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      October 31, 1996
                                          ----------------------------------

[  ]      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                        (IRS Employer           
of incorporation or  rganization)                   Identification No.)


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

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


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

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has  been  subject  to such  filing  requirements  for the  past  90  days. 
                                Yes   X    No  
                                    -----     -----

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

             Class                              Outstanding at October 31, 1996
  -----------------------------                 -------------------------------
  Common Stock, $0.01 par value                            1,573,421



                                                       

<PAGE>

                         Glas-Aire Industries Group Ltd.

                                      INDEX
                                      -----


                                                                          Page
                                                                          ----
PART I.   FINANCIAL INFORMATION

  Item 1.   Financial Statements                                        

            Consolidated Condensed Balance Sheets -
              October 31, 1996 and January 31, 1996                         3

            Consolidated Condensed Statement of Operations
              for the three months ended October 31, 1996 and 1995,
              and for the nine months ended October 31, 1996 and 1995       4

            Consolidated  Condensed  Statement  of Cash Flow for the
              three months ended October 31, 1996 and 1995
              and for the six months ended October 31, 1996 and 1995        5

            Notes to Consolidated Condensed Financial Statements            6

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

PART II.  OTHER INFORMATION

     Item 6.      Exhibits and Reports on Form 8-K                          9


SIGNATURES                                                                 10



                                      - 2 -


<PAGE>


                          PART I. FINANCIAL INFORMATION

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

                                                      October 31,    January 31,
                                                        1996            1996
                                                     ------------   ------------
                                                     (Unaudited)     (Audited)
Assets
Current
     Cash and equivalents                            $ 2,341,603    $   330,107
     Accounts receivable                                 888,644        672,671
     Inventories                                         631,108        689,858
     Prepaid expenses                                    214,027        173,866
                                                     -----------    -----------
                                                       4,075,382      1,866,502
Fixed assets                                           1,091,004        758,166
                                                     -----------    -----------
Total Assets                                         $ 5,166,386    $ 2,624,668
                                                     ===========    ===========

Liabilities and Shareholders' Equity
Current
     Bank indebtedness                               $   140,732    $   255,926
     Accounts payable and accrued liabilities            622,856        511,006
     Incomes taxes payable                               107,770        138,457
     Current portion - long term debt                       --           27,304
     Current portion - capital lease                        --           33,616
                                                     -----------    -----------
                                                     $   871,358    $   966,309

Long-term debt
Obligation under capital lease                              --           63,630
Deferred income taxes                                    133,995        130,571
                                                     -----------    -----------
                                                     $ 1,005,353    $ 1,160,510
                                                     -----------    -----------
Shareholders' equity:
     Share capital                                        16,166          9,238
     Contributed surplus                               3,556,919        911,148
     Treasury stock                                     (143,146)       (17,010)
     Retained earnings                                   743,599        589,834
     Cumulative translation adjustment                   (12,505)       (29,052)
                                                     -----------    -----------
                                                       4,161,033      1,464,158
Total Liabilities and Shareholders' Equity           $ 5,166,386    $ 2,624,668
                                                     ===========    ===========


                                      - 3 -


<PAGE>
<TABLE>
<CAPTION>
      
                                      Glas Aire Industries Group Ltd.
                                      Consolidated Condensed Statement of Operations
                                                        (Unaudited)

                                                        Three Months Ended           Nine Months Ended
                                                     October 31,   October 31,    October 31,    October 31,
                                                        1996          1995           1996           1995
                                                    -----------    -----------    -----------    ----------

<S>                                                 <C>            <C>            <C>            <C>        
Sales                                               $ 1,215,439    $ 1,085,444    $ 3,185,802    $ 3,008,969
Cost of sales                                           919,431        649,797      2,209,204      1,853,104
                                                    -----------    -----------    -----------    -----------
Gross profit                                            296,008        435,647        976,598      1,155,865
                                                    -----------    -----------    -----------    -----------
Expenses
     Depreciation                                        29,493         26,950         75,963         64,098
     Research and development                            73,760         96,349        181,496        190,642
     Selling and distribution                            77,529         60,867        216,264        211,794
     General and administrative                          83,890         99,899        263,049        366,211
     Provision for profit sharing                        (1,970)        11,768         24,101         29,870
     Interest                                           (31,237)         1,934        (50,725)        11,353
                                                    -----------    -----------    -----------    -----------
                                                        231,465        297,767        710,148        873,968
                                                    -----------    -----------    -----------    -----------
Income from operations                                   64,543        137,880        266,450        281,897
Other income                                             (4,492)        (5,697)       (18,440)        (6,005)
                                                    -----------    -----------    -----------    -----------
Income (loss) before income taxes                        60,051        132,183        248,010        275,892
Income taxes - current                                   22,947         39,811         94,245        103,295
Income taxes - deferred                                       0          9,633              0          4,881
                                                    -----------    -----------    -----------    -----------
Net Income (loss) for the period                    $    37,104    $    82,739    $   153,765    $   167,716
                                                    ===========    ===========    ===========    ===========
Net income per share of common stock                $      0.02    $      0.09    $      0.10    $      0.18
Weight average common shares outstanding              1,573,421        919,621      1,573,421        919,621







                            See accompanyings notes to consolidated financial statements

                                                          -4-
                                                
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                                              Glas Aire Industries Group Ltd.
                                      Consolidated Condensed Statement of Cash Flows
                                                        (Unaudited)

                                                                  Three Months Ended            Nine Months Ended
                                                               October 31,    October 31,    October 31,    October 31,
                                                                  1996           1995          1996           1995
                                                              -----------    -----------    -----------    ----------

<S>                                                           <C>             <C>            <C>            <C>   
Increase (decrease) in cash
Cash flows from:
Operating Activities
     Income from operations                                   $    37,104    $    82,739    $   153,765    $   167,716
     Depreciation                                                  29,493         22,083         75,962         64,098
     Deferred income taxes                                          3,548         11,327          3,424          9,589
     Gain on sale of capital assets                                 1,017            (31)         1,017         (4,954)
     Net change in non-cash working capital                      (186,347)        92,384       (116,221)      (389,890)
     Cumulative translation adjustment                             17,953          8,601         16,547         22,896
                                                              -----------    -----------    -----------    -----------
        Net cash (used in) operating activities                   (97,232)       217,103        134,494       (130,545)
                                                              -----------    -----------    -----------    -----------

Financing Activities
     Decrease in obligation under capital lease                      --           (6,235)       (97,246)       (17,577)
     Repayment of long-term debt                                     --          (13,184)       (27,304)       (52,820)
     Purchase of treasury stock                                  (126,136)       (17,010)      (126,136)       (17,010)
     Share offering expenses                                         --          (47,789)      (811,301)       (47,789)
     Increase (decrease) in bank indebtedness                     140,732         (9,072)      (115,194)       284,291
     Common stock                                                    --             --        3,464,000           --
                                                              -----------    -----------    -----------    -----------
        Net cash (used in) financing activities               $    14,596    $   (93,290)   $ 2,286,819    $   149,095
                                                              -----------    -----------    -----------    -----------

Investing Activities
     Proceeds from sale of fixed assets                            12,443            222         12,443         36,009
     Purchase of capital assets                                  (202,655)       (42,728)      (419,077)      (143,404)
     Deferred development costs                                    (3,183)          --           (3,183)          --
                                                              -----------    -----------    -----------    -----------
     Net cash used in investing activities                       (193,395)       (42,506)      (409,817)      (107,395)
                                                              -----------    -----------    -----------    -----------

Decrease in cash during the period                               (276,031)        81,307      2,011,496        (88,845)

Cash and equivalents, beginning of period                       2,617,634        219,172        330,107        389,324
                                                              -----------    -----------    -----------    -----------

Cash and equivalents, end of period                            $2,341,603    $   300,479    $ 2,341,603    $   300,479
                                                              ===========    ===========    ===========    ===========

Changes in non-cash working capital
     Accounts receivable                                      $  (123,535)   $   118,602    $  (216,973)   $   103,502
     Inventories                                                 (128,339)      (166,157)        58,750       (293,160)
     Prepaid expense                                             (151,135)          (577)       (40,161)       (18,070)
     Accounts payable and accrued liabilities                     207,425         98,975        112,850       (115,227)
     Income taxes payable                                           9,237         41,541        (30,687)       (66,935)
                                                              -----------    -----------    -----------    -----------
                                                              $  (186,347)   $    92,384    $  (116,221)   $  (389,890)
                                                              ===========    ===========    ===========    ===========

                                                    See accompanying notes. 


                                                         -5-
</TABLE>


<PAGE>


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

                                October 31, 1996

1.   In the opinion of management,  the  accompanying  unaudited,  consolidated,
     condensed financial statements contain all adjustments  (consisting of only
     those  which are normal and  recurring  in nature)  necessary  to  present,
     fairly,  the  financial  position of the Company as of October 31, 1996 and
     the results of  operations  as well as cash flows for the  three-month  and
     nine-month periods ended October 31, 1996 and 1995.

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

     These financial statements have been prepared in accordance with accounting
     principles   generally   accepted  in  the  United   States.   For  further
     information,  refer to the Company's  consolidated financial statements for
     the fiscal year ended  January 31, 1996 and footnotes  thereto  included in
     the Company's Registration Statement filed on Form SB-2.

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

4.   Inventories  by component  are as follows:

                                              October 31,          October 31, 
                                                 1996                 1995
                                              ----------           ----------
       Raw  materials                         $  473,224           $  455,354
       Work-in-progress                           81,078               80,240
       Finished goods                             56,782              100,016
       Supplies                                   20,024               27,259
                                              ----------           ----------
                                              $  631,108           $  662,869


5.   Bank Indebtedness

                                             October 31,           October 31,
                                                1996                   1995
                                             -----------           -----------
           Revolving Bank loan                $ 140,732             $ 284,291

     
     The revolving bank loan is a Cdn. $1,000,000  overdraft facility,  which is
     due on demand and bears  interest at Canadian  bank prime rates (8% January
     31, 1996, 5% October 31, 1996) plus 1/2%.  This line of credit is renewable
     annually.

      
     The following have been provided as collateral for these loans:

     
     (a)  general assignments of accounts receivable and inventories.

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

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

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

7.   On May 2, 1996, the Company issued 680,000 shares of its common stock in an
     underwritten  public  offering.  Following the public  offering,  the stock
     price  declined  and the Company  repurchased  39,000  shares of the Common
     Stock sold in the public  offering  because  management  believed  that the
     Common  Stock was  undervalued.  As a result,  the  Company  had a total of
     1,573,421  shares of its Common Stock issued and outstanding at October 31,
     1996.


                                      - 6 -


<PAGE>



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

Three Months Ended October 31, 1996 vs Three Months Ended October 31, 1995
--------------------------------------------------------------------------

     The Company's  sales  increased by 12% to  $1,215,439  for the three months
ended  October 31,  1996,  compared to  $1,085,444  for the three  months  ended
October 31,  1995.  This was the result of the  addition of new  customers  plus
volume increases in sales orders from existing customers.

     Gross  profit  decreased  by 32% from  $435,647  for the three months ended
October 31, 1995, to $296,008 for the three months ended October 31, 1996.  This
net decrease of 32% was due  primarily to (1) increases in material  costs;  and
(2) increased  labor costs related to upgrading  the  Company's  facilities  and
equipment for the production of both new and existing products for its customers
in Japan.

     Depreciation  expense  increased  by 10% from  $26,950 for the three months
ended  October 31, 1995, to $29,493 for the three months ended October 31, 1996.
This increase has been the result of adding new equipment into service.

     Expenses for research and development decreased by 23% from $96,349 for the
three  months  ended  October 31,  1995,  to $73,760 for the three  months ended
October 31, 1996. This decrease was primarily because the Company conducted more
research and development  in-house rather than through outside contractors which
resulted in some cost savings.

     Selling and  distribution  expenses  increased by 27%, from $60,867 for the
three  months  ended  October 31,  1995,  to $77,529 for the three  months ended
October 31, 1996.  This increase was primarily due to increased  travel expenses
relating to the Company's marketing efforts.  Commission expenses also increased
due to the addition of new customers  and volume  increases in sales orders from
existing customers.

     General and  administrative  expenses decreased by 16% from $99,899 for the
three  months  ended  October 31,  1995,  to $83,890 for the three  months ended
October 31, 1996. This decrease was the result of the successful installation of
customized  business and accounting  computer  systems for purchasing  inventory
control,  work order  administration,  and for  accounting  applications,  which
facilitated  the  mechanization  of  certain  management   activities   allowing
organizational  downsizing.  Management also believes that the decrease was also
due to effective training of employees in the use of those systems.

     Provision for profit  sharing  decreased  from $11,768 for the three months
ended October 31, 1995, to $(1,970) for the three months ended October 31, 1996,
primarily as a result of the higher cost of sales and the corresponding  decline
in income.

     Interest  income  increased  from $7,972 for the three months ended October
31, 1995, to $32,245 for the three months ended October 31, 1996, as a result of
the investment of proceeds  received in the Company's public offering.  Interest
expense declined because the Company reduced its debt.

     Before income taxes,  the Company's  income decreased 54% from $132,183 for
the three months ended  October 31, 1995,  to $60,051 for the three months ended
October 31, 1996. This decrease in income is primarily due to the higher cost of
sales.

     The Company  accrued  income  taxes of $49,444 for the three  months  ended
October 31, 1995,  compared to $22,947 for the three  months  ended  October 31,
1996, as a result of the decrease in taxable income.

     As a result of the foregoing,  net income  decreased 55.1% from $82,739 for
the three months ended  October 31, 1995,  to $37,104 for the three months ended
October 31, 1996.

Financial Condition and Liquidity

     Working capital was $3,204,024 at October 31, 1996. The increase in working
capital was the result of  completion of the  Company's  public  offering in May
1996.  For the three months ended  October 31, 1996,  net cash used in operating
activities  totaled  $(97,232)  including  income  from  operations  of $37,104,
depreciation of $29,493, a cumulative  transaction  adjustment of $17,953, and a


                                      -7-

<PAGE>


net change in non-cash  working  capital of $(186,347)  Net cash from  financing
activities was $14,596, which resulted from repurchasing 39,000 of the Company's
common shares for $(126,136),  and an increase in bank indebtedness of $140,732.
Net cash used in investing  activities was  $(193,395)  primarily as a result of
the  purchase  of capital  assets.  Accounts  receivable  increased  by $242,137
primarily  due to  increased  sales in October  1996.  Inventories  decreased by
$37,818 as a result of a build-up in inventories of acrylic and boxes during the
last quarter to facilitate  planned  shipments of future products sold.  Prepaid
expenses  increased by $150,558  due to deposit  placed on  equipment.  Accounts
payable and accrued liabilities increased by $108,450 as a result of building up
for higher  sales volume in October  1996.  Income  taxes  payable  decreased by
$32,304 as a result.

Nine Months Ended October 31, 1996 vs Nine Months Ended October 31, 1995
------------------------------------------------------------------------

     The Company's sales increased by 6% to $3,185,802 for the nine months ended
October 31, 1996,  compared to $3,008,969  for the nine months ended October 31,
1995.  This has been the result of the  addition  of new  customers  plus volume
increases in sales orders from existing customers.

     Gross  profit  decreased by 16% from  $1,155,865  for the nine months ended
October 31, 1995, to $976,598 for the nine months ended  October 31, 1996.  This
net decrease of 16% was due primarily to (1) increases in material costs and (2)
increased  labor  costs  related  to  upgrading  the  Company's  facilities  and
equipment for the production of both new and existing products for its customers
in Japan.

     Depreciation  expense  increased  by 19% from  $64,098  for the nine months
ended  October 31, 1995,  to $75,963 for the nine months ended October 31, 1996.
This increase was the result of adding new equipment into service.

     Expenses for research and development decreased by 5% from $190,642 for the
nine months  ended  October 31,  1995,  to  $181,496  for the nine months  ended
October 31, 1996. This decrease was primarily because the Company conducted more
research and development  in-house rather than through outside contractors which
resulted in some cost savings.

     Selling and  distribution  expenses  increased by 2%, from $211,794 for the
nine months  ended  October 31,  1995,  to  $216,264  for the nine months  ended
October 31, 1996.  This increase was primarily due to increased  travel expenses
relating to the Company's marketing efforts.  Commission expenses also increased
due to the addition of new customers,  and volume increases in sales orders from
existing customers.

     General and administrative  expenses decreased by 28% from $366,211 for the
nine months  ended  October 31,  1995,  to  $263,049  for the nine months  ended
October 31,  1996,  as a result of the  successful  installation  of  customized
business and accounting computer systems for purchasing inventory control,  work
order  administration,  and for accounting  applications,  which facilitated the
mechanization  of  certain   management   activities   allowing   organizational
downsizing. Management also believes that the decrease was also due to effective
training of employees in the use of those systems.

     Provision  for profit  sharing  decreased  by 19% from $29,870 for the nine
months ended  October 31, 1995, to $24,101 for the nine months ended October 31,
1996, as a result of the higher cost of sales and the  corresponding  decline in
income.

     Interest  income  increased  from $12,064 for the nine months ended October
31, 1995,  to $67,352 for the nine months ended October 31, 1996, as a result of
the investment of proceeds received from the Company's public offering. Interest
expense  declined  from $23,417 for the nine months ended  October 31, 1995,  to
$16,627 for the nine months ended October 31, 1996.

     Other expenses  increased from $6,005 for the nine months ended October 31,
1995,  to $18,440 for the nine months  ended  October 31,  1996,  as a result of
increased  legal  expenses  relating to the  Company's  obligations  as a public
company and consulting fees related to public relations.

     Before income taxes,  the Company's  income  decreased by 10% from $275,892
for the nine months  ended  October 31,  1995,  to $248,010  for the nine months
ended  October 31, 1996.  This decrease in income is primarily due to the higher
cost of sales.

                                      -8-

<PAGE>


     The Company  accrued  income  taxes of $108,176  for the nine months  ended
October 31,  1995,  compared to $94,245  for the nine months  ended  October 31,
1996, as a result of the decrease in taxable income.

     As a result of the foregoing,  net income decreased by 8% from $167,716 for
the nine months ended  October 31,  1995,  to $153,765 for the nine months ended
October 31, 1996.

Financial Condition and Liquidity

     Working capital was $3,204,960 at October 31, 1996. The increase in working
capital was the result of  completion of the  Company's  public  offering in May
1996.  For the nine months ended  October 31,  1996,  net cash used in operating
activities  totaled  $134,494,  including  income from  operations  of $153,765,
depreciation of $75,962,  a cumulative  translation  adjustment of $16,547 and a
net change in non-cash working capital of $(116,221). Net cash used in financing
activities was  $2,286,819,  which resulted from a decrease in obligation  under
capital lease of $(97,246), repayment of long term debt of $(27,304), repurchase
of 39,000 of the  Company's  common  shares for  $(126,136),  a decrease in bank
indebtedness of $(115,194), a decrease in share offering expenses of $(811,301),
and an  increase  in common  stock of  $3,464,000.  Net cash  used in  investing
activities  was  $(409,817)  primarily  as a result of the  purchase  of capital
assets.  Accounts receivable increased by $320,475 primarily due to the increase
of sales in October  1996.  Inventories  increased  by $351,910 as a result of a
build-up in inventories of acrylic and boxes to effectively  facilitate  planned
shipments of future products sold.  Prepaid expenses increased by $22,091 due to
the deposit  placed on  equipment.  Accounts  payable  and  accrued  liabilities
increased  by $228,077 as a result of  building  up for higher  sales  volume in
October 1996. Income taxes payable decreased by $36,248.


                           PART II. OTHER INFORMATION

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

a)   Exhibits: There are no exhibits for the quarter ended October 31, 1996.

b)   Reports  on Form 8-K:  There were no reports on Form 8-K filed for the nine
     months ended October 31, 1996.


                                      - 9 -



<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:  December 13, 1996                  GLAS-AIRE INDUSTRIES GROUP LTD.



                                          /s/ Alex Ding
                                          ------------------------------------
                                          Alex Ding, President




                                     - 10 -