FORM 10-Q

Securities and Exchange Commission
Washington, D.C.  20549

(Mark One)

[X]	QUARTERLY REPORT PURSUANT TO 
SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended:  March 31, 1999

[   ]	TRANSITION REPORT PURSUANT TO 
SECTION 13 OR 15 (d) OF THE 
SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________.

Commission File No. 0-22372.

GRAND TOYS INTERNATIONAL, INC.
	
		
(Exact name of Issuer as specified in its charter)

	  Nevada	      				
	    87-0454155                 
(State or other jurisdiction of				
	(I.R.S. Employer
incorporation or organization				
	Identification No.)

1710 Route Transcanadienne, Dorval, Quebec, Canada 
H9P 1H7
(Address of principal executive offices)

(514) 685-2180
(Issuer's telephone number)


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

Indicate by check mark whether the Issuer (1) has filed 
all reports required to be filed by Section 13 or 15 (d) of 
the Securities Exchange Act during the preceding 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    _____

Indicate the number of shares outstanding of each of the 
Issuer's classes of common equity, as of April 30, 1999: 
1,577,597


Index to Annual Report on Form 10 - Q
Filed with the Securities and Exchange Commission
Period ended March 31, 1999


ITEMS IN FORM 10 - Q

Page
Part I - Financial Information



Item 1.  Consolidated Financial Statements:



Consolidated Balance Sheets 
      at March 31, 1999 and December 31, 1998              3-4


Consolidated Statements of Earnings
      For The Three Month Period
      Ended March 31, 1999 and 1998                         5


Consolidated Statements of Stockholders' Equity
and Comprehensive Income                                    6


Consolidated Statements of Cash Flows
      For The Three Month Period
      Ended March 31, 1999 and 1998                         7


Notes to Consolidated Financial Statements               8-16



Item 2.  Management's Discussion and Analysis or
Plan of Operation                                       16-20


Item 3.  Quantitative and Qualitative Disclosures
About Market Risks

Part II - Other Information



Item 3. Reports on Form 8K                                 21


Signatures                                              22-23











Part I. - Financial Information

Item 1.  Financial Statements

Consolidated Balance Sheets

<TABLE>
                                                        <C>          <C>
<S>                                                  		March 31,   	December 31,
                                                          		1999          	1998
                                                   		(Unaudited)		
Assets

Current assets:
Accounts receivable (net of allowance for doubtful
accounts; 1999 - $54,384; 1998 - $43,143)	          	$6,564,852      	$7,728,979
Due from affiliated companies	                           17,919         	224,498
Inventory	                                            8,011,437       	4,318,107
Prepaid expenses	                                     1,693,569       	1,050,434
Total current assets	                                16,287,777	      13,322,018

Equipment and leasehold improvements,
 net (note 2)                                          	832,362         	567,299

Goodwill (note 3)	                                    2,379,443	               -


Total assets                                      	$	19,499,582    	 $13,889,317
</TABLE>


Consolidated Balance Sheets

<TABLE>
 
<S>                                                        <C>           <C>
                                                    		March 31,   	December 31,
		                                                         1999           	1998
                                                   		(Unaudited)

Liabilities and Stockholders' Equity

Current liabilities:
 Bank indebtedness (note 4)	                        	$8,379,590      	$6,782,510
Trade accounts payable	                               2,684,103	       1,671,417
Other accounts payable and accrued liabilities         	337,502       	1,034,743
Royalties payable	                                       69,432          	60,728
Income taxes payable	                                   866,660         	378,092
Total current liabilities	                           12,337,287       	9,927,490

Balance of purchase price payable (note 5)           	1,500,000              	-

Minority interest                                          	100	             100

Preferred stock (note  6)                            	1,000,000               	-

Stockholders' equity:
Capital stock (note 7)                                  	1,578           	 1,578
Additional paid-in capital	                         10,599,559	       10,599,559
Deficit                                           	(5,657,220)       (5,991,237)
Accumulated other comprehensive income -
cumulative currency translation adjustment          	(281,722)	        (648,173)
	                                                  	4,662,195        	3,961,727

Commitments and contingencies (notes 10 and 11)

Total liabilities and stockholders' equity	     $	19,499,582      	 $	13,889,317
</TABLE>


See accompanying notes to consolidated financial statements.





Consolidated Statements of Earnings (Unaudited)


<TABLE>
<S>                                                            <C>          <C>
                                           For the three months ended March 31,
  
                                                              1999         1998

Net sales                                               $8,626,916    $4,588,511

Cost of goods sold                                       5,990,128     2,843,822

Gross profit                                             2,636,787     1,744,689


Operating expenses:

Selling, general and administrative                      1,728,390     1,284,608
Foreign exchange gain                                     (137,041)     (63,897)
Interest                                                  127,679       101,498
Bad debt expense                                           37,902        32,867
Depreciation                                               67,990        36,005
                                                        1,824,920     1,391,081

Earnings before income taxes                              811,867       353,608

Current income taxes                                      477,850       132,742

Net earnings                                             $334,017      $220,866

Earnings per share (note 1(h))

    Basic                                                   0.21           0.14
    Diluted                                                 0.21           0.12
    
</TABLE>
See accompanying notes to consolidated financial statements.


Consolidated Statements of Stockholders' Equity  and Comprehensive Income 
(Unaudited)

<TABLE>
<S>                 <C>         <C>             <C>          <C>           <C>
                                                          Cumulative
                   Common     Additional      Retained    Currency
                   Stock      Paid-In         Earnings    Translation
                              Capital         (Deficit)   Adjustment      Total



January 1, 1999    $1,578    $10,599,559    $(5,991,237)   $(648,173) $3,961,727

Net earnings
 for the period        -              -         334,017            -     334,017

Foreign currency 
translation            -              -               -      366,451     366,451
Total comprehensive
 income                -              -               -            -     700,468


March 31, 1999     $1,578     $10,599,559     $(5,657,220) $(281,722) $4,662,195
</TABLE>

See accompanying notes to consolidated financial statements.



Consolidated Statements of Cash Flows (Unaudited)

<TABLE>
                                                            For the three months
                                                                 ended March 31,
   <S>                                                        <C>           <C>
                                                              1999          1998

Cash flows from operating activities:

Net earnings                                              $334,017     $ 220,866
 Items not affecting cash:
 Depreciation                                               67,990        36,005
 Changes in operating working 
 capital items, (note 9)                                (2,080,748)    (323,014)
 Net cash used for operating activities                 (1,678,736)     (66,143)

Cash flows from financing activities:
 Increase in bank indebtedness                           1,546,123       117,446

 Other                                                      64,036        10,891

 Net cash provided by financing activities               1,610,159       128,337

Cash flows from investing activities:

 Additions to equipment                                   (51,981)      (62,194)
 Acquisition                                              120,558              -
 Net cash used for investing activities                    68,577       (62,194)

Net change in cash, being cash at end of year             $     -       $      -

Supplementary disclosure of cash flow information


Cash paid during the year for:

 Interest                                             $127,679         $ 101,498

 Income taxes                                                -           269,953

</TABLE>

See accompanying notes to consolidated financial statements.


Notes to Consolidated Financial Statements

Grand Toys International, Inc., a publicly held company, is organized under the
laws of the State of Nevada.  Its principal business activity, through its 
wholly-owned Canadian and United States operating subsidiaries, is the 
manufacture and distribution of toys and related items.
 
1. Significant accounting policies:

a) Financial statement presentation:
 
The accompanying consolidated financial statements are not audited for the 
mentioned period but include all adjustments (consisting of only normal 
recurring accruals) which management 
considers necessary for the fair representation of results at March 31, 1999.
 
Moreover, these financial statements do not purport to contain complete
disclosures in conformity with generally accepted accounting principles and 
should be read in conjunction 
with the Company's audited financial statements at and for the fiscal year ended
December 31, 1998 contained in the Company's Annual Report on Form 10-K.
 
The results for the three months ended March 31, 1999 are not necessarily 
indicative of the results for the entire fiscal year ending December 31, 1999.
 
b) Principles of consolidation:
 
These consolidated financial statements, presented in U.S. dollars and in 
accordance with accounting principles generally accepted in the United States,
include the accounts of Grand Toys International, Inc. and its subsidiaries.  
All significant intercompany balances and transactions have been eliminated.
 
c) Inventory:
 
Inventory is valued at the lower of cost and net realizable value.  Cost is 
determined by the first-in, first-out method.


Notes to Consolidated Financial Statements

1.  Significant accounting policies, continued:
 
d) Equipment,leasehold improvements and goodwill:

Equipment and leasehold improvements are stated at cost less accumulated 
depreciation.  Depreciation methods and annual rates adopted by the Company 
are as follows:

<TABLE>
<S>                          <C>                              <C>
Asset                        Method                          Rate
Computer equipment           Declining balance               30%
Machinery and equipment      Declining balance               20%
Furniture and fixtures       Declining balance               20%
Trucks and automobiles       Declining balance               30%
Telephone equipment          Declining balance               30%
Leasehold improvements       Straight-line                Term of
                                                   lease plus one
                                                     renewal term
Goodwill                     Straight-line               15 years
</TABLE>



e)	Revenue:
 
	Sales are recorded net of merchandise returns.
 
f)	Foreign currency translation:

i)  Grand Toys Ltd. and Grand Concepts Inc., wholly owned Canadian subsidiaries,
are classified as self-sustaining foreign operations, with assets and 
liabilities translated into 
U.S. dollars at the exchange rates prevailing at the balance sheet date and 
sales, 
expenses and cash flows translated at the average exchange rate for the year. 
The resulting currency translation adjustments are accumulated and reported as 
a separate component of stockholders' equity.
 
ii)  Other monetary assets and liabilities denominated in foreign currencies are
translated at the exchange rates prevailing at the balance sheet date.  Revenues
and expenses denominated in foreign currencies are translated at the rates of
exchange prevailing at 
the transaction dates.  All exchange gains and losses are included in income.


1.  Significant accounting policies, continued:
 
g)	Earnings  per share:
 
i)  Basic earnings per share is determined by dividing the weighted average 
number of common shares outstanding during the period into net earnings.
 
ii)  Diluted earnings per share gives effect to all potential dilutive common 
shares that were outstanding during the period.

h)	Stock option plan:

The Company accounts for its stock option plan (the "Option Plan") in
accordance with the provisions of Accounting Principles Board ("APB") Opinion
No. 25, Accounting for Stock 
Issued to Employees.  As such, compensation expense is recorded on the date of
grant only if the current market price of the underlying stock exceeds the 
exercise price.  FASB Statement No. 123, which became effective in 1996, allows 
entities to continue to apply the provisions 
of APB Opinion No. 25 and requires pro forma net earnings and pro forma earnings
per share disclosures for employee stock option grants made in 1995 and future 
years as if the fair-value-based method defined in FASB Statement No. 123 had
been applied.  

Notes to Consolidated Financial Statements


2.  Equipment and leasehold improvements:

<TABLE>
                                   March 31,                      December 31,
                                     1999                               1998
<S>                            <C>          <C>           <C>            <C>
                               Cost      Accumulated                 Accumulated
                                         depreciation     Cost      depreciation

Computer equipment           $1,426,040   $708,127      $1,094,822      $670,028
Machinery and equipment         435,560    384,575         432,770       356,343
Furniture and fixtures          461,595    432,180         458,318       427,574
Trucks and automobiles           80,971     78,852          80,395        78,122
Telephone equipment              38,730     34,717          38,455        34,261
Leasehold improvements          329,351    301,435         323,042       294,175

                             $2,772,247 $1,939,885      $2,427,802    $1,860,503

Net book value                     $ 832,362                   $ 567,299
</TABLE>

3.  Acquisition

On January 1, 1999, the Company acquired all of the assets of Ark Foundation LLC
for $2,500,000 consisting of the Company's convertible preferred stock having a
stated value of $1,000,000 and an interest bearing promissory note in the 
principal amount of $1,500,000.

The Company accounted for the acquisition under the purchase method of 
accounting and allocated the purchase price as follows:

Net Assets                               $   120,557
Goodwill                                   2,379,443
                                         $ 2,500,000

The acquisition of the above assets was financed as follows:

Series A 5% Cumulative Convertible
Redeemable Preferred Stock (note 6)      $ 1,000,000
Long-term debt (note 5)                    1,500,000
                                         $ 2,500,000
4.  Bank indebtedness:

The Company has a secured line of credit of  $9,939,000  (CA $15,000,000) and 
can draw down working capital advances and letters of credit in amounts 
determined by percentages of its accounts receivable and inventory.  The 
working capital advances are secured by all of the assets of the Company the 
effective interest rate at March 31, 1999 on the Canadian denominated line was
8.00% which represents the lender's prime plus 1 1/4%.  As at March 31, 1999,
the unused portion of the credit facility was approximately $ 1,000,000.

5.  Long-Term Debt

The Company has long-term indebtedness in the form of a subsidiary's interest 
bearing subordinated promissory note in the aggregate
principal amount of $1,500,000.  Interest is payable quarterly, commencing
April 1, 1999 at a rate of 5.76% per annum.  The note is secured by a pledge of
375,000 shares of the Company's common stock.

6.  Preferred Stock

Series A Cumulative Convertible Redeemable Preferred Stock

In connection with the acquisition of Ark Foundation LLC the Company created a
class of 200,000 shares of non-voting
Series A Convertible Redeemable Preferred Stock ("Series A Stock") with a par
stated value of $5.00 per share.  The Series A Stock ranks senior to the common
 stock.
The Series A Stock has a cumulative preferred quarterly dividend of 5% per annum
of the par value, payable in cash. The Series A stock is convertible beginning 
on January 1, 2000 into shares of the Company's common stock.

7.  Capital stock:

a)  Authorized capital:

50,000,000, $0.001 par value voting common shares;
5,000,000, $0.001 par value preferred shares, issuable in series with such 
designation, rights and preferences as may be determined from time to time by 
the Board of Directors.

b)  Issued and outstanding:

<TABLE>
<S>                                                   <C>              <C>
                                                       March 31,  December 31,

                                                            1999          1998



1,577,597 common shares (1998 - 1,577,597
 common shares)                                        $  1,578       $  1,578
(note 1(h))

</TABLE>

8.  Stock options and warrants:

The Company has a stock option plan (the "Option Plan") which provides for the 
issuance of up to 300,000 options to acquire the common stock of the Company. 
Stock options granted under the Option Plan may be Incentive Stock Options under
the requirements of the Internal Revenue Code, or may be Non-qualified Stock 
Options which do not meet such requirements.  
Options may be granted under the Option Plan to, in the case of Incentive Stock
Options, all employees (including officers) of the Company, or, in the case of 
Non-qualified Stock Options, all employees (including officers) or non-employee
directors of the Company.

Options have also been granted outside the Option Plan to three directors, key
executives, outside consultants and a supplier.  As well, warrants have been 
issued to a director in his capacity as an investment banker, a distributor and
to the underwriter pursuant to the public 
offering.  Some of these options and warrants have either expired or were 
forfeited during the year.

Under the plan, the exercise price of each option equals the market price of 
the Company's stock on the grant date and an option's maximum term is ten years.
The range of exercise prices for stock options and warrants outstanding at 
March 31, 1999 is $2.88 to $37.50. 

Details of the options and warrants, all of which are exercisable at year-end,
 are as follows:


<TABLE>
<S>                <C>       <C>        <C>            <C>          <C>
                                                                   Weighted-
                                                                   average
                   Option   Other                                  exercise
                   Plan     Stock                                  price per
                            Options      Warrants      Total       Share

January 1, 1999    44,100   1,779,772    105,000       1,928,872   $6.79

Granted            50,000       1,000          -          51,000    3.98

Forfeited              -       (1,000)         -          (1,000)  (4.38) 

Expired                -            -          -              -        -

March 31, 1999     94,100    1,779,772      105,000     1,978,872    5.83
</TABLE>

<TABLE>
<S>                                        <C>           <C>             <C>  
                                           Income       Shares         Per share
                                          (numerator) 	(denominator)    amount

March 31, 1999

Basic EPS
Earnings available to
common stockholders                      	$	 334,017     	1,577,597     	$	0.30

Effect of dilutive securities
Options                                          	-           	115          	-  

Diluted EPS
Earnings available to
common stockholders
and assumed conversions	                     334,017       1,577,712       	0.30
</TABLE>


Options to purchase 1,870,872 shares and warrants to purchase 105,000 shares of 
the Company's common stock were not included in the diluted earnings per share
calculation as their effect is anti-dilutive.


9.  Changes in operating working capital items:
<TABLE>
<S>                                                      <C>                <C>
                                                    						For the three months
                                                               ended March 31,
                                                          1999              1998
Decrease in accounts receivable                       $1,216,923     $ 2,125,577
Decrease in due from affiliated company                  206,680             307
Increase in inventory                                 (3,657,018)      (413,373)
Increase in prepaid expenses                            (636,679)       (82,233)
Increase in trade accounts payable                       999,411        270,490
Decrease in other accounts payable and accrued 
liabilities                                             (703,437)    (2,122,762)
Increase (decrease) in royalties payable                   8,257        (41,034)
Increase (decrease) in income taxes                      485,120        (59,986)

                                                      $(2,080,743)    $(323,014)
</TABLE>

10.  Commitments:

The Company has entered into long-term leases with minimum annual rental 
payments approximately as follows:

<TABLE>
<S>                         <C>
1999                 			$	299,000
2000		                    385,000
2001		                    283,000
2002		                    255,000
2003		                    236,000
Thereafter		              255,000
                  				$	1,713,000
</TABLE>

Rent expense for the period ended March 31, 1999 and 1998 amounted to
approximately $86,145 and $50,891 respectively.


11.  Contingencies:

(a)  A lawsuit for alleged breach of contract has been filed against the 
Canadian subsidiary by a sales representative.  In the opinion of management, 
the case should be settled.  However, at this point in time it is difficult to 
ascertain or estimate the value of the settlement, if any.

The Company has been named in two lawsuits by a supplier of and a lessor to the
former U.S. subsidiary, Grand Group Inc. for recovery of amounts totaling 
approximately $300,000 although the Company is not party to either contract. 
In the opinion of management, there have been no recent developments and it is 
difficult to ascertain the likelihood of an unfavorable outcome to the Company.

The Company has been named in a lawsuit by a lessor Company on behalf of its 
 former U.S. 
subsidiary, Grand Group for recovery of $277,718.44 for a lease co-signed by
the Company.  The amount of the settlement cannot be ascertained as at 
March 31, 1999.

b)  The Company's Canadian subsidiary, Grand Toys Ltd., is also contingently 
liable for 
outstanding letters of credit of approximately $450,000, as at March 31, 1999.

12. Segment Information

The Company operates primarily in one industry segment which includes the 
distribution of toys and related items.  Virtually all sales are to Canadian 
customers.

13.	 Financial instruments:

(a)	Foreign currency risk management:
The Company enters into forward foreign exchange contracts to minimize its 
foreign currency exposure on purchases.  The contracts oblige the Company to buy
US dollars in the future at predetermined exchange rates.  The contracts are not
used for trading purposes.  The Company's policy is to enter into forward 
foreign exchange contracts on a portion of its purchases anticipated in the next
selling season.  Gains and losses on forward exchange contracts are recorded in
income and generally offset transaction gains or losses on the foreign currency
cash flows which they are intended to hedge.

At March 31, 1999, the Company had purchased a contract to purchase US 
$5,000,000 in the next two months at a rate of 1.4925.  The fair market value of
this contract at March 31, 1999 is approximately $95,000.

(b)	Fair values:
Fair value estimates are made as of a specific point in time, using available
information 
about the financial instruments.  These estimates are subjective in nature and 
often cannot be determined with precision.

The fair value of the Company's accounts receivable, due from affiliated 
companies, bank indebtedness, trade and other payables approximate their 
carrying value due to the 
immediate or short-term maturity of these financial instruments.

(c)	Interest rate risk:
The Company's principal exposure to interest rate risk is with respect to its 
short-term financing which bears interest at floating rates.

14. 	Uncertainty due to the Year 2000 Issue:

The Year 2000 Issue arises because many computerized systems use two digits 
rather than 
four to identify a year.  Date-sensitive systems may recognize the year 2000 as 
1900 or 
some other date, resulting in errors when information using year 2000 dates is 
processed.  
In addition, similar problems may arise in some systems which use certain dates
 in 1999 to 
represent something other than a date.  The effects of the Year 2000 Issue may 
be 
experienced before, on, or after January 1, 2000, and, if not addressed, the 
impact on 
operations and financial reporting may range from minor errors to significant 
systems 
failure which could affect an entity's ability to conduct normal business 
operations.  It is not possible to be certain that all aspects of the Year 2000
 Issue affecting the entity, 
including those related to the efforts of customers, suppliers, or other third 
parties, will be fully resolved.

15. Comparative figures:

Certain comparative figures have been reclassified to conform with the financial
statement presentation adopted in the current year.


Item 2.   Management's Discussion and Analysis or Plan of Operation

Forward looking statements

This Form 10Q contains forward-looking statements about events and circumstances
that have not yet occured.  For example, statements including terms such as the 
Company "expects" or "anticipates" are forward-looking statements.  Investors 
should be aware that the Company's actual results may differ materially from the
Company's expressed expectations because of risks and uncertainties about the 
future.  The Company will not necessarily update the information in this Form 
10Q
if and when any forward-looking statement later turns out to be inaccurate.
Risks and uncertainties that may affect the Company's future results and 
performance include, but are not limited to, the following: intense competition
and pricing pressures in the toy industry; the general consolidation in the toy
industry; whether the Company's general strategy with respect to the toy 
industry and the Company's implementation of that strategy will correctly
anticipate key trends in the toy industry; the Company's ability to expand its
product lines; the Company's relationships with retailers and other issues
with respect to the Company's distribution channels.  Additional information 
about factors that could affect future results and events is included elsewhere 
in this Form 10Q, in the Company's fiscal 1998 Form 10K and in other reports 
filed with the Securities and Exchange Commission.

Overview

Net sales consist of sales of products to customers after deduction of customer
cash discounts, volume rebate allowances, and returns of merchandise.  Sales are
recorded when the merchandise is shipped.

The cost of goods sold for products imported as finished goods includes the cost
of the product, a currency adjustment (if applicable), duty and other taxes, and
freight and brokerage 
charges.  Royalties to suppliers not contingent upon the subsequent sales of the
suppliers' products are included in the price paid for such products.

Major components of selling, general and administrative expenses include: 
payroll and fringe benefits; advertising expense, which includes the cost of
production of television commercials 
and the cost of air time; advertising allowances paid to customers for 
cooperative advertising 
programs; and royalty expense.  Royalties include payments to licensors of 
character properties and to manufacturers of its toy products if such payments 
are contingent upon 
subsequent sales of the products.  Royalties are usually a percentage of the 
price at which the product is sold and are payable once a sale is made.


Item 2.   Management's Discussion and Analysis or Plan of Operation cont'd

Overview cont'd

Accounts receivable are receivables net of an allowance for doubtful accounts. 
The allowance is adjusted periodically to reflect the current status of 
receivables.  Management believes that 
current reserves for doubtful accounts are adequate.  Sales of products to 
retailers and 
distributors are on an irrevocable basis.  Consistent with industry practices, 
the Company may 
make exceptions to this policy on a case-by-case negotiated basis.  Inventory is
comprised of finished goods at landed cost.

All amounts are in US$ unless otherwise noted.


Results of Operations

The following table sets forth consolidated operations data as a percentage of 
net sales for the periods indicated:

<TABLE>

<S>                                                        <C>              <C>
                                                                   For the Three
                                                          Months Ended March 31,

                                                         1999              1998
                                                          %                  %
Net sales                                              100.00            100.00
Cost of goods sold                                      69.44             61.98
Gross profit                                            30.56             38.02

Operating expenses:
 Selling, general and administrative                     20.03            28.00
 Gain on foreign exchange                                (1.59)            1.39
 Interest                                                 1.48             2.21
 Bad debt expense                                          .44              .72
 Depreciation and amortization                             .79              .78
Total operating expenses                                 21.15            30.31

Earnings before income taxes                              9.41             7.71

Net earnings                                              3.87             4.81
</TABLE>

Comparison of the three months ended March 31, 1999 to the three months ended 
March 31, 1998

Net Earnings.

Net earnings were $334,017 for the first quarter of 1999 compared to a net 
earnings of $220,866 for the same period last year.  The increase of $113,151 in
net earnings was mainly 
due to the decrease in selling, general and administrative expenses.

Net Sales. 

Net sales increased by $4,038,404 or by 88% over net sales during the first 
quarter of 1998.  The increase is due to the significant increases in the sale
of the product lines.  Furby (Tiger Electronics) and WCW Wrestlers
 (Toy biz Inc.)

Gross Profit. 

Gross profit for the Company increased by $892,098, or, as a percentage of 
sales, gross profit decreased from 38.02% to 30.56%.  The decrease in gross 
profit percentage was due to the product line, primarily due to the lower gross
margins associated with the Furby product line and the discontinuance
of other product lines.

Selling, General and Administrative Expenses.  

The increase in selling, general and administrative expenses of $443,781 
compared to those of the first quarter of 1998 was mainly due to a decrease in 
cooperative advertising expense.  However, as a percentage of sales a decrease
of 7.97% was experienced.

Income Tax Expense. 

As compared to the same period in 1998, the increase in income tax expense was
 $345,109 due to higher earnings in the period.

Liquidity and Capital Resources

The Company generally finances its operations through borrowings under Grand 
Canada's Credit Agreement with its bank and by cash flow from operations.

In March 1996, Grand Canada entered into a three year banking arrangement with 
a new 
lending institution.  Grand Canada has a secured line of credit of $9,939,000 
US ($15,000,000 CDN) to enable it to meet its plans for growth in the future.  
Grand Canada may draw down working capital advances and letters of credit in 
amounts determined by percentages of its 
accounts receivable and inventory.  Working capital advances taken by Grand
 Canada bear 
interest at prime plus 1 1/4%.  The term of the loan is three years. The loan,
 which originally  
was scheduled to expire on April 1, 1999, was extended to June 30, 1999.  
The Company is presently renegotiating the loan with its current lender and 
other institutions.  Failure to obtain a credit facility would have a material
adverse effect on the Company.   The loan is guaranteed by the Company.

Accounts receivable at March 31, 1999 were $6,564,852 compared to $7,728,979 at 
December 31, 1998.  Inventory was $8,011,437 at March 31, 1999 compared to
 $4,318,107 at December 31, 1998.  Due to the seasonality of the toy industry,
inventory levels will fluctuate according to customer demand.

Grand Canada's level of accounts receivable is subject to significant seasonal 
variations due to 
the seasonality of sales.  As a result, Grand Canada's working capital 
requirements are 
greatest during its third and fourth quarters.  In addition, to the extent that
accounts receivable, inventories, and guarantees and advance payments increase 
as a result of the growth of Grand Canada's business, Grand Canada could require
additional working
capital to fund its operations.  Sources of such funding include cash flow from
 operations, drawings 
on the financing facilities, or sales of additional equity or debt securities 
by the Company.

Liquidity and Capital Resources cont'd

Working capital increased from $3,452,266 at December 31, 1998 to $3,950,490 at
March 31, 1999.  Net cash used for operating activities was $1,276,729 in the 
quarter ended March 31, 1999 compared to net cash used for operations of 
$66,143 in 1998 and cash used for additions to equipment was $51,981 compared to
 $62,194 in 1998.

If the funds available under the Company's financing agreements, together with 
its current 
cash and cash equivalents are not sufficient to meet the Company's cash needs,
 the Company 
may from time to time seek to raise capital from additional sources, including
 extension of its 
current lending facilities, project-specific financing and additional public 
or private debt or 
equity financing.  Management believes that the Company has sufficient funding 
at the present time to meet its 1999 forecast.

Effects Of Inflation

The Company does not believe that inflation has had a significant impact on its
financial position or results of operations in the past three years.

Year 2000 Compliance

The Year 2000 issue is the result of computer programs which were written using
two digits rather than four to define the applicable year.  For example,
 date-sensitive software may 
recognize a date using "00" as the Year 1900 rather than the Year 2000.  Such
misrecognition could result in system failures or miscalculations causing 
disruptions of operations, including, 
among others, a temporary inability to process transactions, send invoices or 
engage in similar normal business activities.

We have appointed one of our officers to develop a comprehensive Year 2000 plan 
with the goal of completing updates to key systems by December 31, 1999.  
We have assessed the 
scope of our risks related to problems our computer systems may have in
 processing date 
information related to the Year 2000 and believe such risks are not significant.
We have identified all of our significant internal software applications which 
contain source 
codes that may be unable to appropriately interpret the year 2000 and have 
already begun to 
modify or replace those applications.  We have determined that our computer 
system is Year 2000 compliant.   In addition, we have inquired of certain of our
 suppliers and customers 
about their progress in identifying and addressing problems relating to the
 Year 2000.  Several of our customers and suppliers have informed us that they 
do not anticipate problems in their 
business operations due to Year 2000 compliance issues, and others have informed
 us that they have not yet addressed this issue.  We are currently unable to 
determine the extent to 
which Year 2000 issues will affect our customers and suppliers, or the extent to
which we would be vulnerable to their failure to remedy any such problems. 
 However, we anticipate 
that at least some of our  customers and suppliers will not be Year 2000 
compliant when the 
time comes, which will result in their inability to purchase from us or ship to
 us in a timely manner. 

We are prepared to focus our time and effort on monitoring those accounts, 
providing 
assistance if possible and finding alternate sources if absolutely necessary. 
 Although we do not expect this to occur, the worst case scenario is that this 
contingency plan may cause us to 
incur additional expenses  and delays in the shipments of some of our products.

New Accounting Pronouncements

In March 1998, the Financial Accounting Standards Board ("FASB") issued 
Statement of 
Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share."  This 
Statement establishes standards for computing and presenting earnings per share
 ("EPS") and applies to 
all entities with publicly-held common stock or potential common stock.  This 
Statement replaces the presentation of primary EPS and fully-diluted EPS with a 
presentation of basic EPS and diluted EPS, respectively.  Basic EPS excludes 
dilution and is computed by dividing 
earnings available to common shareholders by the weighted-average number of 
common 
shares outstanding for the period.  Similar to fully diluted EPS, diluted EPS 
reflect the 
potential dilution of securities that could share in the earnings.  This 
Statement is not expected 
to have a material effect on the Company's reported EPS amounts.  The Statement
 is effective 
for the Company's financial statements for December  31, 1998.


Part II - Other Information

Item 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Impact of Foreign Currency Rate Changes.

During fiscal year 1998, most local currencies of our international subsidiaries
weakened against the U.S. dollar.  As of March 31, 1999, the currency of our 
Canadian subsidiaries has strengthened.  Because we translated foreign 
currencies into U.S. dollars for reporting purposes, currency fluctuations can
have an impact, on the Company's results.  See note 13 (a) of the Financial
Statements.

Item 3.  Reports on Form 8-K

No reports on Form 8-K were file during the quarter ended March 31, 1999

Signatures


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

Dated:  May 12, 1999		              	GRAND TOYS INTERNATIONAL, INC.


                                					By:  /s/ Stephen Altro					
                                     						Stephen Altro
                                     						Chairman


                                     By:  /s/ Ron Goldenberg			
                                     						Ron Goldenberg
                                     						Vice President, Chief Financial 
                                           Officer, Secretary, Treasurer and 
                                           Director	(Principal Financial and
                                           Accounting Officer)







Signatures


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

Dated:  May 12, 1999		                     	GRAND TOYS INTERNATIONAL, INC.


                                       					By:  							
                                      						Stephen Altro
                                      						Chairman
                                      						(Principal Executive Officer)

 
                                            By:  							
                                           	Ron Goldenberg
                                      						Vice President, Chief Financial 
                                            Officer, Secretary, Treasurer and
                                            Director (Principal Financial and
                                            Accounting Officer)