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             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 June 30, 1998.

[ ] 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.
Incorporation                                   Employer
 Incorporation)                                 I.D. Number)

#328-17 Fawcett Road, Coquitlam, B.C. (Canada)      V3K6V2
------------------------------------------------------------
(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:    No: X
(2). Yes: X  No:
The  number  of shares issued and outstanding of issuer's common
stock, $.001 par value, as of June 30, 1998 was 11,601,244.

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 June 30, 1998
         and December 31, 1997.                                           3
         Consolidated Condensed Statement of Operations for the
         Six Months Ended June 30, 1998 and 1997.                         4
         Consolidated Condensed Statement of Stockholders
         Equity for the Six Months Ended June 30, 1998 and 1997.          5
         Consolidated Condensed Statement of Cash Flows                   
         for the Six Months Ended June 30, 1998 and 1997.                 6
         Notes to Financial Statements                                    7
Item  2. Management's Discussion and Analysis of Results of               9
         Operations and Financial Condition.

PART II - OTHER INFORMATION
Item 1.  Legal Proceedings.                                               10
Item 2.  Change in Securities.                                            11
Item 3.  Defaults Upon Senior securities.                                 11
Item 4.  Submission Of Matters To A 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 INFORMATION

Item 1. Financial Statements.


                 AVANI INTERNATIONAL GROUP INC.
                        AND SUBSIDIARIES
              CONSOLIDATED CONDENSED BALANCE SHEETS

                                                   June     December
                                                     30,          31,
                                                   1998         1997
                                              ---------     ---------
       ASSETS                               (Unaudited)     (Audited)

CURRENT ASSETS
   Cash                                    $    623,867     $    120,492
   Accounts receivable                          100,863           76,343
   Goods and services tax receivable             28,934           54,105
   Subscription receivable                            -          240,000
   Inventory                                     63,190          105,530
   Prepaid expenses                              45,718           60,176
                                          -------------      -----------

TOTAL CURRENT ASSETS                            862,572          657,186
                                          -------------      -----------
PROPERTY, PLANT AND EQUIPMENT - Net           1,698,353        1,752,806
                                          -------------      ------------

OTHER ASSETS
   Security deposits                             10,885           8,541
   Trademarks                                     5,477           4,244
   License                                       32,800           4,800
                                          -------------       ------------
                                                 49,162          17,585
                                          -------------       ------------      
TOTAL ASSETS                               $  2,610,087      $2,427,577
                                          =============       ============

     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Current portion of long-term debt            $27,079        $  68,924
   Accounts payable and accruals                 77,932           54,794
   Wages and benefits payable                    12,711           16,086
   Unearned income                               12,505           19,737
   Bottle and cooler deposits                    74,341           66,859
                                                -------        ---------
TOTAL CURRENT LIABILITIES                       204,568          226,400

LONG-TERM DEBT - Net of current portion         431,403          440,669
                                                -------        ---------
TOTAL LIABILITIES                               635,971          667,069
                                                -------        ---------
          STOCKHOLDERS' EQUITY

COMMON STOCK - $.001 par value, 25,000,000
   shares authorized; 11,601,244 and            
   10,113,600 shares issued and outstanding      11,601           10,114

COMMON STOCK DISCOUNT                           (55,000)               -

ADDITIONAL PAID-IN CAPITAL                    4,741,170         3,465,257

COMMON STOCK SUBSCRIBED                               -           240,000

ACCUMULATED OTHER COMPREHENSIVE INCOME         (134,622)         (100,361)

ACCUMULATED DEFICIT                          (2,589,033)       (1,854,502)
                                            ------------      ------------

TOTAL STOCKHOLDERS' EQUITY                    1,974,116         1,760,508
                                            ------------      ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $2,610,087        $2,427,577
                                            ============      ===========


     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       Six Months Ended
                                           June 30,               June 30,
                            ----------------------- ----------------------
                                 1998         1997       1998        1997
                             ---------  ---------- ----------  -----------
                            (Unaudited) (Unaudited)(Unaudited) (Unaudited)

REVENUE
  Bottled water and supply
  sales                        $119,023   $121,152  $223,024     $262,928
  Cooler and equipment sales      2,673      3,711     9,267        6,912
  Cooler rentals                  8,975      5,593    19,321       10,210
                             ----------  ---------  ---------    --------
                                130,671    130,456   251,612      280,050
                             ----------  ---------   --------    --------


COST OF GOODS SOLD
  Cost of goods sold
  (excluding depreciation)       65,331     75,810   150,760      175,037
  Depreciation                   22,610     18,092    43,820       35,146
                             ----------   --------   -------     --------
                                 87,941     93,902   194,580      210,183
                             ----------   --------   --------    --------

GROSS PROFIT                     42,730     36,554    57,032       69,867
                             ----------   --------   --------    --------

OPERATING EXPENSES
  General and administrative    231,559    180,584   485,316      340,220
  Marketing                     129,898     73,287   299,097      133,779
  Research and development            -      3,289         -        3,289
                              ---------    -------   --------     -------
                                361,457    257,160   784,413      477,288
                             ----------  ---------   ---------    ---------
LOSS FROM OPERATIONS           (318,727)  (220,606) (727,381)    (407,421)
                             ----------  ---------- ---------    ---------

OTHER INCOME (EXPENSE)
   Other                          1,393       (44)     2,790           -
   Interest income                7,740      3,466     9,527      10,204
   Interest expense              (8,542)   (14,985)  (19,467)    (24,390)
                              ---------  ---------   --------    --------
                                    591    (11,563)   (7,150)    (14,186)
                                    ---   --------     ------    --------
NET LOSS                      $(318,136) $(232,169)$(734,531)  $(421,607)
                              ========== ========== ==========  ==========

BASIC AND DILUTED LOSS PER
   COMMON SHARE                 $(0.03)    $(0.03)    $(0.07)     $(0.04)
                             ========== ==========   ==========  ==========

WEIGHTED AVERAGE NUMBER
   OF SHARES                11,576,637   9,456,333  11,036,785    9,456,333
                            =========== ==========  ==========   ==========

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



                                     -4-





                       AVANI INTERNATIONAL GROUP INC.
                            AND SUBSIDIARIES
           CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
                     SIX MONTHS ENDED SEPTEMBER 30, 1998
                               (UNAUDITED)
                              
                                                           
                                                        Accumulated      

                                                           Other
               Common Stock   Common Additional   Common   Compre-     
            -----------------  Stock  Paid-in     Stock    hensive   Acumulated
               Shares Amount Discount Capital  Subscribed Income      Deficit
            --------- ------ --------  ------  ---------- -------   ------------

BALANCE,                                                   
DECEMBER                                                   
  31, 1997                                                 
(Audited)  10,113,600 $10,114   $ -  $3,465,257 $240,000 $(100,361)$(1,854,502)
                                                           
PURCHASE                                                   
AND                                                        
RETIREMENT                                                 
OF COMMON                                                         
STOCK        (400,000)  (400)     -    (399,600)    -          -           -
                                                           
ISSUANCE                                                   
OF COMMON                                                 
STOCK        1,647,644 1,647 (55,000) 1,610,997     -          -           -
                                                           
CASH UNDER                                                 
SUBSCRIPTION                                                
AGREEMENT      240,000   240      -     239,760 (240,000)      -           -   
                                                           
OFFERING                                                   
COSTS FOR                                                     
SHARES ISSUED       -     -       -    (175,244)    -          -           -
                                                           
NET LOSS            -     -       -        -        -          -       (734,531)
                                                           
OTHER                                                       
COMPREHENSIVE                                                 
INCOME              -     -       -        -        -      (34,261)        -
         ========== ======= ======== ========= ========= ========== ============
          
BALANCE, 
JUNE 30, 
 1998    11,601,244 $11,601 $(55,000)$4,741,170    $-     $(134,62) $(2,589,033)
        =========== ======= ========= ========= ========  ========= ============


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
                   SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                               (UNAUDITED)


                                                        1998           1997
                                                -------------   ------------

OPERATING ACTIVITIES
   Net loss                                        $(734,531)      $(421,607)
   Adjustments to reconcile net loss to net cash
   used in operating activities
       Depreciation and amortization                  43,820          52,175
       Issuance of common stock for professional
       fees                                           10,000               -
       (Increase) decrease in assets
         Accounts receivable                          (1,056)         33,475
         Inventory                                    41,149         (38,210)
         Prepaid expenses                             14,706         (25,546)
         Other assets                                 (2,398)              -
       Increase (decrease) in liabilities           
         Accounts payable                             31,995         128,943
         Unearned income and deposits                (10,175)         25,997
                                                  -------------     ----------

   Net cash used in operating activities            (606,490)       (244,773)

INVESTING ACTIVITIES
   Acquisition of property, plant and equipment      (13,632)       (285,835)
   Investment in trademarks and patents              (28,000)              -
                                                    ---------      ---------- 

   Net cash used in investing activities             (41,632)       (285,835)
                                                    ---------       ---------

FINANCING ACTIVITIES
   Proceeds from mortgages payable                        -          139,758
   Payments of mortgages payable                     (44,271)        (84,411)
   Issuance of common shares, net of offering   
    costs                                          1,612,400              -
   Purchase of common shares                        (400,000)         (1,000)
                                                   ---------         --------

   Net cash provided by financing activities       1,168,129          54,347
                                                   ----------        --------

EFFECT OF EXCHANGE RATES ON CASH                     (16,632)         (1,131)
                                                   ----------        --------

NET INCREASE (DECREASE) IN CASH                      503,375        (477,392)

CASH - BEGINNING OF PERIOD                           120,492         898,581
                                                   -----------      ----------

CASH - END OF PERIOD                                $623,867       $ 421,189
                                                   ===========      ==========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION 
  Cash paid for:
   Interest                                           19,467       $  20,286
                                                   ============     ==========

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

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
                          JUNE 30, 1998 AND 1997





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, 1997.

The results of operations for the six month periods ended June 30, 1998  
and 1997 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 wholly owned  
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 
('SFAS'),  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 six months ended June 30, 1998 and 1997
was $(34,261) and $721. 

                                 -7-

NOTE 4 - MAJOR CUSTOMER AND SUPPLIER

The Company sells a  substantial portion of its products to one customer.  
During  the  six  months  ended  June  30, 1998  and  1997, sales to this  
customer  aggregated  $25,560  and $171,795.  At June 30, 1998  and 1997, 
amounts due  from this  customer included  in  trade  accounts receivable 
were $12,620 and $27,714.

During the six months ended June 30, 1998 and 1997, the Company purchased 
approximately  41%  and  46% of  its  materials  from  one  supplier.  At 
June 30, 1998 and 1997 amounts due to that supplier were $2,205 and $-0-. 
If the  supplier  ceased  doing  business  with  the Company,  management 
believes that other sources of materials are available.


                              -8-


                   PART II - OTHER INFORMATION

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

Revenues for  the three  and six  months periods  ended  June 30, 1998 were 
$130,671  and  $251,612, respectively, compared  with  revenues of $130,456 
and  $280,050 for the  same  periods  in 1997.  The  decrease of 10.15% for 
the six  month  period  in  1998 was  due to  a  reduction in sales to  the  
Company's  major  customer   in  Taiwan.  The  reduction  is  a  result  of  
the  current economic   difficulties  in  that  country.   The  decrease in 
sales  to  the  customer  (the  major  portion  of  which  occurred  in the 
comparable  first  quarter  periods)  was  offset partially by the increase 
in local sales of its five gallon  and  PET  bottles (which is reflected in 
the  slight  increase  in revenues  for the  three  month  period in 1998).  
Revenues  for  the  six month period in 1998 consisted of $223,024 in water 
and supply sales (a decrease of 15.18% from $262,928 for the prior period), 
$9,267 in cooler  and  equipment  sales (an  increase of 34.07% from $6,912 
for the prior period) and $19,321 in cooler rentals (an  increase of 89.24% 
from $10,210 for the prior period). Of the  total revenue for the six month 
period in 1998, $25,560 (or 11.46% of  total water sales) represented sales 
to  a Taiwan  distributor.  This  amount   represents a  decrease of 85.12% 
from  sales  of $171,795 to the  distributor for the prior period. Interest  
income for the  period earned on  investment of cash totaled $9,527 for the 
six  month  period in  1998  representing  a decrease of 6.63% from $10,204 
for  the  prior  period.  The   decrease is  a  result of  the reduction of 
available cash.

Cost  of sales for the  three and six month period in 1998 totaled $87,941  
and  $194,580,  respectively, compared  with  $93,902 and $210,183 for the 
same periods in 1997.  The  decrease of 7.42% for the  six   month  period  
is  a result of  the  reduction  in sales  for  the  period.  The increase 
for  the three  month period is  a  result  of an incremental  increase of 
delivery expenses  related  to  the increased  sales  of  its  five gallon 
bottles.  Cost of goods  sold for the six  month  periods as  a percentage 
of sales increased  by 2.28% from 75.05% to 77.33% due principally to  the  
incremental increase of  delivery expenses.  Cost  of  sales  for  the six 
month period in  1998 consisted  of $150,760  in bottled  water, supplies, 
coolers  and related  equipment (a  decrease  of 13.87% from $175,037  for  
the prior period)  and  $43,820  in  depreciation  (an increase  of 24.68% 
from $35,146 for the prior period).  Gross  profit for the three and   six   
month  periods  in  1998 was  $42,730  and $57,032, respectively, compared 
with $36,554 and $69,867  for  the prior  periods.  No  cost of sales were 
recognized  for  the six month  period  ended  June 30, 1996. The decrease 
for the three and  six  month  periods in 1998 was due to reduced  revenue  
for  the period  coupled  with increased  delivery expenses  for  its five 
gallon bottles.

General and administrative expenses which includes administrative salaries  
and  overhead for  the six  month period totaled $485,316 which represents  
an  increase of 42.65% from $340,220 for the prior period.  This  increase 
is due to principally to increased professional fees, printing and general  
office expense.  Marketing expenses totaled $299,097  for  the  six  month  
period  in 1998 representing  an  increase  of  124% from $133,779 for the 
prior period.  The increase  in  marketing expenses is due principally  to 
one  time costs related to the Company's  sponsorship of the  Los  Angeles 
Marathon and  the Vancouver Marathon.  Interest expense in connection with 
the  Company's real  estate  totaled $19,467 for the six  month  period in 
1998  representing a decrease of 20.18% from $24,390 for the prior period.  
Net loss  for the  three  and  six  month periods in  1998  fiscal  period  
was  $318,727  and  $727,381,  respectively, compared  with  $220,606  and 
$407,421 for  the  prior periods. 

Liquidity and Capital Resources

Since  its inception  through  December 31 , 1997, the  Company has raised 
approximately  $4,300,000  from the private placement of its common  stock 
(net  of  offering costs). The Company  has used these  proceeds  to  fund 
the construction of  its manufacturing facilities and  its working capital 
requirements.  Through the second  quarter of  1998,  the  Company  raised  
$1,612,400 in additional proceeds (net of offering costs) from the private 
placement of  its  common stock. In  addition, during  the  first  quarter 
of 1998, the Company repurchased 400,000 shares of common  stock  at $1.00 
per share from certain shareholders.

As of June  30, 1998, the Company has working  capital in  the  amount  of 
$658,004. 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  through  
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 the Company. 

Property, plant and  equipment, net  of accumulated  depreciation, totaled 
$1,698,353  on  June  30, 1998.   Property,  plant  and  equipment, net of  
accumulated  depreciation,  totaled  $1,752,806  on  December 31, 1997. In 
connection  with  its real  estate  properties,  as of  June 30, 1998, the  
Company has balloon mortgage payments in the aggregate amount of $431,403.

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 additional  statements concerning operations and future capital 
requirements.

                                 -9-

                    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.
Marina Bottling Company Ltd. ("Marina") was organized  under the laws of 
the Province of British Columbia (Canada) on October 2, 1997 as a wholly 
owned subsidiary of the Company. During 1998, an independent third party 
acquired a 50% interest in  Marina. As of this date, Marina is inactive.

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: December 21, 1998       /s/  Peter Khean
                               Peter Khean
                               Chairman and President


                              /s/Nico Huang
                               Nico Huang
                               Chief Financial Officer and Treasurer





                          SCHEDULE 27.1
                     FINANCIAL DATA SCHEDULE


ART.5 FDS FOR 2nd QUARTER 10-Q

Multiplier  1,000


PERIOD TYPE                                   6 MONTHS
FISCAL YEAR END                               DEC-31-1998
PERIOD END                                    JUN-30-1998
CASH                                          624
SECURITIES                                    0
RECEIVABLES                                   101
ALLOWANCES                                    0
INVENTORY                                     63
CURRENT-ASSETS                                863
PP&E                                          1,742
DEPRECIATION                                  44
TOTAL ASSETS                                  2,610
CURRENT-LIABILITIES                           204
BONDS                                         0
COMMON                                        12
PREFERRED-MANDATORY                           0
PREFERRED                                     0
OTHER-SE                                      1,962
TOTAL-LIABILITIES-AND-EQUITY                  2,610
SALES                                         252
TOTAL-REVENUES                                252
CGS                                           195
TOTAL-COST                                    979
OTHER-EXPENSES                                (11)
LOSS-PROVISON                                 0
INTEREST-EXPENSE                              19
INCOME-PRETAX                                 (735)
INCOME-TAX                                    0
INCOME-CONTINUING                             (735)
DISCONTINUED                                  0
EXTRAORDINARY                                 0
CHANGES                                       0
NET-INCOME                                    (735)
EPS-PRIMARY                                   (.07)
EPS-DILUTED                                   (.07)

                                   -11-