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, 1997
                                                ----------------

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

    For the transition period from __________________ to ____________________

                       Commission file number    1-14244
                                             ---------------

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

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



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

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

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

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has  been  subject  to such  filing  requirements  for the  past  90  days. 

                               Yes  X     No
                                  -----     -----

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

            Class                                Outstanding at October 31, 1997
-----------------------------                    -------------------------------
Common Stock, $0.01 par value                                1,612,421


                                                          


<PAGE>



                         Glas-Aire Industries Group Ltd.

                                      INDEX
                                      -----


                                                                          Page 
                                                                          ---- 

PART I. FINANCIAL INFORMATION

     Item 1. Financial Statements

             Consolidated Condensed Balance Sheets -
               October 31, 1997 and January 31, 1996                         1

             Consolidated Condensed Statement of Operations
               for the three months ended October 31, 1997
               and 1996, and for the nine months ended
               October 31, 1997 and 1996                                     2

             Consolidated  Condensed  Statement  of Cash Flow 
               for the three months ended October 31, 1997
               and 1996 and for the six months ended 
               October 31, 1997 and 1996                                     3

             Notes to Consolidated Condensed Financial Statements            4

     Item 2. Management's  Discussion and Analysis of Financial 
             Condition and Results of Operations                           5-7

PART II. OTHER INFORMATION

     Item 6. Exhibits and Reports on Form 8-K                                7


SIGNATURES                                                                   8





                                                                                


<PAGE>





                          PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

                         Glas Aire Industries Group Ltd.
                      Consolidated Condensed Balance Sheet

                                                     October 31,     January 31,
                                                         1997            1996
                                                     (Unaudited)      (Audited)
                                                     -----------    -----------
Assets

Current
     Cash and Equivalents                              1,871,162    $ 2,119,932
     Accounts receivable                                 901,915        737,587
     Inventories                                         686,831        628,423
     Prepaid Expenses                                     31,900        158,509
                                                     -----------    -----------
                                                       3,491,808      3,644,451
Fixed assets                                           1,502,184      1,220,531
                                                     -----------    -----------
                                                     $ 4,993,992    $ 4,864,982
                                                     ===========    ===========
Liabilities and Shareholders' Equity

Current
     Bank indebtedness                                              $   110,100
     Accounts Payable and accrued liabilities        $   503,233        459,738
     Incomes taxes payable                                89,890         15,262
     Current portion - long term debt                       --             --
     Current portion - capital lease                                       --
                                                     -----------    -----------
                                                         593,123        585,100
Long Term Debt
Obligation Under Capital Lease                              --             --
Deferred Income Taxes                                    179,324        187,498
                                                     -----------    -----------
                                                         772,447        772,598
                                                     -----------    -----------
Shareholders' Equity
     Share capital                                        16,124         16,124
     Contributed surplus                               3,539,951      3,539,951
     Treasury stock                                     (236,163)      (147,476)
     Retained earnings                                   952,321        699,634
     Cumulative translation adjustment                   (50,688)       (15,849)
                                                     -----------    -----------
                                                       4,221,545      4,092,384
                                                     -----------    -----------
                                                     $ 4,993,992    $ 4,864,982
                                                     ===========    ===========

See accompanying notes.


                                       -1-


<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,
                                                  1997               1996               1997               1996
                                              -----------        -----------        -----------        -----------

<S>                                           <C>                <C>                <C>                <C>        
Sales                                         $ 1,899,446        $ 1,215,439        $ 4,882,063        $ 3,185,802
Cost of sales                                   1,365,662            919,431          3,418,431          2,209,204
                                              -----------        -----------        -----------        -----------
Gross profit                                      533,784            296,008          1,463,632            976,598
                                              -----------        -----------        -----------        -----------
Expenses
     Depreciation                                  44,039             29,493            119,298             75,963
     Research and development                      90,035             73,760            310,714            181,496
     Selling and distribution                     107,505             77,529            306,014            216,264
     General and administrative                   127,121             88,382            354,924            281,489
     Provision for profit sharing                  16,655             (1,970)            43,200             24,101
     Interest                                     (17,494)           (31,237)           (59,268)           (50,725)
                                              -----------        -----------        -----------        -----------
                                                  367,861            235,957          1,074,882            728,588
                                              -----------        -----------        -----------        -----------
Income from operations                            165,923             60,051            388,750            248,010
Income taxes - current                             63,643             22,947            136,062             94,245
Income taxes - deferred                              --                 --                 --                 --
                                              -----------        -----------        -----------        -----------
Net Income (loss) for the period              $   102,280        $    37,104        $   252,688        $   153,765
                                              -----------        -----------        -----------        -----------
Net income per share of common stock          $       .07        $      0.02        $       .17        $      0.10
Weight average common shares outstanding        1,509,021          1,573,421          1,509,021          1,573,421
                                              -----------        -----------        -----------        -----------






See accompanying notes to consolidated financial statements


                                                       -2-

</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,
                                                            1997               1996               1997               1996
                                                        -----------        -----------        -----------        -----------

Increase (decrease) in cash
Cash flows from:
Operating Activities
<S>                                                     <C>                <C>                <C>                <C>        
     Income from operations                             $   102,280        $    37,104        $   252,688        $   153,765
     Depreciation                                            44,039             29,493            119,298             75,962
     Deferred income taxes                                   (3,916)             3,548             (8,174)             3,424
     Net change in non-cash working capital                 394,000           (186,347)            21,996           (116,221)
     Cumulative translation adjustment                      (19,026)            17,953            (34,840)            16,547
                                                        -----------        -----------        -----------        -----------
        Net cash (used in) operating activities             517,377            (98,249)           350,968            133,477
                                                        -----------        -----------        -----------        -----------

Financing Activities
     Decrease in obligation under capital lease                --                 --                 --              (97,246)
     Repayment of long-term debt                               --                 --                 --              (27,304)
     Purchase of treasury stock                                --             (126,136)           (88,687)          (126,136)
     Share offering expenses                                   --                 --                 --             (811,301)
     Increase (decrease) in bank indebtedness              (279,373)           140,732           (110,100)          (115,194)
     Common stock                                                                 --                               3,464,000
                                                        -----------        -----------        -----------        -----------
        Net cash (used in) financing activities            (279,373)       $    14,596           (198,787)       $ 2,286,819
                                                        -----------        -----------        -----------        -----------

Investing Activities
     Proceeds from sale of fixed assets                                         13,460             15,340             13,460
     Purchase of capital assets                               8,841           (202,655)          (416,291)          (419,077)
     Deferred development costs                                                 (3,183)                               (3,183)
                                                        -----------        -----------        -----------        -----------
     Net cash used in investing activities                    8,841           (192,378)          (400,951)          (408,800)
                                                        -----------        -----------        -----------        -----------

Decrease in cash during the period                          246,845           (276,031)          (248,770)         2,011,496

Cash and equivalents, beginning of period                 1,624,317          2,617,634          2,119,932            330,107
                                                        -----------        -----------        -----------        -----------

Cash and equivalents, end of period                     $ 1,871,162        $ 2,341,603        $ 1,871,162        $ 2,341,603
                                                        -----------        -----------        -----------        -----------

Changes in non-cash working capital
     Accounts receivable                                $   217,722        $  (123,535)       $  (164,328)       $  (216,973)
     Inventories                                            144,316           (128,339)           (58,408)            58,750
     Prepaid expense                                         10,734           (151,135)           126,609            (40,161)
     Accounts payable and accrued liabilities               (32,165)           207,425             43,495            112,850
     Income taxes payable                                    53,393              9,237             74,628            (30,687)
                                                        -----------        -----------        -----------        -----------
                                                        $   394,000        $  (186,347)       $    21,996        $  (116,221)
                                                        ===========        ===========        ===========        ===========



See accompanying notes.


                                                             -3-

</TABLE>

<PAGE>





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

                                October 31, 1997

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, 1997 and
     the results of  operations  as well as cash flows for the  three-month  and
     nine-month periods ended October 31, 1997 and 1996.

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, 1997 and footnotes  thereto  included in
     the  Company's  Annual Report on Form 10-KSB for the year ended January 31,
     1997, filed with the Securities and Exchange Commission.

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,
                                                      1997               1996
                                                    --------           --------
     Raw materials                                  $410,018           $473,224
     Work-in-progress                                159,458             81,078
     Finished goods                                   97,951             56,782
     Supplies                                         19,404             20,024
                                                    --------           --------
                                                    $686,831           $631,108

5.   Bank Indebtedness

                                                   October 31,       October 31,
                                                      1997              1996
                                                   -----------       -----------

     Revolving Bank loan                                             $  140,732

     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  (4.75 %
     January 31, 1997,  5.25 % October 31, 1997) 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.  As a result,  the  Company  had a total of
     1,612,421  shares of its Common Stock issued and outstanding at October 31,
     1997.


                                       -4-


<PAGE>





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

Three Months Ended October 31, 1997 vs Three Months Ended October 31, 1996

     The Company's  sales increased by 56.28% to $1,899,446 for the three months
ended  October 31,  1997,  compared to  $1,215,439  for the three  months  ended
October 31, 1996.  This  increase was due primarily to (1) new sales of $297,587
or 24.48%  generated by new customers,  (2) sales of $386,420 or 31.8% generated
by new parts and additional orders from existing customers.

     Cost of sales for the three months ended October 31, 1997, increased 48.53%
to $1,365,662  from  $919,431 for the three months ended October 31, 1996.  This
increase  resulted  from an  increase  in sales,  with a greater  than  expected
increase  in direct  labor and  overhead  charges of $62,832  and an increase in
material  cost of  $383,400.  As a percentage  of sales,  an increase of 5.1% in
direct labor and  overhead  charges and 31.5% in material  costs  resulted in an
increase in gross  profit  margin of 3.75% to 28.1% for the three  month  period
ended October 31, 1997 from 24.4% for the three months ended October 31, 1996.

     Depreciation  expense increased by 49.32% from $29,493 for the three months
ended  October 31, 1996, to $44,039 for the three months ended October 31, 1997.
This increase was the result of adding new equipment into service.

     Expenses for research and  development  increased by 22.1% from $73,760 for
the three months ended  October 31, 1996,  to $90,035 for the three months ended
October 31, 1997. This increase was primarily due to the Company conducting more
research and in-house development rather than using outside contractors.

     Selling and distribution expenses increased by 38.67%, from $77,529 for the
three  months  ended  October 31,  1996,  to $107,505 for the three months ended
October 31,  1997.  This  increase was  primarily  due to (1)  increased  travel
expenses relating to the Company's marketing efforts,  (2) increased  Commission
expenses  due to the  addition of new  customers  and volume  increases in sales
orders from existing customers.

     General and administrative expenses increased by 43.8% from $88,382 for the
three  months  ended  October 31,  1996,  to $127,121 for the three months ended
October 31, 1997, as a result of (1) increased  consulting  and legal fees (15%)
relating  to the  Company  becoming  a fully  reporting  public  company,  (this
included  $12,353  relating to annual reports to all  investors),  (2) losses on
foreign  exchange  (31%).  Excluding  the  expenses  relating  to being a public
company, the general and administrative  expenses were actually lower by 2% from
the same period in 1996.  Management  believes that this decrease  resulted from
continuing  efforts in  automation  at the office  level and the  general use of
business systems which have now reached a plateau and should level off.

     Provision for profit  sharing  increased from $(1,970) for the three months
ended  October 31, 1996, to $16,655 for the three months ended October 31, 1997,
as result of the increase in profit.

     Interest income (net of interest expense) decreased by 44% from $31,237 for
the three months ended  October 31, 1996,  to $17,494 for the three months ended
October 31, 1997, This decrease occurred  primarily because the Company had more
cash on deposit earning interest during the comparable period in the prior year.
The decline in interest bearing deposits  resulted from the expenditure of funds
to purchase additional assets to support the Company's increased sales.


                                      -5-

<PAGE>


     The Company's income from operations  increased 176.3% from $60,051 for the
three  months  ended  October 31,  1996,  to $165,923 for the three months ended
October 31, 1997. This increase in income resulted primarily from higher sales.

     The Company  accrued  income  taxes of $22,947 for the three  months  ended
October 31, 1996,  compared to $63,643 for the three  months  ended  October 31,
1997, as a result of the increase in taxable income.

     As a result of the foregoing, net income increased 175.66% from $37,104 for
the three months ended  October 31, 1996, to $102,280 for the three months ended
October 31, 1997.

Nine Months Ended October 31, 1997 vs Nine Months Ended October 31, 1996

     The Company's  sales  increased by 53.24% to $4,882,063 for the nine months
ended October 31, 1997, compared to $3,185,802 for the nine months ended October
31, 1996. This increase was due primarily to (1) new sales of $863,529 or 27.10%
generated  by new  customers,  (2) sales of $832,732 or 26.14%  generated by new
parts and additional orders from existing customers.

     Cost of sales for the nine months ended October 31, 1997,  increased 54.74%
to $3,418,431  from  $2,209,204 for the nine months ended October 31, 1996. This
increase  resulted  from an  increase  in sales,  with a greater  than  expected
increase in direct  labor and  overhead  charges of $273,983  and an increase in
material  cost of $935,244.  As a percentage  of sales,  an increase of 8.60% in
direct labor and  overhead  charges and 29.36% in material  costs  resulted in a
decrease  in gross  profit  margin of .67% to 29.98% for the nine  months  ended
October 31, 1997, from 30.65% for the nine month period ended October 31, 1997.

     Depreciation  expense  increased by 57.05% from $75,963 for the nine months
ended  October 31, 1996, to $119,298 for the nine months ended October 31, 1997.
This increase was the result of adding new equipment into service.

     Expenses for research and development increased by 71.20% from $181,496 for
the nine months ended  October 31,  1996,  to $310,714 for the nine months ended
October 31, 1997. This increase was primarily due to the Company conducting more
research and in-house development rather than using outside contractors.

     Selling and distribution expenses increased by 41.5%, from $216,264 for the
nine months  ended  October 31,  1996,  to  $306,014  for the nine months  ended
October 31, 1997.  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  increased by 26.1% from $281,489 for
the nine months ended  October 31,  1996,  to $354,924 for the nine months ended
October  31,  1997,  as a result of (1)  increased  consulting  and  legal  fees
relating to the Company becoming a fully reporting public company, (2) increased
in  administration  cost of $12,353 relating to annual reports to all investors,
(3) losses on foreign  exchange.  Excluding  the  expenses  relating  to being a
public company,  the general and administrative  expenses were actually lower by
4.4%  from the same  period in 1996.  Management  believes  that  this  decrease
resulted from  continuing  efforts in automation at the office level and general
use of business systems that have now reached a plateau and should level off.




                                      -6-



<PAGE>

     Provision for profit sharing  increased by 79.25% from $24,101 for the nine
months ended  October 31, 1996, to $43,200 for the nine months ended October 31,
1997, as a result of the increase in profit.

     Interest income (net of interest expense)  increased by 16.84% from $50,725
for the nine months ended October 31, 1996, to $59,268 for the nine months ended
October 31, 1997, This increase  occurred  primarily because the proceeds of the
company's public offering (remaining after purchase of assets) were available to
earn  interest  for the entire nine month period this fiscal year as compared to
only the period from the closing of the Company's public offering in May of 1996
to the end of the period. (i.e.. 7 months versus 9 months).

     The Company's income from operations  increased by 56.75% from $248,010 for
the nine months ended  October 31,  1996,  to $388,750 for the nine months ended
October 31, 1997. This increase in income is primarily due to higher sales.

     The Company  accrued  income  taxes of $94,245  for the nine  months  ended
October 31, 1996,  compared to $136,062  for the nine months  ended  October 31,
1997. This is the result of the increase in income from higher revenue.

     As a result of the foregoing,  net income increased by 64.33% from $153,765
for the nine months  ended  October 31,  1996,  to $252,688  for the nine months
ended October 31, 1997.

Financial Condition and Liquidity

     Working  capital was  $2,898,685 at October 31, 1997 compared to $3,059,351
at January 31, 1997. The decrease in working capital primarily resulted from the
expenditure  of  available  cash from  capital  assets to support the  Company's
increased  sales.  For the nine months ended October 31, 1997, net cash provided
from operating activities totaled $350,967,  including income from operations of
$252,688,  depreciation  of $119,298,  a cumulative  translation  adjustment  of
$(34,840) and a net change in non-cash working capital of $21,996. Net cash used
in financing  activities  was $198,787,  which  resulted from a decrease in bank
indebtedness of $110,100,  and the repurchase of treasury stock for $88,687. Net
cash used in investing  activities  was  $400,951,  primarily as a result of the
purchase of capital assets. Over the nine months ended October 31, 1997, changes
in  non-cash  working  capital  occurred  as follows:  (i)  Accounts  receivable
increased by $164,328  primarily due to increase in sales in October 1997,  (ii)
Inventories increased by $58,408,  (iii) Prepaid expenses decreased by $126,609,
(iv) Accounts payable and accrued  liabilities  increased by $43,495 as a result
of increased inventory; and (v) Income taxes payable increased by $74,628 due to
higher sales.  During the next three months the company anticipates making total
capital  expenditures  of  approximately  $330,000 as follows:  (i) $250,000 for
machinery  and  equipment,  (ii) $50,000 for leasehold  improvements,  and (iii)
$30,000 for the QS9000 (Quality Control Certification) process.

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, 1997.

b)   Reports  on Form 8-K:  There were no reports on Form 8-K filed for the nine
     months ended October 31, 1997.




                                       -7-


<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 12, 1997                   GLAS-AIRE INDUSTRIES GROUP LTD.
        -----------------



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





                                       -8-