  issued  85,000  shares of
common stock  respectively  from the  exercise of warrants,  at a price of $0.01
each.

On April 1, 2003 the Company granted  50,000common stock options at the exercise
price of $0.75 to the directors in accordance  with the director's  compensation
program  approved by the  stockholders.  The options vested on April 1, 2003 and
are exercisable to March 31, 2008.

On July 18, 2003,  the Company  issued  40,542 shares of common stock (valued at
$30,000 based upon the trading price of the common stock around the dates of the
respective  agreement)  to the directors as part of their  compensation  for the
fiscal year ended December 31, 2002.

As of  September  30,  2005 the  Company  had  230,000  options  and 0  warrants
outstanding and 93,718 shares of treasury  stock.  The options and warrants were
excluded from the  calculation  of earnings per share due to their  antidilutive
effect.

                                       9
<PAGE>

                         Glas-Aire Industries Group Ltd.
              Notes to Consolidated Condensed Financial Statements
                               September 30, 2005
                                   (Unaudited)


5. 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 and option 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 for
the warrants: 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.

The pro-forma  results set out below are based on the following  assumptions for
the options: No dividends,  risk-free interest rate of 1.65%,  volatility factor
of the  expected  market  price  of the  Company's  common  stock of 137% and an
estimated  weighted average expected life of the options of 24 months.  The fair
value of stock  options  granted on April 1, 2003 to the directors was $0.07 per
option.







                                       10

<PAGE>



                         Glas-Aire Industries Group Ltd.
              Notes to Consolidated Condensed Financial Statements
                               September 30, 2005
                                   (Unaudited)


5. STOCK BASED COMPENSATION (CONTINUED)

<TABLE>
<CAPTION>
                                                                             Three months ended       Nine months ended
                                                                         ------------------------ --------------------------
                                                                              September 30,              September 30,
                                                                                  2005                       2005
                                                                         ------------------------ --------------------------

<S>                                                                                    <C>                      <C>
    Net income (loss), as reported                                                     $(70,173)                $ (194,720)
    Add:  stock-based  compensation  expense
          included in reported  net  income                                                   0                          0
    Deduct:  total stock-based  compensation
             expense  determined under fair-value based method                                0                          0
                                                                         ------------------------ --------------------------
    Net loss, pro-forma                                                                $(70,173)                 $(194,720)
                                                                         ======================== ==========================

    Loss per share
           - basic and diluted - as reported                                            $ (0.03)                    $(0.07)
           - basic and diluted - pro-forma                                              $ (0.03)                    $(0.07)

</TABLE>


6. STOCK OPTIONS

INCENTIVE AND NON-QUALIFIED PLANS

During the year  ended  January  31,  1997,  the  Company's  Board of  Directors
approved an Incentive Stock Option Plan and a  Non-Qualified  Stock Option Plan.
Each plan provides for granting options to purchase not more than 160,000 shares
of the  Company's  common  stock.  The  Incentive  Stock  Option  Plan  is to be
available to management and employees of the Company.  The  Non-Qualified  Stock
Option  Plan  is  to  be  available  to  certain  key   employees,   independent
contractors,  technical advisors and directors of the Company.  Vesting for both
plans will be determined at the date of grant.  Upon granting,  the options will
have a five year life.

At December 31, 2004 no options had been granted under either plan.

DIRECTOR COMPENSATION

In previous  periods the Company had granted  options to directors in accordance
with the director's compensation program approved by the stockholders. A summary
of the status of the Company's stock options outstanding as of December 31, 2004
is as follows:

                                       11

<PAGE>


                         Glas-Aire Industries Group Ltd.
              Notes to Consolidated Condensed Financial Statements
                               September 30, 2005
                                   (Unaudited)


6. STOCK OPTIONS (CONTINUED)

                                                             Number of  Exercise
                                                              Options    Price

Granted - November 4, 1999; Expiring - November 3, 2004        60,000   $  4.50
Granted - November 4, 2000; Expiring - November 3, 2005        60,000   $  2.75
Granted - November 4, 2001; Expiring - November 3, 2006        60,000   $  1.00
Granted - April 1, 2003: Expiring - March 31, 2008             50,000   $  0.75
                                                              ------------------
                                                              230,000

All 230,000  options are vested as of September 30, 2005. The options granted on
December 4, 2001 vested in May 2002.

No options were granted in WTI (or its  predecessor,  Orbital) prior to December
21, 2001.


SFAS No. 123 requires the Company to provide pro-forma information regarding net
loss as if the compensation costs for the Company's stock option grants had been
determined in accordance with the fair value based method prescribed in SFAS No.
123. To provide the required  pro-forma  information,  the Company estimates the
fair value of each stock option granted to directors at the grant date using the
Black-Scholes  option-pricing  model.  The pro-forma  results are set out in the
Summary of  Significant  Accounting  Policies,  base on the  following  weighted
average assumptions: no dividends,  risk-free interest rate of 3.03%, volatility
of the  trading  price of the  Company's  common  stock  of 100% and a  weighted
average  expected life of the stock  options  granted to directors of 24 months.
The fair value of stock  options  granted on December 4, 2001 to  directors  was
$0.53 per option.

7. SEGMENTED INFORMATION

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

<TABLE>
<CAPTION>
                                                        Three months ended                      Nine months ended
                                              --------------------------------------- --------------------------------------
                                                September 30,       September 30,       September 30,       September 30,
                                                     2005                2004                2005               2004
                                              ------------------- ------------------- ------------------- ------------------
<S>                                                           <C>               <C>                   <C>        <C>
        United States                                         $0                $483                  $0         $1,577,917
        Canada                                                 0                   0                   0             57,413
        Japan and other                                        0                   0                   0              2,424
                                              ------------------- ------------------- ------------------- ------------------
                                                              $0                $483                  $0         $1,637,754
                                              =================== =================== =================== ==================
</TABLE>

                                       12
<PAGE>

                         Glas-Aire Industries Group Ltd.
              Notes to Consolidated Condensed Financial Statements
                               September 30, 2005
                                   (Unaudited)

7. SEGMENTED INFORMATION(CONTINUED)

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

                                                       Three months ended                      Nine months ended
                                              --------------------------------------- --------------------------------------
                                                September 30,       September 30,       September 30,       September 30,
                                                     2005                2004                2005               2004
                                              ------------------- ------------------- ------------------- ------------------

<S>                                                           <C>                 <C>                 <C>        <C>
        Nissan North America, Inc.                            $0                  $0                  $0         $  449,744
        Honda Access America, Inc.                             0                   0                   0            504,449
        General Motors                                         0                   0                   0
        Toyota USA                                             0                   0                   0            217,336
                                              ------------------- ------------------- ------------------- ------------------
                                                              $0                  $0                  $0         $1,171,529
                                              =================== =================== =================== ==================
</TABLE>

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

<TABLE>
<CAPTION>
                                                        Three months ended                      Nine months ended
                                              --------------------------------------- --------------------------------------
                                                September 30,       September 30,       September 30,       September 30,
                                                     2005                2004                2005               2004
                                              ------------------- ------------------- ------------------- ------------------

<S>                                                           <C>               <C>                   <C>        <C>
        Sunroof                                               $0                $483                  $0         $1,086,523
        Hood protectors                                        0                   0                   0            401,494
        Rear air deflectors                                    0                   0                   0             93,754
        Door visors                                            0                   0                   0             55,983
                                              ------------------- ------------------- ------------------- ------------------
                                                              $0                $483                  $0         $1,637,754
                                              =================== =================== =================== ==================
</TABLE>


8. COMMITMENTS

The  Canadian  operation  filed  Bankruptcy  on March 24,  2004.  There  were no
commitments for operating lease.

The Company is committed to minimum  lease  payments  totaling  $176,636 for the
next two year with a five year renewal option,  under an operating lease for its
former premises. As the Company is no longer using these premises, the remaining
future  commitment  was fully  expensed in 2002 in the amount of $253,696  which
includes an estimate of common area  expenses and  property tax of $77,060.  The
Company's  monthly  lease  payment  including  its share of common area costs is
approximately  $12,000 per month until expiry in September  2004.  On October 6,
2003 the Landlord  agreed to accept the surrender of the Lease together with the
sum of $125,000 in five

                                       13
<PAGE>


                         Glas-Aire Industries Group Ltd.
              Notes to Consolidated Condensed Financial Statements
                               September 30, 2005
                                   (Unaudited)


8. COMMITMENTS (CONTINUED)

installments as settlement for the release of the Company's obligation under the
term of the Lease agreement.

The Company entered into an operating  lease agreement for its current  premises
commencing  May 1,  2002  for a term of seven  years  with a  five-year  renewal
option.  The landlord has provided the first three months of the lease rent fee.
The Company is committed to the minimum annual lease payments plus proportionate
common area costs in respect of its new premises

The  Company  entered  into an  employment  agreement  with its Chief  Executive
Officer and President  effective  January 1, 2002 and to terminate  December 31,
2005 unless terminated earlier by the Company or the Chief Executive Officer and
President.  The employment agreement is automatically renewable for three years.
The  employment  agreement  provides an annual salary of $213,000 plus an annual
bonus of 10% of the  increase  in net  shareholders'  equity  from the  previous
fiscal year excluding any increase  resulting  from the issue of shares.  If the
Chief Executive  Office and President is terminated for other than just cause or
is  disabled  and unable to perform  has  duties,  he is entitled to a severance
payment up to 18 months of his compensation.

On September 3, 2003 ALC Holdings,  LLC acquired 53.8% of the outstanding shares
of Glas-Aire  Industries  Group Ltd's common stock. Mr.  Grossman's  employments
agreements  with the company and his  outstanding  85,000  shares  warrant  were
cancelled. Mr. Grossman is one of the owners of ALC Holdings, LLC.


9. GOING CONCERN

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going  concern.  The Company  generated net losses of
$2,529,882  during  the period  from  September  29,  1992  (inception)  through
September  30,  2005.  Also,  on March 24,  2004 the  Canadian  Operation  filed
Bankruptcy  with  the  Supreme  Court of  British  Columbia.  On July  31,  2004
Glas-Aire  Industries,  Inc.'s warehouse operation was closed.  These conditions
raise  substantial  doubt  about the  Company's  ability to  continue as a going
concern.  The  Company's  continuation  as a going  concern is  dependent on its
ability  to meet its  obligations,  to  obtain  additional  financing  as may be
required and ultimately to attain profitability. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

Management  plans to raise  additional  funds through debt or equity  offerings.
Management  has yet to decide what type of offering  the Company will use or how
much capital the Company will rise.  There is no guarantee that the Company will
be able to raise any capital through any type of offerings.

                                       14
<PAGE>


                         Glas-Aire Industries Group Ltd.
              Notes to Consolidated Condensed Financial Statements
                               September 30, 2005
                                   (Unaudited)


10. SUBSEQUENT EVENT

The company's  directors had held the meeting on April 24, 2006 and approved the
following issuance of shares.

Company decided to issue 1,220,000 shares of the company's common stock to Craig
Grossman and1,220,000 shares of the Company's common stock to Linda Kwan in lieu
of the payment of their services.  The Company has accrued compensation to Craig
Grossman and Linda Kwan in the amount of approximately $122,000 each.

The Company  decided to issue  44,800  shares of the  Company's  common stock to
Craig Grossman and 191,972 shares of the Company's common stock to Linda Kwan in
connection  with the  payment  of their  personal  funds  paid for legal fees is
connection with the Bank Settlement.

The Company decided to issue  Schlueter & Associates,  P.C. (S&A) or its assigns
400,000  shares of the Company's  common stock to settle the incurred legal fees
to S&A.

The  Company  decided to issue Mark J.  Richardson,  Esq.  93,750  shares of the
Company's  common stock to consideration  for legal and other services  rendered
for the Company.






















                                       15

<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.

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

CHANGES IN RESULTS OF OPERATIONS: THREE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED
TO THREE MONTHS ENDED SEPTEMBER 30, 2004

         The  Company's  sales  decreased by 100% from $483 for the three months
ended  September  30, 2004 to $0 for the three months ended  September 30, 2005.
This  decrease  was  mainly the result of the  Canadian  operation's  filing for
bankruptcy on March 24, 2004 and ceasing its operation after that date.

         Gross profit  margins,  expressed as a percentage  of sales,  decreased
from  (23.28%)  for the three months ended  September  30, 2004,  to 0 % for the
three months ended September 30, 2005. This net decrease was due to the Canadian
operation's  filing for  bankruptcy  on March 24, 2004 and ceasing its operation
after that date.

         General and  administrative  expenses  decreased by 38.70% from $86,498
for the three months ended  September  30, 2004, to $53,025 for the three months
ended  September  30, 2005.  This decrease was primarily due to (i) the Canadian
operation's  filing for  bankruptcy  on March 24, 2004 and ceasing its operation
after that date (ii) an  increase in legal fee  related to loan  guarantee  from
Glas-Aire  Industries  Group Ltd with HSBC, (iii) an increase in Management fees
accrued for two officers to maintain the company.

                                       16
<PAGE>

         Interest  expense  increased by 100% from $0 for the three months ended
September  30, 2004,  to $17,148 for the three months ended  September 30, 2005.
This was the result of (i) the Canadian  operation's  filing for  bankruptcy  on
March 24, 2004 and ceasing its  operation  after that date (ii) a settlement  of
US$82,000  plus  extension  fee for the  release  of loan  guarantee  from  HSBC
effective July 1, 2005.

         Our loss from continuing  operations decreased by 33.01% from a loss of
$104,751 for the three months ended  September 30, 2004 as compared to a loss of
$70,173 for the three months ended September 30, 2005. This decrease in the loss
was primarily due to the Canadian operation's filing for bankruptcy on March 24,
2004 and ceasing its operation after that date.

NINE MONTHS ENDED SEPTEMBER 30, 2005 VS NINE MONTHS ENDED SEPTEMBER 30, 2004

         The  Company's  sales  decreased by 100% from  $1,637,754  for the nine
months ended  September  30, 2004 to $0 for the nine months ended  September 30,
2005.  This decrease was primarily  due to the Canadian  operation's  filing for
bankruptcy on March 24, 2004 and ceasing its operation after that date.

     The gross profit margins expressed as a percentage of sales, decreased from
10.29% for the nine months  period ended  September 30, 2004, to 0% for the nine
months period ended  September 30, 2005.  This net decrease was primarily due to
the Canadian operation's filing for bankruptcy on March 24, 2004 and ceasing its
operation after that date

         Depreciation expense decreased by 100% from $97,641 for the nine months
ended  September 30, 2004 to $0 for the nine months  period ended  September 30,
2005. The primary  reason for this decrease was due to the Canadian  operation's
filing for  bankruptcy  on March 24, 2004 and ceasing its  operation  after that
date.

         Expenses for research  and  development  decreased by 100% from $71,857
for the nine months  ended  September  30, 2004 to $0 for the nine months  ended
September  30,  2005.  This  decrease  was  a  direct  result  of  the  Canadian
operation's  filing for  bankruptcy  on March 24, 2004 and ceasing its operation
after that date

         Selling and distribution  expenses  decreased by 100%, from $61,474 for
the nine months  ended  September  30,  2004,  to $0 for the nine  months  ended
September 30, 2005. This decrease was primarily due to the Canadian  operation's
filing for  bankruptcy  on March 24, 2004 and ceasing its  operation  after that
date.

         General and  administrative  expenses decreased by 42.29% from $307,702
for the nine months ended  September  30, 2004,  to $177,572 for the nine months
ended  September  30, 2005.  This decrease was primarily due to (i) the Canadian
operation's  filing for  bankruptcy  on March 24, 2004 and ceasing its operation
after that date (ii) a decrease in legal fees,  accounting  fees  related to the
preparation  of quarterly  and annual  reports,  (iii) an increase in legal fees
related to loan guarantee from Glas-Aire Industries Group Ltd with HSBC, (iv) an
increase in Management fees accrued for two officers to maintain the company.

                                       17
<PAGE>

         Foreign  exchange gain was $18,371 for the nine months ended  September
30, 2004  compared to a foreign  exchange  gain of $0 for the nine months  ended
September 30, 2005. This decrease was primarily due to the Canadian  operation's
filing for  bankruptcy  on March 24, 2004 and ceasing its  operation  after that
date

         Interest  expense  decreased by 45.48% from $31,451 for the nine months
ended  September  30, 2004,  to $17,148 for the nine months ended  September 30,
2005. This was the result of (i) the Canadian  operation's filing for bankruptcy
on March 24, 2004 and ceasing its operation after that date (ii) a settlement of
US$82,000  plus  extension  fee for the  release  of loan  guarantee  from  HSBC
effective July 1, 2005.

         As a result  of these  factors  net  loss  for the  nine  months  ended
September  30, 2004 was  $382,538  compared  to a loss of $194,720  for the nine
months ended  September 30, 2005. This decrease in loss was primarily due to (i)
the Canadian operation's filing for bankruptcy on March 24, 2004 and ceasing its
operation  after that date (ii) an  increase in legal fee,  interest  related to
loan  guarantee  from  Glas-Aire  Industries  Group Ltd with HSBC,  and (iii) an
increase in Management fees accrued for two officers to maintain the company.

          Gain on  disposition  of operations  decrease by $662,792 for the nine
months ended September 30, 2005. This was the result of the Canadian operation's
filing for bankruptcy and ceasing its operation on March 24, 2004.

LIQUIDITY AND CAPITAL RESOURCES

         Cash used in operating  activities  for the period ended  September 30,
2005 was $23,601  compared to cash used in operating  activities of $287,583 for
the period ended  September 30, 2004.  The use of cash for the nine months ended
can be  primarily  attributed  to (i)  fund  loss of  $194,721  from  continuing
operations (ii) an increase of accrued liabilities of $171,120

         Cash used in financing  activities  for the period ended  September 30,
2005 was $0 compared to $2,018,171 for the period ended September 30, 2004. Cash
used in  financing  activities  for  the  nine  months  ended  can be  primarily
attributed to the Canadian  operation's  filing for  bankruptcy  and ceasing its
operation on March 24, 2004,

         Cash provided by investing  activities  for the period ended  September
30,  2005 was $0  compared to  $2,160,796  in  disposal of fixed  assets for the
period ended September 2004. This was due to the Canadian operation's filing for
bankruptcy and ceasing its operation on March 24, 2004

         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  auditors'  report  accompanying  our December 31, 2002
consolidated  financial  statements contain an explanatory  paragraph expressing
substantial  doubt about the Company's  ability to continue as a going  concern.

                                       18
<PAGE>

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.

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.


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  included  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  evaluates  the future  recoverability  of its fixed assets
when  events or changes in business  circumstances  indicate  that the  carrying
amount of the assets may not be fully recoverable.

                                       19
<PAGE>

FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS

         The Company conducts  business in both Canada and the United States and
uses the U.S.  dollar as its reporting  currency.  The function  currency of the
Canadian  subsidiary is the Canadian  dollar.  The  financial  statements of the
Canadian   subsidiary  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.

RECENT ACCOUNTING PRONOUNCEMENTS

         On May 15, 2003,  the Financial  Accounting  Standards  Board  ("FASB")
issued Statement of Financial  Accounting Standard ("SFAS") No. 150, "Accounting
for Certain Financial  Instruments with  Characteristics of both Liabilities and
Equity".  SFAS No. 150 changes the accounting for certain financial  instruments
that,  under  previous  guidance,  could be classified as equity or  "mezzanine"
equity,  by now requiring those  instruments to be classified as liabilities (or
assets in some  circumstances)  in the  balance  sheet.  Further,  SFAS No.  150
requires  disclosure  regarding the terms of those  instruments  and  settlement
alternatives.  SFAS No. 150 affects an entity's  classification of the following
freestanding  instruments:  a)  Mandatory  redeemable  instruments  b) Financial
instruments  to  repurchase  an entity's  own equity  instruments  c)  Financial
instruments embodying obligations that the issuer must or could choose to settle
by issuing a variable  number of its shares or other  equity  instruments  based
solely on (i) a fixed monetary amount known at inception or (ii) something other
than  changes  in its own equity  instruments  d) SFAS No. 150 does not apply to
features  embedded in a financial  instrument  that is not a  derivative  in its
entirety.  The guidance in SFAS No. 150 is generally effective for all financial
instruments  entered  into or  modified  after May 31,  2003,  and is  otherwise
effective at the beginning of the first interim period  beginning after June 15,
2003.

         The  implementation of this new standard did not have a material effect
on our consolidated financial statements.

ITEM 3.  CONTROLS AND PROCEDURES

         The Company's management, with the participation of the Company's Chief
Executive  Officer and Chief Financial  Officer,  evaluated the effectiveness of
the Company's  disclosure controls and procedures (as defined in Rules 13a-15(e)
and  15d-15(e)  under the  Securities  Exchange  Act of 1934,  as  amended  (the
"Exchange Act")) as of June 30, 2005.  Based on this  evaluation,  the Company's
Chief Executive  Officer and Chief Financial  Officer concluded that, as of June
30, 2005, the Company's  disclosure controls and procedures were (1) designed to
ensure that material  information  relating to the Company, is made known to the
Company's Chief Executive  Officer and Chief Financial  Officer by others within

                                       20
<PAGE>

the  Company,  particularly  during the  period in which  this  report was being
prepared and (2)  effective,  in that they  provide  reasonable  assurance  that
information required to be disclosed by the Company in the reports that it files
or  submits  under the  Exchange  Act is  recorded,  processed,  summarized  and
reported within the time periods specified in the SEC's rules and forms.

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         We are involved in certain legal proceedings, claims and litigation. As
of the  date of the  filing  of this  Quarterly  Report,  there  has been no new
litigation  or new  developments  in any pending  litigation  that have not been
previously reported.

DRAGON CAPITAL

         On August 8, 2003,  Dragon Capital,  LLC ("Dragon")  filed suit against
the Company in Denver District Court (Case No. 03CV6198). Dragon alleges that we
have  refused to pay a success fee in the amount of $59,000 in  connection  with
the  Company's  merger with Wonder Tool,  Inc. The  Claimant  alleges  breach of
contract  claim,  promissory  estoppel  and  unjust  enrichment  against  us. On
September 25, 2003, we filed our answer to the  Complaint.  Management  believes
this claim is entirely  without merit and intends to vigorously  defend  against
this claim.

ITEMS 2, 3 AND 4 ARE NOT APPLICABLE.

ITEM 5.    OTHER INFORMATION

         On September 11, 2003, we issued a press  release  announcing  that ALC
Holdings,  LLC ("ALC") purchased a majority of the outstanding  shares of common
stock of Glas-Aire  Industries Group, Ltd. from several  shareholders.  ALC is a
newly formed company  controlled by several managers,  including Craig Grossman,
our Chief Executive Officer and President. In connection with the acquisition of
the Glas-Aire shares,  five directors of Glas-Aire resigned effective  September
3, 2003.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

         a) Exhibits:

                  31.1     Section 302 Certification

                  32.1     Section 906 Certification

                                       21

<PAGE>

         b) Reports Filed on Form 8-K.

                  A Report on Form 8-K was filed on March 29,  2004 to  disclose
                  the March 24, 2004 appointment of KPMG by the Supreme Court of
                  British  Columbia (Case No.  L040758) as receiver over all the
                  right,  title and  interest of Glas-Aire  Industries  Ltd, the
                  wholly owned subsidiary of Glas-Aire  Industries  Group,  Ltd.
                  (the :"Corporation"),  property, assets and undertakings.  The
                  Corporation was in default of certain  financial ratios in its
                  banking  facilities  agreement  with HSBC and was  indebted to
                  HSBC Bank for approximately $2.7 million (Canadian).


         c) A Report on Form 8K filed on June 17, 2004  disclosed  the change in
Registrant's Certifying Accountant:

                  (a) Dismissal of Previous Independent Accountants.

                  Effective  June  17,  2004,  Glas-Aire  Industries  Group  Ltd
                  ("Company")   dismissed  BDO  Dunwoody  LLP  ("BDO"),  as  its
                  independent  public  accountants.  The Company's sole Director
                  approved this decision to dismiss BDO.

                  (b) Engagement of New Independent Accountants.

                  On June 17, 2004 the Company engaged Dale Matheson Carr-Hilton
                  LaBonte Chartered Accounts as its new independent accountants.





















                                       22
<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: August 14, 2006
                                   GLAS-AIRE INDUSTRIES GROUP LTD.


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


                                   /s/Linda Kwan
                                   ---------------------------------------
                                   Linda Kwan
                                   Chief Financial Officer

                Pursuant to the  requirements of the Securities  Exchange Act of
1934, as amended,  this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates indicated.


By:  \s\ Craig Grossman                                   Dated: August 14, 2006
    ---------------------------------------------------
      Craig Grossman, Chairman of the Board,
      Chief Executive Officer, President,
      and Secretary (Principal Executive Officer)

By:  \s\ Linda Kwan                                       Dated: August 14, 2006
    ---------------------------------------------------
      Linda Kwan, Chief Financial Officer
      (Principal Financial/Accounting Officer)
















                                       23