U.S. SECURITIES AND EXCHANGE COMMISSION
                         Washington, D. C. 20549
                                    
                                    
                               FORM 10-QSB
(Mark One)

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the period ended March 31, 1999.

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE Act of 1934 for the transition period from ___ to ____.

Commission file number: 000-23319

                     AVANI INTERNATIONAL GROUP INC.
                     ------------------------------
             (Name of Small Business Issuer in its charter)

 Nevada                                         88-0367866
---------------                                ----------------
(State of                                      (I.R.S. Employer
 Incorporation)                                 I.D. Number)

#328-17 Fawcett Road, Coquitlam, B.C. (Canada)           V3K 6V2
----------------------------------------------        -----------
(Address of principal executive offices)              (Zip Code)

Issuer's telephone number 604-525-2386.
                          ------------

Securities registered under Section 12 (b) of the Act:

         Title of each class         Name of exchange on which
         to be registered            each class is to be registered

            None                              None

Securities registered under Section 12(g) of the Act:

                              Common Stock
                              -------------
                            (Title of Class)

Check  whether issuer (1) filed all reports to be filed by Section 13  or
15(d)  of  the  Exchange Act during the past 12 months (or  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.
(1). Yes: X  No:
(2). Yes: X  No:

The  number  of  shares issued and outstanding of issuer's common  stock,
$.001 par value, as of March 31, 1999 was 11,608,257.

Transitional Small Business Issuer Format (Check One):
Yes:      No:  X


                                  INDEX
                                    
                                    
                                    
                                    
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.                                   Page No.
       -Consolidated Condensed Balance Sheet as of
        March 31, 1999 (unaudited) and December 31, 1998 (audited). 3
       -Consolidated Condensed Statement of Operations for the
        Three Months Ended March 31, 1999 and 1998 (unaudited).     4
       -Consolidated Condensed Statement of Stockholders
        Equity for the Three Months Ended
        March 31, 1999 (unaudited).                                 5
       -Consolidated Condensed Statement of Cash Flows
        for the Three Months Ended March 31, 1999
        and 1998 (unaudited).                                       6
       -Notes to Financial Statements.                              7
Item 2. Management's Discussion and Analysis.                       9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.                                         11
Item 2. Changes in Securities.                                     11
Item 3. Defaults upon Senior Securities.                           11
Item 4. Submission of Matters to Vote of Securityholders.          11
Item 5. Other Information.                                         11
Item 6. Exhibits and Reports on Form 8-K.                          11
Signatures                                                         11
                     

                                        -2-

PART I - FINANCIAL STATEMENTS
  Item 1. Financial Statements.



                           AVANI INTERNATIONAL GROUP INC.
                                 AND SUBSIDIARIES
                       CONSOLIDATED CONDENSED BALANCE SHEETS




                                               March 31, December 31,
                                                   1999         1998
                                             ----------- -------------
                                             (Unaudited)   (Audited)

ASSETS

CURRENT ASSETS
Cash                                        $    34,751  $  103,428
Accounts receivable                             109,077      79,397
Goods and services tax receivable                51,479      44,280
Inventory                                        41,097      33,123
Prepaid expenses                            ------------ -----------
                                                 32,790      38,650
                                            ------------ -----------

TOTAL CURRENT ASSETS                            269,194     298,878

PROPERTY, PLANT AND EQUIPMENT - NET           1,644,306   1,647,871
                                            ------------ -----------

OTHER ASSETS
Security deposits                                10,355      10,217
Trademarks and licenses                          18,252      18,031
                                            ------------ -----------
                                                 28,607      28,248
                                            ------------ -----------

TOTAL ASSETS                                 $1,942,107  $1,975,997
                                            ============ ===========

          LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Current portion of long-term debt            $    7,119       6,869
Accounts payable and accruals                    53,025      77,446
Wages and benefits payable                       13,413      14,453
Unearned income                                  14,924      16,127
Bottle and cooler deposits                       88,944      85,901
                                             ----------- -----------

TOTAL CURRENT LIABILITIES                       177,425     200,796

LONG-TERM DEBT - NET OF CURRENT PORTION         479,274     408,361
                                             ----------- -----------

TOTAL LIABILITIES                               656,699     609,157
                                             ----------- -----------

COMMITMENTS AND CONTINGENCIES

          STOCKHOLDERS' EQUITY

COMMON STOCK, $.001 par value, 25,000,000
shares authorized; 11,608,257 and
11,608,257 shares issued and outstanding          11,608      11,608

COMMON STOCK DISCOUNT                            (55,000)    (55,000)

ADDITIONAL PAID-IN CAPITAL                     4,765,432   4,765,432

ACCUMULATED DEFICIT                           (3,232,928) (3,140,336)

ACCUMULATED OTHER COMPREHENSIVE LOSS            (203,703)   (215,864)
                                              ----------- -----------

TOTAL STOCKHOLDERS' EQUITY                     1,285,409   1,365,840
                                              ----------- -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $1,942,108  $1,974,997
                                              =========== ===========




    The accompanying notes are an integral part of these consolidated
                          financial statements.


                                      -3-



                         AVANI INTERNATIONAL GROUP INC.
                              AND SUBSIDIARIES             
                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                   THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                 (UNAUDITED)


                                                   1999           1998
                                              ------------   ------------

REVENUE
Bottled water and supply sales                $   166,404     $  104,001
Cooler and equipment sales                          1,432          6,594
Cooler rentals                                     10,662         10,346
                                              ------------   ------------
                                                  178,498        120,941
                                              ------------   ------------

COST OF GOODS SOLD
Cost of goods sold (excluding depreciation)        84,869         85,429
Depreciation                                       21,535         21,210
                                              ------------    -----------
                                                  106,404        106,639
                                              ------------    -----------
GROSS PROFIT                                       72,094         14,302
                                              ------------    -----------

OPERATING EXPENSES
General and administrative                        140,592        253,757
Marketing                                          16,378        169,199
                                              ------------    -----------
                                                  156,970        422,956
                                              ------------    -----------
LOSS FROM OPERATIONS                              (84,876)      (408,654)
                                              ------------    -----------

OTHER INCOME (EXPENSE)
Other                                                 611          1,397
Interest income                                         -          1,787
Interest expense                                   (8,327)       (10,925)
                                              ------------     ----------
                                                   (7,716)        (7,741)
                                              ------------    -----------
NET LOSS                                      $   (92,592)    $ (416,395)
                                              ============    ===========

BASIC AND DILUTED LOSS PER COMMON SHARE       $     (0.01)    $    (0.04)
                                              ============    ===========
 WEIGHTED AVERAGE NUMBER OF SHARES              11,608,257     10,496,933
                                              ============    ===========

  The accompanying notes are an integral part of these consolidated
                          financial statements.

                                   -4-


                      AVANI INTERNATIONAL GROUP INC.
                               AND SUBSIDIARIES
         CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT
                     THREE MONTHS ENDED MARCH 31, 1999
                                (UNAUDITED)





                                                                     Accumulated
              Common Stock                Add-              Common       Other
            -----------------    Common itional   Stock    Accumu-      Compre-
                                 Stock  Paid-In   Sub-       lated       hensive
             Shares    Amount  Discount Capital   scribed  Deficit       Income
           ---------- ------- --------- --------- ------- ---------- -----------

BALANCE
DECEMBER 31,
1998
(Audited)  11,608,257 $11,608 $(55,000) $4,765,432 $   - $(3,140,336)$(215,864)


NET LOSS            -       -        -           -     -     (92,592)        -


OTHER
 COMPREHENSIVE
 INCOME             -       -        -           -     -           -    12,161
            ---------- ------ --------- ---------- ------ ------------ ---------
BALANCE,
MARCH 31,
  1999     11,608,257 $11,608 $(55,000) $4,765,432 $   -  $(3,232,928)$(203,703)
          =========== ======= ========= ========== ====== ============ =========









  The accompanying notes are an integral part of these consolidated
financial statements.

                                        -5-



                      AVANI INTERNATIONAL GROUP INC.
                            AND SUBSIDIARIES
             CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
               THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                               (UNAUDITED)




                                                          1999      1998
                                                       ----------   ------------

OPERATING ACTIVITIES
  Net loss                                             $ (92,592)   $(416,395)
  Adjustments to reconcile net loss to net cash
   used in operating activities
    Depreciation and amortization                         33,627       30,086
    Issuance of common stock for professional fees             -       10,000
    (Increase) decrease in assets
       Accounts receivable                               (34,812)      22,363
       Inventory                                          (7,382)      17,072
       Prepaid expenses                                    6,111       24,612
       Other assets                                            -       (2,202)
    Increase (decrease) in liabilities
       Accounts payable and accruals                     (26,411)     199,562
       Unearned income and deposits                          192       (2,088)
                                                       ----------   -----------

    Net cash used in operating activities               (121,267)    (116,990)
                                                       ----------   -----------

INVESTING ACTIVITIES
  Acquisition of property, plant and equipment            (4,008)     (22,256)
  Investment in trademarks and patents                         -      (28,000)
                                                       ----------   -----------

  Net cash used in investing activities                   (4,008)     (50,256)
                                                       ----------   -----------

FINANCING ACTIVITIES
  Proceeds from mortgages payable                         63,955            -
  Payments of mortgages payable                                -      (43,390)
  Issuance of common shares, net of offering costs             -    1,507,930
  Purchase of common shares                                    -     (400,000)
                                                       ----------   -----------

  Net cash provided by financing activities               63,955    1,064,540
                                                       ----------   -----------

EFFECT OF EXCHANGE RATES ON CASH                          (7,357)      (7,070)
                                                       ----------   -----------
NET INCREASE (DECREASE) IN CASH                          (68,677)     890,224

CASH - BEGINNING OF PERIOD                               103,428      120,492
                                                       ----------   -----------

CASH - END OF PERIOD                                   $  34,751   $1,010,716
                                                       ==========  ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
   Cash paid for:
      Interest                                         $   8,327   $   10,925
                                                       ==========  ===========

      Income taxes                                     $       -   $        -
                                                       ==========  ===========

SUPPLEMENTAL DISCLOSURES OF NONCASH FINANCING
ACTIVITIES
  Common stock subscription                            $       -    $  20,700
                                                       ==========  ===========




    The accompanying notes are an integral part of these consolidated
                          financial statements.


                                      -6-







                         AVANI INTERNATIONAL GROUP INC.
                              AND SUBSIDIARIES         
               NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                            MARCH 31, 1999 AND 1998








NOTE 1 - INTERIM PERIODS

The  unaudited  information has been prepared on the same  basis  as  the
annual  financial  statements  and,  in  the  opinion  of  the  Company's
management, reflects normal recurring adjustments necessary  for  a  fair
presentation of the information for the periods presented.

Certain  information  and  footnote  disclosures,  normally  included  in
financial  statements  prepared  in accordance  with  generally  accepted
accounting  principles,  have been omitted.  These  financial  statements
should  be  read in conjunction with the financial statements  and  notes
thereto included in the Company's Form 10-KSB for the year ended December
31, 1998.

The  results  of operations for the three month periods ended  March  31,
1999 and 1998 are not necessarily indicative of operating results for the
full year.


NOTE 2 - BASIS OF PRESENTATION

The  consolidated condensed financial statements include the accounts  of
Avani  International  Group, Inc. (the "Company") and  its  subsidiaries.
All  material  intercompany balances and intercompany  transactions  have
been eliminated.


NOTE 3 - COMPREHENSIVE INCOME

The  Company adopted Statement of Financial Accounting Standards No. 130,
Comprehensive  Income  for  the  first  quarter  of  fiscal  year   1998.
Comprehensive income is a more inclusive financial reporting  methodology
that   includes   disclosure  of  certain  financial   information   that
historically  has not been recognized in the calculation of  net  income.
Comprehensive  income  (loss), representing foreign currency  translation
adjustments  for  the  three months ended March 31,  1999  and  1998  was
$12,161 and $18,640.





                                         -7-

NOTE 4 - MAJOR CUSTOMER AND SUPPLIER

In  each period the Company sold a substantial portion of its products to
one  customer.   During the three months ended March 31, 1999  and  1998,
sales  to  an Australian customer aggregated $33,984 and  to a  Taiwanese
customer aggregated $18,720.  At March 31, 1999 and 1998, there  were  no
amounts due from these customers included in trade accounts receivable.

During  the  three  months ended March 31, 1999  and  1998,  the  Company
purchased  approximately 47% and 36% of its materials from one  supplier.
At  March  31, 1999 and 1998 there were no amounts due to that  supplier.
If  the  supplier  ceased  doing business with  the  Company,  management
believes that other sources of materials are available.


















                                     - 8 -




Item 2. Management's Discussion and Analysis.
The  following discusses the financial results and position of the consolidated
accounts  of  the  Company  and its wholly  owned  subsidiaries for the periods 
indicated.

Results of Operations

Three Months Ended March 31, 1998  compared  with Three  Months Ended March 31, 
1997.

Revenues for the three months ended March 31, 1999  were $178,498  representing
an increase of 47.59% from revenues of  $120,941 for the  same period  in 1998. 
The increase  for  the  period was  due to higher  pricing of its  PET bottles, 
initiation of sales to  an  Australian  distributor,  and  an increase in local 
sales of  its five  gallon  bottles.   Revenues  for the three month  period in 
1999  consisted of $166,404 in  water and supply sales (an increase of 60% from 
$104,001 for  the prior period),  $1,432 in  cooler  and  equipment  sales  (an
decrease  of 78.28% from $6,594 for the  prior  period) and  $10,662 in  cooler
rentals (an increase  of 3.05% from  $10,346 for  the prior  period).   Of  the
total revenue for the three  month  period in 1999, $33,984 (or 20.42% of total 
water  sales) represented sales to a  new Australian distributor.   During this 
period, sales to a Taiwan  distributor  accounted  for  $18,062 (or  10.85%  of 
total water sales).  This amount represents  a decrease of  3.51% from sales of 
$18,720 to the Taiwan distributor for the prior period.  During this period, the
Company  terminated its  arrangement  with  the  Taiwan  distributor.  Interest 
income  earned on investment of cash  was $0 for the three month period  in 1999
contrasted  with $1,787  for the prior period. The decrease is a result of the 
reduction of available cash for the period. 

Cost of sales for the  three month period in 1999 totaled $106,404 representing
a  slight decrease  from $106,639  for  the  same  period in 1998. Cost of goods
sold for the three  month  period  as  a  percentage  of  sales  was  59.61% for
the  1999  period  representing  a decrease  of 28.56% from 88.17% for the prior
period.   The  decrease  is  a  result  of  the Company's  higher pricing of PET
bottles and  a reduction  of sample  promotions.  Cost of  sales  for  the three
month   period  in  1999  consisted  of  $84,869  in  bottled  water,  supplies,
coolers  and  related  equipment (a  slight  decrease from $85,429 for the prior
period) and  $21,535 in  depreciation  (a  slight increase  from $21,210 for the
prior  period). Gross profit for the three month  period  in  1999 was  $72,094,
compared with $14,302 for the same period in  1998.

General and  administrative  expenses  which  includes  administrative  salaries
and overhead for the three month period in  1999 totaled $140,592 compared  with
$253,757 for the same  period  in  1998.   The  decrease of 44.59% for the three
month period is due principally  to cost reduction  measures implemented  by the
Company  in  the  fourth quarter  of  1998,  which included  the  elimination of
certain  salaried  positions and the reduction of certain professional expenses.
Marketing  expenses   totaled  $16,378  for  the  three  month  period  in  1999
representing  a  decrease  of  90.32% from $169,199 for  the  prior period.  The
decrease  in  marketing  expenses  is  due  the  reduction  of  advertising  and
promotional  costs, including  elimination of costs related to the  Los  Angeles
Marathon and  the  Vancouver  Marathon  and  certain television advertising, all
of which occurred in first quarter  of  1998.   Interest expense  in  connection
with the Company's real  estate  totaled $8,327 for  the  three  month period in
1999 representing  a  decrease  of  23.78%  from  $10,925  for the prior period.
Net loss for the three month period in 1999 was $92,592 compared  with a loss of
$416,395 for the prior period. 


                                    
                                      -9-


                          Year 2000 Compliance
                                    
Year  2000  compliance  is  the  ability of computer  hardware  and software to
respond   to   problems posed  by the  fact that computer programs traditionally
have used two digits rather than  four digits to define an  applicable year.  As
a consequence, any of computer  programs  or  equipment  using internal programs
may  recognize  a date using "00" as the year 1900 rather  than  the  year 2000.
This could result in  a system failure or  miscalculations causing interruptions
of  operations, including  temporary  inability  to  send  invoices or engage in
normal business  activities or  to operate equipment such  as telephone systems,
facsimile  machines  and production machinery.

To date, the Company  has  reviewed its financial accounting software and system
and  has determined it  is fully  Year  2000  complaint.  The  Company has  been
informed  by  its   suppliers  of  major  pieces  of  office  and  manufacturing
equipment that such  equipment is  also Year 2000  complaint.  The  Company  has
initiated a review of its  relationships with suppliers and vendors to determine
if there  will be an impact to  the  Company's  operations  due  to  a Year 2000
issue.  The Company does not  rely on any sole  source  vendor  or supplier, and
most items  can  be  obtained  for alternative  sources if  a preferred supplier
or vendor is not able to meet the Company's  needs.  Because this review is  not
yet completed, the  Company  has not  established  a contingency  plan  for  any
vendors that  may not  be  Year  2000  complaint.  The Company  anticipates that
using  a contingency plan will require using alternate vendors which may not  be
operationally  efficient.  The  supplier and vendor review  is anticipated to be
completed by the first half of 1999. Costs to date and future costs of Year 2000
compliance are not significant or anticipated to be significant.

Liquidity and Capital Resources

Since its inception, the Company has financed its operations principally through
the  private  placement of  its common stock,  and  to  a lesser extent, through
cash  flow  from operations.   During  1998,  the  Company  raised approximately
$1,600,000 net of offering costs from the private placement of its common stock.
In addition during the period, the Company  repurchased 400,000 shares of common
stock at $1.00 per share.

As  of March 31, 1999, the Company has working capital in the amount of $91,769.
The  Company  continues to experience significant losses from operations. During
the last month of 1998 and continuing  to the first quarter of 1999, the Company
has undertaken cost reduction measures in an effort to reduce  operating losses.
These  measures  include  personnel  reductions  and  the elimination of certain
promotional charges.  However, despite  these measures, the Company is uncertain
as  to  when it will achieve profitable operations. Until such time, the Company
intends  to finance its ongoing  operations through the private placement of its
capital  stock  or though debt financing. The Company has no commitments for any
such financing.  No assurances can be given that the Company will be  successful
in these endeavors.  If the Company  is  unsuccessful in  these  endeavors, such
event will have  a  material adverse  impact  on  Company.  

Property,  plant  and  equipment,  net  of  accumulated  depreciation,  totaled
$1,644,306 on March 31, 1999.  Property, plant and equipment, net of accumulated
depreciation, totaled $1,647,871  on December 31, 1998. In connection with its 
real estate properties, as  of March 31, 1999, the Company has balloon  mortgage
payments in the aggregate amount of $479,274.   
            
                                      -10-

Forward Looking Statements.
Certain  of  the  statements  contained in  this Quarterly Report on Form 10-QSB
includes "forward looking statements" within the meaning of  Section  21E of the
Securities Exchange Act of 1934, as amended ("Exchange Act").  See the Company's
Annual Report  on  Form  10-KSB  for  the  period  ending December  31, 1998 for
additional statements concerning  operations  and future capital requirements.

                        Part II OTHER INFORMATION
Item 1. Legal Proceedings.
None

Item 2. Changes in Securities.
None

Item 3. Defaults upon Senior Securities.
None

Item 4. Submission of Matters to a Vote of Securityholders.
None

Item 5. Other Information.
None

Item 6. Exhibits.
(a). Furnish the Exhibits required by Item 601 of Regulation S-B.

Exhibit 27.1 - Financial Data Schedule

(b) Reports on Form 8-K.
None.

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.

                               AVANI INTERNATIONAL GROUP, INC.

Date: May 13, 1999            /s/ Peter Khean
                              ------------------------------
                               Peter Khean
                               Chairman, President
                               and Principal Financial Officer









                                       -11-


                              SCHEDULE 27.1
                         FINANCIAL DATA SCHEDULE
                                    

ART.5 FDS FOR 1st QUARTER 10-Q

Multiplier  1,000


PERIOD TYPE                                   3 MONTHS
FISCAL YEAR END                               DEC-31-1999
PERIOD END                                    MAR-31-1999
CASH                                          35
SECURITIES                                    0
RECEIVABLES                                   109
ALLOWANCES                                    0
INVENTORY                                     41
CURRENT-ASSETS                                269
PP&E                                          1,995
DEPRECIATION                                  351
TOTAL ASSETS                                  1,942
CURRENT-LIABILITIES                           177
BONDS                                         0
COMMON                                        12
PREFERRED-MANDATORY                           0
PREFERRED                                     0
OTHER-SE                                      1,273
TOTAL-LIABILITIES-AND-EQUITY                  1,942
SALES                                         178
TOTAL-REVENUES                                178
CGS                                           106
TOTAL-COST                                    263
OTHER-EXPENSES                                (1)
LOSS-PROVISION                                0
INTEREST-EXPENSE                              8
INCOME-PRETAX                                 (93)
INCOME-TAX                                    0
INCOME-CONTINUING                             (93)
DISCONTINUED                                  0
EXTRAORDINARY                                 0
CHANGES                                       0
NET-INCOME                                    (93)
EPS-PRIMARY                                   (.01)
EPS-DILUTED                                   (.01)